Document:

Exhibit 10.1

 

SETTLEMENT, GENERAL, AND MUTUAL RELEASE
OF CLAIMS, AND 

ASSIGNMENT OF INTEREST TRANSFER AGREEMENT

 

THIS SETTLEMENT, GENERAL RELEASE
OF CLAIMS, AND ASSIGNMENT OF INTEREST TRANSFER AGREEMENT (the “Agreement”) is made and entered into as of March 31,
2016, by and between MCPI, Inc. (“MCPI”), a Nevada corporation, Bendor Investments Ltd. (“Bendor”),
an Oregon corporation, and Charles Stidham, an individual residing in Texas (“Stidham”) (Bendor and Stidham are each
referred to individually as a “Buyer”, and collectively, “Buyers”).

RECITALS:

 

WHEREAS, the Buyers and MCPI have come
to a point where it is no longer economically feasible nor desirable for them to work collaboratively at managing and operating
certain medical and recreational marijuana dispensaries (the “Stores”) located in the State of Oregon; and

 

WHEREAS, Buyers have advanced approximately
$1,095,389.57 (the “Loan”) to fund the operations of the Stores and MCPI but MCPI lacks the funds to repay the Loan
and the interest accruing thereon and lacks the funds to operate the Stores; and

 

WHEREAS, MCPI has asserted a claim against
Bendor alleging that Bendor owes it approximately $342,695.47 for management fees relating to the Stores’ operations, which
claim Bendor disputes; and

 

WHEREAS, the Buyers and MCPI (collectively
the “Parties”) wish to avoid the expense of litigation and have agreed to settle all of their current and ongoing differences
concerning the claims of the Parties, which have either been alleged or would have been alleged in a court of competent jurisdiction
(the “Dispute”); and

 

WHEREAS, the Parties have agreed to: (1)
resolve the claim(s) or potential counterclaims; and (2) execute mutual releases as set forth herein such that any and all unforeseen,
unanticipated and consequential damages or claims are waived and released whether accrued, accruing or yet to be accrued up to
and including the date hereof subject only to the terms and conditions as specified herein; and

 

WHEREAS, Buyers desire to purchase from
MCPI and MCPI desires to sell to the Buyers, one-hundred percent (100%) of MCPI’s total interest (if any) in the Stores and
Medical Management Systems, Inc., an Oregon corporation (“MMS”); and

 

WHEREAS, Buyers also desire to acquire
the trademark “Medication Station” from MCPI; and

 

    	 	1	 

     

    

 

 

WHEREAS, the Parties deem it to be in their
best interest to enter into this Settlement, General Release Of Claims, and Interest Transfer Agreement (the “Settlement
Agreement”) on the terms and conditions set forth below; and

 

NOW, THEREFORE, in consideration of the
mutual covenants to buy and sell and the performance thereof expressed herein by the parties, and other good and valuable consideration,
the receipt of which is hereby acknowledged, each of the Parties does hereby bind themselves, their heirs, executors, administrators,
and assigns, and hereto agree as follows:

 

SETTLEMENT AGREEMENT

 

		1.	Settlement. MCPI agrees to release any and all claims, as further described in Section 2 below, against the Buyers in
exchange for the Buyers agreeing to reduce the principal sum of the Loan owed to Bendor by $342,695.47 (the “Loan Reduction”),
representing the sum MCPI alleges is due it in connection with its prior management of the Stores, in accordance with the following
terms and conditions. Said Loan Reduction shall represent payment in full for all claims relating to the Dispute. Upon execution
of this Agreement, the Parties shall execute a revised Promissory Note in the principal amount of $752,694.10 (the “New Note”),
the amount remaining after deducting the Loan Reduction. Attached hereto and incorporated herein by this reference as Exhibit “A”
is a copy of the revised Promissory Note

		a.	Purchase and Sale of the Stores by Stidham and MCPI

                                                 
i.      Stidham
shall purchase from MCPI, and MCPI shall sell to Stidham, 100% interest of MCPI’s interest in the Stores (if any) and MMS
as well as the assignment of the “Medication Station” trademark for the aggregate purchase price of $25,000.00, to
be paid at Closing through a reduction of the New Note.

                                               
ii.      The purchase
of the Stores shall include the entities known as The Medication Station, Medication Station I and Medication Station II, and
Medical Management Systems, Inc., all Oregon corporations in good standing. MCPI will execute all documents necessary to reflect
the transfer of the Stores to Stidham.

		c.	Closing

 

    	 	2	 

     

    

 

		i.	Closing shall be deemed to have occurred upon execution of the Settlement Agreement by all the
Parties.

 

		ii.	At Closing, MCPI will no longer be considered to be a manager of the Stores and will cease to
operate as such. It will have no further right, title or interest in the Stores and all its right, title and interest to any Store
prior to Closing shall no longer exist. From and after Closing, the Stores shall be owned by Stidham. 

		2.	Releases.

		a.	MCPI, for itself and its past, present and future administrators, agents, assigns, attorneys,
executors, heirs, insurers, parents, partners, predecessors, representatives, servants, subsidiaries, successors, transferees,
underwriters, clients, customers, and all persons acting by, through, under or in concert with any of them, and each of them, hereby
releases and discharges:

                                                    
i.      Buyers,
their past, present and future administrators, agents, assigns, attorneys, executors, heirs, insurers, parents, partners, predecessors,
representatives, servants, subsidiaries, successors, transferees, underwriters, clients, customers, and each of them; and

                                                  
ii.      all
persons acting by, through, under or in concert with any of them of and from any and all actions, causes of action, claims, costs,
damages, debts, demands, expenses, liabilities, losses and obligations of every nature, character and description, known or unknown,
suspected or unsuspected, actual or contingent, which the releasing party now owns or holds, or has at any time heretofore owned
or held, or may at any time hereafter own or hold, by reason of any matter, cause or thing whatsoever incurred, done, omitted or
suffered to be done arising out of, or which may hereafter be claimed to arise out of, related to or in any way directly or indirectly
connected with the Dispute or any matters related to the Stores (all such released or discharged items, collectively, the “MCPI
Released Claims”).

		b.	Bendor and Stidham, for themselves and their past, present and future administrators, agents,
assigns, attorneys, executors, heirs, insurers, parents, partners, predecessors, representatives, servants, subsidiaries, successors,
transferees, underwriters, clients, customers, and all persons acting by, through, under or in concert with any of them, and each
of them, hereby releases and discharges:

                                                 
i.        
MCPI, its past, present and future administrators, agents, assigns, attorneys, executors,
heirs, insurers, parents, partners, predecessors, representatives, servants, subsidiaries, successors, transferees, underwriters,
clients, customers, and each of them; and

    	 	3	 

     

    

                                               
ii.        
all persons acting by, through, under or in concert with any of them of and from any and
all actions, causes of action, claims, costs, damages, debts, demands, expenses, liabilities, losses and obligations of every nature,
character and description, known or unknown, suspected or unsuspected, actual or contingent, which the releasing party now owns
or holds, or has at any time heretofore owned or held, or may at any time hereafter own or hold, by reason of any matter, cause
or thing whatsoever incurred, done, omitted or suffered to be done arising out of, or which may hereafter be claimed to arise out
of, related to or in any way directly or indirectly connected with the Dispute or any matters related to the Stores (all such released
or discharged items, collectively, “Buyers’ Released Claims”). The MCPI Released Claims and Buyers Released Claims
are collectively referred to herein as the “Released Claims”.

 

3.                 
Representation and Warranties of MCPI. MCPI hereby represents and warrants to Buyers that:

		a.	MCPI is a Nevada corporation with full power and authority to enter into this Settlement Agreement
and to carry out its obligations hereunder. The execution, delivery, and performance by MCPI of this Settlement Agreement has been
duly authorized by MCPI and this Settlement Agreement is legally binding upon MCPI in accordance with its terms; 

		b.	The execution, delivery, and performance by MCPI of this Settlement Agreement and the transactions
contemplated thereby will not (i) violate the provisions of any order, judgment, or decree of any court or other governmental agency
or any arbitrator applicable to MCPI or its Articles of Incorporation or Bylaws; or (ii) result in a material breach of or constitute
(with due notice or lapse of time or both) a material default under any contract or agreement to which MCPI is a party or by which
MCPI is bound; and 

		c.	MCPI is a beneficial and record holder of an interest in the Stores, and upon consummation of the transactions contemplated
by this Agreement, MCPI shall have transferred to Buyers and Buyers shall have obtained from MCPI all right, title and interest
in the Stores, free and clear of any and all liens, mortgages, hypothecations, collateral assignments, charges, encumbrances, title
defects, security interests or claims (whether recorded or unrecorded) of any kind.

  

    	 	4	 

     

    

4.        Representations
and Acknowledgements of the Parties. Each of the Parties acknowledge that there is a risk that subsequent to the execution
of this Agreement, one or more Parties will incur or suffer loss, damages or injuries which are in some way caused by or related
to the Released Claims, but which are unknown and unanticipated at the time this Agreement is signed. All parties do hereby assume
the above-mentioned risk and understand that this Agreement SHALL APPLY TO ALL UNKNOWN OR UNANTICIPATED RESULTS OF THE TRANSACTIONS
AND OCCURRENCES DESCRIBED ABOVE, AS WELL AS THOSE KNOWN AND ANTICIPATED, each of the Parties acknowledges in executing the releases
(the “Releases”) contained in this Agreement, that each does so with full knowledge of any and all rights and benefits
that each might otherwise have had , and each, upon the advice of counsel, hereby waives and relinquishes any and all such rights
and benefits. Each of the Parties acknowledges and agrees that this waiver is an essential and material term hereof, without which
this Agreement (including, without limitation, the Releases) would not have been entered into.

 

Each of the Parties further acknowledges
that each may hereafter discover facts different from or in addition to those known or believed to be true with respect to the
Released Claims. Each of the Parties agrees that the Releases shall be and shall remain effective in all respects, notwithstanding
any such different or additional facts, or any facts which are intentionally concealed from either party by the other. In this
regard, and without limitation, each of the Parties declares that it realizes that it may have damages it presently knows nothing
about and that, as to them, they have been released pursuant to the Releases. Each of the Parties further declares that it understands
that the parties being released would not have agreed to compromise their respective claims if the Releases did not cover damages
and their results which may not yet have manifested themselves or which may be unknown or not anticipated at the present time.

 

5.        Miscellaneous.

		a.	The Releases shall not be deemed an admission by any of the Parties of any sort. No right shall inure to any third party from
the obligations, representations and agreements made or reflected herein.

		b.	Each of the Parties represents and warrants that it alone is the owner of the Released Claims, that it has not heretofore assigned
or transferred, nor purported to assign or transfer to any third party, and is not aware of any third party, who might assert some
interest in any of the Released Claims. Each Party further agrees to indemnify, defend and hold harmless the other from all liability,
claims, demands, damages, costs, expenses and attorneys’ fees incurred by the other Party as a result of any third party
asserting any such assignment or transfer of any such interest, right or claim.

 

 

    	 	5	 

     

    

 

		c.	Each of the Parties acknowledges that it has read this Agreement, has been, or has had the
opportunity to be, represented by independent counsel of their own choice in connection with the circumstances leading up to the
execution of the Releases, understands the terms, conditions and consequences of the Releases, and is freely and voluntarily entering
into the Releases.

		d.	By execution of this Release, each releasing party represents and warrants to the released
party that no Claim that he, she or it has, had, might have or might have had in the past against any person or entity released
hereby, has previously been conveyed, assigned, or in any manner transferred, in whole or in part, to any third party. Each releasing
party expressly represents and warrants to the other that he, she or it has full authority to enter into this Release and to release
any and all Claims he, she or it now has, had, might have or might have had in the past against each person or entity released
hereby.

		e.	It is expressly understood and agreed that the terms of this Agreement are contractual and
not merely recitations and that the agreements herein contained are to compromise doubtful and disputed Claims, avoid litigation,
and buy peace and that no releases or other consideration given shall be construed as an admission of liability, all liability
being expressly denied by each released party hereto. 

		f.	Each of the parties hereto hereby irrevocably covenants to refrain from, directly or indirectly,
asserting any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind against the other
party hereto or any other party released hereunder based upon any matter purported to be released hereby.

		g.	It is further understood and agreed that this Agreement and the other agreements referenced
herein by and between the Parties contain the entire agreement between the parties and supersedes any and all prior agreements,
arrangements, or understandings between the parties relating to the subject matter hereof. No oral understandings, statements,
representations, warranties, promises, or inducements contrary to the terms of this Agreement or otherwise not contained in this
Agreement exist. This Agreement cannot be changed or terminated except in writing signed by all parties hereto. The rights, duties
and obligations of the Parties under this Agreement shall operate independently of any other relationship, contractual or otherwise,
between the Parties.

		h.	This Agreement shall be construed in all respects in accordance with the internal laws of the
State of Texas applicable to agreements made and to be performed entirely within Texas. Any dispute which relates to the subject
matter hereof, or arises herefrom, shall be resolved in Dallas County, Texas. 

 

 

    	 	6	 

     

    

 

		i.	By execution of this Agreement, each Releasor warrants and represents that he understands that
this is a full, final, and complete settlement with each party released hereby of all known and unknown Claims relating to the
Dispute. The Releases are not conditioned upon the occurrence or nonoccurrence of any event or the granting of any consent or approval
or related to or dependent upon any other event or any agreement or business transaction between the Parties.

		j.	This Agreement shall be binding upon and shall inure to the benefit of the Parties and their
respective heirs, successors, representatives, assigns, affiliates, agents, shareholders, directors, employees and attorneys, past
and present, and each of them.

		k.	If any court of competent jurisdiction holds any provision of this Agreement invalid or unenforceable,
the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. This Agreement and
all transactions contemplated hereby shall be governed by, construed and enforced in accordance with the laws of the State of Texas.
The parties agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in the State
of Texas, City of Dallas. 

		l.	THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY PROCEEDING WHATSOEVER
BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS.

		m.	Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of service if served personally or five days after mailing if mailed by first class United States mail, certified
or registered with return receipt requested, postage prepaid, and addressed to the last known address of the Parties.

		n.	This Agreement may be signed in one or more counterparts, each of which shall constitute an
original but all of which, when taken together, shall constitute one and the same agreement. If this Agreement is executed in counterparts,
then each Party shall execute sufficient counterpart signature pages for each Party, ultimately, to be provided with an originally
executed counterpart signature page from each Party.

 

    	 	7	 

     

    

 

		o.	Each gender shall include the other genders whenever the context may require in this Agreement.

		p.	Each of the individuals whose signature appears below hereby represents and warrants that he
or she has actual authority to enter into this Agreement.

		q.	Each party shall bear his or her own costs and attorneys' fees.

 

[Signatures continue on next page]

 

 

 

 

 

 

 

 

 

 

 

    	 	8	 

     

    

 

 

IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.

	 	  

 

MCPI, INC.

 

 

 

By: /s/ R. Wayne Duke

R. Wayne Duke, President

 

 

 

BENDOR INVESTMENTS, LTD.

 

 

By:/s/ Charles Stidham

Charles Stidham, President

 

 

 

CHARLES STIDHAM

 

 

 

/s/ Charles Stidham

Charles Stidham

 

 

 

    	 	9Exhibit 10.1

  

AMENDMENT NUMBER TWO dated June 7, 2016 (referred to as “the
Amendment”), amending the Second Amended and Restated Employment Agreement dated November 11, 2010 by and between Stephen
G. Berman (“Berman” or “Executive”) and JAKKS Pacific, Inc., a Delaware corporation the “Company”).

 

WITNESSETH:

 

WHEREAS, Executive and the Company
entered into the Second Amended and Restated Employment Agreement dated November 11, 2010 (the “2010 Restated Employment
Agreement”), as modified by the October 20, 2011 letter amendment, and as amended by Amendment Number One dated September
12, 2012 (the “2012 Amendment”; the 2010 Restated Employment Agreement, as heretofore modified and amended is referred
to as the “Amended Employment Agreement”); and

 

WHEREAS, Executive and the Company
desire to further amend the terms of the Amended Employment Agreement on the terms and subject to the conditions set forth in this
Amendment Number Two (the Amended Employment Agreement, as amended by this Amendment Number Two, is referred to as the “Employment
Agreement”.)

 

NOW, THEREFORE, in consideration
of the mutual promises, representations and warranties set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, and pursuant to Section
21 of the 2010 Restated Employment Agreement, agree as follows:

 

		1.	Definitions. Capitalized terms not otherwise defined in this Amendment are used with the same meanings ascribed thereto
in the Amended Employment Agreement.

 

		2.	Term. Section 2 of the 2010 Restated Employment Agreement, as amended by the 2012 Amendment, is further amended in its
entirety to provide as follows:

 

“2. Term. The term of this
Agreement shall commence as of the date hereof and the term of this Agreement and Executive’s employment hereunder shall
end on December 31, 2020, subject to earlier termination upon the terms and conditions provided elsewhere herein (the “Term”).
As used herein, “Termination Date” means the last day of the Term.”

 

		3.	Compensation. Section 3 of the 2010 Restated Employment Agreement, as amended by the 2012 Amendment, is further amended
as follows:

 

		3.1.	Base Salary. Section 3(a) of the 2010 Restated Employment Agreement, as amended by the
2012 Amendment, is amended in its entirety to provide as follows:

 

“a. Base Salary. As compensation
for his services hereunder, the Company shall pay to Executive a base salary (“Base Salary”) effective as of June 1,
2016 at the annual rate of $1,450,000.00, and commencing January 1, 2017 and for each subsequent calendar year during the Term
at an annual rate to be determined by the Compensation Committee of the Company’s Board of Directors (the “Compensation
Committee”), but that is at least $25,000.00 more than the annual rate in the immediately preceding calendar year. The Base
Salary shall be paid to Executive in substantially equal installments in accordance with the Company’s payroll practices,
subject to any required tax withholding.”

 

     

     

    

  

		3.2.	Annual Restricted Stock Awards. Effective as of January 1, 2017, Section 3(b) of the 2010
Restated Employment Agreement, as amended by the 2012 Amendment, is amended in its entirety to provide as follows:

 

“b. Annual Restricted Stock Awards.

 

(i)Definitions.

 

A. The term “Annual Restricted Shares Grant”
means the number of shares of Restricted Stock issued on each annual Issuance Date, which shall be determined by dividing $3,500,000.00
by the closing price of a share of the Company’s Common Stock on the first trading date immediately preceding such annual
Issuance Date.

 

B. The term “Common Stock” means
the Company’s common stock, par value $.001 per share.

 

C. The term “Issuance Date” means
January 1, 2017 and January 1 of each calendar year thereafter occurring during the Term.

 

D. The term “Performance Measures”
is defined in section 3.4 below of this Amendment Number Two.

 

E. The term “Performance Shares”
is defined in sub-paragraph (ii) (A) below of this Amendment Number Two.

 

F. The term “Plan” means the Company’s
2002 Stock Award and Incentive Plan as in effect on June 1, 2016 and as subsequently may be amended, from time to time, or any
successor plan.

 

G. The term “Restricted Stock” means
shares of restricted common stock of the Company, par value $.001 per share issuable under the Plan.

 

H. The term “Restricted Stock Performance
Measures” has the meaning provided for in Exhibit “A” annexed to of this Amendment Number Two.

 

(ii) Pursuant to and subject to the terms (including,
without limitation, the availability of shares reserved for issuance thereunder) of the Plan, the Company shall issue to Executive
on each annual Issuance Date that number of shares of Restricted Stock with a value equal to $3,500,000.00 which shall vest as
follows:

 

A. Sixty Percent (60%) of each Annual Restricted Shares
Grant, equal in value on its Issuance Date to $2,100,000.00, shall vest in accordance with the Restricted Stock Performance Measures
(the shares included in that part of each Annual Restricted Shares Grant that vest in accordance with the Restricted Stock Performance
Measures are referred to as the “Performance Shares.”)

 

B. Forty Percent (40%) of each Annual Restricted Shares
Grant, equal in value on its Issuance Date to $1,400,000.00, shall vest in four (4) equal annual installments, with twenty-five
percent (25%) thereof vesting on each of the first, second, third and fourth anniversaries of its Issuance Date.

  

     

     

    

 

		3.3.	Annual Performance Bonus Opportunities. 

 

3.3.1.Effective
as of January 1, 2017, Sections 3(d) (i) through 3(d) (v) inclusively of the 2010 Restated Employment Agreement, as amended by
the 2012 Amendment, are further amended in their entirety to provide that the Annual Performance Bonus for fiscal year 2017 and
each fiscal year thereafter during the Term shall equal the amount calculated as provided in clause (A) below and be paid as provided
in clauses (B) and (C) below.

 

		(A)	Each Annual Performance Bonus shall be equal to an amount not exceeding 300% of Base Salary for the applicable fiscal year,
one-half of which shall be earned using Company Net Revenue performance criteria established by the Compensation Committee for
the applicable fiscal year and one-half of which shall be earned using Company EBITDA performance criteria established by the Compensation
Committee for the applicable fiscal year, such criteria to be established by the Compensation Committee during the first fiscal
quarter of the relevant fiscal year for which the Annual Performance Bonus criteria are being established, after consultation with
the Executive, in a manner consistent with past practices. The terms Net Revenue and EBITDA shall have the same meaning as provided
for in Exhibit A.

 

		(B)	That portion of the Annual Performance Bonus up to an amount equal to the first 200% of Base Salary shall be paid in cash;
any excess over 200% of Base Salary shall be paid in Restricted Stock vesting in equal quarterly installments, with the first installment
vesting on the award date and the remainder over 3 years following the award date. The number of shares of Restricted Stock, if
any, forming part of the Annual Performance Bonus shall be determined by dividing the dollar amount of the Restricted Stock portion
of the Annual Performance Bonus by the closing price of a share of the Common Stock on the first trading date immediately preceding
the date on which the Annual Performance Bonus is determined to have been earned.

 

		(C)	The Company shall pay the cash portion and issue the Restricted Stock portion of the Annual Performance Bonus to Executive,
subject to any required tax withholding, not later than twenty-one (21) business days following the date on which the Auditors’
final report on the Company’s financial statements for the fiscal year for which the Annual Performance Bonus is awarded
is issued and delivered to the Company and in any event not later than April 30 in the calendar year following such fiscal year
(the “Annual Performance Bonus Award Date.”) Such Restricted Stock shall be issued subject to the Plan (including,
without limitation, the availability of shares reserved for issuance thereunder) and the applicable Restricted Stock Agreement,
and shall vest in equal annual installments, the first installment of which shall vest on the Annual Performance Bonus Award Date
and thereafter on January 1 in each subsequent year until the final vesting date.

 

		3.4.	The calculations necessary to determine the Restricted Stock Performance Measures and the Annual
Performance Bonus performance criteria (collectively, the “Performance Measures”) shall be made by the Compensation
Committee in its discretion, and will, absent manifest error, be conclusive and binding upon the Company and Executive. The Performance
Measures may all be adjusted in the sole discretion of the Compensation Committee to take account of extraordinary or special items,
or as otherwise may be permitted by the Plan, and the Compensation Committee also reserves the right to modify the vesting and
bonus targets and vesting and bonus percentages in the exercise of its negative discretion to take account of any extraordinary
or special items, and business acquisitions occurring during the Performance Periods and the relevant fiscal years, or as otherwise
determined by the Compensation Committee.

  

     

     

    

 

		3.5.	Section 3(b) of the 2010 Restated Employment Agreement as amended by this Amendment Number Two
shall continue to be subject to the provisions of Sections 3(e) through 3(j) inclusively of the 2010 Restated Employment Agreement.

 

		4.	Medical and Dental Insurance for Executive’s Children. If Executive’s employment by the Company terminates
as a result of Executive’s death, the Company shall continue to pay the health and dental insurance premiums for Executive’s
surviving children under the Company’s health and dental insurance health plans until any such child reaches the maximum
age at which such child may be covered as a matter of law following the death of the child’s parent.

 

		5.	Section 15(c). All references to “December 31, 2015” in Section 15(c) of the 2010 Restated Employment Agreement
are stricken and replaced with “December 31, 2020.”

 

		6.	Section 17(a). Section 17(a) of the 2010 Employment Agreement is supplemented to provide that unless the Employment
Agreement has been terminated by Executive other than as the result of the occurrence of a Good Reason Event or by the Company
as the result of the occurrence of a For Cause Event, if the Term or Executive’s employment by the Company does not continue
after December 31, 2020, the Performance Shares and any Restricted Stock issued in partial payment of an Annual Performance Bonus
shall continue to vest in accordance with and subject to the vesting conditions provided for in Section 3 of this Amendment Number
Two.

 

		7.	Employment Agreement in Full Force and Effect. The Employment Agreement, as expressly amended by this Amendment, remains
in full force and effect.

 

 

 

BALANCE OF THIS PAGE DELIBERATELY LEFT BLANK

 

SIGNATURE PAGE FOLLOWS 

 

     

     

    

 

IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the day and year first above written.

  

	 	THE COMPANY:
	 	 	 
	 	JAKKS PACIFIC, INC.
	 	 	 
	 	By:	/s/
	 	 	Name: 	Joel Bennett
	 	 	Title:  	Executive Vice President Finance
	 	 	 
	 	 	 
	 	EXECUTIVE:
	 	 
	 	/s/
	 	Stephen G. Berman

  

     

     

    

 

EXHIBIT A 

Amendment Number Two to Amended Employment
Agreement Between

Stephen G. Berman “Executive”)
and JAKKS Pacific, Inc. (the “Company”)

 

RESTRICTED STOCK PERFORMANCE MEASURES

 

This Exhibit A to the Amended Employment Agreement between Executive
and JAKKS sets forth the Restricted Stock Performance Measures that will be used to determine vesting of each Annual Restricted
Shares Grant made to Executive. Capitalized terms not otherwise defined in this Exhibit “A” are used below with the
meanings ascribed thereto in Amendment Number Two to the Amended Employment Agreement.

 

		1)	Definitions.

 

a)“Closing Share Value” means
in the case of the Company, the closing price of a share of the Company’s Common Stock, and in the case of the Russel 2000
Index, the price reported as the closing price of the companies in the Russel 2000 Index, in both cases, on the last trading day
of a Restricted Stock Performance Period.

 

b)“EBITDA” means the earnings
before interest, taxes, depreciation and amortization of a company for an entire fiscal year calculated in accordance with the
company’s audited financial statements.

 

c)“Index” means the stock
market index known as the Russel 2000 Index, or if the Russel 2000 Index ceases to be published, then such other stock market index
(such as, but not limited to, the S&P Small Cap 600 Index) that the Compensation Committee determines, with the advice of its
independent compensation consultant, and after receiving input from the Executive, should be used as the Index for determining
the Restricted Stock Performance Measures.

 

d)“Opening Share Value” means
in the case of the Company, the closing price of a share of the Company’s Common Stock, and in the case of the Russel 2000
Index, the price reported as the closing price of the companies in the Russel 2000 Index, in both cases, on the first trading day
of a Restricted Stock Performance Period.

 

e)“Peer Group Companies” means
those public companies whose shares of stock are traded on a recognized securities exchange that the Compensation Committee, with
the advice of its independent compensation consultant, and after receiving input from the Executive, has chosen to comprise the
group of companies used as a basis for comparison of the Company’s Net Revenue Growth and EBITDA Growth in each Restricted
Stock Performance Period.

 

f)“Restricted Stock Performance Measures”
means the TSR Metric, Net Revenue Growth Metric and EBITDA Metric as each such term is defined Section 2 of this Exhibit “A”.

 

g)“Restricted Stock Performance Period”
with respect to each Annual Restricted Shares Grant means the three (3) year period commencing on its Issuance Date and ending
on December 31 of the third calendar year following such Issuance Date.

 

h)“TSR” means the total shareholder
return calculated by dividing (i) the Closing Share Value plus any dividends paid by (ii) the Opening Share Value. The TSR of the
Company shall be adjusted to give appropriate effects to any stock splits, reverse stock splits and similar transactions, as determined
by the Compensation Committee.

 

     

     

    

 

		2)	Vesting of the Performance Shares during each Restricted Stock Performance Period shall be determined by three performance
metrics: TSR for the Company as compared to TSR for the Index during the Restricted Stock Performance Period (the “TSR
Metric”); the percentile performance of the Company relative to the Peer Group Companies measured by the Net Revenue
Growth of the Company as compared to Net Revenue Growth of the Peer Group Companies during the Performance Period (the “Net
Revenue Growth Metric”); and the percentile performance of the Company relative to the Peer Group Companies measured
by the EBITDA Growth of the Company as compared to EBITDA Growth of the Peer Group Companies during the Performance Period (the
“EBITDA Growth Metric”.)

 

a)Each Annual Restricted Shares Grant shall be
divided into the following three Tranches: one Tranche shall be equal to fifty percent (50%) of the Annual Restricted Shares Grant,
and vesting of such Tranche shall be determined by the TSR Metric (the “TSR Tranche”); one Tranche shall be
equal to twenty-five percent (25%) of the Annual Restricted Shares Grant, and vesting of such Tranche shall be determined by the
Net Revenue Growth Metric (the “Net Revenue Tranche”), and the third Tranche shall be equal to twenty-five percent
(25%) of the Annual Restricted Shares Grant, and vesting of such Tranche shall be determined by the EBITDA Growth Metric (the “EBITDA
Tranche”.)

 

b)The number of Performance Shares and the percentage
of Performance Shares in each Tranche that vest shall be determined as set forth in the table below:

 

	Percentage of Performance Shares in a Tranche that Vest According to the Applicable Performance Measure	TSR Tranche (50% of Annual Restricted Shares Grant)	Net Revenue Tranche (25% of Annual Restricted Shares Grant)	
        EBITDA Tranche (25% of Annual Restricted Shares Grant)

	100%	Company’s TSR is 20% or more above of Index TSR	90th percentile or more using Net Revenue Metric	90th percentile or more using EBITDA Metric
	75%	Company’s TSR is 10%-19% TSR above  Index TSR 	75th
    - 89th perce ntile using Net Revenue Metric	75th - 89th percentile using EBITDA Metric
	50%	Company’s TSR is Equal to Index TSR	50th – 74th Percentile using Net Revenue Metric	50th – 74th Percentile using EBITDA Metric
	25% (threshold)	Company’s TSR is 10% or less below Index TSR	25th –  49th Percentile using Net Revenue Metric	25th –  49th Percentile using EBITDA Metric
	0%	Company’s TSR is more than 10% below Index TSR	Less than 25th Percentile using Net Revenue Metric	Less than 25th Percentile using Net Revenue Metric

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