EMPLOYMENT AGREEMENT
Exhibit
99.1
THIS
EMPLOYMENT AGREEMENT is made as of December 13, 2005, by and between RC2
Corporation, a Delaware corporation and its subsidiaries (the “Company”), and
Xxxxxxx X. Xxxxxxxx (the “Employee”). Certain capitalized terms used herein are
defined in section 10 below.
RECITALS
A.
The
Company and the Employee desire to terminate any and all prior agreements,
whether oral or written, between the parties and between the Employee and
Company relating to the Employee’s employment.
B.
The
Company desires to employ the Employee and the Employee is willing to make
his
services available to the Company on the terms and conditions set forth
below.
In
consideration of the premises and the mutual agreements which follow, the
parties agree as follows:
1.
Employment.
The
Company hereby employs the Employee and the Employee hereby accepts employment
with the Company on the terms and subject to the conditions set forth in this
Agreement.
2.
Term.
The
term of the Employee’s employment hereunder shall commence on the date hereof
and shall continue until terminated as provided in section 6 below.
3.
Duties.
The
Employee shall serve as the Chairman of Learning Curve International, Inc.
(“LCI”) a wholly owned subsidiary of the Company and as an Executive Vice
President of RC2 Corporation and will, under the direction of the Company’s
Chief Executive Officer and President, faithfully and to the best of his
ability, perform the duties of such position. The Employee shall be one of
the
principal executive officers and Senior Management of the Company and shall,
subject to the control of the Company’s Board of Directors, have the normal
duties, responsibilities and authority associated with such position. The
Employee shall also perform such additional duties and responsibilities which
may from time to time be reasonably assigned or delegated by the Chief Executive
Officer and/or President and/or the Board of Directors of the Company. The
Employee agrees to devote his entire business time, effort, skill and attention
to the proper discharge of such duties while employed by the Company;
provided
that the
Employee may serve on corporate, civic or charitable boards or committees,
fill
speaking engagements, manage personal investments or engage in other business
activities from time to time on the condition that such activities do not
individually or in the aggregate significantly interfere with the performance
of
the Employee’s duties under this Agreement, subject in each case
to
the prior approval of the Company, such approval not to be unreasonably withheld
or delayed. The Company agrees that Employee may serve as chairman of a company
to be formed during the contract period by Xxx Xxxxx and Xxxxxxx Xxxxxxxx (RCD)
which company’s main business purpose is the production and broadcast of
children’s television programming, provided that such service does not interfere
with Employee’s duties under this Agreement; and provided further, that Employee
will cease serving on behalf of the foregoing company if it becomes a competitor
of the Company.
4.
Compensation.
The
Employee shall continue to receive a base salary of $200,000 per year, payable
in regular and equal monthly installments (the “Base Salary”). The Base Salary
will increase to $210,000 per year beginning on April
3,
2006.
5.
Fringe
Benefits.
(a) Vacation.
The
Employee shall be entitled to four weeks of paid vacation annually. The Employee
and the Company shall mutually determine the time and intervals of such
vacation.
(b) Medical,
Health, Dental, Disability and Life Coverage.
The
Employee shall be eligible to participate in any medical, health, dental,
disability and life insurance policy in effect for the Senior Management of
the
Company.
(c) Incentive
Bonus and Stock Ownership Plans.
The
Employee shall be entitled to participate in any incentive bonus plan, incentive
stock option or other stock ownership plan or other incentive compensation
plan
developed generally for the Senior Management of the Company, on a basis
consistent with his position and level of total compensation with the Company.
Without limiting the foregoing, Employee shall be entitled to participate in
(i)
the annual RC2 Corporation Incentive Bonus Plan on a basis consistent with
past
practice and his position and level of compensation with the Company, and (ii)
the RC2 Corporation Top Management Additional Bonus Plan. With respect to
Employee's participation in the annual RC2 Corporation Incentive Bonus Plan,
Employee shall have a target bonus amount of $400,000 based on an agreed formula
consistent with the bonus formula applicable to the Company's Chief Executive
Officer and President. In addition, Employee shall be entitled to participate
in
the RC2 Corporation 2005 Stock Incentive Plan (the “Option Plan”), on a basis
consistent with his position and level of total compensation with the
Company.
(d)
Automobile.
The
Company agrees to reimburse the Employee up to $600.00 per month, as such amount
may be increased from time to time consistent with the Company’s reimbursement
policy for the Senior Management of the Company to cover Employee’s expenses in
connection with his leasing or use of an automobile. Additionally, the Company
will pay for the gas used for business purposes. All maintenance and insurance
expense for the automobile is the responsibility of the
Employee.
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(e) Reimbursement
for Reasonable Business Expenses.
The
Company shall pay or reimburse the Employee for reasonable expenses incurred
by
him in connection with the performance of his duties pursuant to this Agreement
including, but not limited to, travel expenses, expenses in connection with
seminars, professional conventions or similar professional functions and
other
reasonable business expenses.
(f) Key
Man Insurance.
The
parties agree that the Company has the option to purchase one or more key man
life insurance policies upon the life of the Employee. The Company shall own
and
shall have the absolute right to name the beneficiary or beneficiaries of said
policy. The Employee agrees to cooperate fully with the Company in securing
said
policy, including, but not limited to submitting himself to any physical
examination which may be required at such reasonable times and places as Company
shall specify.
6.
Termination.
(a) Termination
of the Employment Period.
The
Employment Period shall continue until the earlier of: (i) March 31, 2008 unless
the parties mutually agree in writing to extend the term of this Agreement
(such
date hereof or such extended date being referred to herein as the “Expected
Completion Date”), (ii) the date of the Employee’s death or Disability,
(iii) the date the Employee resigns or (iv) the date that the Board of
Directors determines that termination of Employee’s employment is in the best
interests of the Company (the “Employment Period”). The last day of the
Employment Period shall be referred to herein as the “Termination
Date.”
(b) Definitions.
(i)
For
purposes of this Agreement, “Disability” shall mean a physical or mental
sickness or any injury which renders the Employee incapable of performing the
services required of him as an employee of the Company and which does or may
be
expected to continue for more than six months during any 12-month period. In
the
event Employee shall be able to perform his usual and customary duties on behalf
of the Company following a period of Disability, and does so perform such duties
or such other duties as are prescribed by the Board of Directors for a period
of
three continuous months, any subsequent period of Disability shall be regarded
as a new period of Disability for purposes of this Agreement. The Company and
the Employee shall determine the existence of a Disability and the date upon
which it occurred. In the event of a dispute regarding whether or when a
Disability occurred, the matter shall be referred to a medical doctor selected
by the Company and the Employee. In the event of their failure to agree upon
such a medical doctor, the Company and the Employee shall each select a medical
doctor who together shall select a third medical doctor who shall make the
determination. Such determination shall be conclusive and binding upon the
parties hereto.
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(ii)
For
purposes of this Agreement, “Cause” shall be deemed to exist if the Employee
shall have (1) engaged in a material breach of the terms of section 7 or
section
8 of this Agreement; (2) refused to perform a lawful written directive of
the Board of Directors of the Company or the Company’s Chief Executive Officer
that is consistent with Employee’s duties and responsibilities; (3) been
convicted of, or plead guilty to, or plead nolo contendere to a felony
or a
crime involving moral turpitude; (4) committed an act of fraud,
embezzlement or material misappropriation against the Company, including,
but
not limited to, the offer, payment, solicitation or acceptance of any unlawful
bribe or kickback with respect to the Company’s business; (5) habitually
neglected his duties (other than resulting from Employee’s incapacity due to
physical or mental illness); (6) failed to perform the duties incident to
his employment with the Company on a regular basis, including but not limited
to
by reason of chronic absence from work (excluding a failure resulting from
the
Employees’ Disability, vacations, illnesses or leaves of absence approved by the
Board); (7) made a knowing material misrepresentation to the stockholders
or
directors of the Company; or (8) engaged in willful and intentional
material misconduct in the performance of his duties or gross negligence
of his
duties under this Agreement or a material violation of his fiduciary obligations
to the Company; provided, that for purposes of clause (2) and only the
first act
or omission with respect to section 8 of this Agreement for clause (1), any
act or omission that is curable shall not constitute Cause unless the Company
gives Employee written notice of such act or omission, that specifies the
act or
omission in reasonable detail, and that specifically refers to this section
and,
within 15 days after such notice is received by Employee, Employee fails
to cure
such act or omission (except that the Company shall not be required to
provide
such notice more than once in cases of repeated acts or
omissions).
(iii)
For
purposes of this Agreement, “Good Reason” shall mean (1) the material
diminution of the Employee’s duties set forth in section 3 above or any
material adverse change in title, status, responsibilities, authorities or
material perquisites of Employee; (2) the relocation of the offices at
which the Employee is principally employed to a location which is more than
50 miles from the offices at which the Employee is principally employed as
of the date hereof; provided, that travel necessary for the performance of
the
Employee’s duties set forth in section 3 above shall not determine the
location where the Employee is “principally employed;” (3) assignment to
Employee of duties materially inconsistent with his position and duties
described in this Agreement; (4) any material reduction in or failure to pay
Employee’s Base Salary as provided herein; or (5) any breach of Section 5 of
this Agreement by the Company regarding Employee's eligibility to participate
in
incentive option or other incentive compensation.
(c) Termination
for Disability or Death.
In the
event of termination for Disability or death, payments of the greater of (i)
the
Employee’s Base Salary or (ii) $300,000 shall be made to the Employee, his
designated beneficiary or his estate for a period of six months after the
Termination Date in accordance with the normal payroll practices of the Company.
During this period, the Company shall also reimburse the Employee for amounts
paid, if any, to continue medical, dental and health coverage pursuant to the
provisions of the Consolidated Omnibus Budget Reconciliation Act. During this
period, the Company will also continue Employee’s life insurance and disability
coverage, to the extent permitted under applicable policies, and will pay to
the
Employee the fringe benefits pursuant to section 5 which have accrued prior
to
the Termination Date.
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(d) Termination
by the Company without Cause or by the Employee for Good Reason.
If
(i) the Employment Period is terminated by the Company for any reason other
than for Cause, Disability or death, (ii) the Employment Period is
terminated by the Company for what the Company believes is Cause or Disability,
and it is ultimately determined that the Employment Period was terminated
without Cause or Disability or (iii) the Employee resigns for Good Reason,
the Employee shall be entitled to receive, as damages for such a termination,
a
severance amount of $400,000 to be paid on the Termination Date, and
Employee shall receive $200,000 in consideration for his covenants and
agreements provided in sections 7 and 8, with such amount to be paid in a
lump sum of $100,000 on the first anniversary of the Termination Date and the
remaining $100,000 to be paid on the second anniversary of the Termination
Date.
If such a termination or resignation occurs at any time after the occurrence
of
or in contemplation of a Change of Control, then Employee shall be entitled
to
receive as damages for such termination, a severance amount of $700,000 to
be
paid on the Termination Date, and Employee shall be entitled to receive $200,000
in consideration for his covenants and agreements provided in sections 7 and
8,
to be paid six months after the Termination Date. If such a termination occurs
after the occurrence of or in contemplation of a Change of Control, as provided
in the prior sentence, the Noncompete Period provided in section 7(a) shall
be
reduced to six months. During the applicable Noncompete Period, the Company
shall also reimburse the Employee for amounts paid, if any, to continue medical,
dental and health coverage pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act. During the applicable Noncompete Period,
the
Company will also continue Employee’s disability coverage. In addition, the
Company will pay to the Employee the fringe benefits pursuant to section 5
which
have accrued prior to the Termination Date.
(e) Termination
by the Company for Cause or by the Employee Without Good Reason.
If the
Employment Period is terminated by the Company with Cause or as a result of
the
Employee’s resignation without Good Reason, the Employee shall not be entitled
to receive his Base Salary or any fringe benefits or bonuses for periods after
the Termination Date.
(f) Expected
Completion Date Without Offer of Extension.
In the
event that the Termination Date occurs as a result of a failure of the Company
to offer to extend the term of this Agreement at or prior to the Expected
Completion Date, the Employee shall be entitled to receive, as a result of
such
failure by the Company to offer to renew this Agreement and in consideration
of
his covenants and agreements provided in sections 7 and 8, an amount equal
to
$200,000, to be paid on the six month following the Termination Date and the
Noncompete Period will be reduced to six months. If the Company offers, at
least
three months prior to the Expected Completion Date, to extend the term of this
Agreement for a term of at least three more years with similar or better terms
including an increase in both the base salary and bonus compensation to
accommodate CPI increases from January 1, 2006 until December 31, 2007, and
Employee does not agree to an extension, the Noncompete Period shall be two
years with such amount to be paid in a lump sum of $100,000 on the first
anniversary of the Termination Date and the remaining $100,000 to be paid on
the
second anniversary of the Termination Date.
(g) Effect
of Termination.
Except
as provided in section 6(d) and 6(f), the termination of the Employment Period
pursuant to section 6(a) shall not affect the Employee’s obligations as
described in sections 7 and 8.
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7.
Noncompetition
and Nonsolicitation.
The
Employee acknowledges and agrees that the contacts and relationships of the
Company and its Subsidiaries with its customers, suppliers, licensors and other
business relations are, and have been, established and maintained at great
expense and provide the Company and its Subsidiaries with a substantial
competitive advantage in conducting their business. The Employee acknowledges
and agrees that by virtue of the Employee’s employment with the Company, the
Employee will have unique and extensive exposure to and personal contact with
the Company’s customers and licensors, and that he will be able to establish a
unique relationship with those Persons that will enable him, both during and
after employment, to unfairly compete with the Company and its Subsidiaries.
Furthermore, the parties agree that the terms and conditions of the following
restrictive covenants are reasonable and necessary for the protection of the
business, trade secrets and Confidential Information (as defined in
section 8 below) of the Company and its Subsidiaries and to prevent great
damage or loss to the Company and its Subsidiaries as a result of action taken
by the Employee. The Employee acknowledges and agrees that the noncompete
restrictions and nondisclosure of Confidential Information restrictions
contained in this Agreement are reasonable and the consideration provided for
herein is sufficient to fully and adequately compensate the Employee for
agreeing to such restrictions. The Employee acknowledges that he could continue
to actively pursue his career and earn sufficient compensation in the same
or
similar business without breaching any of the restrictions contained in this
Agreement.
(a) Noncompetition.
The
Employee hereby covenants and agrees that during the Employment Period and
for
two years thereafter (the “Noncompete Period”) (except that the Noncompete
Period may be shorted as provided in section 3(d) and 3(f)), he shall not,
directly or indirectly, either individually or as an employee, principal, agent,
partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor,
consultant, representative or in any other capacity, participate in, become
associated with, provide assistance to, engage in or have a financial or other
interest in any business, activity or enterprise which is competitive with
the
business of the Company or any of the Company’s Subsidiaries. The ownership of
less than three percent interest in a corporation whose shares are traded in
a
recognized stock exchange or traded in the over-the-counter market, even though
that corporation may be a competitor of the Company, shall not be deemed
financial participation in a competitor. The continued service as chairman
of
the company described in section 3 of this agreement shall not be deemed to
be a
violation of this noncompete provision. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this section
is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with
a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,
and
this Agreement shall be enforceable as so modified. The term “indirectly” as
used in this section and section 8 below is intended to include any acts
authorized or directed by or on behalf of the Employee or any Affiliate of
the
Employee.
(b) Nonsolicitation.
The
Employee hereby covenants and agrees that during the Noncompete Period, he
shall
not, directly or indirectly, either individually or as an employee, agent,
partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor,
consultant or in any other capacity:
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(i)
canvass,
solicit or accept from any Person who is a customer or licensor of the Company
or any of its Subsidiaries (any such Person is hereinafter referred to
individually as a “Customer,” and collectively as the “Customers”) any business
which is in competition with the business of the Company or any of its
Subsidiaries (as the Company's or its Subsidiaries’ business existed during the
Employment Period) including, without limitation, the canvassing, soliciting
or
accepting of business competitive with the Company’s or its Subsidiaries
business (as the Company's or its Subsidiaries’ business existed during the
Employment Period) from any Person which is or was a Customer of the Company
or
any of its Subsidiaries within two years preceding the date of this
Agreement, or during the Employment Period;
(ii)
advise,
request, induce or attempt to induce any of the Customers, suppliers, or other
business contacts of the Company or any of its Subsidiaries who currently have
or have had business relationships with the Company or any of its Subsidiaries
within two years preceding the date of this Agreement, during the Employment
Period, to withdraw, curtail or cancel any of its business or relations with
the
Company or any of its Subsidiaries;
(iii) induce
or
attempt to induce any employee, sales representative, consultant or other agent
of the Company or any of its Subsidiaries to terminate his relationship or
breach any agreement with the Company or any of its Subsidiaries other than
Xxxxx Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxx, and Xxxxxxx X. Xxxxxxxx;
or
(iv)
hire
any
person who within six months prior to the date of hiring was an employee, sales
representative, consultant or other agent of the Company or any of its
Subsidiaries at any time during the Noncompete Period other than (1) Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxx, and Xxxxxxx X. Xxxxxxxx or (2) a person
whose relationship with the LCI or its Subsidiaries has been terminated by
the
LCI, its Subsidiaries, or their respective successors and assigns.
8.
Confidential
Information.
The
Employee acknowledges and agrees that the customers, business connections,
customer lists, procedures, operations, techniques, and other aspects of and
information about the business of the Company and its Subsidiaries (the
“Confidential Information”) are established at great expense and protected as
confidential information and provides the Company and its Subsidiaries with
a
substantial competitive advantage in conducting their business. The Employee
further acknowledges and agrees that by virtue of his past employment with
the
Company, and by virtue of his employment with the Company, he has had access
to
and will have access to, and has been entrusted with and will be entrusted
with,
Confidential Information, and that the Company would suffer great loss and
injury if the Employee would disclose this information or use in a manner not
specifically authorized by the Company. Therefore, the Employee agrees that
during the Employment Period and for five years thereafter, he will not,
directly or indirectly, either individually or as an employee, agent, partner,
shareholder, owner trustee, beneficiary, co-venturer distributor, consultant
or
in any other capacity, use or disclose or cause to be used or disclosed any
Confidential Information, unless and to the extent that any such information
(a) becomes generally known to and available for use by the public other
than as a result of
the
Employee’s acts or omissions or (b) is legally required to be disclosed
(by oral questions, deposition, interrogatory, request for information or
documents, subpoena, civil investigative demand or similar process); provided,
that to the extent practicable the Employee shall provide the Company with
prompt written notice of such legal requirement so that the Company may seek
a
protective order or other appropriate remedy and, in the event that such
protective order or other remedy is not obtained, the Employee shall furnish
only that portion of the Confidential Information which is legally required
to
be disclosed and will cooperate with the Company to obtain assurances that
confidential treatment will be accorded such Confidential
Information. At
the
Company’s request, the Employee shall deliver to the Company at the termination
of the Employment Period, or at any other time the Company may reasonably
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or
the
business of the Company or any of its Subsidiaries which he may then possess
or
have under his control. The Employee acknowledges and agrees that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company’s or any of its Affiliate’ actual or
anticipated business research and development or existing or future products
or
services and which are conceived, developed or made by the Employee while
employed by the Company and its Subsidiaries (“Work Product”) belong to the
Company or such Affiliate, as the case may be.
7
9.
Common
Law of Torts and Trade Secrets.
The
parties agree that nothing in this Agreement shall be construed to limit or
negate the common law of torts or trade secrets where it provides the Company
and its Affiliates with broader protection than that provided
herein.
10.
Definitions.
“Affiliate”
means,
with respect to any Person, any other Person controlling, controlled by or
under
common control with such Person and any partner of a Person which is a
partnership.
“Change
of Control”
means:
(a)
The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or
more
of either (i) the then outstanding shares of common stock of Company (the
“Outstanding Common Stock”) or (ii) the combined voting power of the then
outstanding voting securities of Company entitled to vote generally in the
election of directors (the “Outstanding Voting Securities”); provided, however,
that the following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from Company, (ii) any acquisition by Company,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Company or any corporation controlled by Company
or
(iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c)
of this definition; or
(b)
Individuals
who, as of the date hereof, constitute the Board of Directors of Company (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Directors of Company; provided, however, that any individual becoming
a
director subsequent to the date hereof whose election, or nomination for
election by Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the
Board of Directors of Company; or
(c)
Approval
by the stockholders of Company of a reorganization, merger or consolidation
(a
“Business Combination”), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result
of
such transaction owns Company through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent
that
such ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the approval of the initial agreement, or of the action of the Board of
Directors of Company, providing for such Business Combination; or
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(d)
Approval
by the stockholders of Company of (i) a complete liquidation or dissolution
of Company or (ii) the sale or other disposition of all or substantially
all of the assets of Company, other than to a corporation, with respect to
which
following such sale or other disposition, [a] more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of
such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior
to
such sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Common Stock and Outstanding Voting Securities, as the case may
be,
[b] less than 20% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally
in
the election of directors is then beneficially owned, directly or indirectly,
by
any Person (excluding any employee benefit plan (or related trust) of Company
or
such corporation), except to the extent that such Person owned 20% or more
of
the Outstanding Common Stock or Outstanding Voting Securities prior to the
sale
or disposition, and [c] at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time
of
the approval of the initial agreement, or of the action of the Board of
Directors of Company, providing for such sale or other disposition of assets
of
Company or were elected, appointed or nominated by the Board of Directors of
Company.
“Person”
means
any individual, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture, unincorporated
organization and any governmental entity or any department, agency or political
subdivision thereof.
“Senior
Management”
at
any
time means the senior executive officers of the Company which will include,
without limitation, the Chief Executive Officer, President, Chief Operating
Officer, Executive Vice Presidents, Chief Financial Officer and such other
officers of the Company as the Board of Directors shall determine from time
to
time.
“Subsidiary”
means,
with respect to any Person, any corporation, partnership, association or other
business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence
of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is
at
the time owned or controlled, directly or indirectly, by any Person or one
or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in
a
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity gains or losses or shall be or control any managing director or general
partner of such partnership, association or other business entity.
11.
Specific
Performance.
The
Employee acknowledges and agrees that irreparable injury to the Company may
result in the event the Employee breaches any covenant or agreement contained
in
sections 7 and 8 and that the remedy at law for the breach of any such
covenant will be inadequate. Therefore, if the Employee engages in any act
in
violation of the provisions of sections 7 and 8, the Employee agrees that
the Company shall be entitled, in addition to such other remedies and damages
as
may be available to it by law or under this Agreement, to injunctive relief
to
enforce the provisions of sections 7 and 8.
12.
Waiver.
The
failure of either party to insist in any one or more instances, upon performance
of the terms or conditions of this Agreement shall not be construed as a waiver
or a relinquishment of any right granted hereunder or of the future performance
of any such term, covenant or condition.
13.
Notices.
Any
notice to be given hereunder shall be deemed sufficient if addressed in writing
and delivered by registered or certified mail or delivered personally, in the
case of the Company, to its principal business office, and in the case of the
Employee, to his address appearing on the records of the Company, or to such
other address as he may designate in writing to the Company. 14. Severability.
In the
event that any provision shall be held to be invalid or unenforceable for any
reason whatsoever, it is agreed such invalidity or unenforceability shall not
affect any other provision of this Agreement and the remaining covenants,
restrictions and provisions hereof shall remain in full force and effect and
any
court of competent jurisdiction may so modify the objectionable provision as
to
make it valid, reasonable and enforceable. Furthermore, the parties specifically
acknowledge the above covenant not to compete and covenant not to disclose
confidential information are separate and independent agreements.
9
14. Severability.
In the
event that any provision shall be held to be invalid or unenforceable for any
reason whatsoever, it is agreed such invalidity or unenforceability shall not
affect any other provision of this Agreement and the remaining covenants,
restrictions and provisions hereof shall remain in full force and effect and
any
court of competent jurisdiction may so modify the objectionable provision as
to
make it valid, reasonable and enforceable. Furthermore, the parties specifically
acknowledge the above covenant not to compete and covenant not to disclose
confidential information are separate and independent agreements.
15.
Complete
Agreement.
Except
as otherwise expressly set forth herein, this document embodies the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way. Without limiting the generality
of the foregoing, this Agreement supersedes the Employment Agreement, dated
as
of March 4, 2003, between Racing Champions Ertl Corporation and the Employee
(together with all amendments thereto, the “Prior Agreement”). The Prior
Agreement is hereby terminated and shall cease to be of any further force or
effect.
16.
Amendment.
This
Agreement may only be amended by an agreement in writing signed by each of
the
parties hereto.
17.
Governing
Law.
This
Agreement shall be governed by and construed exclusively in accordance with
the
laws of the State of Illinois, regardless of choice of law
requirements.
18.
Benefit.
This
Agreement shall be binding upon and inure to the benefit of and shall be
enforceable by and against the Company, its successors and assigns and the
Employee, his heirs, beneficiaries and legal representatives. It is agreed
that
the rights and obligations of the Employee and the Company may not be delegated
or assigned.
[remainder
of page intentionally left blank; signature page follows]
10
[signature
page to Employment Agreement]
IN
WITNESS WHEREOF, the parties have executed or caused this Employment
Agreement
to be executed as of the date first above written.
|
RC2
CORPORATION
BY
/s/ Xxxxxx X.
Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, Chief Executive Officer
|
|
|
RC2
CORPORATION -
COMPENSATION
COMMITTEE
/s/ Xxxx X.
Xxxxxxx
Xxxx
X. Xxxxxxx, Director and Compensation
Committee
Chairman
|
|
|
/s/ Xxxx X.
Xxxxxxx
Xxxx
X. Xxxxxxx, Director and Compensation
Committee
Member
|
|
|
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx
X. Xxxxxx, Director and Compensation
Committee
Member
|
|
|
/s/ Xxxxxxx X.
Xxxxxxxx
Xxxxxxx
X. Xxxxxxxx
|
11
