Exhibit 10.1

 

[image_001.jpg]

 

 

December 27, 2017

 

Mr. Joel M. Bennett

c/o JAKKS Pacific, Inc.

2951 28th Street

Santa Monica, CA 90405

 

 

Dear Joel:

 

As we have discussed, the term of the Employment Agreement dated October 28,
2011 between you ( “Executive” or “you”) and JAKKS Pacific, Inc. (the “Company”
or “JAKKS”), which was extended by agreements dated February 18, 2014 and June
11, 2015 ( collectively, the “Employment Agreement”), will not be renewed after
its expiration on December 31, 2017. This letter (this “Letter Agreement”)
memorializes our discussions with respect to the continuation of your services
as Chief Financial Officer of JAKKS through the Separation Date (as defined
below) and your separation from employment (the “Separation”) by JAKKS on the
Separation Date.

 

Separation Date. For purposes of this Letter Agreement, “Separation Date” shall
mean February 28, 2018, or at the Company’s option, exercised by the Company’s
Chief Executive Officer, through such later date that the Company files its Form
10-K for the 2017 fiscal year, but in any event no later than March 15, 2018,
under the same compensation and other financial benefits as exist under the
Employment Agreement notwithstanding its expiration.

 

Services. Until the Separation Date, or such earlier date that the Company’s
Chief Executive Officer advises you that a successor as Chief Financial Officer
has been hired and will commence to serve in such office (the “Service Date”),
you will continue to serve as Chief Financial Officer of the Company, and from
the Service Date until the Separation Date you will assist the Company and the
new Chief Financial Officer in such person’s transition to such office. After
the Service Date and until the Separation Date, you shall be employed by the
Company as an Executive Advisor, reporting to the Company’s Chief Executive
Officer or his designee, with such duties as shall reasonably be requested of
you by the Chief Executive Officer or his designee. You agree to tender your
resignation from any and all positions you occupy as an officer of the Company
and as an officer, director or manager of any direct or indirect subsidiary of
the Company by signing a resignation letter when requested by the Company.

 

Separation Payments. Upon the Separation Date:

 

(i)Company will pay you a Separation payment in a lump sum of $505,000.00 (your
current annual base salary), less applicable withholding tax and any similar
payroll deductions required by law. If you have not commenced other similar
employment or retention as a full time consultant by the first anniversary of
the Separation Date (the “Anniversary Date”), you will receive payments computed
at the annual rate of $505,000.00 during the period commencing as of the
Anniversary Date and ending three (3) months after the Anniversary Date or such
earlier date that your other similar employment or consulting retention
commences, payable in substantially equal installments no less often than
monthly, in accordance with Company’s normal payroll practices, less applicable
withholding tax and any similar payroll deductions required by law.

 

 

 Page 2 of 5 

 

 

(ii)Company will pay you $67,978.40 representing 35 days of accrued and unpaid
vacation and personal days through December 31, 2017, less any days of vacation
and personal days taken between the date of this Letter Agreement and the
Separation Date,, less applicable withholding tax and any similar payroll
deductions required by law.

 

(iii)Company will pay you $12,000.00 in a lump sum, less applicable withholding
tax and any similar payroll deductions required by law, which lump sum payment
has been computed based on the automobile Allowance of $500.00 per payroll
period payable to you under your Employment Agreement.

 

(iv)22,835 Restricted Stock Units (“RSUS”) heretofore issued to you by the
Company which have not fully vested as of the date of this Letter Agreement
shall fully vest as follows: 5,709 RSUS shall vest on January 2, 2018 and 17,126
RSUS shall vest of the Separation Date, and any other RSUS (including but not
limited to 34,252 other RSUS), rights to acquire shares of common stock or other
securities of the Company, or securities convertible into common stock or other
securities of the Company, or options, warrants or other rights to acquire
common stock or other securities of the Company which have not vested as of
December 31, 2017, shall terminate.

 

(v)The Company will maintain or reimburse you for the cost of maintaining your
family coverage under the Company’s medical insurance program (including the
life insurance coverage) on the same terms as is generally available to other
employees (except that the additional “Armada” coverage available to you and
certain other executive officers shall only be maintained for you by the Company
until March 31, 2018 after which date the Company shall not be obligated to
maintain such “Armada” coverage), through February 28, 2019, provided, however,
if you obtain substantially similar health insurance coverage from another
person (meaning approximately equivalent out of pocket costs, deductibles, and
coverage), the Company’s obligations to reimburse you for such coverage will
cease. The Company will provide COBRA notice to you so that you may elect
coverage commencing on the first date of the month following your qualifying
event. You will promptly notify the Company if health insurance coverage becomes
available to him from another person, and provide sufficient details about the
terms of such coverage available to you so that it can be determined whether
such coverage is substantially similar to the coverage available under the
Company’s medical insurance program.

 

Confidentiality. You acknowledge and agree that you remain bound to any and all
policies agreed to previously, including but not limited to those relating to
protection of the Company’s confidential and proprietary information, including
Section 9 of the Employment Agreement. You agree not to reveal, disclose, or
publicize, or cause to be revealed, disclosed, or publicized, to anyone the
terms of, or the fact that I signed, this document, except as required by law or
by my accountant or counsel. You further represent that you are signing this
document knowingly and voluntarily and have been given adequate time to consult
with counsel of your choosing prior to signing it. The foregoing shall not
restrict Executive or Company in responding in a truthful manner to any subpoena
or other court or governmental inquiry.

 

 

 Page 3 of 5 

 

 

Non-disparagement. Executive agrees that he will not engage in any conduct
injurious to the reputation or interest of the Company or its affiliates,
including but not limited to: (i) divulging, communicating, or in any way making
use of any confidential or proprietary information of the Company or its
affiliates acquired in the performance of Executive’s duties with the Company;
and (ii) disparaging, criticizing, or denigrating the Company or its affiliates
or their respective officers, directors, or employees (or inducing or
encouraging others to do so). The Company agrees not to disparage Executive. The
Company, by Stephen Berman, has agreed to provide Executive with a letter of
gratitude relating to Executive’s years of service.

 

Cooperation. Executive shall cooperate with the Company to respond to requests
by the Company for information concerning matters, including but not limited to,
financial and accounting involving facts or events relating to the Company that
are within his knowledge. Company will reimburse Executive for all reasonable
out-of-pocket expenses incurred in complying with the obligations of this
paragraph.

 

Litigation. Executive agrees to the fullest extent permitted by law not to
commence, maintain, prosecute, or participate in any action or proceeding in any
court or agency against the Company or its affiliates with respect to any act,
omission, transaction, or occurrence up to and including the Separation Date;
(ii) not to instigate, encourage, assist or participate in any action or
proceeding commenced by anyone else against the Company or its affiliates; and
(iii) not to seek or accept any award or settlement from any source or
proceeding with respect to any claim or right covered by this Letter Agreement.
If Executive breaches the provisions of this paragraph, the Company will be
entitled to cease making any further payment to Executive pursuant to this
Letter Agreement without limiting any other legal or equitable remedies that may
be available to the Company.

 

Governing Law. This Letter Agreement shall be construed, interpreted, and
governed in accordance with the laws of the State of California, without
reference to rules relating to conflicts of law, irrespective of the fact that a
party may be or become a resident of a different state. The provisions of this
Letter Agreement are severable and in the event that any provision of this
Letter Agreement is determined to be invalid or unenforceable in any respect by
a court of competent jurisdiction, the remaining provisions of this Letter
Agreement will not be affected, but will, subject to the discretion of such
court, remain in full force and effect, and any invalid or unenforceable
provision will be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.

 

Voluntary Agreement. Executive acknowledges that, by his free and voluntary act
of signing below, he knowingly and voluntarily agrees to all the terms of this
Letter Agreement and intends to be legally bound thereby, and that he has not
relied upon any representation, warranty, or promise of the Company or its
affiliates or their respective officers or directors in entering into this
Letter Agreement that is not expressly set forth in this Letter Agreement.
Executive agrees and acknowledges that he has read this Letter Agreement
carefully, fully understands all of its provisions and agrees to all of its
terms voluntarily, and has +had the opportunity to consult with his own counsel.
No amendment, supplement, modification, waiver or termination of this Agreement
will be binding unless executed in writing by the party to be bound thereby

 

 

 Page 4 of 5 

 

 

Release. By signing this Letter Agreement, Executive, for himself and his heirs,
executors, administrators, successors, assigns, agents, and representatives, in
consideration of the payments and benefits set forth in this Letter Agreement,
hereby does release, remise, acquit, and forever discharge the Company and its
affiliates, and their respective current and former officers, directors,
shareholders, attorneys and agents, and the heirs, executors, administrators,
receivers, successors, and assigns of all of the foregoing, from any and all
claims, demands, causes of action, actions, suits, promises, damages,
liabilities, and judgments whatsoever, whether known or unknown, in law or
equity, which Executive, his heirs, executors, administrators, successors,
assigns, agents, and representatives ever had, now have, or hereafter can,
shall, or may have for, upon, or by reason of any matter, cause, or thing
whatsoever, to and including the date of execution of this document by
Executive, including, but not limited to, any and all claims for damages,
attorneys’ fees, or costs under (i) Title VII of the Civil Rights Act of 1964,
as amended, 42 U.S.C. § 2000e et seq. (including the Equal Employment
Opportunity Act of 1972); the Age Discrimination In Employment Act of 1967, as
amended, 29 U.S.C. § 621 et seq.; the Older Workers Benefit Protection, 29
U.S.C. § 626(f)(1); the Civil Rights Act of 1991, 42 U.S.C. § 1981(a) et seq.;
the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.; The Fair Labor
Standards Act, 29 U.S.C. § 201 et seq.; the Family and Medical Leave Act, 29
U.S.C. § 2601 et. seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C.,
Section 701, et seq.; the Employee Retirement Income Security Act of 1974, as
amended; the Equal Pay Act, 29 U.S.C. Section 206(d); the Worker Adjustment and
Retraining Notification Act of 1988; the California Fair Employment and Housing
Act, and the California Labor Code and any and all other federal, state and
local fair employment and civil rights laws, including but not limited any laws,
rules or regulations of the State of California; (ii) breach of contract
(express or implied), retaliation, wrongful discharge, detrimental reliance,
defamation, any claims for violation of privacy rights and denial of equal
rights; (iii) the United States Constitution; and the Constitution of the State
of California and the Constitutions of any other state or country; all federal,
state, or municipal statutes or ordinances prohibiting discrimination or
pertaining to employment; and (iv) any contract, tort, or common law theories
with respect to the Executive’s hiring by the Company, the terms and conditions
of his employment with the Company, including but not limited to any claims for
salary, bonus, compensation, benefits, or any other interest in the Company and
its profits, earnings or revenues, and the termination of his employment with
the Company. Among other things, these laws prohibit discrimination in
employment on the basis of race, sex, color, religion, age, national origin or
disability. This Release and waiver also includes any claims for wrongful
discrimination, breach of contract, infliction of emotional distress, attorneys’
fees, or any other contract claim arising out of the Employment Agreement.

 

In order to implement a full and complete release, the undersigned expressly
waive and relinquish all rights and benefits afforded by California Civil Code
section 1542, the text of which is set forth below, which waiver and
relinquishment includes all claims which I do not know or suspect to exist in my
favor at the time of executing this release, which if known by me, would
materially affect this letter agreement and release of the Company. California
Civil Code Section 1542 provides as follows:

 

 

 Page 5 of 5 

 

 

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF

 

KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
DEBTOR."

 

You acknowledge that you may later discover claims or facts in addition to or
different from those which you now know or believe to exist with regards to the
subject matter of this Letter Agreement, and which, if known or suspected at the
time of executing this Letter Agreement, may have materially affected its terms.
Nevertheless, you waive any and all claims that might arise as a result of such
different or additional claims or facts.

 

Counterparts. This Letter Agreement may be executed in counterparts, each of
which shall be deemed to be an original of the same agreement, and facsimile and
“pdf” signatures shall be deemed original and binding for purposes of this
Letter Agreement.

 

Revocation. EXECUTIVE ACKNOWLEDGES THAT HE HEREBY HAS BEEN ADVISED IN WRITING:
(a) TO CONSULT WITH COUNSEL PRIOR TO SIGNING THIS LETTER AGREEMENT, AND (b) THAT
BEFORE SIGNING THIS LETTER AGREEMENT, HE HAS TWENTY-ONE (21) DAYS TO CONSIDER IT
AFTER HIS RECEIPT OF IT, WHICH TWENTY-ONE (21) DAY PERIOD CAN BE WAIVED AT ANY
TIME PRIOR TO EXPIRATION OF SUCH PERIOD BY EXECUTIVE SIGNING THIS LETTER
AGREEMENT.

 

IN ADDITION, EXECUTIVE ACKNOWLEDDGES THAT FOR SEVEN (7) DAYS AFTER HIS SIGNING
BELOW, HE MAY REVOKE MY ASSENT TO THIS AGREEMENT ONLY BY GIVING WRITTEN NOTICE
OF REVOCATION TO THE VICE PRESIDENT OF HUMAN RESOURCES OF THE COMPANY WITHIN THE
SEVEN (7) DAY PERIOD FOLLOWING MY SIGNING. THE WRITTEN REVOCATION NOTICE MUST BE
DELIVERED BY EMAIL TO THE VICE PRESIDENT OF HUMAN RESOURCES OF JAKKS PACIFIC,
INC. AT EMORGAN@JAKKS.NET ON OR BEFORE THE SEVENTH (7TH) DAY AFTER EXECUTIVE’S
EXECUTION OF THE AGREEMENT. THE EFFECTIVE DATE OF THIS AGREEMENT SHALL BE THE
EIGHTH DAY AFTER THE DATE NOTED BELOW ON WHICH EXECUTIVE SIGNED THIS AGREEMENT
(IF HE HAS NOT EARLIER REVOKED IT).

 

  Sincerely,       JAKKS Pacific, Inc.               By:           Name: Stephen
Berman       Title: Chairman, CEO & President  

 

Acknowledged & Agreed:                 Joel M. Bennett   Date: