Samuel R. Newborn
1414 Avenue of the Americas
New York, NY 10019
Re: Employment Agreement
Dear Samuel:
I refer
you to your Employment Agreement dated January 1, 2002 with 4Kids
Entertainment Licensing, Inc. (“Employer”) as amended
by letter agreements dated June 16, 2003 and March 2, 2006
(collectively the “Employment Agreement”).
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This letter hereby further amends
the Employment Agreement as follows:
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1. Paragraph 2 (b) of your
Employment Agreement, which was previously amended pursuant to the
March 2, 2006 amendment, shall be further amended as
follows:
(a) The current final sentence of
Paragraph 2 (b) set forth in the March 2, 2006 amendment, which
final sentence reads "Employer’s payments to Employee of the
Severance Benefit shall be made in accordance with the provisions
of Paragraph 3 (b) below" is hereby deleted in its entirety and is
replaced by the following which shall be added to the end of
Paragraph 2 (b):
“Employer’s payments to
Employee of the Severance Benefit shall be made in accordance with
the provisions of Paragraph 3 (b) below subject to Paragraph 19
below. For the avoidance of doubt, the Severance Benefit shall not
be in addition to any payment which Employee may receive pursuant
to Paragraph 10 (f) of this Agreement with respect to a Change of
Control (as defined below in Paragraph 10 (f) (ii)). This Paragraph
2 (b) shall survive the expiration of this Agreement."
2.
Paragraph 10(d) of your Employment Agreement is hereby amended by
deleting the last sentence thereof and replacing it with the
following:
"In the event that such written
notice of termination is delivered, Employee shall continue to
receive Employee’s full salary and Fringe Benefits for the
remainder of the Term. Such payment of the amount due Employee
pursuant to this Paragraph 10 (d) shall be made to Employee in a
lump sum within five (5) business days of the date of the
termination of this Agreement by Employer without cause subject to
Paragraph 19 below.
3. Paragraph 10(f) of your
Employment Agreement, which was previously amended pursuant to the
March 2, 2006 amendment, is hereby further amended by
deleting Paragraph 10 (f) in its entirety and
replacing it with the following new Paragraph 10 (f):
“(f) (i) If during the Term,
there shall occur a Change of Control (as defined below), Employee
may, within six (6) months after the occurrence of the Change of
Control, voluntarily terminate his employment in which case
Employee shall be entitled to receive a payment equal to 2.99 times
his average annual compensation (including bonuses) paid by
Employer during the three (3) calendar years prior to the Change of
Control. For the avoidance of doubt, if Employer terminates
Employee pursuant to Paragraph 10 (d) above during the six (6)
months after the occurrence of the Change of Control but prior to
Employee’s election to terminate Employee’s employment
pursuant to Paragraph 10 (f)(i), Employee shall receive the greater
of the payment due Employee pursuant to Paragraph 10 (d) above or
the payment due Employee pursuant to this Paragraph 10
(f)(i).
(ii) Any payment to be made to
Employee pursuant to Paragraph 10 (f) (i) above shall be made to
Employee in a lump sum as of the date that Employee voluntarily
terminates his employment as provided in this Paragraph 10 (f) (i)
subject to Paragraph 19 below. Notwithstanding anything herein to
the contrary, it is the agreement of the parties that the amount of
payments or other benefits accruing to Employee upon a Change of
Control (whether pursuant to this Agreement or any other agreements
between Employee and Employer and/or Employer’s affiliates to
which Employee is a party or beneficiary) which are taken into
account for purposes of determining the application of the excise
tax pursuant to Section 280G of the Internal Revenue Code
(collectively "Section 280G Compensation") shall not exceed the
maximum amount of Section 280G Compensation which Employee may
receive without Employee becoming subject to the excise tax under
Section 280G of the Internal Revenue Code ("Code"). In the event
that the aggregate amount of the Section 280G Compensation accruing
to Employee upon a Change of Control (whether pursuant to this
Agreement or any other agreements between Employee and Employer
and/or Employer’s affiliates to which Employee is a party or
beneficiary) would result in Employee becoming subject to the
excise tax under Section 280G of the Code, the parties agree that
Employee’s payments pursuant to this Paragraph 10(f)(i) shall
be reduced by an amount which will result in Employee
receiv
