EXHIBIT 10.22
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 Robert J. Riscica, residing at 67 Revere
Drive, Dumont, New Jersey 07628 (the "Executive").
RECITALS
The Company has employed the Executive as Chief Financial
Officer pursuant to an Employment Agreement dated as of January 1, 1996 (the
"Prior Agreement"), and the 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 Chief
Financial Officer. The Executive shall report 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.
3. Term of Employment.
The term of the Executive's employment hereunder shall be for
a one year period beginning on January 1, 1996 and ending on December 31, 1996.
Prior to the end of the term of employment, the Company and the Executive shall
negotiate in good faith regarding the renewal of the Executive's employment;
provided, that any agreement regarding such renewal shall be reflected in a
separate written document or written amendment to this Agreement.
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") of $105,000. The
Base Salary shall be payable in equal bi-weekly installments, less usual,
customary and required payroll deductions. In the event of a renewal of this
Agreement, the Base Salary shall be reviewed annually by the Board of Directors
of the Company solely for the purpose of awarding increases (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 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.
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6. Expenses.
The Executive will be reimbursed for all reasonable travel and
other expenses, 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 and profit sharing
plans now in existence or hereafter adopted by the Company for its senior
executive officers.
(b) Vacations. The Executive shall be entitled to two (2) weeks of paid
vacation in the first year of this Agreement and three (3) weeks of paid
vacation in any renewal year. 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 35,000 shares of the Company's common stock. The Options
shall be granted in accordance with all terms of any such plan and 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 12,000
January 1, 1997 12,000
January 1, 1998 11,000
8. Confidentiality.
(a) Confidential Information. The Executive acknowledges that during
the course of his employment with the Company, the Company will disclose to his
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.
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(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
personalized product substantially similar to 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.
(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.
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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 or a breach of the
fiduciary obligations owed by the Executive to the
Company;
(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;
(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 grossly negligent or willful misconduct
which results in, or would be reasonably likely (as
determined by the Board of Directors of the Company)
to result 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
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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 reduction or failure to pay the Executive's
compensation required to be paid pursuant to section
5 hereof;
(ii) any reduction in the benefits required to be
provided pursuant to section 7 hereof; or
(iii) 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 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, if
any. Upon termination of the Executive's employment in accordance
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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 exercise of any of the Options which are vested 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) six 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.;
and
(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 three (3)
months 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
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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 the 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.
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.
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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:
Robert J. Riscica
67 Revere Drive
Dumont, New Jersey 07628
or to such other address as the Executive may have furnished to the
Company in writing;
If to the Company:
Kideo Productions, Inc.
611 Broadway
Suite 515
New York, New York 10012
Attention: President
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
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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.
ROBERT J. RISCICA KIDEO PRODUCTIONS, INC.
/s/ Robert J. Riscica By: /s/ Richard L. Bulman
- ------------------------- ------------------------------
Name: Richard L. Bulman
Title: President
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