EXHIBIT 10.21
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, (this "Agreement")
dated as of May 20, 1996 and effective as of January 1, 1996, by and between
KIDEO PRODUCTIONS, INC., with an office at 611 Broadway, Suite 515, New York,
New York 10012 (the "Company"), and Marvin Goldstein, residing at 57 Arrandale
Avenue, Great Neck, New York 11024 (the "Executive").
RECITALS
The Company has employed the Executive as Vice President of
Finance/Comptroller pursuant to an Employment Agreement dated as of January 1,
1996 (the "Prior Agreement"), and Company and the Executive desire to amend in
certain respects the Prior Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, as set forth herein, the Company and the
Executive agree as follows:
1. Employment.
The Company will employ the Executive and the Executive
accepts employment on the terms and conditions set forth in this Agreement.
2. Titles and Duties.
The Executive shall be employed by the Company as its Vice
President of Finance/Comptroller or another position determined by the Company,
so long as such other position is part of the senior management team, designated
as a Vice President, and reports only to the President and/or Members of the
Board of Directors of the Company. The Executive shall devote his full business
time and attention, and give his best efforts and skills, to the Company's
business, affairs and interests. Notwithstanding the foregoing, the Company
expressly acknowledges that the Executive shall be permitted to continue to
manage his real estate investments in the same manner as he has so managed such
investments prior to the date hereof.
3. Term of Employment.
The term of the Executive's employment hereunder shall be for
a two year period beginning on January 1, 1996 and ending on December 31, 1997.
On January 1, 1997 and on each January 1st thereafter so long as this Agreement
is in effect (each such date being hereafter referred to as the "Renewal Date"),
the term of the Executive's employment hereunder shall automatically be extended
for an additional one (1) year period unless either party notifies
the other in writing at least sixty (60) days prior to the applicable Renewal
Date that such party does not wish to extend this Agreement beyond the
expiration of the term or extended term hereof, as the case may be, in which
event this Agreement shall terminate on the December 31st next following such
applicable Renewal Date.
4. Location of Employment.
The Executive shall not be required to move his office from
the New York City metropolitan area without the Executive's prior written
consent.
5. Compensation.
(a) Base Salary. During the term of this Agreement, the Company agrees
to pay the Executive a base annual salary (the "Base Salary") commencing at
$75,000 for the first year of this Agreement and increasing by at least the
percentage increase of the consumer price index for the year prior to the
increase for each additional year of this Agreement. The Base Salary shall be
payable in equal bi-weekly installments, less usual, customary and required
payroll deductions. The Base Salary shall be reviewed annually by the Board of
Directors of the Company solely for the purpose of awarding increases beyond the
minimum required by this Agreement (taking into account factors relating to the
Executive's performance as well as the Company's performance as a whole). In the
event an increase in Base Salary is awarded, the Base Salary set forth in this
paragraph 5(a) shall be automatically amended to reflect the new amount.
(b) Bonus.
(i) 1996- The Executive will be eligible to receive
a bonus in respect of the fiscal year
ending July 31, 1996, to be paid at the
discretion of the Board of Directors. In
determining whether to award, and the
amount of, such bonus, the Board of
Directors shall consider among other
factors: achievement of profitability,
stock price performance, achievement of
budget goals, management of resources,
and any other relevant measurements the
Board of Directors deems appropriate.
The Executive understands that such bonus
(if awarded) must be reasonably
acceptable to Whale Securities Co., L.P.
("Whale").
(ii) 1997- The Executive will be eligible to receive
a bonus in respect of the fiscal year
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ending July 31, 1997, to be paid at
the discretion of the Board of
Directors. In determining whether to
award, and the amount of, such
bonus, the Board of Directors shall
consider among other factors:
achievement of profitability, stock
price performance, achievement of
budget goals, management of
resources, and any other relevant
measurements the Board of Directors
deems appropriate. The Executive
understands that such bonus (if
awarded) must be reasonably
acceptable to Whale.
6. Expenses.
The Executive will be reimbursed for all reasonable travel and
other expenses, including CPA dues and reasonable continuing education costs,
subject to a maximum reimbursement in any year of this Agreement of $5,000
unless otherwise approved in advance in writing by the President of the Company.
7. Benefits.
(a) Benefits Plan. The Executive shall be entitled to participate in
all employee benefit plans, including medical, hospital, supplemental life and
disability insurance, pension and supplemental pension plans, profit sharing
plans and stock option plans (including stock options contemplated in
conjunction with the Company's IPO) now in existence or hereafter adopted by the
Company for its senior executive officers. The Executive's benefits, including
the number of stock options granted in any year, shall be among the four highest
given to any officer of the Company who is not a director of the Company. The
Executive shall also be entitled to receive any other fringe benefits that may
be made available from time to time to the Company's senior executive officers
except as may be specifically contradicted by the terms of this Agreement. So
long as the Executive waives his right to participate in the Company's group
health plan, he shall be entitled to reimbursement for the cost of his private
insurance, including disability and life insurance, up to the cost of family
coverage under the Company's group health plan.
(b) Vacations. The Executive shall be entitled to three (3) weeks of
paid vacation in each year of this Agreement. The Executive shall also be
entitled to all paid holidays given by the Company to its employees generally.
(c) Options. As promptly as reasonably practicable following the
adoption by the Company of an incentive option plan and the pending 8.6545-for-1
split of the Company's common stock, the Executive shall be granted options (the
"Options") to purchase
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20,000 shares of the Company's common stock. The Options shall be granted in
accordance with all terms of any such plan. The Company shall use its reasonable
best efforts to ensure that the exercise price is $5.00 per share. The Options
shall vest as follows:
Date Number of Options
March 13, 1996 7,000
January 1, 1997 7,000
January 1, 1998 6,000
8. Confidentiality.
(a) Confidential Information. The Executive acknowledges that during
the course of his employment with the Company, the Company will disclose to him
confidential information concerning its products, services, processes, know-how,
trade secrets, and business methods and procedures, including names of
customers, personnel records, training and operational manuals, and other things
which constitute the property of the Company and which enable the Company to
compete successfully in its businesses (hereinafter the "Confidential
Information"). Notwithstanding the foregoing, Confidential Information shall not
include any information that is or becomes part of the public domain through no
act or fault of the Executive.
(b) Limitations. The Executive hereby agrees that during and after his
employment with the Company he will not, except as required in the conduct of
Company business, or as authorized in writing by the Company, divulge, either
directly or indirectly, any Confidential Information to any persons outside of
the Company's employ. The Executive agrees that in the event of the termination
for any reason of his employment with the Company he will not under any
circumstances retain or use in any way any Confidential Information, written or
otherwise.
9. Covenant Not to Compete.
(a) Products. The Executive acknowledges that the Company develops,
manufactures and markets digitally personalized videos for children (the
"Product").
(b) Competition. The Executive agrees that at no time during his
employment with the Company, and for a period of two (2) years immediately
following the termination of such employment, will he directly or indirectly,
own, manage, operate, control, be employed by, perform services for, participate
in, invest in (other than an investment of less than 5% of any class of equity
security of a publicly held company), loan money to or be connected in any
manner with any business which develops, manufactures or markets any product
which competes with the Product or any other product of the Company, whether
such products have been developed as of the date of this Agreement or are
developed during the Executive's term of employment with the Company.
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(c) Solicitation. The Executive agrees that at no time during his
employment with the Company, and for a period of two (2) years immediately
following the termination of his employment with the Company for any reason,
will he:
(i) for himself or on behalf of any person or
company other than the Company, engage in the
business of developing, manufacturing or
marketing the Product for any persons or
companies who are on the date of the
termination of the Executive's employment with
the Company, or who were at any time during
the Executive's employment with the Company,
customers of the Company (a "Customer"), or
solicit or attempt to solicit the business or
patronage of a Customer for the purpose of
developing, manufacturing or marketing the
Product; or
(ii) solicit or attempt to solicit any employees
of the Company to leave the Company to work
for the Executive or any business with which
he is associated in any manner whatsoever.
10. Termination.
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. The Company may terminate the Executive's employment
hereunder upon the Executive's inability, because of any physical or mental
illness, incompetency, incapacity or other reason to perform his normal duties
for a period of ninety (90) consecutive days.
(c) Cause. The Company may terminate the Executive's
employment hereunder for "Cause" which, for purposes hereof, shall
be defined as:
(i) the commission of embezzlement or fraud on the
Company by the Executive;
(ii) misappropriation of the Company's funds or
assets by the Executive;
(iii) the Executive intentionally causing or
knowingly influencing the material
misstatement of a financial position or
statement of income and expenses of the
Company in a manner known to the Executive
to be not consistent with generally accepted
accounting principles;
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(iv) the continual or frequent possession by the
Executive of an illegal substance or abuse by the
Executive of a controlled substance or alcohol
resulting in a pattern of behavior disruptive to
the business operations of the Company;
(v) any material violation by the Executive of any
covenant contained in this Agreement, including
covenants related to competition, confidentiality
and maintenance of insurance; and
(vi) any other willful misconduct which results in
material harm to the Company.
Notwithstanding the foregoing, the employment of the Executive shall not be
terminated pursuant to this paragraph 10(c) unless the Company first gives the
Executive a written notice (the "Deficiency Notice") which specifies in
reasonable detail the deficiencies in the performance of the Executive's duties.
The Executive shall have a period of fifteen (15) days to cure the deficiencies
contained in the Deficiency Notice. In the event the Executive does not so cure
such deficiencies to the reasonable satisfaction of the Company, the Company
shall have the right to immediately terminate the Executive's employment so long
as such discharge is for Cause as defined herein. The provisions of this
paragraph 10(c) may be invoked by the Company any number of times and cure of
any deficiencies contained in any Deficiency Notice shall not be construed as a
waiver of this paragraph 10(c) nor prevent the Company from issuing any
subsequent Deficiency Notices.
(d) Resignation for Good Reason. The Executive may terminate
his employment hereunder for "Good Reason" which, for purposes
hereof, shall be defined as:
(i) any substantial change in the Executive's
employment conditions or diminution of duties
inconsistent with his title, authorities, duties
and responsibilities provided in section 2
hereof;
(ii) any reduction or failure to pay the Executive's
compensation required to be paid pursuant to
section 5 hereof;
(iii) any reduction in the benefits required to be
provided pursuant to section 7 hereof; or
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(iv) any relocation of the principal location of
Executive's employment as set forth in section 4
hereof without his consent.
11. Effect of Termination.
(a) Termination by the Company for Cause or Due to Executive's Death.
If the Executive employed hereunder shall be terminated due to the Executive's
Death or for Cause, the Company shall pay the Executive his benefits, Base
Salary (at the rate then in effect), vacation pay and unpaid and verified
business expenses that have accrued to the date of termination, and the Company
shall have no further obligations to the Executive under this Agreement. In the
event of termination for Cause, (i) the Executive will not be entitled to
receive any severance pay, (ii) all of the Executive's then-unexercised Options
will simultaneously terminate, and (iii) the provisions of sections 8 and 9
hereof shall continue in full force and effect.
(b) Termination by the Company due to the Executive's Disability.
During any period that the Executive is prevented from performing his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his salary and benefits including stock
option benefits in the amounts or rates in effect upon the commencement of his
disability until Executive starts receiving benefits under Executive's private
disability insurance policy, which he agrees to maintain. Upon termination of
the Executive's employment in accordance with paragraph 10(b), (i) the Company
shall have no further obligations to the Executive under this Agreement except
those that may exist regarding the Executive's purchase of stock and (ii) the
provisions of section 8 hereof shall continue in full force and effect.
(c) Termination by the Company without Cause or Resignation by the
Executive with Good Reason. (A) If the Executive's employment hereunder shall be
terminated by the Company other than for death, Cause or disability or shall be
terminated by the Executive by Resignation with Good Reason, the Company agrees:
(i) to pay as severance (and not as liquidated
damages) a lump-sum payment, in lieu of all
amounts which would otherwise be payable during
the remainder of the term of this Agreement, in
an amount equal to the sum of: (1) ten month's of
the Base Salary then in effect; (2) any unpaid
amount of Base Salary that has actually accrued
to the date of termination; (3) any unpaid and
verified business expenses that have accrued to
the date of termination; and (4) any unpaid
vacation pay that has accrued to the date of
termination. Said lump-sum amount shall be
payable within thirty (30) days of the date of
termination.;
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(ii) to provide all insurance benefits to which the
Executive would be entitled in accordance with
paragraph 7(a) during the remaining term of this
Agreement, but in no event for less than one (1)
year period; and
(iii) that all unvested stock and stock options
purchased by or granted to the Executive shall be
immediately vested; and all restrictions upon the
resale of such stock or stock options which are
within the sole control and discretion of the
Company shall be waived immediately to the extent
permissible under applicable securities law.
(B) The Executive agrees that in any such event, the
provisions of section 8 hereof shall continue in full force and effect. The
executive further agrees that, if he receives all payments provided for in this
paragraph 11(c) within the time specified in paragraph 11(c)(A)(i), then the
Company will have no further obligations to the Executive under this Agreement.
In the event that the payments required to be made to the Executive under this
paragraph 11(c) are not made by the Company within the time specified in
paragraph 11(c)(A)(i), and if the Executive has incurred any legal fees and
expenses in attempting to collect any of such payments, then the Company shall
reimburse the Executive for such fees and expenses (including all court costs
and the reasonable fees of the Executive's counsel). In the event of any
termination of the Executive's employment, this paragraph 11(c) will apply in
place of any Company severance policies that might otherwise be applicable, and
the Company will have no obligation to make any payments to the Executive except
those expressly prescribed in paragraphs 11(c)(A)(i), 11(c)(A)(ii), and
11(c)(A)(iii).
(C) In the event of a termination contemplated by this
paragraph 11(c): (i) any amounts paid to Executive as a consequence of
termination of employment shall be paid as severance pay and not as liquidated
damages; and (ii) the Executive shall have no duty to seek or accept subsequent
employment, and any amounts or benefits received by him as a result of such
subsequent employment shall not be offset against any amounts required to be
paid by the Company hereunder.
12. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit
of the Company, its successors and assigns. The Executive may not assign this
Agreement in whole or in part.
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13. Governing Law.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York.
14. Specific Performance.
The parties to this Agreement hereby agree that an award of
damages alone is inadequate to remedy a breach of the terms of sections 8 and 9
of this Agreement and that specific performance, injunctive relief or other
equitable remedy is the only way by which the intent of such sections of this
Agreement may be adequately realized upon breach by one or more of the parties.
Such remedy shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which the parties may have.
15. Entire Agreement.
This Agreement constitutes the full and complete understanding
and agreement of the parties, supersedes all prior understandings and agreements
as to employment of the Executive (including, but not limited to, the Prior
Agreement), and cannot be amended, changed, modified or terminated without the
written consent of the parties thereto.
16. Waiver of Breach.
No provision of this Agreement shall be deemed waived unless
such waiver is in writing and signed by the party making such waiver. The waiver
by either party of a breach of any term of this Agreement shall not operate nor
be construed as a waiver of any subsequent breach hereof.
17. Notices.
Any notice hereunder shall be in writing and shall be given by
personal delivery or certified or registered mail, return receipt requested, to
the following addresses:
If to the Executive:
Mr. Marvin Goldstein
57 Arrandale Avenue
Great Neck, NY
or to such other address as the Executive may have furnished to the
Company in writing;
If to the Company:
Richard Bulman, President
Kideo Productions, Inc.
611 Broadway, Suite 515
New York, NY 10012
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with a copy to:
Michael B. Solovay, Esq.
Solovay Marshall & Edlin, P.C.
845 Third Avenue
New York, New York 10022
or to such other address as the Company may have furnished to the
Executive in writing.
18. Severability.
If any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. Without limiting the generality of the foregoing, in the event of any
challenge to this Agreement, the parties expressly hereby agree and instruct any
court interpreting it to make whatever changes, if any, are necessary in order
to uphold the validity, legality and enforceability of this Agreement and at the
same time to the fullest extent possible to uphold the substantive intent of the
Agreement.
19. Headings.
The headings, titles or captions of the Sections of this
Agreement are included only to facilitate reference, and they shall not define,
limit, extend or describe the scope of intent of this Agreement or any provision
hereof; and they shall not constitute a part hereof or affect the meaning or
interpretation of this Agreement or any part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written, intending that it be
effective as of January 1, 1996.
MARVIN GOLDSTEIN KIDEO PRODUCTIONS, INC.
/s/ Marvin Goldstein By: /s/ Richard L. Bulman
Name: Richard L. Bulman
Title: President
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