EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of June 9, 2000, by and between TEAM
COMMUNICATIONS GROUP, INC., a California corporation (herein referred to as the
"Company"), and you, XXXXX XXXXXX XXXXXXX.
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 exclusively 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 President of TEAM
Entertainment Group, a division of TEAM Communications Group, Inc.
3. You shall report to the Company's chief executive officer, currently
Xxxx X. Xxxxx. 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, including the
responsibility for, and oversight of, all production for the division, all TEAM
affiliates, outside producers or production companies acquired by TEAM, and such
other services as may be requested by the Company from time to time hereunder.
You will not be responsible for overall corporate management, international
sales and corporate marketing. Your services shall be exclusive to the Company
during the Term of this Agreement.
5. (a) The Initial Term of your employment by the Company under this
Agreement shall commence as of June 19, 2000, (the "Effective Date") and (unless
earlier terminated pursuant to this Agreement) shall continue thereafter through
June 18, 2002 (the "Initial Term").
(b) The Company shall have the option to extend the term for one (1)
additional year (the "Option Term"), such option to be exercised by notifying
you in writing no less than one hundred twenty (120) days prior to the end of
the Initial 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:
(i) Three Hundred Seventy Five Thousand Dollars ($375,000)
commencing on the Effective Date and continuing through June 18, 2001.
(ii) From June 19, 2001 through the end of the Initial Term
you shall be entitled to receive a base salary in an amount equal to Four
Hundred Twenty Five Thousand Dollars ($425,000).
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(iii) In the event that the Company elects to exercise its
option to extend the term of your employment, from June 19, 2002 through June
18, 2003, you shall be entitled to receive a base salary in an amount equal to
Four Hundred Seventy Five Thousand Dollars ($475,000).
(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 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, you shall be
eligible to receive:
(a) A discretionary bonus compensation as the Company's Board of Directors
may elect to award to you in the Company's sole and absolute discretion.
(b) A mandatory bonus determined as follows:
(i) For each year of employment a minimum amount of $120,000 per
twelve months of employment or pro rata portion thereof. This minimum bonus, for
the first year of your employment only, will be payable $60,000 on your starting
date and $60,000 ninety (90) days thereafter. It will thereafter be payable at
the conclusion of each year of your employment on the anniversary date of your
employment. For the avoidance of doubt, the next bonus (i.e., the bonus for the
second year of employment) shall be payable on or about June 30, 2002.
(ii) The minimum set forth in (b)(i) shall be applicable against a
bonus in the amount of four per cent (4%) of your division's net profits during
your employment, resulting from productions either initiated during your
employment or which you are responsible for supervising during your employment
(collectively, "Subject Productions"). For purposes of this agreement "Subject
Productions" shall not include the series "Call of the Wild", "Destination
Style", "Weird World" and "World's Most Mysterious Places." "Net profits" will
be defined as gross revenue reported pursuant to the Company's audited 10-K
filing from any source resulting from the exploitation of the Subject
Productions, including barter revenue, less the direct costs of the division
(reasonably allocated between the Subject Productions and the excluded
productions, with the portion allocable to the latter not being charged), less
3% of actual production costs of the Subject Productions, as an overhead fee for
the Company, less the amortized (pursuant to the 10-K) costs of development and
production of the Subject Productions, less costs of financing of production and
marketing of the Subject Productions, and less distribution fees of 20%
(inclusive of any subdistributors or agents) for all sales(i.e., foreign, video,
Internet, etc.) except domestic sales or syndication, which will be actual costs
of sales (inclusive of any subdistributors or agents), with a floor of 20%, and
a cap of 35%, plus actual barter sale costs.
(iii) The bonus for this Section 7(b) shall be computed by Team's
accounting department and submitted to you within120 days from the completion of
the fiscal year end audit. In the event that you disagree with such calculation,
you shall have 15 business days to object, at
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which time you and the Company will negotiate for fifteen (15) days in good
faith to achieve a final resolution. In the event that a resolution is not
achieved, an accounting firm of your choice, reasonably acceptable to the
Company shall prepare a separate report. The cost for such accounting firm shall
be borne by you. If, following the audit and negotiations there remain
unresolved issues, the parties will submit such unresolved issues to a single
mutually acceptable arbitrator familiar with such entertainment related
accounting issues, with the matter to be resolved pursuant to the rules of the
American Arbitration Association.
(iv) In the event that your employment should cease prior to the
conclusion of the Company's fiscal year, currently December 31, and such
termination is not "for cause" as defined herein, your bonus will accrue through
the end of the then current fiscal year, and be thereafter calculated and paid
pursuant to the schedule set forth above.
(c) 60,000 stock options with the exercise price at the current market
price on the date of grant. The date of grant will be June 19, 2000. These stock
options will vest monthly over a period of two (2) years, or pro rata portion
thereof. Such options shall have a five (5) year term commencing on the
Effective Date and shall be subject in all respects to the Team Communications
Stock Option Plan.
(d) In the event that the Company elects to exercise its option to extend
the term of your employment, from June 19, 2002 through June 18, 2003, you shall
be entitled to receive thirty thousand (30,000) additional stock options with
the exercise price at the current market price on the date of grant. The date of
grant will be June19, 2002. These stock options will vest monthly over a period
of one (1) year, or pro rata portion thereof. 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. 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 exclusive services to
the Company during the Term, and that you have not made and will not make any
commitment or do any act in conflict with the Agreement.
9. On the condition that you are not in breach or default of the
Agreement, the Company shall reimburse you for all of your reasonable
pre-approved expenses (including an entertainment allowance commensurate with
other executives of your level in the entertainment industry) 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, the Company will provide you a
monthly automobile allowance of Six Hundred Fifty Dollars ($650) or an annual
amount of Seven Thousand Eight Hundred Dollars ($7,800). 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.
10. You and the Company agree that the services to be rendered by you
pursuant to the Agreement, and the rights and interests granted by you to the
Company pursuant to the
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Agreement, are of a special, unique, extraordinary and intellectual character,
which gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in any action at law, and that a breach by you
of any of the terms of the Agreement will cause the Company great and
irreparable injury and damage. You hereby expressly agree that the Company shall
be entitled to the remedies of injunction, specific performance and other
equitable relief to prevent a breach of the Agreement by you. This provision
shall not, however, be construed as a waiver of any of the rights which the
Company may have hereunder, at law, for damages, or otherwise.
11. (a) If during the Term, you should (i) die or (ii) become so
physically or mentally disabled whether totally or partially, that you are
unable to perform the duties, functions and responsibilities required hereunder
for (aa) a period of three (3) consecutive months or (bb) shorter periods
aggregating to four (4) months within any period of twelve (12) months
("Disability"), then in such event, Company may, at any time thereafter, by
written notice to you, terminate your employment hereunder. In the event of a
question as to your disability, you agree to submit to reasonable medical
examinations upon the request of Company. If your services are terminated, as
aforesaid, you or your designated beneficiary shall be entitled to receive your
prorated base salary, prorated share of the Bonus for that Fiscal Year, stock
options vested as of that date and unused vacation, if any, earned through the
date of your termination.
(b) In the event that 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 one hundred twenty (120) 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 one hundred
twenty (120) period without any further liability or obligation to you hereunder
except for your prorated base salary, prorated share of the Bonus for that
Fiscal Year, stock options vested as of that date and unused vacation as of the
date of such termination (such a termination herein referred to as a termination
"For Disability or Force Majeure").
(c) In the event you, at any time, breach any provision of the
Agreement, fail, refuse or neglect (other than by reason of any above-referenced
disability or incapacity) to perform fully your obligations hereunder, or engage
or participate in any serious or willful misconduct in connection with any of
your obligations under the Agreement, and such misconduct, breach, failure,
refusal or neglect continues for forty eight (48) hours after you are placed on
notice by Company of such misconduct, breach, failure, refusal or neglect, 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.
(d) 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, the Company shall not be entitled to take as an
offset against your entitlement any sums earned by you during the remainder of
the Term and you shall continue to
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be entitled only to your base annual compensation under Paragraph 6 of the
Agreement until the end of the then current Term (or Option Term if applicable).
In the event that such termination is without cause, you will further receive
the applicable bonus(es) pursuant to paragraph 7 of the Agreement, subject to
the time frame, terms and conditions set forth in said paragraph 7 and all of
the stock options granted for the then current Term (or Option Term if
applicable) shall vest immediately upon such termination Without Cause, subject
to the terms of the employee stock option plan.
(e) Any termination under this Paragraph 12 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, subject to compliance with provisions relating
to eligibility or qualification; and
(b) You will be entitled to three (3) weeks vacation per year, 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 XXX plan, subject to all terms and conditions of any such plan.
(d) A reserved parking space and an unshared assistant/secretary
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 or indirectly compete or
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, become an officer, employee, consultant, agent,
partner (other than a limited partner) or director of any other business
enterprise engaged in any of the actual or contemplated businesses or activities
of the Company.
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16. 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 Los
Angeles. You shall make such business trips as requested by the Company or as
may be required for the conduct of your duties under the Agreement. Your air
travel accommodations will be no less than business class (if available,
otherwise first class) for domestic travel and first class for international.
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 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. Company shall not, however, have
the right to materially change the nature of your duties or your reporting
obligation. 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 Xxxxx
To You: Xxxxx Xxxxxxx
0000 Xxx Xxxxxx Xxxx
Xxxxxxx Xxxxxxxxx XX 00000
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. Such
notices shall be deemed delivered upon receipt by the addressee.
22. If the compensation provided by the Agreement shall exceed the amount
permitted by any present or future law or governmental order or regulation, such
stated compensation shall be reduced, while such limitation is in effect, to the
amount which is so permitted. The payment
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of such reduced compensation shall be deemed to constitute full performance by
the Company of its obligations hereunder with respect to compensation for such
period; provided, however, that the Company shall pay you the aggregate amount
of such reduction if and when such payment becomes permissible at law.
23. 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.
24. Concurrently with your execution and delivery to Company of this
Agreement, you shall execute and deliver to the Company an Employee
Confidentiality Agreement in the form of Exhibit A attached hereto.
25. 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/ Xxxx Xxxxx
-----------------------------------------
Xxxx Xxxxx, Chairman and CEO
ACCEPTED AND AGREED TO:
/s/ Xxxxx XxXxxx Xxxxxxx .
----------------------------
Xxxxx XxXxxx Xxxxxxx
Social Security Number: ###-##-####
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EXHIBIT A
EMPLOYEE CONFIDENTIALITY AGREEMENT
In consideration of my employment, or my continued employment, as
the case may be, by Team Communications Group, Inc., or by any direct or
indirect subsidiary or affiliate of Team Communications Group, Inc. (such
employer for the purposes of this Employee Confidentiality Agreement being
hereinafter referred to as the "Company"), I agree with the Company as follows:
As long as I shall remain in the employ of the Company I shall
devote my best efforts and ability to the service of the Company in my
employment capacity, as the Company shall from time to time direct, and I shall
perform my duties faithfully and diligently. Further, I shall abide by all
rules, regulations and policies of the Company (including without limitation
those contained in the Company's current employee manual as it may hereafter be
modified, supplemented or replaced), and I acknowledge that I am familiar with
the same.
I shall not, during my employment by the Company or thereafter, use
or disclose to others without the prior written consent of the Company, any
trade or business secrets, secret "know-how", confidential, secret, technical,
financial or proprietary information or other nonpublic information relative to
the business or activities of the Company, obtained by me while in the employ of
the Company or otherwise. Upon leaving the employ of the Company, I shall not
take with me any confidential, secret, technical, financial or proprietary data,
drawings, documents or information obtained by me as the result of my
employment, or any reproductions thereof. All such items and all copies thereof,
including without limitation all memoranda, notes, records and other documents
related to the actual or contemplated business or activities of the Company that
were made or compiled by me, or made available to me during the term of my
employment by the Company, shall be and remain the Company's property, and I
shall surrender the same to the Company on the termination of my employment by
the Company, or at any other time on request.
I agree that the Company shall be entitled to injunctive or other
appropriate equitable relief to prevent or remedy my proposed, anticipatory or
actual breach of the terms of this agreement including, without limitation, the
disclosure of any information, data, documents or other materials covered by the
terms of this agreement.
This agreement shall inure to the benefit of the Company, its
subsidiaries, affiliates, allied companies, successors and assigns or the
nominees of the Company; and I specifically agree to execute any and all
documents considered necessary or desirable to assign, transfer, sustain or
maintain inventions, discoveries, applications, copyrights, trademarks or
patents, both in the United States and in foreign countries.
IN WITNESS WHEREOF, I have hereunto signed my name as of the date of
the Employment Agreement to which this document is attached and effective as of
the Effective Date (as defined in the Employment Agreement).
/s/ Xxxxx XxXxxx Xxxxxxx
--------------------------
Xxxxx XxXxxx Xxxxxxx
ACCEPTED:
Team Communications Group, Inc.
/s/ Xxxx Xxxxx
-------------------------------
By: Xxxx Xxxxx
Its: Chairman and CEO
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