Terms of Employment for Douglas S. Bennett
This letter shall serve as an agreement between National Lampoon and Douglas S.
Bennett in regards to his employment. Effective date of this plan will be
October 14, 2002.
1. Title of position will be President effective January 1, 2003 or upon
Jim Jimirro's relinquishing the title. Effective immediately the title
will be Executive Vice President. Responsibilities include managing the
day to day operations of the business You will work closely with Dan
Laikin and the Board of Directors on all aspects of the business.
2. Base Salary will be $175,000 effective 12/1/2002.
3. Expenses associated with this position will be reimbursed on a timely
basis.
4. Compensation for position will include a bonus program.
The cash piece of the program will include a bonus program
paid out on a quarterly basis. The targets for the program
will be mutually agreed upon between Bennett and the Board of
Directors. The following chart depicts term, amount of payout
and timing of payment.
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Period Amount Payout
------ ------ ------
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Jan - Mar $31,250 April
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April - June $31,250 July
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July - Sept $31,250 Oct
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Oct - Dec $31,250 Jan
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5. Concurrent with the signing of this document Bennett will be granted
135,000 options at the then current stock price. These options will
vest monthly over a 3 year period.
- Future options will be granted at the following intervals. For the
period January '03 through June '03 in the amount of 50,000
options. Another 50,000 options will be granted for the period
July '03 through December '03. These additional options will carry
the same vesting terms as original grant and will be priced at the
then current stock price.
6. Upon change of control of the company 100% of any unvested options
will immediately vest.
7. Should the company decide to enact a stock split during the terms of
this agreement then option program will increase by the amount of the
split.
8. It is anticipated that you will commute to Los Angeles, Ca. from the
San Francisco area in order to take this position. By 12/31/2003 you
will consult with CEO and the Board of Directors on the need to
relocate on a permanent basis to Los Angeles. If the determination is
made to move you and your family and there is a mutual agreement with
you, then National Lampoon will deliver to you a relocation package to
help to the expense of the move.
9. You should be aware that your employment with the Company is for no
specified period and constitutes "at will" employment. As a result,
you are free to resign at any time, for any reason or for no reason.
Similarly, the Company is free to terminate its employment
relationship with you at any time, with or without cause, and with or
without notice. Nothing in this letter shall confer upon you any
express or implied rights to a promotion or continued employment.
Notwithstanding the foregoing, you will be entitled to receive
the following severance benefits if your employment is
"Terminated without Cause" by the Company or in the event of
"Constructive Termination", death or disability (a) continuation
of your base salary for a period of 6 months following the date
your termination becomes effective, (b) continuation of employee
benefits, and (c) continued vesting of any outstanding and
unvested stock options for a period of 6 months following the
date your termination becomes effective. For purposes of this
agreement, "Constructive Termination" means diminution of duties,
title, reporting relationship, location change, pay reduction or
any other involuntary change in the material terms or conditions
of your employment. For purposes of this agreement, "Cause" means
good faith termination by a majority of the Board of Directors
that you have: (a) engaged in acts of violation of the law; (b)
breached your fiduciary duty to the Company or duties of loyalty
or care to the Company; (c) intentionally and persistently
disobeyed the good faith, lawful, substantive policies or
instructions of the Board of Directors, after being given thirty
days written notice and failing to cure such circumstances are
not susceptible of cure during such thirty day period, failing to
initiate and diligently pursue actions reasonably calculated to
achieve and cure such circumstances as soon as reasonably
practicable thereafter.
/s/ Douglas S. Bennett /s/ Timothy S. Durham
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Douglas S. Bennett National Lampoon Board
10/14/02 January 13, 2003
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Date Date