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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
AGREEMENT made this 29th day of April, 1994, by and between
XXXXXXXX ENTERTAINMENT INC., a Delaware corporation (the "Company"), and XXXXX
X. XXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Executive was a shareholder and President of Tradewest,
Inc. and certain of its affiliates ("Tradewest"); and
WHEREAS, the Company is a wholly owned subsidiary of WMS Games
Inc., a Delaware corporation, which is a wholly owned subsidiary of WMS
Industries Inc., a Delaware corporation ("WMS"), and is acquiring substantially
all of the assets and business of Tradewest concurrently herewith pursuant to
the terms of two asset purchase agreements dated April 4, 1994 (collectively the
"Purchase Agreement"); and
WHEREAS, as a result of such acquisition, the Company will be
engaged in the business of designing, developing, programming, publishing and
distributing interactive entertainment software for use with interactive
entertainment hardware platforms; and
WHEREAS, the Company desires to employ Executive and Executive
is willing to undertake such employment on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT; DUTIES. Effective as of the "Commencement Date,"
as hereinafter defined, the Company shall employ Executive as President and
Chief Operating Officer of the Company and to perform such duties incidental
thereto and such other duties as the Chairman of the Company shall reasonably
assign consistent with such office. In such capacity, Executive will exercise
chief operating authority over the Company's operations and activities, subject
to the requirement that Executive shall report to and be subject to the
direction and control of the Chairman of the Company and its Board of Directors.
Notwithstanding Executive's position as President, Executive shall not and shall
have no authority to enter into any license, sale, purchase or manufacturing
agreement on behalf of the Company relating to intellectual property, either as
licensee, licensor, purchaser, seller or otherwise, unless such agreement and
the terms thereof shall have been approved in writing by the President of WMS or
its successor. Executive's duties hereunder shall include his obligations under
the Purchase Agreement applicable to the operations of the Company's business.
During Executive's employment hereunder he shall be headquartered at the
Company's offices in Xxxxxxx County,
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Texas. In no event shall Executive be required to move his place of residence
out of Xxxxxxx County, Texas.
2. ACCEPTANCE AND LOYALTY. Executive hereby accepts such
employment and agrees that throughout the period of his employment hereunder, he
will devote his full time, attention, knowledge and skills, faithfully,
diligently and to the best of his ability, in furtherance of the business of the
Company and will perform the duties assigned to him pursuant to Section hereof.
Executive shall perform all duties and responsibilities in a professional manner
consistent with the skill, competence and efficiency expected of a President and
Chief Operating Officer and subject to the direction and control of the Chairman
of the Company and its Board of Directors. Executive will do such traveling as
may be reasonably required of him in the performance of his obligations
hereunder. Executive shall at all times be subject to, observe and carry out
such rules, regulations, policies, directions and restrictions as the Company
shall from time to time establish and as to which Executive is notified. During
his employment hereunder, Executive shall not, without the written approval of
the Board of Directors first had and obtained in each instance, directly or
indirectly, accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Company or any of its
subsidiaries or affiliates except that Executive may continue his existing
relationship with Master Sales and that Executive may continue to serve as a
director of Corsicana National Bank provided, however, that such relationship
and services do not interfere with or detract from Executive's obligations under
this agreement to the Company. During Executive's employment hereunder,
Executive shall not be entitled to additional compensation for serving in any
office, including as a director, of the Company or any of its subsidiaries or
affiliates to which he may be elected.
3. TERM. Executive's employment and the term of this agreement
shall commence on May 2, 1994 (the "Commencement Date") and continue for a
period of four years thereafter (the "Termination Date") subject to the
provisions for termination as provided in Section below.
4. COMPENSATION. As full compensation for his services hereunder
and in consideration of the provisions of Section hereof, the Company shall pay
Executive a salary at the rate of Two Hundred Fifty Thousand ($250,000) Dollars
per annum during the term of this agreement. Executive's salary shall be payable
in equal installments in accordance with the Company's normal payroll policy,
subject to normal payroll taxes and withholding requirements.
5. EMPLOYEE BENEFITS. Executive shall be entitled to participate
to the extent he is eligible in all pension, retirement, profit-sharing,
hospitalization, insurance (including disability insurance) or other similar
employee benefits generally available to executives of the Company provided that
the benefits made available to Executive shall be made available on the same
basis of participation as those made available to Xxxxxxx X. Xxxxxxx in his
capacity as Vice President and General Manager of the amusement game operations
of WMS or to his successor in such position. Except to the extent that the
Company shall be so obligated directly or through WMS to make such benefits
available to Executive on the same basis as such benefits are made
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available to Xxxxxxx X. Xxxxxxx or his successor from time to time, the Company
shall be under no obligation to establish or maintain any particular benefits or
any particular employee benefit plans. The foregoing obligation shall not apply
to stock options or other stock related compensation plans.
6. STOCK OPTION. On the Commencement Date, Executive shall be
granted a non-qualified stock option (the "Option") to purchase 200,000 shares
of the common stock, $.50 par value per share (the "Common Stock"), of WMS
subject to the terms of the WMS 1993 Stock Option Plan or the WMS 1991 Stock
Option Plan or otherwise containing terms and conditions substantially the same
as such plans. The exercise price of the Option will be the fair market value of
the Common Stock on the date of grant. The Option will be for a term of 10 years
and will be exercisable in four equal annual installments commencing one year
after the date of grant provided that such Option shall become exercisable in
full the business day immediately preceding the Termination Date. The Option
shall become immediately exercisable in full upon a "Change of Control" as that
term is defined in the Purchase Agreement. For purposes of the Option and
applicable plan under which it is granted, Executive will be deemed to have
terminated his employment with the written consent of the Company and the
Option, to the extent exercisable on the effective date of such termination,
shall remain exercisable as provided in the applicable plan, if Executive's
employment terminates for any of the following reasons: (i) the passage of the
Termination Date; (ii) upon a termination of Executive's employment by the
Company in violation of this agreement or (iii) Executive shall terminate his
employment by the Company for any of the following reasons: (a) Executive shall
be placed in a position of lesser stature than provided in Section hereof; (b)
Executive shall be assigned duties, performance requirements or working
conditions significantly different from or at significant variance with those
provided in Section hereof; (c) Executive shall be treated by the Chairman or
Board of Directors in a manner which is in derogation of his status as President
and Chief Operating Officer as provided in Section hereof or (d) the Company
shall change the location of its operations so that Executive is no longer
headquartered in Xxxxxxx County, Texas and is required to move his residence out
of Xxxxxxx County, Texas in order to effectively perform his duties under
Section hereof. The foregoing events described in clauses (i), (ii) and (iii)
are referred to herein as "Executive's Cause."
7. KEY-MAN LIFE INSURANCE. The Company or WMS may purchase and
maintain life insurance covering the life of Executive ("Key-man Insurance") in
an amount determined by the Company. The Company or WMS, as the case may be,
shall be the sole owner and beneficiary of the Key-man Insurance and may apply
to the payment of premiums thereunder any dividends declared and paid thereon.
Executive shall submit himself to such physical examinations as the Board of
Directors may deem necessary or desirable in connection with the purchase and
maintenance of the Key-man Insurance. Executive represents and warrants that to
his knowledge, there is no reason that any insurer would refuse to issue such
policy. Executive has not heretofore been refused on medical grounds any life
insurance for which he has applied.
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8. REIMBURSABLE EXPENSES. The Company shall reimburse Executive
for all out-of-pocket expenses reasonably incurred by him in connection with the
performance of his duties hereunder and the business of the Company upon the
submission to the Company of appropriate receipts and/or other documentation
consistent with Company policy. Executive shall be entitled to first-class air
travel for Company business and shall otherwise be entitled to reimbursement of
expenses on the same basis as Xxxxxxx X. Xxxxxxx in his capacity as Vice
President and General Manager of the amusement game operations of WMS or his
successor.
9. VACATION. Executive shall be entitled to four weeks paid
vacation each year during the term hereof; such vacation is to be taken at times
mutually agreeable to Executive and the Chairman of the Company. Vacation time
shall not be accumulated from year to year unless Executive is requested by the
Chairman of the Company to forego a vacation during any year.
10. TERMINATION.
10.1 The Company may terminate Executive's employment
hereunder and remove him as an officer of the Company immediately by written
notice to Executive for any of the following reasons: (a) commission of any act
of fraud or gross negligence by Executive in the course of his employment
hereunder which, in the case of gross negligence, has a materially adverse
effect on the business or financial condition of the Company; (b) willful and
material misrepresentation at any time during the term hereof by Executive to
the Chairman or Board of Directors of the Company; (c) willful failure, willful
refusal or willful neglect by Executive to comply with any of his material
obligations hereunder which conduct continues uncured after Executive has
received written warning thereof from the Chairman of the Company or Board of
Directors that Executive's services will be terminated; (d) willful disregard of
the authority of the Board of Directors, dishonesty, habitual drunkenness or
excessive absenteeism not related to illness which conduct continues uncured
after due warning in writing from the Chairman or Board of Directors that
Executive's services will be terminated; (e) engagement by Executive in any act,
whether with respect to his employment or otherwise, which constitutes a felony
violation of the criminal laws of the United States or any state thereof or any
similar foreign law to which he may be subject; (f) death or disability (defined
as unable to perform Executive's duties hereunder due to physical or mental
disability for a period of six consecutive months) of Executive or (g) acts,
conduct or reputation of Executive which hinder, limit or prohibit the ability
of the Company or any of its affiliates from applying or qualifying for,
obtaining, maintaining or renewing any license, permit or contract related to
their businesses or proposed businesses. Executive acknowledges that the
Company's affiliates now have and may in the future desire to obtain various
licenses and other permits or approvals governing alcoholic beverages, gaming,
gambling and the like and the inability of the Company or such affiliates to
apply or qualify for, obtain, maintain or renew any such licenses, permits or
contracts will have a material adverse affect on the Company and/or its
affiliates. Accordingly, Executive acknowledges that the foregoing grounds for
termination are reasonable and necessary for the Company and its affiliates.
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10.2 Notwithstanding the termination of Executive's
employment hereunder, the Company's obligation to pay Executive's salary under
Section hereof shall continue until the Termination Date, unless it is
ultimately determined in arbitration under this agreement or by a court of
competent jurisdiction, and such determination is final and nonappealable, that
Executive's conduct constituted fraud or a felony. In such event Executive's
employment shall be deemed for all purposes to have been terminated for cause
and the Company shall have no obligation to continue to pay Executive's salary
under Section following the date of such termination and Executive shall refund
to the Company the payments made by the Company to Executive under Section after
the effective date of his termination.
10.3 Concurrently with the execution of this agreement,
Executive has completed and submitted to the Company and WMS a pre-employment
questionnaire in the form customarily used by WMS for prospective employees. A
copy of such completed questionnaire is annexed hereto as Exhibit A (the
"Questionnaire"). In the event that Executive's employment is terminated solely
by reason of clause (g) of Section , and such termination arises from facts
which were known to Executive on the date hereof and were obviously or clearly
responsive to the Questionnaire but were nevertheless misstated so as to be
incorrect or misleading or were undisclosed on the Questionnaire, then for all
purposes such termination shall be deemed for cause and Purchaser shall have no
continuing obligation to pay Executive's salary under Section hereof following
the date of such termination.
10.4 Notwithstanding the Company's continuing
obligation to make payments under Section until the Termination Date following
Executive's termination of employment under certain circumstances, if such
termination is by reason of clauses (b), (c) or (d) of Section then for all
purposes Executive's employment shall be deemed to have been terminated for
cause.
10.5 If a Change of Control as defined in the Purchase
Agreement occurs and Sellers and the Stockholders, as those terms are defined in
the Purchase Agreement, elect to shorten the "Earnings Period" as provided in
Section 3.8 of the Purchase Agreement, then Executive shall be entitled to
terminate his employment by the Company but the Company shall nevertheless be
required to continue to pay Executive his salary under Section until the
Termination Date.
11. RESTRICTIVE COVENANTS
In consideration of the compensation and benefits
payable under this agreement including the continuation under certain
circumstances of salary payments until the Termination Date notwithstanding
termination of employment, Executive shall not, during the term of this
agreement and for a period of one year thereafter
11.1 in the United States, Canada or Mexico act in
concert with employees, representatives, agents, independent contractors or
other persons engaged in business with the Company or WMS or any of its wholly
owned subsidiaries for the purpose of
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organizing any business activity competitive with that of the Company or WMS or
any of its wholly owned subsidiaries; or
11.2 without the prior written approval of the Board of
Directors of the Company, directly or indirectly, through any other person,
firm, partnership, corporation or other entity, solicit, raid, entice, hire,
induce or seek to influence any person that presently is or at any time during
the term hereof shall be an employee of the Company to become employed by any
other person, firm, partnership, corporation or other entity, and Executive
shall not knowingly assist or induce any such person, firm, partnership,
corporation or other entity in taking such action; or
11.3 in the United States, Canada or Mexico, (i)
directly or indirectly own, manage, operate, join, control, participate in,
invest in, be employed by, render service to or otherwise be connected with in
any manner, whether as an officer, director, employee, partner, investor,
consultant, shareholder or otherwise, any business entity engaged in the
business of designing, developing, publishing, programming or distributing
interactive entertainment software for use with interactive entertainment
hardware platforms or in any other business engaged in by the Company, or (ii)
for himself or on behalf of any other person, firm, partnership, corporation or
other entity, call on any customer, supplier, licensee or licensor of the
Company, including any licensor or licensee of any intellectual property related
to the Company's business, for the purpose of soliciting, diverting, taking away
such customer, supplier, licensor or licensee from the Company or otherwise
interfering with the Company's relationship with such customer, supplier,
licensee or licensor.
Nothing contained in this agreement shall be deemed to prohibit Executive from
investing his funds in and receiving dividends or other investment income from
securities of a company if the securities of such company are listed for trading
on a national stock exchange or traded in the over-the-counter market and
Executive's holdings therein represent less than five (5%) percent of the total
number of shares or principal amount of other securities of such company
outstanding. The parties acknowledge that Master Sales is engaged in the
business of selling and distributing coin operated video and other amusement
games. So long as the business of Master Sales is limited to such activities,
nothing herein shall be deemed to prohibit Executive from continuing his
ownership thereof.
12. CONFIDENTIALITY AGREEMENT.
12.1 As used herein, the term "Confidential
Information" shall mean any and all information of the Company and of its
affiliates (for purposes of this Section , the Company's affiliates shall be
deemed included within the meaning of the "Company"), including, but not limited
to, all data, compilations, programs, devices, strategies, or methods concerning
or related to (i) the Company's finances, financial condition, results of
operations, employee relations, amounts of compensation paid to officers and
employees and any other data or information relating to the internal affairs of
the Company and its operations; (ii) the terms and conditions (including prices)
of sales and offers of sales of the Company's products and
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services; (iii) the terms, conditions and current status of the Company's
agreements and relationship with any customer, supplier, licensee or licensor;
(iv) the customer and supplier lists and the identities and business preferences
of the Company's actual and prospective customers, suppliers, licensees and
licensors or any employee or agent thereof with whom the Company communicates;
(v) the trade secrets, manufacturing and operating techniques, price data,
costs, methods, systems, plans, procedures, formulas, processes, hardware,
software, machines, inventions, designs, drawings, artwork, blueprints,
specifications, tools, skills, ideas, and strategic plans possessed, developed,
accumulated or acquired by the Company; (vi) any communications between the
Company, its officers, directors, stockholders, or employees, and any attorney
retained by the Company for any purpose, or any person retained or employed by
such attorney for the purpose of assisting such attorney in his or her
representation of the Company; (vii) any other information and knowledge with
respect to all interactive entertainment software, entertainment platforms
hardware, or coin-operated amusement games and gaming devices developed or in
any stage of development by the Company; (viii) the abilities and specialized
training or experience of others who as employees or consultants of the Company
during the term hereof have engaged in the design or development of any such
products; and (ix) any other matter or thing, whether or not recorded on any
medium, (a) by which the Company derives actual or potential economic value from
such matter or thing being not generally known to other persons or entities who
might obtain economic value from its disclosure or use, or (b) which gives the
Company an opportunity to obtain an advantage over its competitors who do not
know or use the same.
12.2 Confidential Information shall not include
information (i) previously known to Executive through lawful means and which was
not the subject of a prior confidentiality agreement; (ii) generally known
through lawful means to others engaged in the same trade or business; (iii) part
of public knowledge or literature or (iv) received by Executive from a third
party who was not bound by a confidentiality agreement and who obtained such
information through lawful means.
12.3 Executive acknowledges and agrees that the Company
is engaged in the highly competitive interactive entertainment software,
entertainment platforms hardware, coin-operated amusement games and gaming
devices businesses and has expended, or will expend, significant sums of money
and has invested, or will invest, a substantial amount of time to develop and
maintain the secrecy of the Confidential Information. The Company has thus
obtained, or will obtain, a valuable economic asset which has enabled, or will
enable, it to develop an extensive reputation and to establish long-term
business relationships with its suppliers, customers and others. If such
Confidential Information were disclosed to another person or entity or used for
the benefit of anyone other than the Company, the Company would suffer
irreparable harm, loss and damage. Accordingly, Executive acknowledges and
agrees that, unless the Confidential Information becomes publicly known through
legitimate origins not involving an act or omission by Executive:
(i) the Confidential Information is, and at
all times hereafter shall remain, the sole
property of the Company;
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(ii) Executive shall use his best efforts to
guard and protect the Confidential Information
from disclosure to any competitor, customer,
supplier, licensee or licensor of the Company
or any other person, firm, corporation or
other entity and will not disclose such
information except to the extent necessary and
appropriate for the legitimate purposes of the
Company or such disclosure is with the express
written consent of the Chairman of the Board;
and
(iii) unless the Company gives Executive prior
express written permission, during his
employment and thereafter, Executive shall not
at any time use for his own benefit, or
divulge to any competitor or customer or any
other person, firm, corporation, or other
entity, any of the Confidential Information
which Executive may obtain, learn about,
develop or be entrusted with as a result of
Executive's employment by the Company.
12.4 Executive also acknowledges and agrees that all
documentary and tangible Confidential Information including, without limitation,
such Confidential Information as Executive has committed to memory, is supplied
or made available by the Company to the Executive solely to assist him in
performing his services under this agreement. Executive further agrees that
after his employment with the Company terminates for any reason:
(i) Executive shall not remove from the
property of the Company and shall immediately
return to the Company, all documentary or
tangible Confidential Information in his
possession, custody, or control and not make
or keep any copies, notes, abstracts,
summaries, tapes or other record of any type
of Confidential Information; and
(ii) Executive shall immediately return to the
Company any and all other property of the
Company in his possession, custody or control,
including, without limitation, any and all
keys, security cards, passes, credit cards and
marketing literature.
13. INVENTION DISCLOSURE. Executive agrees to disclose to the
Company promptly and fully all ideas, inventions, concepts, discoveries,
developments, programs or improvements ("Inventions") that may be made or
conceived by him and all Intellectual Material (as defined below) that may be
created or developed by him (whether such inventions and Intellectual Material
are developed solely by him or jointly with others) during his employment by the
Company which either (i) in any way are connected with or related to the actual
or known to Executive to be contemplated business, work, research, or
undertakings of the Company or (ii) result from or are suggested by any task,
project, or work that he may do for, in connection with, or on behalf of the
Company. Executive agrees that such Inventions and Intellectual Material shall
become the sole and exclusive property of the Company and Executive hereby
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assigns to the Company, all of his rights to any such Inventions and
Intellectual Material. As used herein, "Intellectual Material" shall include,
but shall not be limited to, ideas, titles, themes, production ideas, methods of
presentation, artistic renderings, sketches, plots, music, lyrics, dialogue,
phrases, slogans, catch words, characters, names and similar literary, dramatic
and musical material, trade names, trademarks and service marks and all
copyrightable expressions in audio visual works, computer software, electronic
circuitry and all mask works for integrated circuits. With respect to Inventions
and Intellectual Material, Executive shall during the period of this employment
hereunder and from time to time thereafter: (a) execute all documents required
by the Company for vesting in the Company or any of its affiliates the entire
right, title and interest in and to the same, (b) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (c) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto. If any such assistance is required following the term of this
agreement, the Company shall reimburse Executive for his lost wages or salary
and the reasonable expenses incurred by him in rendering such assistance.
Anything contained in this section does not apply to an Invention for which no
equipment, supplies, facilities, or trade secret information of the Company or
its affiliates was used and which was developed entirely on the Executive's own
time, unless the Invention relates (i) to the business of the Company or its
affiliates or (ii) to the Company's actual or demonstrably anticipated research
or development, or the Invention results from any work performed by Executive
for the Company.
14. REMEDIES. The parties hereto acknowledge that Executive's
services are of a special, unique, extraordinary and intellectual character
which gives him peculiar value and that the business of the Company and its
affiliates is highly competitive and that violation of any of the covenants
provided in Sections , and of this agreement would cause immediate, immeasurable
and irreparable harm, loss and damage to the Company not adequately compensable
by a monetary award. Executive acknowledges that the time, geographical area and
scope of activity restrained by the provisions of Sections , and are reasonable
and do not impose a greater restraint than is necessary to protect the goodwill
of the Company's business. In the event of any such breach or threatened breach
by Executive of any one or more of such covenants, the Company shall be entitled
to such equitable and injunctive relief as may be available to restrain
Executive and any business, firm, partnership, individual, corporation or entity
participating in such breach or threatened breach from the violation of the
provisions hereof. Executive further agrees that any temporary restraining order
or emergency, preliminary or final injunctions may be issued by any court of
competent jurisdiction. To the fullest extent permitted by law, Executive hereby
waives any right to require the posting of a bond as a condition to the issuance
or maintenance of such order or injunction and agrees that any such order or
injunction may be entered and maintained without the posting of a bond. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
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15. ENTIRE AGREEMENT. This agreement constitutes the entire
agreement of the parties hereto with respect to Executive's employment with the
Company and no amendment or modification hereof shall be valid or binding unless
made in writing and signed by the party against whom enforcement thereof is
sought.
16. NOTICES. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or sent by telephone facsimile or sent by certified mail, return receipt
requested, or sent by responsible overnight delivery service, postage and fees
prepaid, to the parties hereto at their respective addresses set forth below.
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Section . The date of the giving of any notice sent by mail
shall be three business days following the date of the posting of the mail, if
delivered in person, the date delivered in person, if sent by overnight delivery
service, the next business day following delivery to an overnight delivery
service or if sent by telephone facsimile, the date sent by telephone facsimile.
If to the Company:
c/o WMS Industries Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone Facsimile: 000-000-0000
Attn: Xx. Xxxx X. Xxxxxxxx
If to Executive:
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000
Telephone Facsimile:______________
17. NO ASSIGNMENT. Neither this agreement nor the right to
receive any payments hereunder may be assigned by Executive. This agreement may
not be assigned by the Company. This agreement shall be binding upon Executive,
his heirs, executors and administrators and upon the Company, its successors and
assigns.
18. NO WAIVER. No course of dealing nor any delay on the part of
the Company in exercising any rights hereunder shall operate as a waiver of any
such rights. No waiver of any default or breach of this agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
19. GOVERNING LAW. This agreement shall be governed, interpreted
and construed in accordance with the substantive laws of the State of Illinois
applicable to agreements entered into and to be performed entirely therein.
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20. ARBITRATION. The parties will arbitrate any dispute, claim
or controversy relating to or arising out of this agreement and Executive's
employment hereunder. Any party may initiate arbitration by giving written
notice to the other party of an intention to arbitrate and by filing with the
regional office of the American Arbitration Association located in San Diego,
California, three copies of such notice and three copies of this agreement
together with the appropriate filing fee. Such notice shall contain a statement
setting forth the nature of the dispute and the remedy sought. The arbitration
shall be conducted before a single arbitrator selected by the parties from the
Panel of Arbitrators with expertise in the interactive entertainment software
industry submitted to the parties by the American Arbitration Association. The
arbitration shall be conducted in San Diego, California in accordance with the
rules of the American Arbitration Association in effect at the time the notice
to arbitrate is served. The arbitrator's decision will be final and binding on
the parties. The arbitrator may grant any legal and/or equitable relief to which
a party may be entitled under the law or legal theory under which the party
seeks relief. The award shall not serve as precedent or authority in any
subsequent proceeding provided that if the losing party should fail to comply
with the award, the prevailing party may apply to any court having jurisdiction
for an order confirming the award in accordance with applicable law. Unless
otherwise required by law or court orders, the substance of any arbitration
proceedings pursuant hereto, including the content and result of the award,
shall be kept confidential by all parties and by the arbitrator. The fact that
such a proceeding exists or that an award has been rendered, need not be kept
confidential. Each party shall bear its own costs of the proceeding, including
costs of witnesses. The compensation of the arbitrator and any other costs of
the proceeding shall be shared equally by Executive and the Company.
21. SEVERABILITY. If any clause, paragraph, section or part of
this agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any arbitrator or court of competent jurisdiction, such provision
shall be ineffective but shall not in any way invalidate or affect any other
clause, paragraph, section or part of this agreement. The parties intend that
all clauses, paragraphs, sections or parts of this agreement shall be
enforceable to the fullest extent permitted by law.
22. COUNTERPARTS. This agreement may be executed in one or more
counterparts, each of which counterparts, when taken together, shall constitute
but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
XXXXXXXX ENTERTAINMENT INC.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Chairman
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/s/ Xxxxx X. Xxxx
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XXXXX X. XXXX
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