Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
effective as of December 31, 2001 ("Effective Date"), by and between Xxxxxx
XxXxxxx Hay ("Executive"), currently residing in La Quinta, CA, and Thane
International, Inc., a Delaware corporation, with offices in La Quinta,
California ("Corporation").
WHEREAS, the Executive and the Corporation entered into an employment contract
effective June 10, 1999, (the "1999 Contract") pursuant to which the Executive
was entitled to certain compensation and benefits;
WHEREAS, the parties intend that the execution and delivery of this Agreement,
as a new contract to completely supersede the 1999 Contract; and
WHEREAS, the Corporation desires to continue to employ the Executive in the
capacity hereinafter stated, and the Executive desires to enter into the employ
of the Corporation in such capacity for the period and on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby covenanted and agreed by the Corporation and the
Executive as follows:
1. Employment Period. The Corporation hereby agrees to continue to employ the
Executive as its Chief Creative Officer ("CCO") and the Executive, in such
capacities, agrees to provide services to the Corporation for the period
beginning on the Effective Date (the "Commencement Date"), and ending on the
third anniversary of the Commencement Date (the "Employment Period").
2. Position and Duties.
The Corporation does hereby employ Executive and Executive hereby
accepts such employment and shall devote her full time energies and talents
exclusively to serving as CCO in the best interest of the Corporation and upon
the terms and provisions set forth in this Agreement. Subject to direction from
the Board of Directors, Executive shall have full authority over all Corporation
creative activities and shall carry out and perform all orders, directions, and
policies stated to her by the Board of Directors periodically, either orally or
in writing. Executive shall carry out the duties assigned to her in a
trustworthy, businesslike, and loyal manner. Without the Board's consent (not to
be unreasonably withheld), Executive shall not: (i) serve as or be a consultant
to or employee, officer, agent or director of any corporation, partnership or
other entity other than the Corporation (other than civic, charitable or other
public service organizations); or (ii) have more than three percent (3%)
ownership interest in any enterprise other than the Corporation if such
ownership interest in any enterprise other than the Corporation would have a
material effect upon the ability of the Executive to perform her duties
hereunder.
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3. Compensation.
(a) She shall receive, for each 12-consecutive month period beginning
on January 1, 2002 and each anniversary thereof, a rate of salary that is not
less than $425,000 per year, payable in substantially equal monthly or more
frequent installments and subject to normal tax withholding. During the
Employment Period the Executive's salary rate shall be reviewed by the Board on
or before each anniversary of the Commencement Date to determine whether an
increase in her rate of compensation is appropriate, but shall at a minimum be
increased 5% per annum.
(b) She shall be eligible to receive incentive compensation payments
as determined by the Board of Directors.
(c) She shall be reimbursed by the Corporation, consistent with past
practices , for health insurance coverage provided through the Screen Actors
Guild and shall receive the following benefits on substantially the same terms
and conditions as other similarly situated executives of the Corporation:
long-term disability, thrift, pension, vacation, and sick days.
(d) She shall be reimbursed by the Corporations for all reasonable
business, promotional, travel and entertainment expenses incurred or paid by her
during the employment period in the performance of her services under this
Agreement provided that the Executive furnishes to the Corporations appropriate
documentation in a timely fashion required by the Internal Revenue Code in
connection with such expenses and shall furnish such other documentation and
accounting as the Corporations may from time to time reasonably request.
(e) She shall be entitled to receive the perquisites set forth on
Exhibit A hereto.
4. Compensation Due Upon Termination. Except as otherwise provided under the
executive benefit plans maintained by the Corporation in which the Executive
participates in accordance with subparagraph 3(c), the Executive's right to
compensation for periods after the date her employment with the Corporation
terminates shall be determined in accordance with the following:
(a) Discharge Without Cause. In the event the Corporation terminates
the Executive's employment under this Agreement without cause (as defined in
subparagraph 4(c)), the Executive shall be entitled to receive:
(i) all payment of her salary (as of the date of termination) in
accordance with the provisions of subparagraph 3(a) for the lesser of (a) twelve
months or (b) the remainder of the Employment Period; and
(ii) payment of any incentive compensation payments that
otherwise would have been payable to the Executive under subparagraph 3(b)
through the date her employment with the Corporation terminates.
(iii) Section 6 shall terminate on the date that the Executive no
longer receives compensation from the Corporation pursuant to subparagraph
4(a)(i).
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(b) Voluntary Resignation. The Corporation shall have no obligation to
make payments to the Executive in accordance with the provisions of paragraph 3
for periods after the date on which the Executive's employment with the
Corporation terminates due to the Executive's voluntary resig nation.
(c) Discharge for Cause. The Corporation shall have no obligation to
make payments to the Executive in accordance with the provisions of paragraph 3
for periods after the Executive's employment with the Corporation is terminated
on account of the Executive's discharge for cause. For purposes of this
subparagraph 4(c), the Executive shall be considered discharged for "cause" if
she is discharged by the Corporation on account of the occurrence of one or more
of the following events:
(i) the Executive becomes habitually addicted to drugs or
alcohol;
(ii) the Executive discloses confidential information in
violation of paragraph 5;
(iii) the Executive engages in competition in violation of
paragraph 6;
(iv) the Corporation is directed by regulatory or governmental
authorities to terminate the employment of the Executive;
(v) the Executive is indicted of a felony crime (other than a
felony resulting from a traffic violation);
(vi) the Executive flagrantly disregards her duties under this
Agreement after (A) notice has been given to the Executive by the Board that it
views the Executive to be flagrantly disregarding her duties under this
Agreement and (B) the Executive has been given a period of 10 days after such
notice to cure such misconduct (provided that no such notice or cure period
shall be required if Executive's disregard of her duties is willful and has
materially and adversely affected the Corporation);
(vii) any event of egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable judgment of the Board, the
Executive's credibility and reputation no longer conform to the standard of the
Corporation's executives; or
(viii) the Executive commits an act of fraud against the
Corporation or violates a duty of loyalty to the Corporation or violates
paragraph 2.
(d) Disability. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of paragraph 3 for
periods after the date the Executive's employment with the Corporation
terminates on account of disability. For purposes of this subparagraph 4(d),
determination of whether the Executive is disabled shall be determined in
accordance with the Corporation's long term disability plan and applicable law,
except payments due and owing as of such date.
(e) Death. The Corporation shall have no obligation to make payments
to the Executive in accordance with the provisions of paragraph 3 for periods
after the date of the Executive's death, except payments due and owing as of
such date.
5. Confidential Information. Except as may be required by the lawful order of
a court or agency of competent jurisdiction, the Executive agrees to keep secret
and confidential indefinitely all
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non-public information concerning the Corporation and its affiliates that was
acquired by or disclosed to the Executive during the course of her employment by
the Corporation or any of its affiliates, including information relating to
customers (including, without limitation, credit history, repayment history,
financial information and financial statements), costs, and operations,
financial data and plans, whether past, current or planned and not to disclose
the same, either directly or indirectly, to any other person, firm or business
entity, or to use it in any way; provided, however, that the provisions of this
paragraph 5 shall not apply to information that is in the public domain or that
was disclosed to the Executive by independent third parties who were not bound
by an obligation of confidentiality, or information that was disclosed to
Executive in the ordinary course of the Corporation's business negotiations with
customers or suppliers for the benefit of the Corporation. The Executive further
agrees that she shall not make any statement or disclosure that (a) would be
prohibited by applicable Federal or state laws or (b) is intended or reasonably
likely to be detrimental to, or disparaging of, the Corporation or any of its
subsidiaries or affiliates.
6. Non-competition. The Executive and the Corporation agree that reasonable
restrictions upon direct competition with the Corporation following termination
of the Executive's employment with the Corporation are necessary to protect the
business interests of the Corporation.
(a) For purposes of this Paragraph 6, the "Business" of the
Corporation is defined as the design, production and distribution of television
programs that are marketing or advertisement pieces ("infomercials") targeted at
potential consumers of health, beauty, fitness and related home products, or
other products as may be identified pursuant to Paragraph 6(b) herein, with the
objective of causing the television viewers to make purchases of the products
featured in the television programs.
(b) The extent of the Corporation's Business is limited to the actual
and intended business of the Corporation, as demonstrated by books, records,
contracts, advertising, strategic plans and financial and budget documents,
created or relied upon during the Employment Period and as of the date the
Executive leaves the employment of the Corporation.
(c) The Executive and Corporation agree that for the period (the
"Non-Competition Period") commencing on the Effective Date and ending on the
third anniversary of the date hereof, subject to Paragraph 4(a) (iii) herein,
the Executive shall not serve as or be a consultant to or employee, officer,
agent, director or owner of more than three percent (3%) of another corporation,
partnership or other entity whose primary Business competes with the Corporation
in Business (as defined in this paragraph 6).
(d) That the nature of the television production business of the
Corporation is interstate and international in scope, that the global scope of
the business renders a global restriction reasonable and a more narrowly
tailored geographic restriction insufficient to protect the legitimate business
interests of the Corporation.
(e) The Executive may engage in the design, production and
distribution of infomercials other than those competing with the Business of the
Corporation as defined in this Section 6 at any
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time following termination of employment with the Corporation.
(f) The Executive may engage in design, production and distribution of
infomercials competing with the Business of the Corporation as provided for in
Section 6(a), after the Non- Competition Period.
7. Successors. This Agreement shall be binding on, and inure to the benefit
of, the Corporation and its successors and assigns and any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Corporation's assets and business.
8. Nonalienation. The interests of the Executive under this Agreement are not
subject to the claims of her creditors, other than the Corporation, and may not
otherwise be voluntarily or involun tarily assigned, alienated or encumbered
except to the Executive's estate upon her death.
9. Remedies. The Executive acknowledges that the Corporation would be
irreparably injured by a violation of paragraphs 5 or 6, and agrees that the
Corporation shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of paragraph 5 or 6, or to any other appropriate
equitable remedy without bond or other security being required.
10. Waiver of Breach. The waiver by either the Corporation or the Executive of
a breach of any provision of this Agreement shall not operate as or be deemed a
waiver of any subsequent breach by either the Corporation or the Executive.
11. Notice. Any notice to be given hereunder by a party hereto shall be in
writing and shall be deemed to have been given when received or, when deposited
in the U.S. mail, certified or registered mail, postage prepaid:
(a) to the Executive addressed as follows:
Xxxxxx XxXxxxx Hay
00-000 Xxxxxxxxx
Xx Xxxxxx, XX 00000
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(b) to the Corporation addressed as follows:
Thane International, Inc.
Legal Department
00-000 Xxxxx Xxxxxxx, Xxxxx 000
Xx Xxxxxx, XX 00000
with copies to:
Thane International, Inc.
c/o HIG Capital LLC
0000 Xxxxxxxx Xxx Xx., Xxxxx 0000
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
13. Amendment. This Agreement may be amended or canceled by mutual agreement of
the parties in writing without the consent of any other person and no person,
other than the parties thereto (and the Executive's estate upon her death),
shall have any rights under or interest in this Agreement or the subject matter
hereof.
14. Applicable Law. The provisions of this Agreement shall be construed in
accordance with the internal laws of the State of California.
15. Termination. All of the provisions of this Agreement shall terminate after
the expiration of the Employment Period, except that paragraph 5 shall survive
indefinitely, and paragraph 6 shall terminate upon the earlier to occur of (a)
expiration of the Non-competition Period; and (b) a discharge of the Executive
without cause, pursuant to paragraph 4(a) (iii) hereof.
* * *
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IN WITNESS WHEREOF, the Executive and the Corporation have executed this
Employment Agreement as of the day and year first above written.
XXXXXX XXXXXXX HAY:
/s/ Xxxxxx XxXxxxx Hay
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THANE INTERNATIONAL, INC.:
/s/ Xxxx X. Xxxxxxxx
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By:
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Its:
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