EMPLOYMENT AGREEMENT
THIS AGREEMENT is made March 23, 2001, and is effective as of January 1,
2000, (the "Effective Date"), by and between TEAM COMMUNICATIONS GROUP, INC., a
California corporation (herein referred to as the "Company"), and you, Xxxx X.
Xxxxx.
In consideration of the mutual covenants, terms and conditions set forth
herein, you and the Company agree as follows:
1. The Company hereby employs you pursuant and subject to the terms,
conditions and provisions of this Agreement. You hereby accept such employment
and agree to render your services to the Company as provided herein, where and
when required by the Company (presently in Los Angeles, California), all of
which services shall be performed conscientiously and to the full extent of your
ability. You further agree to abide by all rules, regulations and policies of
the Company.
2. Your title and position with the Company shall be Senior Vice
President, General Counsel.
3. You shall report to the Company's chief executive officer, currently
Xxxxxxx X. Xxxxxxx and president, currently Xxx X. Xxxxxxx. Any conflict between
divisions of responsibility between you and any other employee shall be resolved
by the chief executive officer.
4. The services to be rendered by you hereunder shall include, without
limitation, all services customarily rendered by persons engaged in the same
capacity or in a similar capacity in the entertainment industry, and such other
services as may be requested by the Company from time to time hereunder.
5. The Term of your employment by the Company under this Agreement shall
commence as of the Effective Date and (unless earlier terminated pursuant to
this Agreement) shall continue thereafter through December 31, 2003 (the
"Term"). The Company shall thereafter have an option to renew this agreement for
an additional two (2) years, through December 31, 2005 (the"Renewal Term").
6. (a) As full consideration for all services to be rendered by you
pursuant hereto, and for all rights and interests herein granted by you to the
Company, and provided that you are not in breach or default of this Agreement
and that you have kept and performed all of your obligations hereunder, and
subject to the terms and conditions hereof, you shall be entitled to receive a
base salary in an amount equal to Two Hundred Sixty Thousand Dollars ($260,000)
commencing on the Effective Date and continuing through December 31, 2001.
Commencing January 1, 2001 and continuing through December 31, 2002, you shall
be entitled to receive a base salary in an amount equal to Two Hundred Seventy
Five Thousand Dollars ($275,000). Commencing January 1, 2003 and continuing
through the end of the Term, you shall be entitled to receive a base salary in
an amount equal to Three Hundred Thousand Dollars ($300,000). In the event that
the Company elects to exercise its option and extend your services for the
Renewal Term, your base salary shall increase by five per cent (5%) cumulatively
per year for each year of the Renewal Term.
(b) Such compensation shall be paid in accordance with the Company's
normal payroll practices. The Company may make such deductions, withholdings or
payments from any sum payable to you pursuant to this Agreement as are required
by any applicable law, rule or regulation for taxes or similar charges.
Compensation payments made to you by the Company or
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any affiliate of the Company shall be deemed made pursuant to this Agreement and
any compensation paid to you from and after the Effective Date of this Agreement
shall be deemed to have been paid hereunder.
7. In addition to the base salary set forth in Paragraph 6, and any stock
options previously granted prior to the date of this agreement, as of March 23,
2001 you shall be granted 200,000 options to purchase shares of the Company's
common stock at an exercise price of $0.81 per share. Such options shall vest as
follows:
50,000 as of March 23, 2001
50,000 as of December 31, 2001
50,000 as of December 31, 2002
50,000 as of December 31, 2003
Such options shall have a five (5) year term commencing on the date of
grant and shall be subject in all respects to the Team Communications Stock
Option Plan.
8. Upon a sale of all or substantially all of the Company, or upon a
"Change of Control" as defined below, Executive shall receive a further one time
payment equal to one per cent (1%) of the "Net Appreciation." For purposes of
this Agreement, "Net Appreciation" shall mean the difference between (i) the
total purchase price consideration received by the Company (or its shareholders)
in a sale or, in the event of a "Change of Control", the market value of the
Company, determined by reference to its closing bid or ask price on the date the
Change of Control occurs and (ii) the closing market value as of March 23, 2001.
(a) For purposes of this Agreement, a "Change of Control" shall be
deemed to occur :
(i) upon a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of regulation
14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then
subject to such reporting requirement;
(ii) Any "person" (as such term is defined in Section 3(a)(9) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Exchange Act) directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding
securities;
(iii) during any period of two (2) consecutive years (the "Period"),
individuals who at the beginning of the Period constitute the Board,
including for this purpose any new director whose election or
nomination for election by the Company's shareholders was approved
by a vote of at least two thirds of the directors then still in
office who were directors at the beginning of the Period (or whose
election or nomination was similarly approved by the Board), cease
for any reason to constitute a majority thereof;
(iv) the sale or other disposition of all or substantially all of
the assets of the Company; or
(v) the merger of the Company with any other corporation or other
entity if shareholders of the Company prior to the effective date of
the merger own, immediately following the merger, less than seventy
five per cent of the combined voting power of the surviving
corporation or other entity excluding from such ownership any voting
securities not received in exchange for or in respect of voting
securities of the Company.
(b) In the event that Executive leaves the employ of the Company
either due to the
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expiration of this Agreement, death, disability, or a termination without cause,
in the event of a subsequent sale of all, or substantially all of the Company,
or upon a Change of Control, which sale or Change of Control is either publicly
announced or contracted for during the twelve (12) months after such leaving,
Company shall pay Executive at the time of the closing of such sale or Change of
Control (or of the closing of a subsequent sale or Change of Control which
occurs at a later date but obviates the initial such sale or Change of Control,
e.g., if a higher bid upsets an earlier agreed upon or announced transaction)
one percent (1%) of the Net Appreciation.
9. You represent and warrant that you are free to enter into the Agreement
and to grant the rights and interests to the Company that you purport to grant
thereunder and that there are no agreements or arrangements in effect, whether
written or oral, which could prevent you from rendering services to the Company
during the Term.
10. On the condition that you are not in breach or default of the
Agreement, the Company shall reimburse you for all of your reasonable expenses
incurred while employed and performing your duties under and in accordance with
the terms and conditions of the Agreement, subject to your full accounting
therefor and your providing the Company with appropriate documentation,
including without limitation receipts, for all such expenses in the manner
required pursuant to Company's policies and procedures and the Internal Revenue
Code, and subject to the Company's prior approval. Furthermore, for the period
January 1, 2001 through December 31, 2001, the Company will provide you a
monthly automobile allowance of Seven Hundred Fifty Dollars ($750) or an annual
amount of Nine Thousand Dollars ($9,000). From January 1, 2002 through December
31, 2002, this amount will increase to Eight Hundred Fifty Dollars ($850.00) per
month or an annual amount of Ten Thousand Two Hundred Dollars ($10,200). From
January 1, 2003 through December 31, 2003, this amount will increase to One
Thousand Dollars ($1000.00) per month or an annual amount of Twelve Thousand
Dollars ($12,000). This allowance will be considered additional compensation and
shall be paid along with your base compensation in accordance with the Company's
normal payroll practices.
11. (a) In the event that (i) you become incapacitated or prevented from
fully rendering your services hereunder by reason of your illness, mental,
physical or other disability, and such incapacity or inability shall continue
for sixty (60) consecutive days during any period of the Term; or (ii) the
Company's normal operations are prevented or interrupted because of force
majeure events or any other cause beyond the Company's sole control (e.g., any
labor dispute, strike, fire, war, civil disturbance, act of God, governmental
action or proceeding or any event sufficient to excuse performance as a matter
of law), and such prevention or interruption shall continue for sixty (60)
consecutive days during any period of the Term; then the Company shall have the
right to terminate your employment under the Agreement immediately upon the
expiration of said six (6)-week period without any further liability or
obligation to you hereunder except for any accrued compensation payable to you
as of the date of such termination (such a termination herein referred to as a
termination "For Disability or Force Majeure").
(b) In the event you, at any time, materially breach any provision
of the Agreement, fail, refuse or neglect (other than by reason of any
above-referenced disability or incapacity) to reasonably perform fully your
obligations hereunder, or engage or participate in any egregious willful
misconduct in connection with any of your obligations under the Agreement, the
Company shall have the right to terminate your employment under the Agreement at
any time thereafter (such a termination herein referred to as a termination "For
Cause"). In the event of any termination For Cause, you shall be entitled to
receive only accrued compensation payable to you as of the date of such
termination, without regard to any other compensation, benefits or perquisites.
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(c) In addition to the right to terminate For Cause or For
Disability or Force Majeure, the Company shall have the right to terminate your
employment under the Agreement at any time for any reason, upon thirty (30)
days' notice to you (such a termination herein referred to as a termination
"Without Cause"); provided, however, that if termination of your employment is a
termination Without Cause, you shall continue to be entitled to your base annual
compensation under Paragraph 6 of the Agreement until the end of the Term.
(d) Any termination under this Paragraph 11 shall not be deemed to
be a waiver by the Company of any of the Company's rights or remedies otherwise
available to the Company hereunder, at law, in equity or otherwise.
12. You shall not enter into any contracts or make any commitments on
behalf of the Company outside of the ordinary course of your duties and services
in the ordinary course of the Company's business nor for an amount in excess of
such limits as may be specified by the Company without the prior written
approval and consent of the Company in accordance with the standard practices
and operating procedures thereof.
13. During the Term hereof you shall be entitled to:
(a) The Company's basic health and life insurance benefits generally
available to other senior executives of the Company, including any applicable
major medical insurance benefits for you and your immediate family, subject to
compliance with provisions relating to eligibility or qualification; and
(b) During the term of this of this agreement four (4) weeks per
year of vacation with pay and normal and customary holidays in accordance with
the Company's policy for vacations and holidays for senior executives of the
Company.
(c) To participate in any Company retirement or similar benefit plan
available to Company's senior executives, including, without limitation, the
Company's 401(k), or XXX plan, subject to all terms and conditions of any such
plan.
(d) A reserved parking space and an unshared assistant/secretary
For the purpose of determining your length of service with the Company with
respect to the applicable provisions of any benefit to which you may be entitled
hereunder (except with respect to stock options and the vesting provisions
thereof), such determination shall include your previous term of service to the
Company from March 1, 1995 through the date of this Agreement.
14. The Company may secure in its own name or otherwise, and at its own
expense, life, health, accident and other insurance covering you or you and
others, and you shall not have any right, title or interest in or to such
insurance other than as expressly provided herein. You agree to assist the
Company in procuring such insurance by submitting to the usual and customary
medical and other examinations to be conducted by such physician(s) as the
Company or such insurance company may designate and by signing such applications
and other written instruments as may be required by the insurance companies to
which application is made for such insurance.
15. During the Term, you shall not directly compete or materially
interfere with the actual or contemplated businesses or activities of the
Company. In this regard, during the Term, you shall not, without the prior
written consent of the Company which consent shall not be unreasonably
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withheld, become an officer or employee of any other business enterprise engaged
in any of the actual business or activities of the Company.
16. Other than as required by the public disclosure obligations of the
Company, or to your attorneys or accountants, you agree that you will not,
during the Term or thereafter, disclose to any other person or entity the terms
or conditions of the Agreement (including the financial terms thereof) and shall
not directly or indirectly issue or permit the issuance of any publicity
whatsoever regarding, or grant any interview or make any statements concerning,
the Company's engagement of you hereunder without the prior written consent of
the Company.
17. The primary place of your employment under the Agreement shall be the
Los Angeles Metropolitan Area. You shall make such trips away from the County of
Los Angeles as requested by the Company or as may be required for the conduct of
your duties under the Agreement. Any air travel shall be business class if
available, and if in excess of five (5) hours duration shall be first class.
18. The Company hereby represents and warrants that it has obtained all
approvals necessary to enter into this Agreement.
19. The Agreement shall be governed by, and construed in accordance with,
the laws of the State of California applicable to contracts entered into and
fully performed therein.
20. The Company shall have the right to assign or otherwise delegate the
Agreement or any of its rights or obligations thereunder, in whole or in part,
to any person or entity. Without limiting the generality of the foregoing, the
Company shall have the right to license, delegate, lend or otherwise transfer
any of its rights to any or all of your services under the Agreement to any
person, company or other entity controlling, controlled by, or under common
control with the Company, and you agree to render such services required under
the Agreement for such person, company or other entity as part of the services
to be rendered under the Agreement for no additional compensation other than as
provided for in this Agreement. You shall not have any right to assign, delegate
or otherwise transfer any duty or obligation to be performed by you hereunder to
any person or entity, nor to assign or transfer any rights hereunder.
21. All notices which either party is required or may desire to give to
the other party under or in connection with the Agreement shall be sufficient if
given by addressing the same to the respective party at the address set forth
below or at such other place as may be designated by the respective party:
To Company: Team Communications Group, Inc.
00000 Xxxxxxxx Xxxxxxxxx 0xx xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
To You: Xxxx X. Xxxxx
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx XX 00000
When notices addressed as required by this Paragraph 21 shall be hand delivered,
telexed, or deposited, postage prepaid, registered or certified mail, in the
United States mail, or delivered to a telegraph office, toll prepaid, the
Company or you, as appropriate, shall be deemed to have delivered such notice.
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22. You agree to execute and deliver to the Company such further documents
and instruments as the Company may desire to further evidence, effectuate or
protect the Company's rights hereunder. The Agreement may be modified only by a
written instrument duly executed by each of the parties thereto. No person has
any authority on behalf of the Company to make any representation or promise not
set forth in the Agreement, and you hereby represent and warrant that the
Agreement has not been executed in reliance upon any representation or promise
except those contained therein. No waiver by the Company of any default or other
breach of the Agreement shall be deemed to be a waiver of any preceding or
succeeding breach or default.
23. This Agreement supersedes all prior or contemporaneous agreements,
whether oral or written, between the parties hereto concerning the subject
matter hereof, and constitutes the valid, binding and entire agreement between
the parties with respect thereto, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
TEAM COMMUNICATIONS GROUP, INC.
By /s/ Xxx X. Xxxxxxx
------------------------------------------
Xxx X. Xxxxxxx
President and Chief Administrative Officer
ACCEPTED AND AGREED TO:
/s/ Xxxx X. Xxxxx .
----------------------
Xxxx X. Xxxxx
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