EXHIBIT 10.15
EMPLOYMENT AGREEMENT
AGREEMENT by and between Golden Books Family Entertainment, Inc. (the
"Company"), and Xxxxx Xxxxxxxxxxx (the "Executive"), effective as of September
9, 19996 (the "Effective Date").
1. EMPLOYMENT TERM. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to enter the employ of the Company, commencing on
the Effective Date and continuing for a three-year term from such Effective
Date, unless terminated earlier in accordance with Section 4 below.
2. TITLE, REPORTING AND DUTIES.
(a) Commencing on the Effective Date and for the remainder of the
Employment Term, the Executive shall serve as the Company's Executive Vice
President and Chief Financial Officer, with such duties, responsibilities
and authority in both capacities as shall be consistent therewith. The
Executive shall be based in New York City.
(b) During the Employment Term, and excluding any periods of vacation,
holiday and sick leave to which the Executive is entitled, the Executive
agrees to devote full time during normal business hours to the business and
affairs of the Company and to use the Executive's best efforts to perform
faithfully and efficiently such responsibilities.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During the Employment Term, the Executive shall
receive an annual base salary ("Annual Base Salary") of $300,000 for each
year of the term. The Annual Base Salary will be reviewed by the Company's
Compensation Committee at the end of each year of the term and may be
adjusted at the discretion of the Compensation Committee. The Annual Base
Salary shall be paid in equal biweekly installments.
(b) ANNUAL BONUS. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year during the Employment Term, an
annual bonus (the "Annual Bonus") pursuant to the Company's annual
incentive plans (the "Annual Plans"), pro rated in the case of a bonus for
any year during which the Executive was employed for less than 12 months.
The Executive shall have a target annual bonus of 100% of his Annual Base
Salary (the "Target Bonus"), subject in each case to attainment of the
performance goals set forth in the Annual Plans. Each such Annual Bonus
shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such Annual Bonus.
Notwithstanding the above, it is the intent of the parties hereto that the
Annual Plans meet all applicable requirements for the exemption of the
payments thereunder from the limitations of Section 162(m) of the Internal
Revenue Code of 1986, as amended, including the requirement that the Annual
Plans be approved by the shareholders of the Company prior to the payment
of any bonuses thereunder
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The Board may award the Executive bonuses other than pursuant to the Annual
Plans in its discretion.
(c) STOCK OPTIONS. The Executive will be granted, as of the Effective
date hereof, a stock option (the "Option") to purchase 1% of the Company's
fully-diluted restructured common stock ("Stock") in the form of "at the
money" stock options with an exercise price based upon the total equity
value of the Company (as set forth in the Disclosure Statement for the
Plan). Executive acknowledges that certain action will need to be taken by
the Board of Directors and the Compensation Committee to effectuate such
Option grant. The Option will become exercisable as to one-third of the
shares of Stock subject thereto on the first anniversary of the date of
grant, as to an additional one-third of such shares on the second
anniversary of the date of grant, and as to an additional one-third of such
shares on the third anniversary of the date of grant. The Option will have
a term of seven years (the "Option Term"). Upon the termination of
Executive's employment:
(1) by reason of death, the Executive's estate may exercise the
Option (to the extent exercisable at the time of death) until the
earliest of one year following the Executive's death or the end of the
Option Term, following which time the Option shall terminate and be no
longer exercisable;
(2) by the Company for "Cause" or by the Executive voluntarily
without "Good Reason" (as each term is defined in Section 4 below),
the Option shall terminate and no longer be exercisable on the date
the Executive is advised by the Board that he is being terminated for
cause, or the effective date of the Executive's voluntary termination
without good reason, as applicable; or
(3) by the Company without Cause or by the Executive with Good
Reason, the entire Option shall become fully and immediately
exercisable and the Executive may exercise the Option until the
earliest of one year following the Executive's termination or the end
of the Option Term, following which time the Option shall terminate
and be no longer exercisable.
The Executive shall be entitled to participate in other Company
stock option grants or other equity plans or programs, if any, in
which senior executives of the Company are eligible to participate
generally as may be determined by the Compensation Committee.
Other than as stated above, the Option will be governed by the
terms and conditions of the Company's Stock Option Plan and the
standard Stock Option Agreement thereunder to be executed by the
Executive and the Company.
(d) INCENTIVE, SAVINGS, RETIREMENT AND EQUITY PLANS. During the
Employment Period, the Executive shall be eligible to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other senior executives of the Company and its
affiliated companies, provided that after a Change of
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Control in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect
to both regular and special incentive opportunities, to the extent, if any,
that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than
the most favorable of those provided by the Company and its affiliated
companies for the Executive under such plans, practices, policies and
programs as in effect at any time during the 120-day period immediately
preceding a Change of Control. In addition, the Executive may participate
in other equity plans and share in future grants to management employees of
stock options contemplated to be granted at or about the Effective Date to
management employees.
(e) WELFARE BENEFIT PLANS. During the Employment Term, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee term life, group life,
accidental death and travel accident insurance plans and programs, if any)
that are applicable generally to other senior executives of the Company and
its affiliated companies. It is acknowledged that the Executive's level of
participation in these plans shall be consistent with an executive of his
stature in the Company's industry.
(f) EXPENSES. During the Employment Term, the Company shall pay or
promptly reimburse the Executive for all reasonable business expenses upon
presentation of receipts therefor in accordance with the normal practices
of the Company. It is acknowledged that the Executive will incur expenses
consistent with an executive of his stature in the Company's industry.
(g) FRINGE BENEFITS. During the Employment Term, the Executive shall
be entitled to fringe benefits appropriate to an executive of Executive's
stature in the Company's industry. Additionally, the Company shall pay the
Executive's reasonable legal fees for preparation and review of this
Employment Agreement, and shall reimburse the Executive, up to $7,500.00
per year, for personal tax and legal counsel in connection with the Company
stock option plan.
(h) VACATION AND HOLIDAYS. During the Employment Term, the Executive
shall be entitled to four weeks of paid vacation per year and all other
paid holidays given to employees of the Company.
4. TERMINATION OF EMPLOYMENT.
(a) CAUSE. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean: (i) the conviction of, or pleading guilty to, a felony or crime
involving moral turpitude, or (ii) the failure of the Executive to perform,
in any material respect, his obligations under this Agreement after a
written demand for such performance is delivered to the Executive
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by the Board, which specifically identifies the manner in which the Board
or Chief Executive Officer believes that the Executive has not performed
the Executive's duties; or (iii) a disability that prohibits the Executive
from substantially meeting his responsibilities as a senior executive of
the Company on a full-time basis for 90 out of 120 consecutive business
days.
(b) GOOD REASON. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in each case, without the Executive's prior written consent:
(i) the assignment to the Executive of any duties materially
inconsistent with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose any action not taken in bad faith and which is remedied by the
Company within twenty (20) days after receipt of notice thereof given
by the Executive;
(ii) any failure by the Company, in any material respect, to
comply with any of the compensation and benefits provisions of Section
3 of this Agreement, other than failure not occurring in bad faith and
which is remedied by the Company within twenty (20) days after receipt
of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location outside New York City;
(iv) any failure by the Company to comply with and satisfy any
covenant or agreement contained in this Agreement, excluding for this
purpose any failure or omission not occurring in bad faith or any
action not taken in bad faith and which is remedied by the Company
within twenty (20) days after receipt of notice thereof given by the
Executive; or
(v) the Company's termination of the Executive's employment
within two years of a "Change of Control." A "Change of Control," for
purposes of this Agreement, shall be deemed to have occurred if (i)
any "person (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than the Company, an employee benefit plan of the Company, or
any of the Company's direct or indirect affiliates (hereinafter, a
"THIRD PARTY"), 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 fifty percent
(50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote in the election of directors
of the Company or (ii) all or substantially all of the assets of the
Company are acquired by a Third Party.
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(c) DEATH. The Executive's employment shall terminate automatically
upon the Executive's death during the Employment Period.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
10(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after
the giving of such notice). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be (although such Date
of Termination shall retroactively cease to apply if the circumstances
providing the basis of termination for Cause or Good Reason are cured in
accordance with Section 4(a) or 4(b) of this Agreement, respectively), (ii)
if the Executive's employment is terminated by the Company other than for
Cause, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death, the Date of Termination shall
be the date of death of the Executive.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) GOOD REASON: OTHER THAN FOR CAUSE. If, during the Employment Term,
the Company shall terminate the Executive's employment other than for Cause
or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive the aggregate of the
following amounts:
A. the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid, and
(2) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1) and (2)
shall be hereinafter referred to as the "Accrued
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Obligations"). All Accrued Obligations shall be paid in a lump
sum in cash within 30 days of the Date of Termination; and
B. the Executive's Annual Base Salary as set forth in
Section 3(a) for the year in which the Date of Termination falls,
to be paid either (1) in a lump sum, if approved by the Board, 30
days after the Date of Termination, or (2) as salary continuation
for a period of one year following the Date of Termination,
except that, in the event of a "Change of Control" termination,
as defined in Section 4(b)(v) herein, the Executive shall be paid
two times his Annual Base Salary in a lump sum or as a two-year
salary continuation. The Executive shall have no duty or
obligation to mitigate, and such salary continuation payments
will continue even in the event the Executive becomes reemployed
by another employer.
(ii) all stock options, restricted stock and other stock-based
compensation shall become exercisable or vested pursuant to Section
3(c)(3) herein;
(iii) for one year after the Executive's Date of Termination (or
for two years in the event of a "Change of Control" termination, as
defined in Section 4(b)(v) herein), the Company shall continue
benefits to the Executive and/or the Executive's family at least equal
to those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section 3(e) of
this Agreement if the Executive's employment had not been terminated,
provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the corresponding
medical and other welfare benefits described herein shall be
terminated. Those welfare benefits not offered by the new employer
shall continue until termination of the abovedescribed one or two year
period. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the
later of two years after the Date of Termination or the end of the
Employment Term and to have retired on the last day of such period;
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided to the Executive or which the
Executive is entitled to receive under any plan, program, policy or
practice or contract or agreement of the Company and its affiliated
companies, to the extent payment of any such amounts or benefits are
not already provided for under this Agreement (such other amounts and
benefits shall be hereinafter referred to as the "Other Benefits").
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The Executive shall have the right to approve, such approval not be
unreasonably withheld by the Company, any written announcement, if any, of the
termination of the Executive's employment with the Company.
(a) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations, the right to exercise the Executive's Stock Option under
Section 3(c)(1) herein, and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the
Date of Termination.
(b) CAUSE: OTHER THAN FOR GOOD REASON. If, during the Employment Term,
the Executive's employment shall be terminated by the Company for Cause or
by the Executive without Good Reason, this Agreement shall terminate
without further obligations to the Executive other than the payment of
Accrued Obligations, and the payment or provision of Other Benefits. All
Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination. Upon a termination of the
Executive's employment for Cause by the Company or by the Executive without
Good Reason, the Executive shall forfeit all stock options that are not
vested on the Date of Termination. If the Executive's employment is
terminated for Cause, nothing in this Agreement shall prevent the Company
from pursuing any other available remedies against the Executive.
6. CHANGE IN CONTROL. Upon the occurrence of a Change in Control of the
Company during the Employment Period, all stock options, restricted stock and
other stock-based compensation shall become immediately exercisable or vested,
as the case may be.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
8. FULL SETTLEMENT. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others.
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9. CONFIDENTIAL INFORMATION; NON-SOLICITATION.
(a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by
acts by the Executive or representatives of the Executive in violation of
this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 8 constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
(b) For a period of one year following the termination of the
Executive's employment for any reason, the Executive shall not, directly or
indirectly, (i) employ or seek to employ any person who is at the Date of
Termination, or was at any time within the six-month period preceding the
Date of Termination, an employee of the Company or any of its subsidiaries
or affiliates or otherwise cause or induce any employee of the Company or
any of its subsidiaries or affiliates to terminate such employee's
employment with the Company or such subsidiary or affiliate for the
employment of another company (included for this purpose the contracting
with any person who was an independent contractor of the Company during
such period) or (ii) solicit any customers of the Company to purchase
products or services then sold by the Company from another person or entity
without, in either case, the prior written consent of the Company's Board
of Directors.
10. SUCCESSORS.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's executors, successors and legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly in writing and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if
no such succession had taken place. Failure to do so shall constitute good
reason for the Executive to terminate his employment. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
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successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Xx. Xxxxx Xxxxxxxxxxx
000 Xxxx 00xx Xxxxxx
Apartment 3902
Xxx Xxxx, Xxx Xxxx 00000
WITH A COPY TO:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
IF TO THE COMPANY:
Golden Books Family Entertainment, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
WITH A COPY TO:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
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or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 4 (b)
of this Agreement, shall not be deemed to be a waiver of such provision or
right or any other provision or right of this Agreement.
(f) This Agreement supersedes and replaces in its entirety the
Employment Agreement, dated as of September 9, 1996, between the Executive
and the Company.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
XXXXX XXXXXXXXXXX
/S/ XXXXX XXXXXXXXXXX
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GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
By: /S/
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Name:
Title:
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