EXHIBIT 10.20
EMPLOYMENT AGREEMENT, DATED APRIL 15, 1996,
BY AND BETWEEN THE COMPANY AND LAWRENCE BERNSTEIN
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 15th day of
April, 1996, by and among JANEX CORPORATION, a New Jersey corporation
("Employer"), JANEX INTERNATIONAL, INC., a Colorado corporation
("International"), and LAWRENCE I. BERNSTEIN ("Employee"). The parties hereto
agree as follows:
1. Duties. Employer hereby employs Employee as the Executive Vice
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President-Marketing of Employer. Employee shall be responsible for Employer's
marketing, product development and product sourcing, and shall undertake such
other duties and responsibilities as the Chief Executive Officer of Employer may
reasonably request.
2. Term. The term of employment shall be one (1) year commencing as of
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the date hereof, and ending April 14, 1997, subject to earlier termination as
set forth below. If Employer does not intend to extend the term of this
Agreement beyond April 14, 1997, Employer shall so notify Employee not later
than February 14, 1997.
3. Salary. Employee shall receive from Employer, as compensation for his
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services a salary of Two Hundred Twenty Five Thousand Dollars ($225,000.00) per
year during Employee's employment hereunder. Said salary shall be payable in
equal semi-monthly installments on the first and 15th day of each month, subject
to usual withholding and other employment related taxes.
4. Annual Bonus Pool. Pursuant to an Employment Agreement between
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Sheldon F. Morick, the CEO of Employer and Employer, an Annual Bonus Pool has
been established. Employee shall be entitled to participate in the Bonus Pool.
5. Stock Options. Employee shall receive stock options to acquire up to
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250,000 shares of International's restricted common stock, in accordance with
the provisions of the Stock Option Agreement attached hereto as Exhibit "A".
Said options shall vest as to 50,000 shares immediately, and 50,000 shares
yearly after the date hereof, subject to the terms and conditions of the Stock
Option Agreement. The exercise price shall be $1.45. As an inducement to
International to issue said stock options to Employee, Employee represents and
warrants to International, which shall be continuing representations and
warranties, as follows:
a. The stock options and the shares of International's common stock
to be acquired by Employee thereunder, shall be acquired for Employee's own
account and not with a view to or for sale in connection with any distribution
of such securities.
b. Employee has the requisite financial and/or business experience
necessary to evaluate the risks and rewards of investing in the shares of
International and Employee is capable of protecting himself in that regard.
c. The shares of International stock that Employee will be acquiring
upon exercise of option(s), will be "restricted securities" as that term is
defined in Rule 144, promulgated under the Securities Act of 1933, as amended;
that the exemption from registration under Rule 144 will not be available in any
event for at least two (2) years from the date of issuance, and even then will
not be available unless (1) a public trading market then exists for the Stock,
(2) adequate information concerning International is then available to the
public, and (3) other terms and conditions of Rule 144 are complied with; and
that any sale of the Stock may be made by the undersigned only in accordance
with such terms and conditions.
d. That Employee understands that the certificates representing the
shares of International stock shall be stamped or otherwise imprinted with a
legend, which provides substantially as follows (but may also include references
to state law):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 ("THE ACT") AND ARE "RESTRICTED SECURITIES" AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
e. If during the term of this Agreement, International proposes to
register any of its Common Stock under the Securities Act of 1933 ("Act"),
solely for cash, on a form that would also permit the registration of the shares
of Common Stock underlying the options held by Employee, Employer shall, each
time, give written notice to Employee. Upon the written request of Employee
given within twenty days of mailing of any such notice by Employer,
International shall use its best efforts to cause to be registered under the Act
that number of shares of Common Stock underlying such options, as Employee has
requested to be registered. Provided, however, that any such registration shall
be subject to the approval of the underwriter, in the underwriter's sole
discretion.
6. Vacation and Health Care Benefits. Employee shall be entitled to
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three (3) weeks vacation per year, during the term of this Agreement. During the
term of this Agreement, Employer shall, at Employer's expense, provide usual and
customary medical benefits for Employee and his dependents.
7. Taxes. Employee agrees to be responsible for the payment of any and
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all taxes, including but not limited to income, estate and gift taxes arising
out of or related to the compensation/ benefits (including the stock options)
received or to be received by Employee under this Agreement.
8. Business Expenses. During the term of this Agreement, Employer shall
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provide Employee with such appropriate credit cards as are reasonably necessary
for Employee to carry
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out his duties hereunder. Additionally, Employee shall be entitled to receive,
within 15 days after delivery by him of an itemized statement thereof and
appropriate receipts, reimbursement for all reasonable expenses incurred by him
in connection with the performance of his duties.
9. Termination.
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a. Employee's employment may be immediately terminated by Employer
for cause. As used herein, the term "cause" shall mean (1) wilful and habitual
neglect of duty (not due to disability), which Employee fails to cure within ten
(10) days after written notice thereof; (2) intentional or grossly negligent
conduct toward, involving or affecting Employer; or (3) Employee's conviction of
a crime involving morale turpitude.
b. If Employee becomes permanently disabled, either Employer or
Employee may immediately terminate Employee's employment. As used herein, the
term "permanently disabled" shall mean if by reason of bodily injury or mental
or physical disease Employee is unable to perform substantially all of the
duties required of Employee under this Agreement for a continuous period of two
(2) months.
c. If there is a merger, or purchase or sale of stock or assets
involving a change in control of Employer, the Board of Directors may elect to
terminate Employee or if in connection therewith the Board substantially and
adversely alters Employee's duties or compensation, then Employee may elect to
resign, and in such event, Employer shall continue to pay Employee's salary (at
its then level) for the greater of: (1) six months from the date of termination,
or (2) for the balance of the one year term of this Agreement.
d. This Agreement shall terminate immediately upon the death of
Employee.
10. Restrictive Covenant. During the term of this Agreement, Employee
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shall devote his full time and efforts exclusively to Employer's business and
affairs and do his utmost to promote its interests. He shall not, directly or
indirectly, own, manage, operate, join, control, be employed by, or participate
in the ownership, management, operation, or control of, or be connected in any
manner with, any business which is competitive to that of Employer or its
affiliates or any business selling to or doing business with Employer or its
affiliates.
11. Inventions and Confidential Information.
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a. Employee recognizes that his employment with Employer will
involve contact with information of substantial value to Employer, which is not
old and/or generally known in the trade and which gives Employer an advantage
over its competitors who do not know or use it, including but not limited to
designs, drawings, processes, inventions, prototypes and product concepts, sales
and customer information, and business and financial information, relating to
the business of Employer (herein referred to as "Confidential Information").
Employee shall at all times regard and preserve as confidential such
Confidential Information obtained by Employee from whatever source and will not,
either during his employment or
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thereafter, publish or disclose any part of such Confidential Information in any
manner, or use the same except on behalf of Employer, without the prior written
consent of Employer. Further, Employee shall, during his employment and
thereafter, refrain from any acts or omissions that would reduce the value of
such Confidential Information to Employer.
b. Employee shall promptly disclose in writing to Employer complete
information concerning each and every invention or discovery or improvement
thereof (herein referred to as "Inventions"), whether Employee considers them
patentable or not, conceived or reduced to practice by Employee, either solely
or in collaboration with others, during the period of Employee's employment by
Employer, and relating either directly or indirectly to the business of Employer
or to its actual or demonstrably anticipated research or development, or
resulting from any work performed by Employee for Employer or with the
equipment, supplies, facilities or Confidential Information of Employer.
c. Employee agrees that any such Inventions conceived or reduced to
practice by Employee during the period of Employee's employment by Employer, as
defined in paragraph 12b above, are the sole property of Employer, and Employee
hereby assigns and agrees to assign to Employer, its successors and assigns, all
of Employee's right, title and interest in and to said Inventions, and any
patent applications or Letters Patent thereon.
NOTIFICATION
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This Agreement does not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the Employer was used
and which was developed entirely on the Employee's time, and (a) which does
not relate (1) to Employer's actual or demonstrably anticipated research or
development, or (b) which does not result from any work performed by
Employee for Employer, as defined and provided by Section 2870 of the
California Labor Code.
d. Employee agrees, at any time during Employee's employment or
thereafter, upon request and without further compensation therefor, but at no
expense to Employee, to do all lawful acts, including the execution of papers
and oaths and the giving of testimony, that in the opinion of Employer, its
successors or assigns, may be necessary or desirable for obtaining, sustaining,
reissuing or enforcing Letters Patent in the United States and throughout the
world for said Inventions, and for perfecting, recording or maintaining the
title of Employer, its successors and assigns, thereto.
e. For any Invention conceived or reduced to practice by Employee
during the period of Employee's employment by Employer, and up to and including
a period of twelve (12) months after termination of Employee's employment, but
which is claimed for any reason to belong to an entity or person other than
Employer, Employee shall promptly disclose the same in writing to Employer and
shall not disclose the same to others if Employer, within twenty (20)
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days thereafter, shall claim ownership of such Invention under the terms of this
Agreement. If Employer makes such a claim, Employee agrees that any controversy
relating to such claim will be settled and determined by binding arbitration in
accordance with the provisions of paragraph 12 below.
f. Employee agrees that all accounts, notes, data, sketches,
drawings and other documents and records, and all material and physical items of
any kind, including all reproductions and copies thereof, which relate in any
way to the business of Employer or contain Confidential Information, made by
Employee or that come into Employee's possession by reason of Employee's
employment are the property of Employer and will be promptly surrendered to
Employer at the conclusion of Employee's employment.
g. Employee agrees that Employee will not disclose to Employer or
induce Employer to use any invention or confidential information belonging to
any third party.
h. Employee affirms that Employee has no agreement with any other
party that would preclude Employee's compliance with Employee's obligations
under this Agreement as set forth above.
i. Employee agrees that at the conclusion of Employee's employment
with Employer, Employee shall give a written statement to Employer certifying
that Employee has complied with Employee's obligations under paragraph 11 of
this Agreement and acknowledging Employee's continuing obligations to disclose
Inventions, to do certain lawful acts relating to United States and foreign
Letters Patent on said Inventions, and to preserve as confidential and refrain
from using Employer's confidential Information. The written statement shall be
in the form of Exhibit "B" attached hereto.
j. Employee acknowledges that International is a public company
whose shares trade on NASDAQ. Accordingly, Employee acknowledges that he is
prohibited from engaging in securities transactions on the basis of information
not available to the general public which, if known to outsiders, might affect
their investment decision.
k. The provisions of this paragraph 11 shall specifically survive
any termination of this Agreement.
12. Arbitration. Any controversy or claim between the parties hereto
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involving the interpretation, breach or enforcement of any provision of this
Agreement, shall be settled by arbitration conducted in Los Angeles County,
California, in accordance with, and by an arbitrator appointed pursuant to, the
Rules of the American Arbitration Association then in effect, and judgment upon
the award rendered pursuant thereto may be entered in any court of competent
jurisdiction. The arbitration award shall be final and binding upon the parties
hereto, and all rights or remedies of the parties hereto to the contrary are
expressly waived. The arbitrator or arbitrators shall be empowered to grant any
provisional relief or equitable relief (including, without limitation, temporary
or permanent restraining orders or injunctions)
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provided for under the California Code of Civil Procedure or otherwise under
California law. Employee is obligated under this Agreement to render services of
a special, unique, unusual, extraordinary, and intellectual character, which
give this Agreement peculiar value. The loss of these services cannot be
reasonably or adequately compensated in damages in an action at law.
Accordingly, in addition to other remedies provided by law or this Agreement,
Employer shall have the right to obtain injunctive relief against the breach of
this Agreement by Employee or the performance of services elsewhere by Employee,
or both. Section 1283.05 of the California Code of Civil Procedure shall be
applicable to any arbitration. The costs of conducting the arbitration
proceeding shall be borne by the losing party or in such proportions as the
arbitrator decides.
13. Attorneys' Fees. In the event any arbitration, suit, proceeding or
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action is instituted arising out of or relating in any manner whatsoever to this
Agreement, the prevailing party(ies) shall recover from the losing party(ies)
reasonable attorneys' fees in addition to the costs and expenses of such
proceeding. In any such suit, proceeding or action, the arbitrator or judge, as
the case may be, shall have the power and authority to determine which
party(ies) is the prevailing party(ies).
14. Notices. Any party desiring to give notice to any other party to this
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Agreement, shall give such notice in writing either in person or by facsimile,
telegram, express mail, air express carrier or certified mail. Notices shall be
addressed and delivered to the addressees as follows:
IF TO EMPLOYER OR
INTERNATIONAL: Janex Corporation
Janex International, Inc.
21700 Oxnard Street, suite 1610
Woodland Hills, CA 91367
Atten: President
With a copy in all instances to:
Ronald J. Grant, Esq.
Tilles, Webb, Kulla & Grant, ALC
433 North Camden Drive, Suite 1010
Beverly Hills, CA 90210
IF TO EMPLOYEE: Lawrence I. Bernstein
2110 Country Hill Lane
Los Angeles, CA 90049
Notices delivered or sent in accordance herewith, shall be deemed given on
the date of delivery if personally delivered; upon receipt if sent by facsimile,
telegram, express mail or air
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express carrier; three (3) business days after mailing, if mailed by certified
mail, return receipt requested. Any notice not delivered or sent in accordance
herewith, shall be deemed given only upon actual receipt. Any party may change
his or its address for notices, by giving notice to the other parties in
accordance herewith.
15. Assignment. Except as specifically set forth in this Agreement,
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neither this Agreement nor any interest herein, shall be assigned or transferred
without the prior written consent of the parties hereto. Any attempted
assignment or transfer in violation of the previous sentence shall be void.
Subject to the restrictions on assignment and transfer, the provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, legal representatives, successors
and assigns.
16. Applicable Law. This Agreement shall be interpreted, governed by and
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enforced in accordance with the internal laws of the State of California.
17. Modification. This Agreement shall not be changed, modified, or
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amended in any respect except by a written instrument signed by the party
charged with such change, modification or amendment.
18. Entire Agreement. This provisions of this Agreement supersedes any
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and all prior and contemporaneous written or oral agreements, understandings and
representations between the parties relating to the subject matter of this
Agreement. Except as set forth in this Agreement, there are no other
agreements, understandings or representations pertaining to the subject matter
hereof.
19. Non-Waiver. No delay or failure by either party to exercise any right
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under this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right.
20. Headings. Headings in this Agreement are for convenience only and
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shall not be used to interpret or construe its provisions.
21. Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
22. Severability. If any provision of this Agreement is held invalid or
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unenforceable, the remainder of this Agreement shall nevertheless remain in full
force and effect. If any provision is held invalid or unenforceable with respect
to particular circumstances, it shall nevertheless remain in full force and
effect in all other circumstances.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day
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and year first above written.
EMPLOYER: INTERNATIONAL:
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JANEX CORPORATION JANEX INTERNATIONAL, INC.
By:/s/ SHELDON F. MORICK By:/s/ SHELDON F. MORICK
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Sheldon F. Morick, Sheldon F. Morick,
Chief Executive Officer Chief Executive Officer
EMPLOYEE:
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/s/ LAWRENCE I. BERNSTEIN
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Lawrence I. Bernstein, an individual
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Exhibit B
STATEMENT ON CONCLUSION OF EMPLOYMENT
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In connection with the conclusion of my employment with Janex Corporation
(herein referred to collectively as the "Company"), I certify that I have
surrendered and returned to the Company all accounts, notes, data, sketches,
drawings, and other documents and records, and all material and physical items
of any kind, including all reproductions and copies thereof, which are the
property of the Company, which relate in any way to the business of the Company
or contain Confidential Information (as defined in the Employment Agreement
identified below).
I also understand that I have a continuing obligation under the Employment
Agreement signed by me, dated April 15, 1996, to disclose information concerning
certain described "Inventions" for a period up to and including twelve (12)
months after termination of my employment, to do certain lawful acts relating to
United States and foreign Letters Patent on certain of said Inventions which are
the property of the Company, and to preserve as confidential and refrain from
using information defined in said Employment Agreement as Confidential
Information which relates to the business of the Company. I also understand
that I have a continuing obligation under the aforementioned Employment
Agreement to refrain from any acts or omissions that would reduce the value of
such Confidential Information to the Company.
EXECUTED BY ME at _________________________, ____________________, this
______ day of ________________________, 199___.
___________________________________
(Employee's Name)
___________________________________
(Witness)
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