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Exhibit 10.30
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into as of April 8, 1999, between STUART ENTERTAINMENT, INC., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXXXX (the "Executive").
RECITALS
A. The Company and the Executive have previously entered into that
certain Personal Services Agreement, dated October 5, 1998 (the "Prior
Agreement"), pursuant to which the Company has agreed to employ the Executive,
and the Executive has agreed to serve, as the Company's Chief Executive Officer.
B. The Company and the Executive desire to amend and restate the Prior
Agreement to thereby modify certain terms and conditions relating to the
employment of the Executive by the Company as its Chief Executive Officer and
Chairman of the Board.
C. The Company and the Executive intend that this Agreement shall
supersede all prior agreements, whether oral or written, relating to the terms
and conditions of the Executive's employment, including without limitation the
Prior Agreement.
NOW, THEREFORE, in consideration of their mutual covenants and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Cause" shall mean a termination of the Executive's employment
during the Term which is a result of any of the following: (i) the Executive
shall be convicted of, or plead guilty to, a felony; (ii) the Executive shall
commit theft or embezzlement of property of the Company or any affiliate of the
Company or any act involving moral turpitude or the use or possession of illegal
drugs; (iii) the board of directors of the Company shall determine that the
Executive has materially failed in the performance of his employment duties to
the Company, which failure is not cured within 30 days (or if such cure is
commenced within such 30 day period and thereafter diligently pursued, such
longer period as is reasonably required to cure such failure) after written
notice describing such failure in reasonable detail is provided to the Executive
by the Company's board of directors; (iv) any gaming license issued to the
Company or any affiliate thereof by any governmental entity shall be revoked or
suspended, or shall not be renewed, as a result of any act or omission committed
by the Executive; (v) the Executive shall commit any act or omission which, in
the reasonable judgment of the board of directors of the Company, could
reasonably be expected to result in the revocation or suspension of, or prevent
the renewal of, any gaming
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license of the Company or any affiliate thereof; or (vi) the Executive shall be
habitually under the influence of drugs or alcohol which shall materially and
adversely affect the performance of the Executive's duties.
1.2 "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor provisions thereto.
1.3 "Conversion Event" shall mean (i) the successful consummation of an
exchange offer in which the Company's existing 12-1/2% Senior Subordinated
Notes are exchanged for equity interests in the Company, or (ii) the entry of a
final and non-appealable order confirming a plan of reorganization for the
Company under Title 11, Chapter 11 of the United States Code involving the
restructuring of the Company's debt.
1.4 "Common Stock" shall mean shares of the voting common stock of the
Company.
1.5 "Disability" shall mean (i) the Executive's incapacity due to
physical or mental illness which causes him to be absent from the full-time
performance of his duties with the Company for three (3) consecutive months or
for ninety (90) days or more in any twelve (12) month period, and (ii) the
Executive's failure to return to full-time performance of his duties for the
Company within thirty (30) days after written Notice of Termination due to
Disability is provided by the Company to the Executive. Any question as to the
existence of the Executive's Disability upon which he and the Company cannot
agree shall be determined by a qualified independent physician selected by the
Executive (or, if the Executive is unable to make such selection, such selection
shall be made by any adult member of the Executive's immediate family), and
approved by the Company. The determination of such physician made in writing to
the Company and to the Executive shall be final and conclusive for all purposes
of this Agreement.
1.6 "Good Reason" shall mean a resignation of the Executive's
employment during the Term as a result of any of the following:
(a) A meaningful and detrimental alteration by the Company of
the Executive's office, function, duties or responsibilities (including the
Executive's reporting responsibilities) to a scope less than that associated
with the Executive's most significant position with the Company during the
ninety (90) day period immediately following such alteration;
(b) A reduction by the Company in the Executive's annual Base
Salary as set forth herein or as the same may be increased from time to time
thereafter;
(c) The failure by the Company to continue in effect any
compensation plan in which the Executive participates unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan or the failure by the Company to continue the
Executive's participation therein on at least as favorable a basis, both in
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terms of the amount of benefits provided and the level of the Executive's
participation relative to other participants;
(d) The failure by the Company to continue to provide the
Executive with fringe benefits and arrangements (including, without limitation,
life insurance, health, medical, dental, accident and disability plans and
programs, income tax services, car allowances and other fringe benefits) at
least as favorable in the aggregate to those fringe benefits and arrangements
that the Executive previously enjoyed, or the failure by the Company to provide
the Executive with the number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy previously in effect;
(e) Except in connection with or as a result of any Conversion
Event, any person (as defined in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934) shall become the "beneficial owner" (as defined in Rule
13d-3 promulgated pursuant to the Securities Exchange Act of 1934), directly or
indirectly, of 25% or more of the combined voting power of the Company's then
outstanding Common Stock;
(f) Except in connection with or as a result of any Conversion
Event, the occurrence within any twelve (12) month period of a change in the
membership of the Company's board of directors such that the Incumbent Members
do not constitute a majority of the members of such Board of Directors; or
(g) A material breach by the Company of the provisions of this
Agreement (provided, however, that any event described in clauses (a) through
(e) above shall not constitute Good Reason unless it is communicated by the
Executive to the Company in writing and is not corrected by the Company in a
manner which is reasonably satisfactory to the Executive, including full
retroactive correction with respect to any monetary matter, within ten (10) days
of the Company's receipt of such written notice from the Executive).
1.7 "Retirement" shall mean normal retirement at age 65 or in
accordance with retirement rules generally applicable to the Company's senior
executives.
ARTICLE 2
DUTIES AND TERM
2.1 Employment.
(a) The Executive shall have such duties and responsibilities
as shall be assigned to the Executive from time to time by the Board of
Directors of the Company (the "Board") in the Executive's capacity as the Chief
Executive Officer and the Chairman of the Board of the Company and as is
consistent with the Bylaws of the Company.
(b) During the period of his employment hereunder, the
Executive shall devote substantially all of his business time, attention, skill
and efforts to the faithful
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performance of his duties hereunder; provided, however, that the Executive may
serve or continue to serve on the board of directors or hold other offices or
positions in companies or organizations if they involve no conflict of interest
with the interests of the Company and may engage in customary professional
activities which in the judgment of the Board will not materially affect the
performance by the Executive of his duties hereunder.
2.2 Term. The term of this Agreement shall commence on the date first
written above and shall continue, unless sooner terminated, until December 31,
2001 (the "Initial Term"). Thereafter, the term of this Agreement may be
extended upon the mutual written agreement of the Executive and the Company (any
such extensions are referred to herein as "Renewal Terms"). The Initial Term and
any Renewal Terms of this Agreement shall be collectively referred to as the
"Term."
ARTICLE 3
COMPENSATION
3.1 Base Salary. Subject to the further provisions of this Agreement,
the Company shall pay the Executive during the Term of this Agreement a base
salary at an annual rate of not less than $250,000 (as such amount may be
increased from time to time, the "Base Salary"). The Base Salary shall be
reviewed at least annually by the Board and the Board may, in its discretion,
increase the Base Salary. The Base Salary of the Executive shall not be
decreased at any time during the term of this Agreement from the amount of Base
Salary then in effect, except in connection with across-the-board salary
reductions similarly affecting all senior executives of the Company.
Participation in deferred compensation, discretionary bonus, retirement, stock
option and other employee benefit plans and in fringe benefits shall not reduce
the Base Salary payable to the Executive under this Section 3.1. The Base Salary
under this Section 3.1 shall be payable by the Company to the Executive not less
frequently than monthly.
3.2 Initial Compensation. The Company and the Executive acknowledge
that, pursuant to Section 3 of the Prior Agreement, the Company has previously
paid to the Executive the following compensation:
(a) a lump sum of $100,000, paid upon the effective date of
the Prior Agreement;
(b) fully vested options to purchase 200,000 shares of Common
Stock at an exercise price of One Dollar ($1.00) per share on the effective date
of the Prior Agreement, such options to be issued under the Company's existing
stock option plan;
(c) options to purchase 300,000 shares of Common Stock at an
exercise price of One Dollar ($1.00) per share on the effective date of the
Prior Agreement, such options to vest in three (3) equal groups of 100,000
shares each on the anniversary of the effective date of the Prior Agreement and
to be issued under the Company's existing stock option plan.
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The parties acknowledge and agree that such amounts were paid as initial
compensation to retain the services of the Executive under the Prior Agreement
and that the Executive became indefeasibly entitled to receive such amounts upon
the effective date of the Prior Agreement.
3.3 Incentive Compensation. Subject to the further provisions of this
Agreement, during the Term of this Agreement the Executive shall be entitled to
participate in an equitable manner with all other senior executives of the
Company in such bonus or other incentive compensation programs as the Company
may adopt from time to time, including, but not limited to, bonuses or other
compensation provided pursuant to any performance-based management incentive
plans that the Company may adopt from time to time. Nothing in this section
shall be deemed to limit the ability of the Executive to be paid and receive
discretionary bonuses from the Company, based solely on the Executive's
performance, without regard to the payment of discretionary bonuses to any other
officers of the Company.
3.4 Participation in Retirement and Employee Benefit Plans: Fringe
Benefits. The Executive shall be entitled to participate in all plans of the
Company relating to stock options, stock purchases, pension, thrift, profit
sharing, life insurance, hospitalization and medical coverage, disability,
travel or accident insurance, education or other retirement or employee benefits
that the Company has adopted or may adopt for the benefit of its senior
executives. In addition, the Executive shall be entitled to participate in any
other fringe benefits, such as club dues and fees of professional organizations
and associations, which are now or may become applicable to the Company's senior
executives, and any other benefits which are commensurate with the duties and
responsibilities to be performed by the Executive under this Agreement. The
Executive shall, during the Term of his employment hereunder, continue to be
provided with benefits at a level which shall in no event be less in any
material respect than the benefits available to the Executive as of the date of
this Agreement. Notwithstanding the foregoing, the Company may terminate or
reduce benefits under any benefit plans and programs to the extent such
reductions apply uniformly to all senior executives enabled to participate
therein, and the Executive's benefits shall be reduced or terminated
accordingly.
3.5 Vacation. The Executive shall be entitled to a vacation during each
year of the employment term, without diminution of his salary in accordance with
the Company's vacation policy as in effect from time to time.
3.6 Costs and Expenses. The Company and the Executive acknowledge that
the Executive will incur cash out-of-pocket expenses while traveling on business
for the Company and performing the Executive's duties under this Agreement, and
that it would be inefficient for both the Company and the Executive to provide
for the Company to reimburse the Executive for such expenses that are not paid
directly by the Company. Accordingly, the Company shall pay to the Executive
during each calendar month (or portion thereof) or during the term of this
Agreement a monthly out-of-pocket travel expense fee in the amount of $750,
which travel expense fee shall be full and complete payment to the Executive for
all such out-of-pocket travel expenses. The Company and the Executive
acknowledge that the actual amount of such expenses incurred by the Executive
during any given month may be more or less than the amount
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of such travel expense fee. The amount of such travel expense fee will be
evaluated periodically and adjusted if necessary.
3.7 Restructuring Bonus. The Executive will receive a bonus
("Restructuring Bonus") payable in cash upon the occurrence of a Conversion
Event consisting of (A) a lump sum payment of cash in an amount equal to thirty
percent (30%) of the Executive's Base Salary in effect at such time, and (B) an
aggregate of one and eight-tenths (1.8%) of the equity in the entity resulting
from such Conversion Event (calculated on a fully diluted basis as of the
effective date of such Conversion Event), in the form of restricted stock grants
or warrants with a nominal exercise price (the specific terms and conditions of
which shall be set forth in a separate agreement to be entered into between the
Company and the Executive at such time). The Executive shall not be entitled to
receive a Restructuring Bonus if his employment is terminated prior to the
occurrence of a Conversion Event either (i) by the Company with Cause, or (ii)
by the Executive (regardless of cause or reason). It is understood and agreed
that for income tax purposes, the Restructuring Bonus shall not be deemed to be
income of the Executive until actually received by the Executive.
ARTICLE 4
TERMINATION OF EMPLOYMENT
4.1 Death or Retirement of Executive. This Agreement shall
automatically terminate upon the death or Retirement of the Executive.
4.2 By the Executive. The Executive shall be entitled to terminate this
Agreement by giving written notice to the Company:
(a) for Good Reason; and
(b) at any time without Good Reason.
4.3 By the Company. The Company shall be entitled to terminate this
Agreement by giving written notice to the Executive:
(a) in the event of the Executive's Disability;
(b) for Cause; and
(c) at any time without Cause.
4.4 Date of Termination. Any termination of the Executive's employment
by the Company or by the Executive during the Term shall be communicated by a
notice of termination to the other party hereto (the "Notice of Termination").
The Notice of Termination shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of his employment
under the provision so indicated. The date of termination of employment with the
Company and
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its subsidiaries (the "Date of Termination") shall be determined as follows: (i)
if the Executive's employment is terminated for Disability, thirty (30) days
after such notice is given (provided that the Executive shall not have returned
to the full-time performance of duties during such thirty (30) day period), (ii)
if the Executive's employment is terminated by the Company other than for Cause
or Disability, five (5) days after the date such notice is received by the
Executive, (iii) if the Executive's employment is terminated by the Company for
Cause, the later of the date specified in such notice or ten (10) days following
the date such notice is received by the Executive, (iv) if the Executive's
employment is terminated by the Executive for Good Reason, ten (10) days after
the date such notice is received by the Company, and (v) if the Executive's
employment is terminated by the Executive other than for Good Reason, the date
set forth in such notice, which shall be no earlier than twenty (20) days after
the date such notice is received by the Company.
ARTICLE 5
COMPENSATION UPON TERMINATION OF EMPLOYMENT
5.1 Upon Termination for Death, by the Company for Cause, by the
Executive Without Good Reason, or at Expiration of Term and Refusal of
Employment by the Executive. If the Executive's employment is terminated by
reason of the Executive's death or Disability, by the Company for Cause, by the
Executive without Good Reason, or if at the end of the Term of this Agreement
the Company decides to extend the Term, but the Executive decides not to
continue in the employ of the Company, the Company shall:
(a) pay the executive (or his estate or beneficiaries), upon
the later of ten (10) business days after such termination date or the effective
date of standard termination and release documents to be executed by the
Executive, any Base Salary which has accrued but which has not been paid as of
the termination date (the "Accrued Base Salary");
(b) reimburse the Executive (or his estate or beneficiaries),
within five (5) days of such termination, for expenses incurred by him prior to
the date of termination which are subject to reimbursement pursuant to
applicable Company policies then in effect (the "Accrued Reimbursable
Expenses");
(c) provide to the Executive (or his estate or beneficiaries)
any accrued and vested benefits required to be provided by the terms of any
Company-sponsored benefit plans or programs (the "Accrued Benefits"), together
with any benefits required to be paid or provided in the event of the
Executive's death or Disability under applicable law;
(d) pay the Executive (or his estate or beneficiaries), upon
the later of ten (10) business days after such termination date or the effective
date of standard termination and release documents to be executed by the
Executive, any discretionary bonus with respect to a prior fiscal year which has
accrued and been earned but has not been paid, and pay the Executive (or his
estate or beneficiaries) as soon as practicable any incentive compensation
earned by the Executive as of the Termination Date which (i) is determined by
objective measurements standards under the Company's incentive compensation
programs applicable to senior
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executives, and (ii) would have been paid to Executive had the Executive been
continuously employed through the end of such measurement period (collectively,
the "Accrued Bonus"); and
(e) allow the Executive (or his estate or beneficiaries) to
exercise all vested, unexercised stock options outstanding at the termination
date in accordance with the terms of the plans and agreements pursuant to which
such options were issued.
5.2 Upon Termination at Expiration of Term and the Company's Failure to
Extend. If the Executive's employment is terminated upon the expiration of the
Term of this Agreement and the Company does not extend the Term of this
Agreement, the Company shall:
(a) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive, the Accrued Base Salary;
(b) pay the Executive, within five (5) days of such
termination, the Accrued Reimbursable Expenses;
(c) pay the Executive the Accrued Benefits;
(d) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive (or as soon as practicable
thereafter), the Accrued Bonus;
(e) allow the Executive the right to exercise all vested,
unexercised stock options in accordance with Section 5.1(e); and
(f) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive, a cash lump sum payment
in an amount equal to his Base Salary (as in effect at the time of such
termination) for a period equal to twelve (12) months.
5.3 Upon Termination by the Company Without Cause or by the Executive
for Good Reason. If the Executive's employment is terminated by the Company
without Cause or by the Executive for Good Reason, the Company shall:
(a) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive, the Accrued Base Salary;
(b) pay the Executive, within five (5) days of such
termination, the Accrued Reimbursable Expenses;
(c) pay the Executive the Accrued Benefits;
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(d) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive (or as soon as practicable
therafter), the Accrued Bonus;
(e) pay the Executive, upon the later of ten (10) business
days after such termination date or the effective date of standard termination
and release documents to be executed by the Executive, a cash lump sum in an
amount determined as follows: (A) prior to the effective date of any Conversion
Event, an amount equal to his Base Salary (as in effect at the time of such
termination) for a period of thirty-six (36) months; and (B) from and after the
effective date of any Conversion Event, an amount equal to his Base Salary (as
in effect at the time of such termination) for a period equal to the greater of
twelve (12) months or the number of months remaining until the expiration of the
Term; provided, however, that in any case such amount shall not exceed 2.99
times the Executive's "base amount," as such term is defined in Section 28OG of
the Code and the regulations promulgated thereunder;
(f) maintain in full force and effect, for the continued
benefit of the Executive and his eligible beneficiaries, until the first to
occur of (i) his attainment of, and qualification to receive, comparable
benefits upon alternative employment or (ii) twelve (12) months following the
Termination Date, the employee benefits pursuant to Company-sponsored benefit
plans, programs or other arrangements in which the Executive was entitled to
participate immediately prior to such termination (provided, that in the event
that the Executive's participation or the participation of such eligible
beneficiaries in any such plans or arrangements is prohibited by the terms
thereof, the Company shall provide, at the Company's expense, the Executive
and/or such eligible beneficiaries with benefits for such period substantially
similar to those that the Executive and/or such eligible beneficiaries were
entitled to receive under such plans as of the Termination Date); and
(g) allow the Executive the right to exercise in full all
outstanding vested stock options and restricted stock awards for a period of
twelve (12) months following the Termination Date and, if the Executive then
holds stock options and/or restricted stock awards not fully vested or
exercisable, all such options and restricted stock awards will immediately vest
in full and become exercisable in accordance with their terms for a period of
twelve (12) months following the Termination Date.
ARTICLE 6
DISABILITY
If the Executive's employment is terminated by reason of the
Executive's Disability, the Executive shall be entitled to receive such
disability payments and other benefits as are provided under any disability
programs for senior executives of the Company as shall be in effect at the time
of such Disability.
ARTICLE 7
RESTRICTIVE COVENANTS
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7.1 Competition.
(a) The Executive agrees that during his employment with the
Company and for a period of two (2) years following the date of termination or
expiration of his employment hereunder (the "Non-Competition Period"), for any
reason except if the termination is due to the Company's failure to extend the
Term of this Agreement (whether such termination shall be voluntary or
involuntary), the Executive shall not:
(i) directly or indirectly, for himself or as agent of, or on
behalf of, or in conjunction with, any person, firm, corporation or association,
entering into competitive endeavors and undertaking any commercial activity
which is contrary to the best interest of the Company or its affiliates or
subsidiaries, including becoming an employee, owner (except for passive
investments of not more than one percent of the outstanding shares of, or any
other equity interest in, any company or entity listed or traded on a national
securities exchange or in the over-the-counter securities market), officer,
agent or director of any firm, person, corporation, association or other entity
in any geographic area in which the Company conducts its business which either
directly competes with a line or lines of business of the Company accounting for
ten percent (10%) or more of the Company's gross sales, revenues of earnings
before taxes or derives ten percent (10%) or more of such firm's or person's
gross sales, revenues or earnings before taxes from a line or lines of business
which directly compete with the Company; or
(ii) directly or indirectly solicit for employment, endeavor
to entice away from the Company otherwise interfere with the Company's
relationship with any person who is employed by or otherwise engaged to perform
services for the Company, whether for the Executive's own account or for the
account of any other individual, partnership, firm, corporation or other entity.
(b) The Executive expressly agrees and acknowledges that:
(i) this covenant not to compete is reasonably necessary for
the protection of the interests of the Company and is reasonable as to time and
geographical area and does not place any unreasonable burden upon him;
(ii) the general public will not be harmed as a result of
enforcement of this covenant not to compete;
(iii) his personal legal counsel has reviewed this covenant
not to compete;
(iv) he understands and hereby agrees to each and every term
and condition of this covenant not to compete; and
(v) notwithstanding any provision of this Agreement to the
contrary, the Company shall not, from and after any breach by Executive of the
provisions of this Article 7, have any further obligations to make payments to
Executive under this Agreement.
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(c) If the Executive's employment is terminated upon the
expiration of the Term of this Agreement due to the Company's failure to extend
the Term, the Non-Competition Period will be for one (1) year.
7.2 Proprietary Information.
(a) Executive will not at any time, whether during or after
Executive's employment with the Company, disclose or use for his own benefit or
purpose of any other person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise other than the
Company or its affiliates and subsidiaries, any trade secrets, information,
data, or other confidential information relating to customers, development
programs, costs, marketing, trading, investment, sales activities, promotion,
credit and financial data, manufacturing processes, financing methods, plans, or
the business and affairs of the Company or its affiliates and/or subsidiaries
("Proprietary Information"). The term Proprietary Information shall not include
information which is not unique to the Company, its affiliates or subsidiaries,
or which is generally known to the industry or the public other than as a result
of the Executive's breach of this covenant. The Executive agrees that all
materials or articles of information of any kind furnished to the Executive by
the Company or developed by the Executive in the course of his employment are
and shall remain the sole property of the Company and, upon termination of
Executive's employment with the Company, Executive will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof, in any way relating to the business of the Company
and its affiliates or subsidiaries, except that Executive may retain personal
notes, notebooks and diaries. The Executive further agrees that he will not
retain or use for his account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of the Company or its affiliates or subsidiaries. The Executive agrees that all
Proprietary Information shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all licenses
and other rights in connection with such Proprietary Information.
(b) The Company from time to time receives from third parties
confidential or proprietary information subject to a duty on the Company's part
to maintain the confidentiality of such information and to use it only for
certain limited purposes ("Third Party Information"). During Executive's
employment with the Company and thereafter, Executive will hold Third Party
Information in the strictest confidence and will not disclose or use Third Party
Information except as permitted by any agreement between the Company and such
third party.
(c) Executive acknowledges that the Company's customers and
suppliers constitute a valuable and unique asset of the Company. Executive will
not at any time, whether during or after his employment with the Company, (i)
disclose such list of customers and/or suppliers or any part thereof to any
person, firm, corporation, association or other entity for any reason or purpose
whatsoever, (ii) assist in obtaining customers for any other similar business,
or (iii) encourage any customer or supplier to terminate their relationship with
the Company.
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(d) Executive agrees to assign to the Company, without further
consideration, his entire right, title and interest (throughout the United
States and in all foreign countries), free and clear of all liens and
encumbrances, in and to all Inventions (as defined below). Notwithstanding the
foregoing, the Company may, in its discretion, agree to provide consideration
for certain Inventions through a written agreement between the Company and the
undersigned which specifically provides for such consideration; in all other
cases, no consideration shall be paid. The Inventions shall be the sole property
of the Company, whether or not copyrightable or patentable. In addition,
Executive agrees to maintain adequate and current written records on the
development of all Inventions, which shall also remain the sole property of the
Company. Executive understands that "Inventions" means all ideas, processes,
inventions, technology, designs, formulas, discoveries, patents, copyrights and
trademarks, and all improvements, rights and claims related to the foregoing,
that are conceived, developed, or reduced to practice by Executive alone or with
others. If, in the course of Executive's employment, with the Company, Executive
incorporates into Company property an invention owned by Executive or in which
Executive has an interest, the Company is granted a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license to make, modify, use and sell
Executive's invention as part of an in connection with the Company's property.
7.3 Remedies. The Executive expressly agrees and acknowledges that the
covenant not to compete set forth in Section 7.1 is necessary for the Company's
and its affiliates' protection because of the nature and scope of their business
and his position with the Company. Further, the Executive acknowledges that, in
the event of his breach of his covenant not to compete, money damages will not
sufficiently compensate the Company for its injury caused thereby, and he
accordingly agrees that in addition to such money damages he may be restrained
and enjoined from any continuing breach of the covenant not to compete without
any bond or other security being required. The Executive acknowledges that any
breach of the covenant not to compete would result in irreparable damage to the
Company. The Executive acknowledges that the remedy at law for any breach or
threatened breach of Sections 7.1 and 7.2 will be inadequate and, accordingly,
that the Company shall, in addition to all other available remedies (including
without limitation, seeking such damages as it can show it has sustained by
reason of such breach), be entitled to injunctive relief or specific
performance. If the scope of the Executive's agreement under this Article VII is
determined by any court of competent jurisdiction to be too broad to permit the
enforcement of all of the provisions of this Article VII to their fullest
extent, then the provision of this Article VII shall be construed (and each of
the parties hereto hereby confirms that its intent is that such provisions be so
construed) to be enforceable to the fullest extent permitted by applicable law.
To the maximum extent permitted by applicable law, the Executive hereby consents
in any proceeding brought to enforce such provisions to the judicial
modification of the provisions of this Article VII in such a manner that renders
such provisions enforceable to the maximum extent permitted by applicable law.
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ARTICLE 8
MISCELLANEOUS
8.1 Assignment and Delegation.
(a) This Agreement is personal to each of the parties hereto. No party
may assign or delegate any rights or obligations hereunder without first
obtaining the written consent of the other parry hereto, except that this
Agreement shall be binding upon and inure to the benefit of any successor
corporation to the Company.
(b) The Company shall use reasonable efforts to require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as defined herein and any successor to its business and/or assets which
assumes this Agreement by operation of law or otherwise.
(c) This Agreement shall inure to the benefit of and be enforceable by
the Executive and his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees. If the
Executive should die while any amount would still be payable to him hereunder
had he continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his devisee,
legates or other designee, or if there is no such designee, to his estate.
8.2 Notice. For the purpose of this Agreement, notices and a other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
addresses as either party may have furnished to the other in writing in
accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:
To the Company: Stuart Entertainment, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attn: General Counsel
To the Executive: Xxxxxx X. Xxxxxxxx
00 Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
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Any notice of termination pursuant to Section 4.4 of this Agreement shall
specify the specific termination provision relied upon by the party giving
notice and shall state the effective date of such termination.
8.3 Amendments or Additions; Prior Agreements. No amendments or
additions to this Agreement shall be binding unless in writing and signed by
each of the parties hereto. This Agreement shall supersede all prior agreements,
whether oral or written, relating to the terms and conditions of the Executive's
employment, including without limitation the Prior Agreement, other than any
stock option or stock purchase agreements (which shall remain unaffected by this
Agreement, except to the extent any vesting or exercise period may be modified
hereby).
8.4 Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
8.5 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If, in any
judicial proceedings, a court shall refuse to enforce one or more of the
covenants or agreements contained herein because the duration thereof is too
long, or the scope thereof is too broad, it is expressly agreed between the
parties hereto that such scope or duration shall be deemed reduced to the extent
necessary to permit the enforcement of such covenants or agreements.
8.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
8.7 No Mitigation or Offset. The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer or by pension benefits
paid by the Company or another employer after the date of termination or
otherwise except that on the date that the Executive and his dependents are
eligible and elect coverage under the plans of a subsequent employer which
provide substantially equivalent or greater benefits to the Executive and his
dependents.
8.8 Enforcement Expenses. The Company intends that Executive should not
be required to incur the expenses associated with the enforcement of his rights
under this Agreement because the such expenses would substantially detract from
the benefits intended to be extended to him under this Agreement, nor be bound
to negotiate any settlement of his rights under this Agreement under threat of
incurring all of such expenses. Accordingly, if the Company fails to comply with
any of its obligations under this Agreement or in the event that the Company or
any other person takes any action to declare this Agreement void or
unenforceable, the Company must indemnify Executive for all legal costs and fees
(including without limitation, attorneys'
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fees, retainers, arbitration costs, charges for transcripts, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage and delivery service fees, and all other
disbursements or out-of-pocket expenses) that Executive incurs by asserting or
defending his rights under this Agreement. The Company will be obligated to
reimburse Executive for the fees and expenses of his chosen counsel on a
regular, periodic basis upon presentment by him of a statement or statements
prepared by such counsel in accordance with its customary practices, but in no
event later than 45 days after such presentment. If such fees and expenses are
not reimbursed within 45 days of presentment, the Company must pay Executive
interest running from the date of such presentment at the applicable federal
rate provided for in Section 1274(d) of the Code, or any successor provision
thereof, for an obligation with a term equal to the length of such delay.
8.9 Modifications and Waiver. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer of the Company
as may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
8.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware without regard to its conflicts of law principles.
8.11 Taxes. Any payments provided for hereunder shall be paid net of
any applicable employment taxes required under federal, state or local law,
subject however to any mandatory withholding.
8.12 Survival. The obligations of the Company under Article V hereof
and the obligations of the Executive under Article VII hereof shall survive the
expiration of this Agreement.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first indicated above.
STUART ENTERTAINMENT, INC.,
a Delaware corporation
By /s/ Xxxxxxxx Xxxxxx
----------------------------------------
Its Executive Vice President & Chief
Financial Officer
--------------------------------------
"COMPANY"
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
XXXXXX X. XXXXXXXX
"EXECUTIVE"
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