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.

                 -------------------------------------------------------------
                       Period                Amount             Payout
                       ------                ------             ------
                 -------------------------------------------------------------
                      Jan - Mar             $31,250              April
                 -------------------------------------------------------------
                    April - June            $31,250              July
                 -------------------------------------------------------------
                     July - Sept            $31,250              Oct
                 -------------------------------------------------------------
                      Oct - Dec             $31,250              Jan
                 -------------------------------------------------------------

<PAGE>

     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.

<PAGE>

               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