EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement ("Agreement") is between National Lampoon, Inc.
("Employer"), with its principal place of business at 0000 Xxxxxx Xxxx., Xxx
Xxxxxxx, Xxxxxxxxxx 00000, ("Employer") and Xxxxxxxx Xxxxxxx ("Employee") whose
address is 000 X. Xxxxxxx Xxxxx, #000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000. This
date of this Agreement is October 27, 2008 (the "Effective Date").
1. EMPLOYMENT: Employer hereby agrees to employ Employee as its principal
accounting officer and Employee hereby agrees to accept such employment
under the terms and conditions set forth below. Employee shall be based in
Los Angeles, California but shall travel as reasonably required by
Employer.
2. TITLE: Chief Financial Officer
3. TERM: Employment shall be at will, subject to the termination provisions
included in paragraph 15 below.
4. BASE SALARY: Employee's compensation shall be One Hundred Thousand Dollars
($100,000) per year, subject to normal statutory deductions, payable
semi-monthly or in accordance with Employer's then existing payment
policy.
5. OPTIONS: Employee has been or will be granted options to purchase
Employer's common stock as follows:
(a) An option to purchase 150,000 shares of Employer's common
stock at an exercise price of $2.30 was granted to Employee on
December 17, 2007. The right to purchase 50,000 shares of
common stock vested immediately and the right to purchase the
remaining 100,000 shares of common stock will vest over the 36
month period following the grant date.
(b) An option to purchase 100,000 shares of Employer's common
stock will be granted on the date that the American Stock
Exchange notifies the Employer that it has regained compliance
with Section 1003(a)(iv) of the AMEX Company Guide, as
required by the letter received by the Employer on February
27, 2008 from the American Stock Exchange. The right to
purchase the common stock will vest on the date (the
"Notification Date") that the Employer receives written
notification from the American Stock Exchange that it has
regained compliance with Section 1003(a)(iv) of the AMEX
Company Guide. The exercise price will be equal to the last
sale price of Employer's common stock on the Notification
Date. If no sales of Employer's common stock are made on the
Notification Date, then the exercise price will be equal to
the last sale price of Employer's common stock on the last day
prior to the Notification Date on which trades were made and
reported. The term of the option will be 5 years.
(c) Until this Agreement is terminated in accordance with
paragraph 15 below, on January 31, 2009 and on January 31st of
each year thereafter, Employee will receive an option to
purchase 100,000 shares of Employer's common stock at an
exercise price that is equal to or greater than the last sale
price of Employer's common stock on the grant date. If no
sales of Employer's common stock are made on the grant date,
then the exercise price will be equal to the last sale price
of Employer's common stock on the last day prior to the grant
date on which trades were made and reported. The right to
purchase the common stock will vest in equal increments over
36 months. The term of the option will be 10 years.
6. BENEFITS: During Employee's employment under this Agreement, Employee
shall be entitled to participate in any and all medical, pension, dental
and life insurance plans and disability income plans, retirement
arrangements and other employment benefits as in effect from time to time
for the employees of Employer generally. Such participation shall be
subject to (i) the terms of the applicable plan documents (including, as
applicable, provisions granting discretion to Employer's Board of
Directors or any administrative or other committee provided for therein or
contemplated thereby) and (ii) Employer's generally applicable policies.
Employee shall be entitled to accrue vacation time at the rate of 10
business days per year, in accordance with Employer's vacation policy.
Vacation time shall accrue as of November 1, 2007. Employer shall
reimburse Employee for all reasonable business expenses incurred by
Employee during Employee's employment hereunder to the extent in
compliance with Employer's business expense reimbursement policies in
effect from time to time and upon presentation by Employee of such
documentation and records as Employer shall from time to time reasonably
require.
7. SERVICES: Employee's services shall not be exclusive to Employer. Employee
shall render such services as are customarily rendered by persons in
Employee's capacity in the entertainment industry and as may be reasonably
requested by Employer. Employee hereby agrees to comply with all
reasonable requirements, directions and requests, and with all reasonable
rules and regulations made by Employer in connection with the regular
conduct of its business; to render services during Employee's employment
hereunder whenever and wherever and as often as Employer may reasonably
require in a competent, conscientious and professional manner. Employee
acknowledges receipt of a handbook setting forth Employer's rules and
policies.
8. INDEMNITY. Subsequent to the execution of this Agreement, Employer and
Employee shall execute and deliver to each other an Indemnity Agreement.
The delivery of such agreement by Employer is in consideration for the
performance by Employee of her obligations since the start of her
employment and under this Agreement.
9. CONFIDENTIAL INFORMATION; RESULTS AND PROCEEDS: Employee hereby expressly
agrees that Employee will not disclose any confidential matters of
Employer prior to, during or after Employee's employment. In addition,
Employee agrees that Employer shall own all rights of every kind and
character throughout the universe, in perpetuity to any material and/or
idea suggested or submitted by Employee or suggested or submitted to
Employee by a third party that occurs during Employee's employment.
Employee agrees that Employer shall own all the results and proceeds of
Employee's services that are related to Employee's employment and
responsibilities, whether rendered before or after the Effective Date.
10. NOTICES: All notices to be given pursuant to this agreement shall be
effected either by mail or personal delivery in writing at the addresses
first above written.
11. COMPLETE AGREEMENT; MODIFICATIONS: Each party to this Agreement
acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party, or anyone
acting on behalf of any party that are not embodied herein, and that no
other agreement, statement, or promise not contained in this Agreement
shall be valid or binding. This Agreement embodies the complete agreement
and understanding between the parties and supersedes all prior
understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof. Any
modification of this Agreement will be effective only if it is in writing
and signed by the party to be charged.
12. LAWS: This agreement will be governed by the laws of the State of
California irrespective of rules pertaining to conflicts of laws. This
Agreement may be executed via facsimile and/or in counter-parts and all
such counter-parts and/or facsimile copies shall be deemed one and the
same and an original of this Agreement.
13. WAIVERS: Failure to require compliance with any provision or condition
provided for under this Agreement at any one time, or several times, shall
not be deemed a waiver or relinquishment of such provision or condition at
any other time.
14. ASSIGNMENT: Employee shall not assign any of her rights or delegate any of
her duties under this Agreement. Employer's rights and obligations under
this Agreement will inure to the benefit of and be binding upon Employer's
successors and assigns.
15. TERMINATION AND NON-RENEWAL: Notwithstanding any other provisions of this
Agreement, Employee's employment under this Agreement shall terminate
under the following circumstances:
(a) Termination by Employer for Cause. Employee's employment under
this Agreement may be terminated for Cause without further liability
on the part of Employer other than for accrued but unpaid salary
through the date of termination effective immediately upon written
notice to Employee. "Cause" shall mean the following:
(i) the commission by Employee of any act of embezzlement,
fraud, larceny or theft on or from Employer or an affiliate of
Employer;
(ii) the commission by Employee of, or indictment of Employee
for a felony or any misdemeanor, which misdemeanor involves
moral turpitude, deceit, dishonesty or fraud;
(iii) failure to perform, or materially poor performance of,
Employee's duties and responsibilities assigned or delegated
under this Agreement, or any material misconduct or violation
of Employer's policies, in either case, which continues for a
period of 30 days after written notice given to Employee; or
(iv) a material breach by Employee of any of the covenants,
terms or provisions of this Agreement or any agreement between
Employer and Employee regarding confidentiality.
(b) Termination by Employee. Employee's employment under this
Agreement may be terminated by Employee by written notice to the
Board of Directors at least 30 days prior to such termination.
(c) Death; Disability. Upon the death of the Employee, or upon the
permanent disability (as defined below) of the Employee continuing
for a period in excess of 30 consecutive days, all obligations of
Employer under this Agreement shall immediately terminate other than
any obligation of Employer with respect to earned but unpaid salary
and earned benefits contemplated hereby to the extent accrued or
vested through the date of termination. As used herein, the terms
"permanent disability" or "permanently disabled" shall mean the
inability of the Employee, by reason of injury, illness or other
similar cause, to perform a major part of her duties and
responsibilities in connection with the conduct of the business and
affairs of Employer, as determined reasonably and in good faith by
Employer.
(d) Termination by Employer Without Cause. Subject to the payment of
Termination Benefits pursuant to paragraph 15(e), Employee's
employment under this Agreement may be terminated without Cause by
Employer upon written notice to Employee.
(e) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or otherwise required by law, all
compensation and benefits payable to Employee under this Agreement
shall terminate on the date of termination of Employee's employment
under this Agreement. Notwithstanding the foregoing, in the event of
termination of Employee's employment with Employer pursuant to
paragraph 15(d) above, Employer shall pay or provide to Employee (i)
only such compensation as is earned under paragraph 4 through the
date of termination plus one month's salary; (ii) all accrued but
unused vacation benefits; (iii) all unvested options will
immediately vest, (iv) Employee will have the right to exercise all
options for a period of 90 days following the termination date. (the
"Severance Benefits").
The parties hereto agree that the Severance Benefits are to be in
full satisfaction, compromise and release of any claims arising out
of any termination of the Employee's employment pursuant to
paragraph 15(d), and such amounts shall be contingent upon the
Employee's delivery of a general release of such claims upon
termination of employment in a form reasonably satisfactory to
Employer, it being understood that no Severance Benefits shall be
provided unless and until the Employee determines to execute and
deliver such release.
(f) Notwithstanding termination of this Agreement as provided in
this paragraph 15 or any other termination of Employee's employment
with Employer, Employee's obligations under paragraphs 9 and 16
hereof shall survive any termination of Employee's employment with
Employer at any time and for any reason.
16. TRADE SECRETS: The parties acknowledge and agree that during the term of
this Agreement and in the course of the discharge of his duties hereunder,
Employee shall have access to and become acquainted with information
concerning the operation of Employer and its affiliated entities,
including without limitation, financial, personnel, sales, planning and
other information that is owned by Employer and regularly used in the
operation of Employer's business and that this information constitutes
Employer's trade secrets. Employee agrees that she shall not intentionally
or through gross negligence disclose any such trade secrets, directly or
indirectly, to any other person or use them in any way during her
employment or at any other time thereafter, except as is required in the
course of her employment for Employer.
17. ARBITRATION: Any controversy, dispute or claim of whatever nature arising
out of, in connection with or relating to this Agreement or the
interpretation, meaning, performance, breach or enforcement thereof,
including any controversy, dispute or claim based on contract, tort, or
statute, and including without limitation claims relating to the validity
of this Agreement or relating to termination of employment, shall be
resolved at the request of either party to this Agreement, by final and
binding arbitration conducted at a location determined by the arbitrator
in Los Angeles, California, administered by and in accordance with the
then existing Rules of Practice and Procedure of J*A*M*S/Endispute, Inc..
(Jo Ao Mo S), and judgment upon any award rendered by the arbitrator(s)
may be entered by any State or Federal Court having jurisdiction thereof.
Either party may commence such proceeding by giving notice to the other
party in the manner provided in paragraph 10 of this Agreement. Upon
filing a demand for arbitration, all parties to the Agreement will have
right of discovery to the maximum extent provided by law for actions tried
before a court, and both agree that in the event of an arbitration,
disputes as to discovery shall be determined by the arbitrator(s). The
arbitrator(s) in any such proceeding shall apply California substantive
law and the California Evidence Code to the proceeding. The arbitrator(s)
shall have the power to grant all legal and equitable remedies
(provisional and final) and award damages provided by California law. The
arbitrator(s) shall prepare in writing and provide to the parties an award
including findings of fact and conclusions of law. The arbitrator(s) shall
not have the power to commit errors of law or legal reasoning, and the
award may be vacated or corrected pursuant to California Code of Civil
Procedure ss.ss.1286.2 or 1286.6 for any such error. Employer shall pay
all fees of the arbitrator, and each party shall bear its or his expenses,
costs and attorney fees relating to the arbitration and recovery under any
order and/or judgment rendered therein. In any such proceeding general
counsel for Employer may represent Employer regardless of whether such
counsel has rendered advice to Employee in the past unless prohibited by
law or rules of the California State Bar Association. The parties hereto
hereby submit to the exclusive jurisdiction of the courts of the State of
California for the purpose of enforcement of this agreement to arbitrate
and any and all awards or orders rendered pursuant thereto. Should any
party seek a provisional remedy to enforce such party's rights under this
Agreement, such action shall be brought exclusively in the Superior Court
of the State of California in and for the County of Los Angeles ("Superior
Court") pursuant to California Code of Civil Procedure ss.1281.8. Service
in any such action may be effected by providing process to the other party
in the manner provided in Paragraph 10. The Superior Court in such action
shall apply California substantive law. Each party shall bear its or her
expenses, costs and attorney fees relating to such proceeding and
enforcement of or securing recovery under any order and/or judgment
rendered therein. The parties hereto hereby submit to the exclusive
jurisdiction of the Superior Court for the purpose of securing such
provisional remedies to enforce this Agreement and any and all orders and
judgments rendered pursuant thereto.
18. INDEMNIFICATION: Employer hereby agrees to hold harmless and indemnify
Employee to the fullest extent authorized or permitted by law, as such may
be amended from time to time, from and against all expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably
incurred by her or on her behalf in connection with any proceeding or any
claim, issue or matter, if she acted in good faith and in a manner she
reasonably believed to be in or not opposed to the best interests of
Employer and, with respect to any criminal proceeding, had no reasonable
cause to believe her conduct was unlawful. The benefits afforded hereby
may not be reduced at a subsequent date without the express written
permission of the Employee. Employee shall be entitled to indemnification
if, by reason of her employment, which the parties agree began on November
1, 2007, she is, or is threatened to be made, a party to or participant in
any proceeding brought by a third party, whether brought by or in the
right of Employer, provided however, that, if applicable law so provides,
no indemnification against expenses shall be made in respect of any claim,
issue or matter in such proceeding as to which Employee shall have been
adjudged to be liable to Employer unless and to the extent that the
Superior Court of the State of California, or the court in which such
proceeding shall have been brought or is pending, shall determine that
such indemnification may be made.
19. If the foregoing represents Employee's and Employer's understanding and
agreement and Employee, please sign where set forth below.
National Lampoon, Inc.
By ________________________________
Its: _____________________________
Agreed to and Accepted:
________________________________
Xxxxxxxx Xxxxxxx
Dated: _________________________
