EXHIBIT 10(ww)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is effective as of
March 18, 2000, by and between Tiger Electronics, Ltd., a
Delaware corporation with a principal place of business at 000
Xxxxxxxxx Xxxxxxx, Xxxxxx Xxxxx, XX 00000-0000 ("Tiger"),
Hasbro, Inc., a Rhode Island corporation with a principal place
of business at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000
("Hasbro"), and Xxxxx Xxxxxxx, an individual with a residence at
0000 Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxx, XX 00000 (the "Employee").
WHEREAS, Tiger desires to employ Employee; and
WHEREAS, Employee desires to be employed by Tiger;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Term of Employment. Tiger hereby agrees to employ
Employee and Employee hereby accepts employment with Tiger for
the period commencing on or about March 18, 2000 (the
"Commencement Date") and ending on March 17, 2003, (the "Term")
unless otherwise terminated in accordance with the provisions of
Section 4. The Term shall be extended by mutual agreement.
2. Title; Reporting Employee. Employee shall serve as Chief
Operating Officer of Tiger until January 1, 2001, at which time
Tiger shall elect Employee to the position of President and
Chief Operating Officer of Tiger. . In accepting such
employment, Employee agrees to undertake the duties and
responsibilities described herein and such other duties and
responsibilities as are assigned to Employee. Employee agrees
to devote his entire business time, attention and energies to
the business and interests of Tiger during the Term. Employee
agrees to comply with all Tiger and applicable Hasbro policies
that are in effect during the Term.
3. Compensation and Benefits.
3.1 Salary. Tiger shall pay to Employee, an annual base
salary of Five Hundred Thousand Dollars ($500,000) in biweekly
installments, less all applicable taxes and withholdings.
Provided Employee remains employed by Tiger in the capacity
noted in 2, above, Employee's salary shall be adjusted to Five
Hundred Twenty Five Thousand Dollars ($525,000) on or about
March 19, 2001 and to Five Hundred Fifty Thousand Dollars
($550,000) on or about March 19, 2002.
3.2 Sign-On Bonus. Employee will receive a sign-on bonus of
Two Hundred Fifty Thousand Dollars ($250,000), payable in two
equal installments. The first installment shall be paid to
Employee as soon as practicable after March 18, 2000 and the
second installment shall be paid to Employee as soon as
practicable after March 18, 2001. If Employee (i) voluntarily
leaves the employ of Tiger or (ii) is terminated by Tiger
pursuant to Paragraph 4.1 below, prior to March 18, 2001,
Employee shall repay the entire first installment of such sign-
on bonus to Tiger on the date Employee terminates his employment
with Tiger. If Employee (i) voluntarily leaves the employ of
Tiger or (ii) is terminated by Tiger pursuant to Paragraph 4.1
below, prior to March 18, 2002, Employee shall repay the entire
second installment of such sign-on bonus to Tiger on the date
Employee terminates his employment with Tiger. Employee shall
be entitled to retain any bonus previously paid if Employee's
termination is for any reason other that Employee voluntarily
leaving the employ of Tiger or Employee is terminated pursuant
to Paragraph 4.1.
3.3 Management Incentive Plan Bonus.
(a) During the Term, Employee will be eligible to receive a
Management Incentive Plan bonus based on a target of fifty
percent (50%) of Employee's earned base salary for the incentive
year. Actual bonus awards may vary depending on Tiger, Hasbro
or Employee's performance and are discretionary.
(b) Notwithstanding the foregoing, Employee will receive, at
the time Management Incentive Plan Bonuses are customarily paid
by Tiger, a minimum Management Incentive Plan Bonus for calendar
year 2000 of Two Hundred Fifty Thousand Dollars ($250,000) (the
"2000 MIP Bonus"). If Employee terminates his employment
pursuant to Paragraph 4.5 below prior to March 18, 2001, no 2000
MIP Bonus shall be payable to Employee. If Employee terminates
his employment pursuant to Paragraph 4.5 below between March 19,
2001 and March 18, 2002, Employee shall repay Tiger two-thirds
(2/3) of the 2000 MIP Bonus paid. If Employee terminates his
employment pursuant to Paragraph 4.5 below between March 19,
2002 and March 18, 2003, Employee shall repay Tiger one-third
(1/3) of the 2000 MIP Bonus paid. All repayments of the 2000
MIP Bonus shall be made on the date Employee terminates his
employment with Tiger. Employee shall be entitled to retain any
of the 2000 MIP Bonus if termination is for any reason other
than pursuant to Paragraph 4.1 or 4.5 below.
3.4 Stock Option and Restricted Stock Grants.
(a) Prior to Xxxxx 00, 0000, Xxxxxx agrees to obtain the
approval of the Hasbro Compensation and Stock Option Committee
to grant Employee a non-qualified stock option for the purchase
of 50,000 shares of common stock of Hasbro. Such option shall
have an exercise price equal to the mean of the high and low
prices of the shares on March 20, 2000 and shall vest in three
equal annual installments commencing March 18, 2001. Such
option shall be granted pursuant to Hasbro's standard form of
Stock Option Agreement, as modified to reflect the last sentence
of Section 5.3 below.
(b) Prior to Xxxxx 00, 0000, Xxxxxx agrees to obtain the
approval of the Hasbro Compensation and Stock Option Committee
to grant Employee a non-qualified stock option grant for the
purchase of 100,000 shares of common stock of Hasbro. Such
option shall have an exercise price equal to ten percent (10%)
higher than the mean of the high and low prices of the shares on
March 20, 2000 Such options shall vest in five equal annual
installments commencing March 18, 2001. Such option shall be
granted pursuant to Hasbro's standard form of Stock Option
Agreement. for premium priced options, as modified to reflect
the last sentence of Section 5.3 below.
(c) Prior to Xxxxx 00, 0000, Xxxxxx agrees to obtain the
approval of the Hasbro Compensation and Stock Option Committee
to grant Employee 61,000 restricted shares of Hasbro common
stock, to be awarded to Employee on March 18, 2000. Such
restricted shares shall vest in one installment on March 18,
2003 and certificate(s) for such restricted shares shall be held
in escrow and shall contain legends, which indicate the shares
are subject to forfeiture and transfer restrictions. The grant
of restricted shares of common stock shall be granted pursuant
to Hasbro's standard form of Restricted Stock Agreement.
(d) Fringe Benefits. Employee shall be entitled to
participate in benefit programs that Tiger establishes and makes
available to its senior officers to the extent that Employee's
position, tenure, salary and other qualifications make Employee
eligible to participate, including but not limited to Tiger's
group life insurance, short and long term disability insurance,
medical, dental, pension, 401(k) savings, stock incentive
programs and deferred compensation programs for salaried
employees, as in effect from time-to-time. Employee shall be
entitled to 4 weeks paid vacation per year, in accordance with
Tiger's vacation policy and to be taken at a mutually agreeable
time.
3.5 Air Travel. All air travel by Employee for business or
relocation purposes shall be at business class level and if
business class is not available, first class provided that first
class is approved by Employee's immediate supervisor.
3.6 Company Car Allowance/Lease. During the Term of the
Agreement, Employee shall receive, at Employee's option, a
monthly car allowance of Eight Hundred Sixty Dollars ($860.00)
or the equivalent in an automobile leased by Tiger for Employee.
3.7 Relocation. Employee shall be entitled to relocation
assistance pursuant to Hasbro's Relocation Expenses for
Transferred Employees and Executive New Hires (the "Relocation
Policy"), a copy of which Employee acknowledges he has received
and reviewed. Tiger and the Employee agree that Sections 2.4,
4.2, 9.2, 9.3 and 11 of the Relocation Policy shall not apply;
however, Employee agrees that Employee will use reasonable
efforts to relocate to the Vernon Hills, Illinois area within
six (6) months from commencing employment. Tiger and Employee
further agree: (a) that Section 5.1 of the Relocation Policy is
amended to provide Employee with suitable housing at Tiger's
expense for up to six (6) months; (b) Section 6.2 of the
Relocation Policy shall be construed to mean that insurance on
household goods will be for full replacement value; and (c)
Section 7.1 of the Relocation Policy will be modified such that
the miscellaneous expenses maximum shall be Ten Thousand Dollars
($10,000).
3.8 Change of Control Agreement. Hasbro and the Employee
shall enter into Hasbro's standard form of Change of Control
Agreement as amended.
4. Employment Termination. Employee's employment by Tiger
pursuant to this Agreement shall terminate upon the occurrence
of any of the following:
4.1 At the election of Tiger, for cause, immediately upon
written notice to Employee by Tiger. For the purposes of this
Section 4.1, for cause termination shall be deemed to exist upon
(a) Employee's material failure to perform (i) Employee's
assigned duties for Tiger; or (ii) Employee's obligations under
this Agreement; (b) conduct of the Employee involving fraud,
gross negligence or willful misconduct or other action which
damages the reputation of Tiger or Hasbro; (c) Employee's
indictment for or conviction of, or the entry of a pleading of
guilty or nolo contendere by Employee to, any crime involving
moral turpitude or any felony; (d) Employee's fraud,
embezzlement or other intentional misappropriation from Tiger or
Hasbro; or (e) Employee's material breach of any material
policies, rules or regulations of employment which may be
adopted or amended from time to time by Tiger or Hasbro. Tiger
shall provide Employee in writing of any alleged violation of
(a) or (b) above, after which Employee shall have thirty (30)
days to cure such violation.
4.2 Thirty days after Employee's death or disability. As
used in this Agreement, the term "disability" shall mean
Employee's inability, due to a physical or mental disability,
for a period of 180 consecutive days, to perform the services
contemplated under this Agreement, with or without reasonable
accommodation. A determination of disability shall be made by a
physician satisfactory to both Employee and Tiger, provided that
if Employee and Tiger do not agree on a physician, Employee and
Tiger shall each select a physician and these two together shall
select a third physician, whose determination as to disability
shall be binding on all parties.
4.3 At the election of Tiger without cause and not because
of a "Change of Control."
4.4 At Employee's election for "good reason", defined as the
failure of Tiger to elect Employee to the position of President
and Chief Operating Officer on or about January 1, 2001.
4.5 At Employee's election without cause or good reason, as
defined above, upon not less than thirty (30) days notice.
5. Effect of Termination.
5.1 Termination for Cause or at Employee's Election. In the
event Employee's employment is terminated for cause pursuant to
Section 4.1 or at Employee's election pursuant to Section 4.5,
Tiger shall pay Employee the compensation and benefits otherwise
payable to Employee under Section 3 through the last day of
Employee's actual employment by Tiger.
5.2 Termination for Death or Disability. If Employee's
employment is terminated by death or because of disability
pursuant to Section 4.2, Tiger shall pay to Employee's estate or
to Employee, as the case may be, the compensation which would
otherwise be payable to Employee up to the end of the month in
which the termination of Employee's employment because of death
or disability occurs. All stock options and restricted stock
granted to Employee shall vest and be exercisable in accordance
with the relevant agreements and plans.
5.3 Termination at the Election of Tiger or for Good Reason.
If Employee's employment is terminated at the election of Tiger
pursuant to Section 4.3 or at Employee's election for "good
reason" as defined in Section 4.4, and provided Employee
executes a full and complete release in a form prepared by
Tiger, then Employee shall be entitled to the greater of
Employee's base salary at the times and in the amounts that
would have been paid to Employee had Employee remained in the
employ of the Company for the balance of the Term or twelve (12)
months of base salary continuation. Such base salary
continuation shall be less all applicable taxes and
withholdings, and shall be paid in accordance with the
applicable severance plan for Hasbro Salaried Employees (the
"Severance Plan"). Notwithstanding the provisions of the
Severance Plan or this Paragraph 5.3, provided that Employee
executes a full and complete release in a form prepared by
Tiger, if Employee's employment is terminated pursuant to
Section 4.3 or 4.4, all unvested stock options and restricted
stock will become vested and any bonus repayment obligations of
Employee, as set forth in paragraphs 3.2 or 3.3 above, will
terminate.
5.4 Survival. The provisions of Sections 6 and 7 below
shall survive the termination of this Agreement.
6. Non-Solicitation.
(a) During the Employment Period and for a period of one (1)
year after the termination or expiration thereof, for any
reason, Employee will not directly or indirectly:
(i) either alone or in association with others, solicit, or
permit any person or organizations directly or indirectly to
solicit, any individual who at the time of the solicitation is,
or who within the six (6) month period prior to such
solicitation was an employee of Tiger or Hasbro to leave the
employ of Tiger or Hasbro or terminate his or her employment
relationship with either Tiger or Hasbro, or hire or attempt to
hire or induce, any employee or employees of Tiger or Hasbro to
terminate their employment with, or otherwise cease their
relationship with, Tiger or Hasbro; or
(ii) solicit, divert or take away, or attempt to divert or
to take away, the business or patronage of any of the clients,
customers or accounts, or prospective clients, customers or
accounts, of Tiger or Hasbro;
(b) The geographic scope of this Section 6 shall extend to
anywhere Tiger or Hasbro or their respective subsidiaries is
doing business at the time of termination or expiration. If any
restriction set forth in this Section 6 is found by any court of
competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time,
range of activities or geographic area as to which it may be
enforceable.
(c) Employee acknowledges that the restrictions contained in
this Section 6 are necessary for the protection of the business
and goodwill of Tiger and Hasbro and are considered by Employee
to be reasonable for such purpose. Employee agrees that any
breach of this Section 6 will cause Tiger and Hasbro substantial
and irrevocable damage, and therefore, in the event of any such
breach, in addition to such other remedies which may be
available, Tiger and Hasbro shall have the right to obtain and
receive specific performance and injunctive relief without
posting a bond or other security.
7. Other Agreements.
(a) Employee hereby represents that Employee is not bound by
the terms of any agreement with any previous employer or other
party, which would impair Employee's right or ability to enter
the employ of Tiger or perform fully Employee's obligations
pursuant to this Agreement. Employee further represents and
warrants that Employee's performance of all the terms of this
Agreement and as an Employee of Tiger does not and will not
breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Employee in
confidence or in trust prior to Employee's employment with
Tiger.
(b) Employee agrees that upon the Commencement of Employee's
employment with Tiger he shall execute Hasbro's Invention
Assignment and Proprietary Information Agreement.
8. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon
personal delivery or upon deposit in the United States Mail, by
registered or certified mail, postage prepaid, addressed to
Hasbro at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 Attention:
General Counsel and to Employee at 0000 Xxxxxxxx Xxxx, Xxxxxxxx
Xxxx, XX and to Employee's attorney, Xxxxxx X. Xxxx, Xx.,
Carponelli & Xxxx, Suite 2350, 00 X. Xxxxxx Xxxxxx, Xxxxxxx, XX
00000 or at such other address or addresses as either party
shall designate to the other in accordance with this Section 8.
9. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior
agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement.
10. Amendment. This Agreement may be amended or modified
only by a written instrument executed by Employee, Tiger and
Hasbro.
11. Governing Law. This Agreement shall be construed, inter-
preted and enforced in accordance with the laws of the State of
Rhode Island and Employee consents to the exclusive jurisdiction
of the Federal District Court for the District of Rhode Island
to resolve all disputes arising out of Employee's employment
relationship with the Company.
12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of both parties and their
respective successors and assigns, including any corporation
with which or into which Tiger may be merged or which may
succeed to its assets or business, provided, however, that
Employee's obligations are personal and shall not be assigned by
Employee.
13. Miscellaneous.
13.1 No delay or omission by Tiger in exercising any right
under this Agreement shall operate as a waiver of that or any
other right. A waiver or consent given by Tiger on any one
occasion shall be effective only in that instance and shall not
be construed as a bar or waiver of any right on any other
occasion.
13.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or
affect the scope or substance of any Section of this Agreement.
13.3 In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity,
legality and enforceability of the remaining provisions shall in
no way be affected or impaired thereby.
13.4 IN WITNESS WHEREOF, the parties hereto have executed
this Agreement under seal as of the day and year set forth
above.
Tiger Electronics, Ltd.
/s/ Xxxxxx X. Xxxxxxxxxx
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Hasbro, Inc.
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: President and Chief Operating Officer
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
