EXHIBIT 10.24
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, (this "Agreement")
dated as of May 20, 1996 and effective as of January 2, 1996, by and between
KIDEO PRODUCTIONS, INC., with an office at 611 Broadway, Suite 515, New York,
New York 10012 (the "Company"), and Joanne Denk, residing at 209 Ridgewood
Avenue, Glen Ridge, New Jersey 07028 (the "Executive").
RECITALS
The Company has employed the Executive as Vice President of
Marketing pursuant to an Employment Agreement dated as of January 2, 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 Vice
President of Marketing 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 her full business time and
attention, and give her 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 two year period beginning on January 2, 1996 and ending on January 1, 1998.
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; provided,
further, that if the Company determines that it does not intend to offer to
renew the employment of the Executive following the term provided for in this
Agreement, the Company will attempt to reach such determination on or before
July 1, 1997 and inform the
Executive of such fact on such date, but in no event will such notification be
given later than September 1, 1997.
4. Location of Employment.
The Executive shall not be required to move her 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. 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 twelve months
ending December 31, 1996 under the
following formula: If the Company
achieves profitability (without regard to
any employee bonus provisions), then
$25,000 for achieving at least $7,311,000
in sales for the year then ended, with an
additional $1,000 bonus for each
additional full percentage point by which
this sales target is exceeded; the
preceding is subject to a maximum total
bonus for 1996 of $50,000. If the
Company fails to achieve profitability
(without regard to any employee bonus
provisions), then $18,750 for achieving
at least $7,311,000 in sales for the year
then ended, with an additional $750 bonus
for each additional full percentage point
by which this sales target is exceeded;
the preceding is subject to a maximum
total bonus for 1996 of $37,500.
(ii) 1997- The Executive will be eligible to receive
a bonus in respect of the twelve months
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ending December 31, 1997, to be paid
based upon a plan similar to the one
currently in place for her 1996
bonus which has been approved by the
Company's President, its Board of
Directors and Whale Securities Co.,
L.P.
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. In addition, the Company will reimburse the Executive for
reasonable documented expenses related to her relocation of residence to the New
York City metropolitan area up to a maximum amount of $10,000. All such expense
reimbursement will be made within 2 weeks of submission by the Executive of a
detailed expense report with appropriate backup documentation.
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 the second 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 30,000 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 or the offering price in any initial public offering of the Company's
common stock. The Options shall vest as follows:
Date Number of Options
---- -----------------
January 1, 1997 10,000
January 1, 1998 10,000
January 1, 1999 10,000
8. Confidentiality.
(a) Confidential Information. The Executive acknowledges that during
the course of her employment with the Company, the Company will disclose to her
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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 her
employment with the Company she 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 her employment with the Company she 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 her
employment with the Company, and for a period of two (2) years immediately
following the termination of such employment, will she 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 her
employment with the Company, and for a period of two (2) years immediately
following the termination of her employment with the Company for any reason,
will she:
(i) for herself 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
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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
she is associated in any manner whatsoever.
10. Termination.
(a) Death. The Executive's employment hereunder shall
terminate upon her 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 her 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;
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(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 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
her 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 her 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 her 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.
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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
shall 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 her duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive her salary and benefits in the amounts or
rates in effect upon the commencement of her disability until Executive starts
receiving benefits under Executive's private disability insurance policy, which
she 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 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) eight 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 six (6) months period;
and
(iii) that all unvested stock and stock options
purchased by or granted to the Executive shall
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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 she 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 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,
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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:
Joanne Denk
209 Ridgewood Avenue
Glen Ridge, New Jersey 07028
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
with a copy to:
Michael B. Solovay, Esq.
Solovay Marshall & Edlin, P.C.
9
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 2, 1996.
JOANNE DENK KIDEO PRODUCTIONS, INC.
/s/ Joanne Denk By: /s/ Richard L. Bulman
- ------------------------- ----------------------------------
Name: Richard L. Bulman
Title: President
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