Term Sheet for Employment of Richard R. Neitz as President, Retail Products Division

Summary

This agreement outlines the employment terms for Richard R. Neitz as President of the Retail Products Division, including a $250,000 annual salary for a three-year term, stock options, bonus eligibility based on company earnings, and various benefits such as moving expenses, vacation, health coverage, car allowance, and life insurance. The agreement also addresses non-compete and separation terms, immediate vesting of options upon a change in control, and indemnification against actions by DSI Toys. A definitive agreement will be negotiated later.

EX-10.21 3 0003.txt EXHIBIT 10.21 RICHARD R. NEITZ-TERM SHEET TITLE- PRESIDENT-RETAIL PRODUCTS DIVISION o $250,000 ANNUAL SALARY; 3 YEAR TERM SUBJECT TO SEPARATION AND NON-COMPETE TERMS SIMILAR TO THAT OF PRIOR EMPLOYMENT CONTRACT WITH DSI. o 100,000 NQSO STOCK OPTIONS AT THE CLOSING PRICE ON THE DAY MR. NEITZ COMMENCES EMPLOYMENT WHICH IS OCTOBER 1,1999; OPTIONS WILL VEST RATABLY OVER A THREE YEAR PERIOD. o BONUS PROGRAM-IF RETAIL EARNINGS BEFORE TAXES EXCEED $1.5 MILLION AND $2.5 MILLION IN EACH OF THE FISCAL YEARS ENDED JULY 31,2000 AND 2001 RESPECTIVELY, THEN MR. NEITZ WILL RECEIVE A BONUS EQUIVALENT TO 2% OF ALL SUCH NET EARNINGS BEFORE TAXES. ONCE $2.5 MILLION OF EARNINGS HAVE BEEN OBTAINED IN ANY FISCAL YEAR, THE MINIMUM TO EARN A BONUS SHALL BE INCREASED 20% A YEAR THEREAFTER. o MOVING EXPENSES-ALL OUT-OF-POCKET MOVING EXPENSES. TWO BEDROOM APARTMENT WHILE RELOCATING FOR A PERIOD NOT TO EXCEED 6 MONTHS. o VACATION- 3 WEEKS ANNUALLY, EARNED RATABLY OVER THE EMPLOYMENT TERM, AND NOT TO BE CARRIED FORWARD TO FUTURE YEARS. o HEALTH BENEFITS-SAME AS ALL EXECUTIVE OFFICERS. o CAR ALLOWANCE- $500 PER MONTH o LIFE INSURANCE-PICK UP PAYMENTS ON INSURANCE CURRENTLY BEING PAID BY DSI. o MEMBERSHIP TO TOY MANUFACTURERS OF AMERICA o CHANGE IN CONTROL- IF THERE IS A SIGNIFICANT CHANGE IN STOCK OWNERSHIP OR BOARD OF DIRECTORS THEN OPTIONS VEST IMMEDIATELY. o TRAVEL-1ST CLASS AND MAY TAKE WIFE ONE TIME ANNUALLY 1ST CLASS TO HONG KONG. o ATTORNEY FEES EXCEEDING $10,000 REGARDING SEPARATION AGREEMENT WITH DSI. o BOARD SEAT. o MOBIL PHONE USAGE SIMILAR TO EXISTING SERVICE FOR EXECUTIVES. o DEFINITIVE AGREEMENT TO BE NEGOTIATED. o COMPANY WILL HOLD MR. NEITZ HARMLESS AND INDEMNIFY ON ANY ACTION BY DSI TOYS AS IT PERTAINS TO MR. NEITZ AND PLAY BY PLAY TOGETHER. - ------------------ ----------------- RAYMOND BRAUN RICHARD R. NEITZ PRESIDENT AND CHIEF OPERATING OFFICER OCTOBER 5, 1999