EXHIBIT 10.15
EMPLOYMENT AGREEMENT
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THIS AGREEMENT ("Agreement"), dated as of October 20, 1997, between TOYMAX
INTERNATIONAL, INC., a Delaware corporation (the "Company"), and XXXXXX X. XXXXX
(the "Executive").
WITNESSETH
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WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept such employment, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, representations
and warranties set forth herein, and for other good and valuable consideration,
it is hereby agreed as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts such employment, upon the terms and conditions set
forth herein.
2. TERM. Subject to the provisions of Section 10 hereof, the period of
the Executive's employment under this Agreement shall be from October 1, 1997
through September 30, 2000, as may be extended as hereinafter provided (the
"Term"). As of September 30, 2000 and each subsequent September 30, (September
30, 2000 and each subsequent September 30 hereinafter called a "Renewal Date"),
the Term shall be automatically extended by one additional year (i.e. to include
a period of 12 months commencing on the day after each Renewal Date) unless, at
least 60 days prior to any such Renewal Date, the Company shall deliver to the
Executive or the Executive shall deliver to the Company written notice that the
Term will not be further extended.
3. POSITION AND DUTIES.
(a) During the Term, the Executive shall serve as Managing Director of
Toymax (H.K.) Limited ("Limited") and as Vice President, International Sales of
the Company and shall have such duties consistent with such offices as from time
to time may be prescribed by the Board of Directors of the Company (the
"Board").
(b) During the Term, the Executive shall perform and discharge the
duties that may be assigned to him by the Board from time to time in accordance
with this Agreement, and the Executive shall devote his best talents, efforts
and abilities to the performance of his duties hereunder. Executive shall be
required to spend such time traveling within the U.S., Europe, the Far East and
elsewhere as is necessary to carry out his duties and responsibilities hereunder
during the Term.
(c) During the Term, the Executive shall perform such duties on a
full-time basis and the Executive shall have no other employment and no other
outside business activities whatsoever; provided, however, that the Executive
shall not be precluded from making passive investments which do not require the
devotion of any significant time or effort.
4. COMPENSATION.
(a) For the Executive's services hereunder, the Company shall pay the
Executive a minimum annual salary (as the same shall be increased from time to
time, the "Base Salary") of $185,000, payable in accordance with the customary
payroll practices of the Company.
(b) The Base Salary shall be increased by 5% (or such greater
percentage as the Board may determine) on January 1, 1999 and each subsequent
January 1 during the Term.
5. BONUSES.
(a) EXECUTIVE BONUS PLAN. During the Term, the Executive shall be
eligible to participate in the Company's Executive Bonus Plan (the "Bonus
Plan"), in accordance with the terms and conditions of such Plan, as they may
exist from time to time. Nothing herein shall preclude the Company from
amending the Bonus Plan from time to time or terminating the Bonus Plan, in
whole or in part, at any time.
6. OTHER BENEFITS. During the Term, the Company shall provide the
Executive with the following benefits:
(a) STOCK OPTION PLAN. The Executive shall be eligible to
participate in the Company's Stock Option Plan in accordance with the terms and
conditions thereof.
(b) MEDICAL, HEALTH, DENTAL AND LIFE INSURANCE BENEFITS. The Company
shall, at its own expense, provide the Executive and his eligible dependents
with the group medical, health, dental and life insurance coverage provided by
the Company generally to its employees. Nothing herein shall prevent the
Company from amending and/or terminating the coverages and/or plans described in
this Section 6(b), provided, however, that such amendment and/or termination is
applicable generally to the employees of the Company.
(c) 401(K) PLAN. The Executive shall be entitled to participate in
the Company's 401(k) Plan in accordance with the terms and conditions of such
plan.
(d) LIABILITY INSURANCE. The Executive shall be provided with the
directors and officers liability insurance coverage generally provided to
officers of the Company and Limited. Notwithstanding the foregoing, the Company
and Limited agree to indemnify the
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Executive against all costs, damages and expenses, including attorneys' fees,
incurred by the Executive as a result of claims by third parties arising out of
or from the Executive's lawful acts as an employee of the Company and Limited,
provided such acts are not grossly negligent and are performed in good faith and
in a manner reasonably believed by the Executive to be in the Company's and
Limited's best interests. Any counsel employed to defend the Executive in any
such action shall be reasonably acceptable to the Executive, the Company and
Limited. Any counsel appointed by any insurance carrier for the Company and/or
Limited shall be deemed acceptable. It is the intent of the parties that the
obligation imposed by this paragraph will survive the termination of this
Agreement.
(e) OTHER BENEFITS. The Company shall make available to the
Executive any and all other employee or fringe benefits (in accordance with
their terms and conditions) which the Company may make available generally to
its other employees.
7. AUTOMOBILE ALLOWANCE. During the Term, the Company shall reimburse the
Executive for expenses, such as automobile lease or loan payments, in an amount
up to $600 per month, plus such amount(s) as may be required to reimburse the
Executive for expenses such as registration, insurance, repairs, maintenance,
license fees, gasoline and oil incurred by the Executive incident to his use of
an automobile in connection with his duties hereunder.
8. REIMBURSEMENT OF EXPENSES. During the Term, the Company shall pay or
reimburse the Executive for all reasonable travel, entertainment and other
business expenses actually incurred or paid by the Executive in the performance
of his duties hereunder upon presentation of expense statements and/or such
other supporting information as the Company may reasonably require of the
Executive.
9. VACATIONS. The Executive shall be entitled to no less than four weeks
of paid vacation during each full calendar year of the Term (and a pro rata
portion thereof for any portion of the Term that is less than a full calendar
year); provided that no single vacation may exceed two consecutive weeks in
duration. Unused vacation may not be carried over to successive years.
10. TERMINATION. The employment hereunder of the Executive may be
terminated prior to the expiration of the Term in the manner described in this
Section 10.
(a) TERMINATION BY THE COMPANY FOR GOOD CAUSE. The Company shall
have the right to terminate the employment of the Executive for Good Cause (as
such term is defined herein) by written notice to the Executive specifying the
particulars of the circumstances forming the basis for such Good Cause.
(b) TERMINATION UPON DEATH. The employment of the Executive
hereunder shall terminate immediately upon his death.
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(c) VOLUNTARY RESIGNATION BY THE EXECUTIVE. The Executive shall have
the right to voluntarily resign his employment hereunder (as such term is
defined herein) by 30 days' advance written notice to the Company.
(d) TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE. The Company shall
have the right to terminate the Executive's employment hereunder without Good
Cause by 30 days' advance written notice to the Executive.
(e) TERMINATION DATE. The "Termination Date" is the date as of which
the Executive's employment with the Company terminates. Any notice of
termination given pursuant to the provisions of this Agreement shall specify the
Termination Date.
(f) CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Person" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, joint
venture, court -or government (or political subdivision or agency thereof).
(ii) "Change of Control" with respect to the Company, means
the occurrence of any of the following, other than in connection with the
initial public offering of the Common Stock, (A) the acquisition directly or
indirectly (in one or more related transactions) by any Person (other than the
Executive), or two or more Persons (other than the Executive) acting as a group,
of beneficial ownership (as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of more than 20% of the outstanding capital
stock of the Company entitled to vote for the election of directors ("Voting
Shares"); (B) the merger or consolidation of the Company with one or more other
corporations as a result of which the holders of the outstanding Voting Shares
of the Company immediately before the merger hold less than 80% of the Voting
Shares of the surviving or resulting corporation; (C) the sale of all or
substantially all of the assets of the Company.
(iii) "Good Cause" shall exist if, and only if, the Executive
(A) wilfully or repeatedly fails in any material respect to perform his
obligations hereunder as provided herein (unless performance of such obligations
violates foreign, federal, state or local law), provided that such Good Cause
shall not exist unless the Company shall first have provided the Executive with
written notice specifying in reasonable detail the factors constituting such
material failure and such material failure shall not have been cured by the
Executive within 30 days after such notice or such longer period as may
reasonably be necessary to accomplish the cure; or (B) has been convicted of a
crime which constitutes a felony under applicable law or has entered a plea of
guilty or nolo contendere with respect thereto.
11. OBLIGATIONS OF COMPANY ON TERMINATION. Notwithstanding anything in
this Agreement to the contrary, the Company's obligations on termination of the
Executive's employment shall be as described in this Section 11.
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(a) OBLIGATIONS OF THE COMPANY IN THE CASE OF TERMINATION WITHOUT
GOOD CAUSE. In the event that prior to the expiration of the Term, the Company
terminates the Executive's employment, pursuant to Section 10(d), without Good
Cause, the Company shall provide the Executive with the following:
(i) AMOUNT OF SEVERANCE PAYMENT. Except as provided in
Section 11(b) below the Company shall pay the Executive the " Severance Payments
" equal to the sum of the following:
(A) the continuation, for a period of twelve (12) months
following the Termination Date, of the Executive's Base Salary at the rate in
effect on the Termination Date, payable in accordance with the customary payroll
practices of the Company; and
(B) an immediate single lump sum cash payment of any Base
Salary, Bonus Plan bonuses, allowable vacation and unreirnbursed expenses
accrued but unpaid as of the Termination Date.
(b) OBLIGATIONS OF THE COMPANY IN THE CASE OF TERMINATION OF
EXECUTIVE'S EMPLOYMENT FOLLOWING A CHANGE IN CONTROL. In the event that at any
time during the Term and following a Change of Control, the Company terminates
the Executive's employment without Good Cause, in lieu of the Severance Payments
to which the Executive is entitled under Section 11(a)(i) above, the Company
shall pay the Executive as follows:
(i) CHANGE OF CONTROL SEVERANCE PAYMENT. The Company shall
continue to pay to the Executive for a period of twenty-four (24) months
following the Termination Date the Executive's Base Salary at the rate in effect
on the Termination Date, payable in accordance with the customary payroll
practices of the Company, plus an immediate single lump sum cash payment of any
Base Salary, Bonus Plan bonuses, allowable vacation and unreimbursed expenses
accrued but unpaid as of the Termination Date.
(c) OBLIGATIONS OF THE COMPANY IN CASE OF TERMINATION FOR DEATH,
VOLUNTARY RESIGNATION OR GOOD CAUSE. Upon termination of the Executive's
employment upon death (pursuant to Section 10(b)), as a result of the voluntary
resignation of the Executive (pursuant to Section 10(c)) or for Good Cause
(pursuant to Section 10(a)), the Company shall have no payment or other
obligations hereunder to the Executive, except for the payment of any Base
Salary, Bonus Plan bonuses, allowable vacation and unreimbursed expenses accrued
but unpaid as of the date of such termination.
12. SEVERABILITY. Should any provision of this Agreement be held, by a
court of competent jurisdiction, to be invalid or unenforceable, such invalidity
or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each other provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
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13. SUCCESSORS AND ASSIGNS.
(a) This Agreement and all rights under this Agreement are personal
to the Executive and shall not be assignable other than by will or the laws of
descent. All of the Executive's rights under the Agreement shall inure to the
benefit of his heirs, personal representatives, designees or other legal
representatives, as the case may be.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. Any Person succeeding to the
business of the Company by merger, purchase, consolidation or otherwise shall
assume by contract or operation of law the obligations of the Company under this
Agreement.
14. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflicts of laws rules thereof.
15. NOTICES. All notices, requests and demands given to or made upon the
respective parties hereto shall be deemed to have been given or made three
business days after the date of mailing when mailed by registered or certified
mail, postage prepaid, or on the date of delivery if delivered by hand, or one
business day after the date of delivery by Federal Express or other reputable
overnight delivery service, addressed to the parties at their addresses set
forth below or to such other addresses furnished by notice given in accordance
with this Section 15: (a) if to the Company, to 000 X. Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxx Xxxx 00000 and (b) if to the Executive, to 00 Xxxxxxx Xxxxx, Xxxxxxx, X.X.
00000.
16. WITHHOLDING. All payments required to be made by the Company to the
Executive under this Agreement shall be subject to withholding taxes, social
security and other payroll deductions in accordance with applicable law and the
Company's policies applicable to executive employees of the Company.
17. COMPLETE UNDERSTANDING. Except as expressly provided below, this
Agreement supersedes any prior contracts, understandings, discussions and
agreements relating to employment between the Executive and the Company,
including but not limited to that certain Employment Agreement between the
Executive and the Company dated as of March 18, 1993, and constitutes the
complete understanding between the parties with respect to the subject matter
hereof. No statement, representation, warranty or covenant has been made by
either party with respect to the subject matter hereof except as expressly set
forth herein. Notwithstanding the foregoing or anything in this Agreement to
the contrary, (i) any Employee Patent and Confidential Information Agreement by
and between the Company and the Executive shall remain in full force and effect,
and (ii) during the Term and at all times thereafter, the Executive hereby
agrees not to disclose any confidential and/or proprietary information
concerning the Company, Limited and/or the business and/or operations of the
Company and/or Limited without the express written consent of the Company and
Limited.
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18. MODIFICATION; WAIVER.
(a) This Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Company and the Executive or in the case of a waiver, by the party against
whom the waiver is to be effective. Any such waiver shall be effective only to
the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
19. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.
20. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name by one of its officers duly authorized to enter
into and execute this Agreement, and the Executive has manually signed his name
hereto, all as of the day and year first above written.
TOYMAX INTERNATIONAL, INC.
By:
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Witness
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Witness Xxxxxx X. Xxxxx
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