Exhibit 10.1
EMPLOYMENT
AGREEMENT
This employment agreement (this
“ Agreement ”) is effective January 1,
2006, between Excelligence Learning Corporation (“
Employer ”) and Judith McGuinn (“
Employee ”).
WHEREAS, Employer desires the
services of Employee in order to retain Employee’s
experience, abilities, and knowledge, and is therefore willing to
engage her services on the terms and conditions set forth herein;
and
WHEREAS, Employee desires to be
employed by Employer and is willing to do so on the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of
the above recitals and of the mutual promises and conditions set
forth in this Agreement, it is agreed as follows:
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1.
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Duration : Subject to earlier termination as provided in
this Agreement, Employee shall be employed for a term beginning
January 1, 2006, and continuing through December 31,
2008. If Employer intends to employ Employee after the termination
of this Agreement, the parties will meet at least sixty
(60) days prior to the expiration of this Agreement to make a
good faith attempt to negotiate a new agreement.
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2.
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Place of
Employment : Unless the
parties agree otherwise in writing, during the employment term,
Employee shall perform the services Employee is required to perform
under this Agreement at Employer’s headquarters (which are
currently located at 2 Lower Ragsdale Drive, Suite 200, Monterey,
California, 93940); provided, however, that Employer may from time
to time require Employee to travel temporarily to other locations
on Employer’s business.
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3.
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Duties and
Authority : Employer
shall employ Employee as Executive Vice President and Chief
Operating Officer or in such other capacity or capacities as
Employer may from time to time prescribe. Employee shall have the
full power and authority to manage and conduct business for the
Employer, subject to the directions and policies of Employer as
they may be, from time to time, stated either orally or in
writing.
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4.
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Reasonable
Time and Effort : During
Employee’s employment, Employee shall devote such time,
interest, and effort to the performance of this Agreement as may be
fairly and reasonably necessary. Except with the prior written
approval of the Chief Executive Officer, Employee, during the term
of this Agreement or any renewal thereof, will not (i) accept
any other employment, (ii) serve on the board of directors or
similar body of any other business entity, (iii) engage
directly or indirectly, in any other business activity (whether or
not pursued for pecuniary advantage) that is or may be competitive
with, or that might place her in a competing position to, that of
Employer or any of its Affiliates. For this purpose, “
Affiliate ” shall mean any partnership, joint venture,
limited liability company or corporation that, directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, Employer. For this
purpose, the term “ Control ” includes, without
limitation, the possession, directly or indirectly, of the power to
direct the management and policies of a partnership, joint venture,
limited liability company or corporation, whether through the
ownership of voting securities, by contract or
otherwise.
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5.
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Salary : During the term of this Agreement, Employer
agrees to pay Employee a base salary of $225,000 per year. The base
salary shall be payable as a current salary on a bi-weekly basis.
Employer, in its sole discretion, may increase Employee’s
base salary or any other benefits but may not decrease
Employee’s salary during the term of this Agreement. At
Employee’s request, Employee will receive a salary review at
or near the end of each twelve (12) month period during the
term.
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If, during the term of this
Agreement, Employee’s employment is terminated for any reason
other than due to a Change in Control (as set forth in the next
paragraph) and apart from the reasons set forth in Sections 10, 11
or 12 hereof, or if (i) Employee’s title is lowered, or
(ii) Employee’s place of business is relocated at least
thirty (30) miles from Employer’s headquarters on the
effective date of this Agreement, Employer shall continue to pay
Employee’s base salary in effect at the time of
Employee’s termination of employment through
December 31, 2008. In such case, Employee will have no
obligation to mitigate her lost compensation. Employer will also
reimburse Employee’s insurance premiums incurred as a result
of the continuation of Employee’s benefits coverage required
by COBRA.
If Employee is terminated within two
years after a Change of Control (defined below), and such
termination is not for a reason set forth in Sections 10, 11 or 12
hereof, Employee shall be entitled to a severance payment equal to
200% of Employee’s annual base salary under this Agreement,
paid in four equal quarterly installments during the year following
the Employee’s date of termination In such case, Employee
will have no obligation to mitigate her lost compensation. Employer
will also reimburse Employee’s insurance premiums incurred as
a result of the continuation of Employee’s benefits coverage
required by COBRA.
For purposes of this Agreement,
“ Change in Control ” shall mean any of the
following events:
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a)
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The
acquisition, directly or indirectly, by any “person” or
“group” (as those terms are defined in Sections
3(a)(9), 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), of
“beneficial ownership” (as determined pursuant to Rule
13d-3 under the Exchange Act) of 40% or more of the combined voting
power of Employer’s then outstanding “ Voting
Securities ” (defined as the common stock of Employer,
together with any other securities of Employer that are entitled to
vote generally in the election of directors of Employer) other than
an acquisition by (i) any stockholder of Employer which, on
the date hereof, owns more than 30% of the combined voting power of
Employer’s outstanding Voting Securities (or any
“group” of which any such stockholder is a part),
(ii) a subsidiary of Employer or (iii) any employee
benefit plan (or any related trust) sponsored or maintained by
Employer or a subsidiary of Employer;
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b)
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Individuals who, as of the
effective date of this Agreement, constitute the Board of Directors
of Employer (the “ Incumbent Board ”) cease for
any reason to constitute a majority of the members of the Board;
provided , however , that any individual who becomes
a director after the effective date of this Agreement whose
election, or nomination for election by Employer’s
stockholders, was approved by a vote of at least a majority of the
members of the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any individual whose initial assumption of office
occurs as a result of an actual or threatened
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election contest relating to the
election or removal of the directors of Employer or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
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c)
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Consummation by
Employer of (i) a merger, reorganization, consolidation or
similar transaction (any of the foregoing, a “ Merger
”) in which the beneficial owners of Employer’s Voting
Securities immediately before such Merger beneficially own,
immediately after such Merger, directly or indirectly, less than
50% of the combined voting power of the Voting Securities of
Employer resulti
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