EX-10.1 2 dex101.htm AMENDED AND RESTATED EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between BLOCKBUSTER INC. (“Blockbuster” or the “Company”), and XXXXXX XXXXX (“Executive”). Blockbuster and Executive may hereinafter be referred to jointly as the “Parties.”
WHEREAS, Executive and the Company previously entered into an employment agreement, as amended from time to time, dated September 12, 2007 (the “Original Effective Date”); and
WHEREAS, the Parties desire to amend and restate the employment agreement on the terms and conditions set forth herein.
During the Term of Employment, Executive shall devote all of his professional attention, on a full time basis, to the business and affairs of the Company and shall use his best efforts to advance the best interest of the Company and shall comply with all of the policies of the Company, including, without limitation, such policies with respect to legal compliance, conflicts of interest, confidentiality and business ethics as are from time to time in effect.
During the Term of Employment, Executive shall not, without the prior approval of the Board, which approval will not be unreasonably withheld, (a) directly or indirectly render services to, or otherwise act in a business or professional capacity on behalf of or for the benefit of, any other Person (as defined below) as an employee, advisor, member of a board or similar governing body, independent contractor, agent, consultant, representative or otherwise, whether or not compensated, or (b) accept appointment to or work in any capacity for any charitable or not-for-profit organization; and, in the case of clauses (a) and (b), to the extent Board approval is granted for Executive’s engagement in any such activity, Executive shall only engage in such activity to the extent that such activity does not conflict or interfere with the performance of Executive’s duties to the Company. Executive shall be entitled to manage his personal investments and affairs and to engage in public speaking, provided that such activities do not conflict or interfere with the performance of Executive’s duties. “Person” or “person” as used in this Agreement means any individual, partnership, limited partnership, corporation, limited liability company, trust, estate, cooperative, association, organization, proprietorship, firm, joint venture, joint stock company, syndicate, company, committee, government or governmental subdivision or agency, or other entity.
|
Page 1 |
A. Salary. For all duties to be performed by Executive on and after the Effective Date in any capacity hereunder, Executive shall be paid a base salary (“Base Salary”) at an annual rate, to be determined by the Board, of not less than $650,000.00 per year, payable in accordance with the normal payroll practices and procedures of the Company and subject to normal withholdings. In the event the Parties agree to enter into a new employment agreement (the “New Agreement”) following the end of the Term of Employment, Executive’s annual rate of Base Salary under the New Agreement shall not be less than $700,000.00 per year.
(1) One-third of the stock options have an exercise price equal to the Fair Market Value (as defined in the 2004 Plan) of shares of the Company’s Common Stock on the Original Effective Date;
|
Page 2 |
(2) One-third of the stock options have an exercise price equal to the exercise price determined in Paragraph 3.D.(1) above multiplied by 115%; and
(3) One-third of the stock options have an exercise price equal to the exercise price determined in Paragraph 3.D.(1) above multiplied by 132%.
F. Expense Reimbursement. Executive shall be entitled to reasonable reimbursement of all reasonable expenses incurred on behalf of the Company during the Term of Employment, in accordance with the Company’s standard policies and procedures, which provide an objectively determinable nondiscretionary definition of the expenses eligible for reimbursement. Notwithstanding any provision of this Agreement to the contrary, the amount of expenses for which Executive is eligible to receive reimbursement during any calendar year shall not affect the amount of expenses for which Executive is eligible to receive reimbursement during any other calendar year within the Term of Employment. Reimbursement of expenses under this Paragraph 3.F. shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred. Executive is not permitted to receive a payment or other benefit in lieu of reimbursement under this Paragraph 3.F.
|
Page 3 |
|
Page 4 |
G. Date of Termination/Disability. “Date of Termination” means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that if Executive’s employment is terminated by reason of his death, the Date of Termination shall be the date of death of Executive; provided, further that, in the case of a termination due to Executive’s Disability, the Date of Termination is the end of any sixty (60) day period or the eighty-first day in any twelve (12) month period that Executive is absent from work by reason of Disability.
A. For Cause or Voluntary Termination or Termination Due to Executive’s Death or Disability.
EMPLOYMENT AGREEMENT |
Page 5 |
(1) If Executive’s employment is terminated as a result of a For Cause Termination or a Voluntary Termination, or due to Executive’s death or Disability, Executive will then, in lieu of any other payments of any kind (including without limitation, any severance payments), be entitled to receive, within thirty (30) days following the Date of Termination, the following:
(a) Payment of any unpaid Base Salary through the Date of Termination;
(b) Payment for any vacation time accrued and unused as of the Date of Termination, pursuant to Company policy; and
(c) Executive’s vested stock options may be exercised in accordance with the applicable provisions of the 2004 Plan, and all unvested stock options shall be forfeited.
(2) If Executive’s employment is terminated as a result of a For Cause Termination or a Voluntary Termination, or due to Executive’s death or Disability, coverage under all of the Company’s benefit plans and programs in which Executive is entitled to participate under Paragraph 3.E. above will terminate as of the Date of Termination except to the extent expressly provided in such plans, programs, or applicable law.
B. Involuntary Termination or Good Reason Termination.
(1) If Executive’s employment is terminated as a result of an Involuntary Termination or a Good Reason Termination, Executive will then, in lieu of any other payments of any kind (including without limitation, any severance payments), be entitled to receive, within thirty (30) days following the Date of Termination (except as otherwise specified below), the following:
(a) Payment of any unpaid Base Salary through the Date of Termination;
(b) Payment for any vacation time accrued and unused as of the Date of Termination, pursuant to Company policy;
(c) A pro-rata portion of all outstanding equity grants held by Executive on the Date of Termination that are subject solely to time-based vesting conditions will vest as of the Date of Termination, based on the number of days during the applicable vesting period that Executive was employed by the Company, divided by the total number of days in such vesting period;
(d) Executive’s vested stock options may be exercised in accordance with the applicable provisions of the 2004 Plan;
EMPLOYMENT AGREEMENT |
Page 6 |
(e) A portion of the Annual Bonus that Executive would have been entitled to receive for the fiscal year of termination based on the actual performance attained, such portion to be determined by multiplying such Annual Bonus by a fraction, the numerator of which is the number of days during which Executive was employed by the Company in the fiscal year of Executive’s termination, and the denominator of which is 365 (the “Pro-Rata Bonus”), with such Pro-Rata Bonus payable to Executive at the time specified in Paragraph 3.C as if Executive’s employment had not terminated;
(f) Payment of a lump sum equal to the sum of (i) twelve (12) months’ worth of Executive’s Base Salary, as in effect on the Date of Termination, plus (ii) an amount equal to Executive’s Target Bonus for the fiscal year of termination; and
(g) Continued eligibility to participate in all of the Company’s group health plans (including continued eligibility for Executive’s spouse and eligible dependents), to the extent covered immediately prior to the Date of Termination, on the same terms and conditions as active employees of the Company, until the earlier to occur of (i) 12 months from the Date of Termination (the “Severance Period”), or (ii) until Executive is or becomes eligible for comparable coverage under the group health plan of a subsequent employer. The health care continuation coverage period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), or any replacement or successor provision of United States law, shall run concurrently with the Severance Period. For the avoidance of doubt, this provision shall not entitle Executive to any continued disability coverage.
Notices to Blockbuster:
Blockbuster Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Notices to Executive:
Xxxxxx Xxxxx
| ||||
| ||||
| ||||
Facsimile No.: |
|
EMPLOYMENT AGREEMENT |
Page 7 |
Any notice shall be deemed to have been given at the time of personal delivery or, in the case of facsimile, upon transmission (provided confirmation is sent as described above) or, in the case of expedited delivery via overnight service upon receipt thereof.
8. Non-Disclosure/Non-Disparagement.
A. During the Term of Employment and at all times thereafter, Executive shall (1) hold in a fiduciary capacity for the benefit of the Company and each of its affiliates, all secret or confidential information, knowledge or data, including, without limitation, trade secrets, sources of supplies and materials, customer lists and their identity, designs, production and design techniques and methods, identity of investments, identity of contemplated investments, business opportunities, valuation models and methodologies, processes, technologies, and any intellectual property relating to the business of the Company or its affiliates, and their respective businesses, (a) obtained by Executive during Executive’s employment by the Company and any of the subsidiaries of the Company, and (b) not otherwise in the public domain (“Confidential Information”); and (2) comply with any confidentiality obligations of the Company to a third party. Executive shall not, without the prior written consent of the Company (acting at the direction of the Board): (i) except to the extent compelled pursuant to the order of a court or other body having jurisdiction over such matter or based upon the advice of counsel that such disclosure is legally required, communicate or divulge any Confidential Information to anyone other than the Company and those designated by the Company; or (ii) use any Confidential Information for any purpose other than the performance of his duties pursuant to this Agreement. Executive will reasonably assist the Company or its designee, at the Company’s expense, in obtaining a protective order, other appropriate remedy or other reliable assurance that confidential treatment will be accorded any Confidential Information disclosed pursuant to the terms of this Agreement.
B. Executive agrees not to disparage the Company, any of its affiliates or any of their respective officers or directors at any time during or after his Term of Employment hereunder.
EMPLOYMENT AGREEMENT |
Page 8 |
C. All processes, technologies, intellectual property and inventions (collectively, “Inventions”) conceived, developed, invented, made or found by Executive, alone or with others, during the Term of Employment that are within the scope of the Company’s business operations, whether or not patentable and whether or not on the Company’s or any of its subsidiaries’ time or with the use of the Company’s or any of its subsidiaries’ facilities or materials, shall be the property of the Company or its respective subsidiary, as the case may be, and shall be promptly and fully disclosed by Executive to the Company. Executive shall perform all reasonably necessary acts (including, without limitation, executing and delivering any confirmatory assignments, documents, or instruments requested by the Company or any of its subsidiaries) to vest title to any such Invention in the Company or the applicable subsidiary and to enable the Company or the applicable subsidiary, at their expense, to secure and maintain domestic and/or foreign patents or any other rights for such Inventions.
A. Executive will not, for a period of one (1) year following the Date of Termination, either directly or indirectly, as principal, agent, owner, employee, partner, investor, stockholder (other than solely as a holder of not more than 1% of the issued and outstanding shares of any public entity), consultant, advisor or otherwise howsoever own, operate, carry on or engage in the operation of or have any financial interest in or provide, directly or indirectly, financial assistance to or lend money to or guarantee the debts or obligations of any Person carrying on or engaged in any business that is similar to or competitive with the business conducted by the Company or any of its subsidiaries, whether with respect to customers, sources of supply or otherwise.
B. Executive covenants and agrees with the Company and its subsidiaries that, during the Term of Employment and for one (1) year thereafter, Executive shall not, directly or indirectly, for himself or for any other Person:
(1) solicit, interfere with or endeavor to entice away from the Company or any of its subsidiaries or affiliates, any customer or client;
(2) attempt to direct or solicit any customer or client away from the Company or any of its subsidiaries or affiliates; or
(3) interfere with, entice away or otherwise attempt to induce any person who is then or has been within six (6) months prior thereto an employee of the Company or any of its subsidiaries or affiliates to terminate his/her employment with the Company or any of its subsidiaries or affiliates.
Executive represents to and agrees with the Company that the enforcement of the restrictions contained in Paragraph 8 and Paragraph 9 (i.e., the Non-Disclosure, Non-Disparagement and Non-Compete provisions of this Agreement) would not be unduly burdensome to Executive and that such restrictions are reasonably necessary to protect the legitimate interests of the Company. Executive agrees that the remedy of damages for any breach by Executive of the provisions of either of these paragraphs may be inadequate and that the Company shall be entitled to seek injunctive relief, without posting any bond, and Executive agrees not to oppose granting of such relief on the grounds that monetary damages would adequately compensate the Company. This Paragraph 9 constitutes an independent and separable covenant that shall be enforceable notwithstanding any right or remedy that the Company may have under any other provision of this Agreement or otherwise.
EMPLOYMENT AGREEMENT |
Page 9 |
EMPLOYMENT AGREEMENT |
Page 10 |
12. Arbitration. Except as provided otherwise in Paragraph 9, all claims, demands, causes of action, disputes, controversies or other matters in question (“Claims”), whether or not arising out of this Agreement or the Executive’s service (or termination from service) with the Company, whether arising in contract, tort or otherwise and whether provided by statute, equity or common law, that the Company may have against the Executive or that the Executive may have against the Company, or its parents, subsidiaries or affiliates, or against each of the foregoing entities’ respective officers, directors, employees or agents in their capacity as such or otherwise, shall be submitted to binding arbitration, if such Claim is not resolved by the mutual written agreement of the Executive and the Company, or otherwise, within thirty (30) days after notice of the dispute is first given. Claims covered by this Paragraph 12 include, without limitation, Claims by the Executive for breach of this Agreement, wrongful termination, discrimination (based on age, race, sex, disability, national origin, sexual orientation, or any other factor), harassment and retaliation. Any arbitration shall be conducted in accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue is not addressed by the FAA, with the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”) or such other rules of the AAA as are applicable to the Claims asserted. If a Party refuses to honor its obligations under this Paragraph 12, the other Party may compel arbitration in either federal or state court. The arbitrator shall apply the substantive law of Texas (excluding choice-of-law principles that might call for the application of some other jurisdiction’s law) or federal law, or both as applicable to the Claims asserted. The arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability or enforceability or formation of this Agreement (including this Paragraph 12), including any Claim that all or part of the Agreement is void or voidable and any Claim that an issue is not subject to arbitration. The results of arbitration will be binding and conclusive on the parties hereto. Any arbitrator’s award or finding or any judgment or verdict thereon will be final and unappealable. All parties agree that venue for arbitration will be in Dallas, Texas, and that any arbitration commenced in any other venue will be transferred to Dallas, Texas, upon the written request of any Party to this Agreement. In the event that an arbitration is actually conducted pursuant to this Paragraph 12, the Party in whose favor the arbitrator renders the award shall be entitled to have and recover from the other Party all costs and expenses incurred, including reasonable attorneys’ fees, reasonable costs and other reasonable expenses pertaining to the arbitration and the enforcement thereof and such attorneys fees, costs and other expenses shall become a part of any award, judgment or verdict. Any and all of the arbitrator’s orders, decisions and awards may be enforceable in, and judgment upon any award rendered by the arbitrator may be confirmed and entered by any federal or state court having jurisdiction. All privileges under state and federal law, including attorney-client, work product and party communication privileges, shall be preserved and protected. The decision of the arbitrator will be binding on all parties. Arbitrations will be conducted in such a manner that the final decision of the arbitrator will be made and provided to the Executive and the Company no later than 120 days after a matter is submitted to arbitration. All proceedings conducted pursuant to this agreement to arbitrate, including any order, decision or award of the arbitrators, shall be kept confidential by all parties. EXECUTIVE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, EXECUTIVE IS WAIVING ANY RIGHT THAT EXECUTIVE MAY HAVE TO A JURY TRIAL OR A COURT TRIAL OF ANY SERVICE RELATED CLAIM ALLEGED BY EXECUTIVE.
A. Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws.
EMPLOYMENT AGREEMENT |
Page 11 |
EMPLOYMENT AGREEMENT |
Page 12 |
J. Consultation with Attorney. Executive acknowledges that he has been advised in writing to consult with an attorney before signing this Agreement.
[Signature Page Follows]
EMPLOYMENT AGREEMENT |
Page 13 |
IN WITNESS WHEREOF, the Parties have executed the Agreement as of the dates set forth below.
EXECUTIVE | BLOCKBUSTER INC. | |||||||
/s/ Xxxxxx Xxxxx | By: | Xxxxx Xxxxx | ||||||
XXXXXX XXXXX | Its: | President and CEO | ||||||
Date: | May 17, 2010 | Date: | May 17, 2010 |
[Signature Page to Employment Agreement]
EMPLOYMENT AGREEMENT |
Page 14 |
EXHIBIT A
GENERAL RELEASE OF ALL CLAIMS
This General Release of All Claims (the “General Release”) dated as of , 20 is made in consideration of severance payments and other benefits provided to the undersigned employee (“Executive”) under the Employment Agreement by and between Executive and Blockbuster Inc. (the “Company”), effective as of , 2010 (the “Employment Agreement”). Unless otherwise defined herein, the terms defined in the Employment Agreement shall have the same defined meaning in this General Release.
1. For valuable consideration to be paid to Executive, upon expiration of the seven day revocation period provided in Section 8 herein, as provided for in Paragraph 5 of the Employment Agreement and to which he is not contractually entitled to absent the execution of this General Release, the adequacy of which is hereby acknowledged, Executive, for himself, his spouse, heirs, administrators, children, representatives, executors, successors, assigns, and all other persons claiming through Executive, if any (collectively, “Releasers”), does hereby release, waive, and forever discharge the Company and the Company’s former, present or future subsidiaries, parents, affiliates, related organizations, employees, officers, directors, equity holders, attorneys, successors and assigns (collectively, the “Releasees”) from, and does fully waive any obligations of Releasees to Releasers for, any and all liability, actions, charges, causes of action, demands, damages, or claims for relief, remuneration, sums of money, accounts or expenses (including, without limitation, attorneys’ fees and costs) of any kind whatsoever, whether known or unknown or contingent or absolute, which heretofore has been or which hereafter may be suffered or sustained, directly or indirectly, by Releasers in consequence of, arising out of, or in any way relating to Executive’s employment with the Company (whether pursuant to the Employment Agreement or otherwise) or any of its affiliates and the termination of Executive’s employment. The foregoing release and discharge, waiver and covenant not to xxx includes, but is not limited to, all claims, and any obligations or causes of action arising from such claims, under common law including any state or federal discrimination, fair employment practices or any other employment-related statute or regulation (as they may have been amended through the date of this General Release) prohibiting discrimination or harassment based upon any protected status including, without limitation, race, color, religion, national origin, age, gender, marital status, disability, handicap, veteran status or sexual orientation. Without limitation, specifically included in this paragraph are any claims arising under the Federal Rehabilitation Act of 1973, Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act, the National Labor Relations Act, the Fair Labor Standards Act, Employee Retirement Income Security Act of 1974, the Family Medical Leave Act of 1993, the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and any similar state statutes. The foregoing release and discharge also expressly includes any claims under any state or federal common law theory, including, without limitation, wrongful or retaliatory discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence. This also includes a release by Executive of any claims for alleged physical or personal injury, emotional distress relating to or arising out of Executive’s employment with the Company or the termination of that employment; and any claims under the WARN Act or any similar law, which requires, among other things, that advance notice be given of certain work force reductions. This release and waiver applies to any claims or rights that may arise after the date Executive signs this General Release, but does not apply to any such claims arising out of conduct by any Releasees that takes place after Executive signs this General Release. All of the claims, liabilities, actions, charges, causes of action, demands, damages, remuneration, sums of money, accounts or expenses described in this Section 1 shall be described, collectively, as the “Released Claims”.
EXHIBIT A – GENERAL RELEASE OF CLAIMS |
Page 1 |
2. Excluded from this General Release are any claims which cannot be waived by law, including, but not limited to, the right to participate in an investigation conducted by certain government agencies. Executive does, however, waive Executive’s right to any monetary recovery should any agency (such as the Equal Employment Opportunity Commission) pursue any claims on Executive’s behalf. Executive represents and warrants that Executive has not filed any complaint, charge, or lawsuit against the Releasees with any government agency or any court.
3. Executive agrees never to xxx Releasees in any forum for any Released Claims covered by the above waiver and release language, except that Executive may bring a claim under the ADEA to challenge this General Release. If Executive violates this General Release by suing Releasees, other than under the ADEA, Executive shall be liable to the Company for its reasonable attorneys’ fees and other litigation costs incurred in defending against such a suit. Nothing in this General Release is intended to reflect any party’s belief that Executive’s waiver of claims under ADEA is invalid or unenforceable, it being the interest of the parties that such claims are waived.
4. Executive acknowledges and recites that:
(a) Executive has executed this General Release knowingly and voluntarily;
(b) Executive has read and understands this General Release in its entirety;
(c) Executive has been advised and directed orally and in writing (and this subparagraph (c) constitutes such written direction) to seek legal counsel and any other advice he wishes with respect to the terms of this General Release before executing it;
(d) Executive’s execution of this General Release has not been forced by any employee or agent of the Company, and Executive has had an opportunity to negotiate about the terms of this General Release and that the agreements and obligations herein are made voluntarily, knowingly and without duress, and that neither the Company nor its agents have made any representation inconsistent with the General Release; and
EXHIBIT A – GENERAL RELEASE OF CLAIMS |
Page 2 |
(e) Executive has been offered 21 calendar days after receipt of this General Release to consider its terms before executing it.
5. This General Release shall be governed by, and construed in accordance with, the laws of the United States applicable thereto and the internal laws of the State of Texas, without giving effect to the conflicts of law principles thereof.
6. Executive represents that he has returned all property belonging to the Company including, without limitation, keys, access cards, computer software and any other equipment or property. Executive further represents that he has delivered to the Company all documents or materials of any nature belonging to it, whether an original or copies of any kind, including any Confidential Information.
7. Executive represents that he has been provided notice of his right to elect continuation of medical benefits under COBRA and that he is not entitled to any other benefits under the Company’s employee benefit plans.
8. Executive shall have 7 days from the date hereof to revoke this General Release by providing written notice of the revocation to the Company, in accordance with the requirements of Paragraph 7 of the Employment Agreement, in which event this General Release shall be unenforceable and null and void.
I, XXXXXX XXXXX, represent and agree that I have carefully read this General Release; that I have been given ample opportunity to consult with my legal counsel or any other party to the extent, if any, that I desire; and that I am voluntarily signing by my own free act.
PLEASE READ THIS GENERAL RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
EXECUTIVE: |
|
XXXXXX XXXXX |
Date: , 20 |
EXHIBIT A – GENERAL RELEASE OF CLAIMS |
Page 3 |