EXECUTIVE COMPENSATION AGREEMENT
THIS AGREEMENT, made as of this 14th day of August 1998, by
AND between Planet Entertainment Corporation, a Florida Corporation, having its
principal place of business at 000 Xxxxx 00 Xxxxx, Xxxxxxxxxx, XX 00000
(hereinafter "Planet" or the "Company") and Xxxx X. Xxxxxx, an individual
residing at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (hereinafter referred to as
"Xxxxxx").
WITNESSETH
WHEREAS, it is deemed in the best interest of the Company that
Xxxxxx to devote a majority of his professional time and energies to the
business of the Company;
WHEREAS, the Company seeks to be assured of the continued
special services of Xxxxxx; and Xxxxxx desires to be so employed; and
WHEREAS, the parties desire to set forth in writing their
prior understanding and agreement with respect to such employment;
NOW THEREFORE,
In consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. POSITION.
The Company hereby employs Xxxxxx as the Company's President
and Chief Executive Officer in accordance with the powers and duties specified
herein, and generally to be responsible for the day to day management of any
executive decisions concerning the operations of the Company, direct and control
its day to day affairs, make necessary decisions commensurate with his positions
in the Company, be responsible for the financial concerns and operations of the
Company and, in general, to exercise his authority for the best long term
interests of the Company and its shareholders.
2. TERM.
Effective as of even date, the employment of Xxxxxx shall be
for a term often (10)
Page 1 of 7
years subject to Xxxxxx'x good faith performance of the powers and duties
outlined in this Agreement.
3. COMPENSATION.
Xxxxxx shall be paid a salary of $125,000 for the first year
of employment hereunder with an annual increase during the following nine years,
of at least 10% per annum, each year. Said compensation will commence on the
effective date of this agreement as set forth in Paragraph 2 above.
4. BONUS.
Xxxxxx shall participate in a management incentive plan
whereby his bonus being 2.5% of all pre-tax profits recorded by the Company in
accordance with Generally Accepted Accounting Principles ("GAAP"), and shall
also be entitled to the greater of 2% of the value of any acquisition made by
the Company, as computed by the purchase price plus the value of any additional
consideration paid by the Company in connection with any such acquisition, or 2%
of the revenue reported by any such acquisition in the preceding fiscal year by
the acquiree. In the case that any portion of such consideration shall consist
of publicly held securities, the market price of these securities shall be used
to determine value, and the value related to any option, warrant or right to
purchase these securities shall be determined by Black-Scholes. In addition,
Xxxxxx shall be entitled to 2.5% of any capital raised for the Company. At the
option of Xxxxxx, any compensation due under this provision may be converted
into the Company's common stock at a conversion price equal to the average
closing bid price for the Company's securities 30 days prior to any such
acquisition or capital funding.
5. ADDITIONAL COMPENSATION.
Nothing herein shall prohibit the Board of Directors from
granting additional compensation to Xxxxxx in the form of employee stock options
and his salary shall be reviewed annually by the Board concerning appropriate
increases and/or to grant appropriate bonuses for his contributions to the
Company and he shall be included in any cash or stock bonus or stock plan hereto
fore or hereinafter adopted by the company. Under no circumstances shall the
compensation be reduced without Xxxxxx'x consent.
Page 2 of 7
6. POWERS AND DUTIES.
Xxxxxx shall be required to devote a substantial portion of
his professional time, attention and energies to the business of the Company and
particularly as it relates to his position as President and Chief Executive
Officer provided, however, that he may be associated with other companies or
business entities which do not compete directly or indirectly with the company
and which activities do not materially interfere with his responsibilities to
the Company. Additionally, he shall assume and perform such other and further
responsibilities and duties as may be assigned to him from time to time by the
Board of Directors.
7. COVENANT OF NON-COMPETITION.
During the period of this Agreement, provided the Company is
not in material default of any of the provisions hereof, Xxxxxx shall not,
directly or indirectly, engage in any activity which may be deemed competitive
or in any way in conflict with the Company's business and activities; nor shall
he engage in or be a member of any partnership or as an officer, director or
employee of any corporation or business entity, which competes directly or
indirectly with the company without the express permission of the Board of
Directors; nor shall he engage in or be actively involved in an other
consultation or advisory agreements, contracts or activities of a professional
or commercial nature, which would compete directly or indirectly with the
Company unless permitted by the Company and its Board of Directors.
8. CONFIDENTIALITY
Xxxxxx shall keep confidential and secret any methods,
formulations, inventions, know-how, sales and marketing techniques and other
information utilized by the Company during the course of his employment.
9. REIMBURSEMENT OF EXPENSES/EMPLOYEE BENEFITS.
During the term of Xxxxxx'x employment hereunder, the Company
shall:
(A) Promptly reimburse Xxxxxx for all reasonable expenses
incurred in connection with the performance of his duties outlined in this
Agreement, inclusive of; but not limited to, travel, long distance telephone
charges, entertainment and administrative and miscellaneous expenses upon
presentation of an itemized list of such expenditures;
(B) Provide health, hospitalization, major medical, dental and
mental health insurance
Page 3 of 7
coverage, including routine visits and reimbursement for all deductible amounts
and/or uninsured expenses, it any, to Xxxxxx and his family or, in lieu thereof
at Xxxxxx'x option, with a medical coverage allowance of $1,000 per month;
(C) Provide disability insurance coverage to Xxxxxx in the
lesser of the maximum premium amount of $3,000 per year or the maximum benefit
amount of $200,000 per year; and
(D) Provide Xxxxxx with a Company car to be leased at a cost,
including all maintenance charges, of no more than $1,250 per month or, at
Xxxxxx'x option, with a car allowance of $1,250 per month.
10. TERMINATION.
The Company shall have the right at any time, upon not less
than sixty (60) days written notice to Xxxxxx, to terminate the employment of
Xxxxxx for "Cause." For purposes of this agreement "Cause" shall mean Xxxxxx'x
conviction for a crime of dishonesty, or his failure or refusal in a material
and continuing manner to perform his obligations as set forth in this agreement,
or his material breach of any provision of this Agreement, for a period of more
than twenty (20) days after receipt of written notice from the Company
specifying the failure or breach, requesting that it be cured and Xxxxxx'x
failure to cure the same or to be diligently exerting his best efforts to cure
the same. "Cause" shall not include the inability of Xxxxxx to perform his
obligations hereunder due to mental or physical impairment, or external
circumstances of the market place, governmental regulations or policies or
adverse domestic or world conditions adversely effecting the Company's business.
It is agreed that the Company shall not discharge or terminate the services of
Xxxxxx unless there is a material breach of this Agreement supported by a good
faith resolution of the Board of Directors based upon an opinion of Counsel to
the Company specifying in detail the basis for said termination. In the event of
termination for cause, Xx. Xxxxxx shall receive his salary and bonus, per 4.
above, and other benefits for two (2) years from the date of discharge.
11. TERMINATION WITHOUT CAUSE.
The Company may terminate Xxxxxx on ninety (90) days written
notice subject to the conditions set forth hereunder. In the event Xxxxxx is
terminated without cause or his continued employment would require him to
relocate to an office in excess of fifty (50) miles from the Company's present
offices and he chooses not to relocate, then the Company, at Xxxxxx' option
shall
Page 4 of 7
pay Xxxxxx twice his salary and bonus for the prior twelve months times the
remaining number of years of this agreement.
12. VACATION.
Xxxxxx shall be entitled to a four (4) weeks paid vacation per
year during the term of this Agreement, which shall be taken at such time as is
convenient to the Company and Xxxxxx. Any and all unused vacation may be carried
over to The succeeding year(s).
13. LIFE INSURANCE.
The Company shall pay premiums for the purchase key man life
insurance on the life of Xxxxxx in the maximum amount of $3,000 per year, the
first $500,000, of any benefit from which shall be payable to the Company with
the balance to be paid to a beneficiary to be designated by Xxxxxx. Xxxxxx shall
have the right increase the benefit amount, at his cost and expense for any
additional premium, and designate a beneficiary for said additional benefit.
14. DIRECTOR'S AND OFFICER'S INSURANCE.
Simultaneously with the execution of this Agreement, the
Company shall secure directors and officers liability insurance with coverages
and monetary amounts of protection mutually agreed upon by the Company and
Xxxxxx not to be less than $1 million.
15. STOCK OPTION.
Xxxxxx shall have the right to participate in the Company's
non-qualified stock option plan, or any subsequent stock option plan adopted by
the Company.
16. STOCK SPLITS AND DIVIDENDS.
Should the stock of the company split or a stock dividend be
paid for any reason during the term of this Agreement, any unexercised stock
option or warrant, or portion thereof; shall be deemed to be subject to the
terms of the stock split or purchase the equivalent number of shares covered by
the split as if he had previously owned or received his option prior to the
stock split.
17. CHANGE OF CONTROL. In the event of a change in control,
Xxxxxx may, at his option resign from the Company, but in any event shall be
entitled to all amounts due and owing under this Agreement for the term, which
shall be accelerate and shall be due within 10 days of any change in control. A
change of control shall be deemed to have occurred in the event of a sale or
merger of the Company to a non-affiliated third party to which Xxxxxx does not
consent; or a change
Page 5 of 7
in the make up of a majority of the members of the Board of Directors to which
Xxxxxx does not consent.
18. NOTICES.
All notices and other communications required hereunder shall
be in writing and shall be deemed to have been duly given if delivered or mailed
(registered or certified mail, postage prepaid, return receipt requested), if to
Xxxxxx, to his residence, and if to the Company to its principal office.
19. WAIVER.
No waiver of any provision of this Agreement shall be deemed
or shall constitute a waiver of any other provision. No waiver shall be
effective unless executed in writing by the parties hereto.
20. LAW GOVERNING.
This Agreement shall be construed and governed in accordance
with the laws of the State of New Jersey.
21. INDEMNIFICATION.
The Company hereby agrees to defend, indemnify and hold
harmless Xxxxxx in connection with any legal action or administrative proceeding
filed against him as a result of any act or omission performed during the course
and scope of his employment, except as may be contrary or prohibited as a matter
of public policy and the laws of the State of Florida.
22. LEGAL EXPENSES.
Any legal expenses incurred by Xxxxxx in connection with his
employment, this agreement and the indemnity provisions contained herein shall
be borne by the Company.
23. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the
parties and may not be modified, amended or supplemented, except by the written
agreement of the parties hereto.
24. SEVERABILITY
If any provision of this Agreement shall be determined to be
void, unenforceable, or against public policy, that provision shall be stricken
and this Agreement shall be construed as if the objectionable provision did not
exist.
Page 6 of 7
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE executed this
Agreement the day and year first above written.
PLANET ENTERTAINMENT CORPORATION
BY: /s/ Xxxxxx Xxxxxxx
----------------------------
NAME:
TITLE: Exec. VP & Director
DATE: 8/14/98
XXXX X. XXXXXX
By: /s/ Xxxx X. Xxxxxx
----------------------------
DATE: 8/14/98
BE IT RESOLVED that at a duly constituted meeting of the Board
of Directors of Planet Entertainment Corporation, the foregoing Agreement was
accepted and ratified, and was authorized to be entered into by the Company.
BY: /s/ Xxxxxxx Xxxxxx
----------------------------
Page 7 of 7
RESOLUTION OF THE BOARD OF DIRECTORS
PLANET ENTERTAINMENT CORPORATION
BE IT RESOLVED that on August 14, 1998, notice having been
given telephonically of a meeting of the Board of Directors on august 14, 1998,
and a quorum of Directors physically being present at said meeting, it was fully
resolved by a majority of those Directors present and voting that the executive
Compensation Agreement between the Company and Xxxx X. Xxxxxx was accepted and
ratified, and approved.
BY: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Chairman, Secretary
BY: ABSTAIN
----------------------------
Xxxx X. Xxxxxx
President, CEO
BY: /s/ Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
Director
BY:
----------------------------
Xxxxxxx Xxxxxxxxx
Director