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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
__________, 1999, by and between Xxxxx Xxxxx (hereinafter referred to as
"Executive"), Cyrk, Inc., a Delaware corporation (the "Corporation"), and Simon
Marketing, Inc., a Delaware corporation ("SM"), with reference to the following
facts:
A. Pursuant to an Employment Agreement dated as of May 7, 1997 (the
"Prior Agreement"), Executive has been employed by SM.
B. SM is a wholly-owned subsidiary of the Corporation.
C. Executive remains a person whose skills, experience and training are
required by the Corporation and SM. Executive, the Corporation, and SM wish to
terminate the Prior Agreement, and to enter into a new agreement whereby
Executive will serve as Co-Chief Executive Officer and Co-President of the
Corporation on the terms and conditions hereinafter set forth.
D. In order to induce Executive to accept such employment, SM has
agreed to guarantee the obligations of the Corporation hereunder.
NOW THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. EMPLOYMENT
1.1 POSITION AND DUTIES
The Corporation hereby employs Executive, and Executive accepts such
employment, as Co-Chief Executive Officer and Co-President of the Corporation
upon the terms and provisions set forth in this Agreement. Executive shall
report only to the Board of Directors of the Corporation (the "Board") through
the Chairman of the Board, and, subject to the directions of the Board, acting
through the Chairman of the Board, shall have full general supervision,
direction and control of all aspects of the business, officers and employees of
the Corporation and its subsidiaries (including SM) that are customary for the
Chief Executive Officer of a public company like the Corporation, except for
such duties and responsibilities allocated by the Board (acting through its
Chairman) to the other Co-Chief Executive Officer. All officers and employees of
the Corporation and its subsidiaries (including SM) shall report directly or
indirectly to Executive or to the Co-Chief Executive Officer as the Board may
from time to time determine. The Corporation shall employ two administrative
assistants and a driver to assist Executive on substantially the same basis on
which such administrative assistants and driver were employed by SM immediately
before the date of this Agreement. Executive shall devote his full working time
and effort to the business and affairs of the Corporation and its subsidiaries
and will act in accordance with the policies and directions of the Board, acting
through its Chairman. Executive may
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participate in other business activities and act as a director of any profit or
nonprofit corporation, so long as such activity is not competitive with the
business of the Corporation and its subsidiaries in any material respect and
does not materially detract from the performance of his duties as a full time
executive of the Corporation. The Prior Agreement is hereby terminated effective
as of the day before the date of the closing under that certain Securities
Purchase Agreement of even date herewith by and between Overseas Toys, L.P. and
Cyrk, Inc. (the "Closing").
1.2 BOARD OF THE CORPORATION; ADDITIONAL DUTIES
So long as Executive is employed by the Corporation, Executive
shall serve as a director of SM, and of such subsidiaries of the Corporation as
the Board may designate, shall be nominated for election as a director of the
Corporation at each meeting of the shareholders of the Corporation at which
directors are elected (unless such nomination is unnecessary because Executive
is serving as a director and his term is not expiring), and Executive shall
perform additional duties for the Corporation and its subsidiaries (including
SM) as the Board may reasonably request. In the event of the termination of
Executive's employment for any reason, Executive agrees to resign as a director
of the Company and of any or all subsidiaries of the Company upon the request of
the Board, acting through its Chairman.
1.3 CONSULTING
During the Consulting Term (as defined below), Executive shall
make himself available from time to time as the Corporation and its subsidiaries
(including SM) may reasonably request to consult with the Corporation and its
subsidiaries (including SM) with regard to their business; provided, however,
that (a) Executive shall not be required to be available more than 20 hours per
month, or for more than two hours in any period of 24 consecutive hours, (b)
Executive shall not be required to be available except on reasonable advance
notice, and (c) Executive shall not be required to travel outside of a fifty
(50) mile radius from his residence.
2. TERM
Executive's employment under this Agreement shall commence on the date
of the Closing, and shall continue for a period of three (3) years, or five (5)
years if Executive gives a notice of extension before the expiration of thirty
(30) months from the date hereof, unless in either case sooner terminated as
hereinafter provided (the "Term"). This Agreement shall not become effective
before the Closing, or if the Closing does not occur. The "Consulting Term"
shall commence on the expiration or earlier termination of the Term and shall
continue for five (5) years thereafter, unless sooner terminated by the giving
of thirty (30) days' written notice of termination by Executive to the
Corporation, which Executive may give at any time after the second anniversary
of the commencement of the Consulting Term.
3. COMPENSATION
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3.1 SALARY
As compensation for the services to be performed by Executive
during the Term of this Agreement, the Corporation shall pay Executive a salary
of $750,000 per year during the Term, payable in accordance with the
Corporation's practices in effect from time to time, but not less often than
biweekly.
3.2 BONUSES
Upon execution of this Agreement, Executive shall receive a
cash bonus of $2,250,000 (the "Signing Bonus"). If for any reason or for no
reason, other than as set forth in Sections 6.4 or 6.6, Executive's employment
with the Corporation and all of its subsidiaries is terminated by either
Executive or the Corporation prior to the fifth anniversary of the Closing
(including, without limitation, if Executive does not extend the Term to five
years as set forth in Section 2), then within thirty (30) days of any such
termination, Executive (or his estate if the termination is on account of
Executive's death) shall repay to the Corporation the portion of the Signing
Bonus attributable to any portion of such five-year period remaining after the
termination of Executive's employment, determined by prorating the Signing Bonus
over the five-year period, with the proration over any period of less than a
full calendar year being made on a daily basis of a 365 day year. Executive
shall not be obligated to repay any portion of the Signing Bonus in the event of
his termination of employment as described in Sections 6.4 or 6.6. Executive
shall be entitled to participate in any bonus pool or discretionary bonus
arrangement of the Corporation or its subsidiaries (including SM) at a level
commensurate with his position as Co-Chief Executive Officer and Co-President of
the Corporation; provided, however, that nothing in this Section 3.2 shall be
deemed to require the Corporation to pay equal bonuses to the two Co-Chief
Executive Officers or Co-Presidents. Such bonuses shall be based on reasonable
criteria pertaining to the Corporation's performance. For each fiscal year of
the Corporation, Executive shall receive a bonus of at least 2.133% of his
annual salary for each percentage point by which the Corporation's actual EBITDA
for such fiscal year exceeds 85% of the Corporation's projected or targeted
EBITDA for such fiscal year as determined by the Board; provided, however, that
this sentence shall not obligate the Corporation to pay Executive a bonus for
any fiscal year greater than 32% of Executive's salary for such fiscal year.
3.3 BENEFITS
Executive shall be entitled to participate in all pension
plans, profit sharing plans, life, medical, dental, disability or other
insurance plans or policies or other similar plans or benefits the Corporation
or its subsidiaries (including SM) may provide generally for their senior
executives or for employees of the Corporation or its subsidiaries (including
SM) generally from time to time in effect during the Term, but as to medical and
dental insurance plans, with terms no less favorable to Executive than provided
to Executive by the SM immediately preceding the date of this Agreement. During
the Consulting Term, the Corporation and its subsidiaries (including SM) will
continue to provide Executive with group life, health and disability insurance
coverage at their expense. During the Term, the
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Corporation shall reimburse Executive for medical and health-related expenses
not covered or reimbursed by insurance (including, but not limited to, services
recommended by a physician) in the same manner as was SM's practice immediately
before the date of this Agreement. The Corporation shall at all times during the
Term and during the Consulting Term pay for and maintain for the benefit of
Executive and his designees the policies of split dollar life insurance in
effect immediately before the date of this Agreement (the "Split Dollar
Policies"). If for any reason any of such policies shall terminate or not be
renewed, the Corporation will use its best reasonable commercial efforts to
secure replacement policies providing comparable coverage. Executive, or his
designee, shall be the owner of the policies for all purposes, subject to
whatever rights the Corporation may have to a return of its premiums under
certain circumstances. The Corporation shall continue to pay the premiums on
such policies after the termination of the Consulting Term so long as Executive
is willing to provide consulting services to the Corporation after the
expiration of the Consulting Term on the same basis as the senior executives of
the Corporation and Executive continues to be bound by the provisions of Section
8 of this Agreement. Executive shall be reimbursed for his reasonable estate
planning, legal representation and advice, tax planning and return preparation
and accounting fees and related expenses. (All of the benefits referred to in
this Section 3.3 are collectively referred to as "Additional Benefits.")
3.4 STOCK OPTIONS
Executive shall be considered for grants of options to acquire
shares of the Corporation's common stock, SARS, phantom stock rights and any
similar option or securities compensation, at a level commensurate with
Executive's position as Co-Chief Executive Officer and Co-President of the
Corporation, when and as such grants are considered for other executives or
employees of the Corporation or its subsidiaries (including SM), but any grant
is wholly at the discretion of the Board or appropriate Board committee.
3.5 PERIODIC REVIEW
The Corporation shall review Executive's salary, stock
options, and other benefits then being provided to Executive not less frequently
than annually and may, but shall not be obligated to, increase Executive's
salary.
3.6 REIMBURSEMENTS
Executive shall be promptly reimbursed by the Corporation for
all amounts reasonably expended by Executive in the course of performing duties
for the Corporation, including without limitation, reasonable expenses for
travel, entertainment, parking, automobile and driver, business meetings,
professional dues, club memberships, and credit cards, all in accordance with
policies set by the Board from time to time, subject to the following:
(a) Executive shall be entitled to first class
travel, meals and lodging;
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(b) The Corporation shall reimburse Executive for the
travel expenses of a travelling companion, who may be a family member of
Executive, and, if a family member of Executive, whose travel, meals and hotel
accommodations may be the same as those of Executive; and
(c) The Corporation shall reimburse Executive for the
travel expenses of Executive's wife, minor children and caregiver travelling
with Executive on a business trip which extends, or which is expected to extend,
for more than seven (7) days, whose travel, meals and hotel accommodations may
be the same as those of Executive.
During the Term, Executive shall be entitled to the use of a Jaguar XJR
or equivalent automobile on the same terms and conditions as the then-current
practice of the Corporation and its subsidiaries (including SM) for their senior
executives.
3.7 DEDUCTIONS
There shall be deducted from Executive's gross compensation
appropriate amounts for standard employee deductions (e.g. , income tax
withholding, social security and state disability insurance) and any other
amounts authorized for deduction by Executive.
3.8 LOCATION
Executive's office shall be in Century City, California. In
the event that SM relocates its headquarters from Century City, California,
Executive shall in no event be required to move his residence from Los Angeles,
California, nor perform his duties outside of Century City, and shall be allowed
to function as Co-Chief Executive Officer and Co-President of the Corporation
from an appropriate and satisfactory office, and with an appropriate and
satisfactory staff, provided to him in Century City. Executive will not be
required to increase his travel beyond that currently undertaken by him and
Executive shall at all times determine whether and when to travel on business
trips.
4. VACATION
Executive shall be entitled to not less than four (4) weeks of paid
vacation for each twelve (12) month period of employment which shall accrue on a
pro rata basis from the date of this Agreement. Subject to the foregoing minimum
vacation, Executive shall be entitled to paid vacation, holidays and leave time
in accordance with the plans, policies, programs and practices in effect
generally with respect to other senior employees of the Corporation and its
subsidiaries (including SM).
5. INDEMNIFICATION
The Corporation, and its subsidiaries (including SM) shall, to the
maximum extent permitted by law, jointly and severally indemnify and hold
Executive harmless from and against any expenses, including reasonable
attorney's fees, judgements, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising out of, or related
to, Executive's employment by the Corporation or by its
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subsidiaries (including SM). The Corporation and its subsidiaries (including SM)
shall advance to Executive any reasonable expenses, including reasonable
attorneys' fees and costs of settlement, reasonably incurred in defending any
such proceeding to the maximum extent permitted by law. The Corporation and its
subsidiaries (including SM) shall cause Executive to be covered under directors
and officers liability insurance policies in reasonable amounts in accordance
with past practice.
6. TERMINATION OF EMPLOYMENT
Employment shall terminate upon the occurrence of any of the following
events:
6.1 EXPIRATION OF TERM
Upon the expiration of the Term as specified in Section 2.
6.2 MUTUAL AGREEMENT
Whenever the Corporation and Executive mutually agree in
writing to termination.
6.3 TERMINATION FOR CAUSE
At any time by the Corporation for cause. For purposes of this
Agreement, "cause" shall mean and be limited to (a) Executive's conviction by,
or entry of a plea of guilty in, a court of competent jurisdiction for a felony
involving moral turpitude or harm to the business or reputation of the
Corporation, and such conviction or guilty plea becoming final and
non-appealable; and (b) material breach of duty or this Agreement by the
Executive or his habitual neglect of such duty to perform his duties under this
Agreement, in each case after reasonable written notice and a reasonable
opportunity (of not less than thirty (30) days) to cure. Executive may not be
terminated for cause unless and until the Board has made such determination and
such determination has been confirmed after hearing by an independent arbitrator
as provided in Section 12.1; provided, however, that the Corporation may suspend
Executive's duties and authority hereunder with pay pending the outcome of such
arbitration.
6.4 TERMINATION WITHOUT CAUSE
The Corporation shall have the right to terminate Executive's
employment with the Corporation without cause at any time, but in the event of
any such termination, Executive shall be paid a lump sum payment equal to the
present value of all "Compensation" for the greater of the unexpired portion of
the Term, or one (1) year. For this purpose, the term "Compensation" shall mean
(a) salary at the rate in effect on the date of termination, and (b) the average
of the bonuses (but not the Signing Bonus) which Executive received with respect
to the two (2) fiscal years of the Corporation preceding the fiscal year in
which the termination occurs, with the bonus Executive received with respect to
any short or partial fiscal year being annualized on the basis of a twelve-month
year. The present value of Executive's Compensation shall be determined by
discounting each element
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of Compensation from the date it would otherwise have been paid had this
Agreement not been terminated until the date Executive receives the lump-sum
payment under this Section 6.4 at a discount rate equal to the applicable
federal rate (as defined in Section 1274(d) of the Internal Revenue Code)
compounded semi-annually. Executive shall not be required to seek other
employment or otherwise to mitigate his damages in the event of his discharge
without cause. Executive shall have the right to "gross up" protection against
any golden parachute excise tax under Section 4999 of the Internal Revenue Code.
In addition, the Corporation shall continue to pay the premiums on the Split
Dollar Policies for the balance of the Term and thereafter as provided in
Section 3.3, and shall, at its expense, continue to provide Executive with
coverage under all life, medical, dental, disability or other insurance plans or
policies contemplated by Section 3.3 for the balance of the Term and for the
Consulting Term, notwithstanding such termination. Executive acknowledges that
payment of the foregoing amounts by the Corporation shall release the
Corporation and its subsidiaries, and their respective officers, directors and
affiliates from any further obligations or liability to Executive arising from
termination of Executive's employment.
6.5 DEATH/DISABILITY
For the purposes of this Agreement, disability shall mean the
absence of Executive performing Executive's duties with the Corporation or its
subsidiaries (including SM) on a full time basis for one hundred eighty (180)
days in any period of twelve (12) consecutive months, as a result of incapacity
due to mental or physical illness which is determined to be total and permanent
by a physician selected by the Corporation or its insurers and reasonably
acceptable to Executive or Executive's legal representative. If Executive shall
become disabled, Executive's employment may be terminated by written notice to
Executive, in which event Executive shall be entitled to receive disability
insurance payments under policies maintained by the Corporation providing annual
payments on terms no less favorable to Executive than those currently applicable
to the chief executive officer and chief operating officer of the Corporation
and its subsidiaries (including SM), or as increased from time to time, and
continuation of medical and dental insurance, and payment of the premiums on his
Split Dollar Policies through age 66. In addition, the Corporation shall, at its
expense, continue to provide Executive with coverage under all other life,
medical, dental, or other insurance plans or policies contemplated by Section
3.3 for the Consulting Term, notwithstanding such termination of Executive's
employment. If Executive dies during the Term, the Corporation shall pay to
Executive's estate (or such other person as Executive may designate in writing
during his lifetime to the Corporation with the written consent of his spouse),
Executive's salary and pro-rated Bonus through the date of death.
6.6 BY EXECUTIVE FOR GOOD REASON
Executive shall have the right to terminate his employment
with the Corporation at any time for good reason. For purposes of this
Agreement, "good reason" shall mean and be limited to (a) any material
diminution, on a cumulative basis, of Executive's duties, authority or position
with the Corporation as specified in Section 1, or (b) a material breach by the
Corporation of a material obligation of the Corporation under this
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Agreement, which such material breach is not cured within thirty (30) days
written notice by Executive to the Corporation. Upon any termination of
employment by Executive for good reason, Executive shall be entitled to receive
the lump sum payment provided in Section 6.4 hereof within five (5) days after
Executive gives notice of termination hereunder, and the other benefits provided
in Section 6.4, as though the Corporation had terminated Executive's employment
without cause. Executive's termination for good reason shall not be effective
until confirmed after hearing by an independent arbitrator as provided in
Section 12.1.
7. CHANGE OF CONTROL
If the Corporation adopts any policy or enters into an agreement during
the Term providing severance benefits and termination rights to any executive
officer, or acceleration of options to acquire shares of its common stock, SARS,
phantom stock rights and any similar option or securities compensation, on a
change of control of the Corporation, then Executive shall be granted
termination and acceleration rights and benefits as least as favorable as those
granted to any such executive officer.
8. NON-COMPETE AND NO SOLICITATION
8.1 NON-COMPETITION. During the Term and the Consulting Term, the
Executive will not directly or indirectly, as a consultant to, or employee,
officer, director, stockholder (except as a holder of less than 5% of the
outstanding stock of any publicly traded corporation), partner or other owner of
or participant in any business entity other than the Corporation and its
subsidiaries (including SM), engage in or assist any other person or entity to
engage in any business which competes with any business in which the Corporation
or its subsidiaries (including SM) or any of their affiliates is engaging or is
preparing to engage at the time of termination of the Executive's employment,
anywhere in the United States or anywhere else in the world where the
Corporation or its subsidiaries (including SM) or any of their affiliates do
business.
8.2 NON-SOLICITATION. The Executive acknowledges that he has had and
will have extensive contacts with employees, customers and suppliers of the
Corporation and its subsidiaries (including SM). Accordingly, the Executive
covenants and agrees that, during the Term and the Consulting Term, he will not,
without the written consent of the Corporation (i) solicit the services of any
of the employees of the Corporation or its subsidiaries (including SM), who were
employed by the Corporation or its subsidiaries (including SM) within the one
(1) year period immediately prior to the termination of the Executive's
employment with the Corporation, (ii) provide services to, or solicit, divert or
take away, or attempt to divert or take away from the Corporation or its
subsidiaries (including SM) the business of any person or entity who was a
customer, or who had been actively solicited by the Corporation or its
subsidiaries (including SM) to become a customer, of the Corporation, or its
subsidiaries (including SM) within the one (1) year period immediately prior to
the termination of the Executive's employment with the Corporation, or (iii)
solicit, divert or take away, or attempt to divert or take away, from the
Corporation or its subsidiaries (including SM) the business of any person or
entity who was a supplier of the Corporation or its subsidiaries (including SM)
within the one (1) year
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period immediately prior to the termination of the Executive's employment with
the Corporation.
8.3 REMEDIES. Without limiting the remedies available to the
Corporation, the Executive acknowledges that his talents and services are
special and unique, and that a breach of any of the covenants contained in
Section 8.1 or Section 8.2 could result in irreparable injury to the Corporation
for which there might be no adequate remedy at law, and that, in the event of
such a breach of threat thereof, the Corporation shall be entitled to obtain a
temporary restraining order and/or a preliminary injunction and a permanent
injunction restraining him from engaging in any activities prohibited by Section
8.1 or in Section 8.2 or such other equitable relief as may be required to
enforce specifically any of the covenants of Section 8.1 or Section 8.2. The
provisions of Section 8.1 and the provisions of Section 8.2 shall survive the
termination of this Agreement and shall continue thereafter in full force and
effect in accordance with the terms of Section 8.1 and 8.2.
9. CONFIDENTIALITY
9.1 The Executive will not at any time, directly or indirectly,
disclose or divulge, except as required in connection with the performance of
his duties for the Corporation, and except to legal counsel or as required or
requested by any governmental agency or pursuant to legal process, any
Confidential Information (as hereinafter defined) acquired by him during or in
connection with his employment by the Corporation. As used herein "Confidential
Information" means all trade secrets of the Corporation and its subsidiaries
(including SM), including information of others that the Corporation and its
subsidiaries (including SM) have agreed to keep confidential; provided, that
Confidential Information shall not include any information that has entered or
enters the public domain through no fault of the Executive or which the
Executive is required to disclose by legal process or to defend himself in a
legal proceeding.
9.2 The Executive shall make no use whatsoever, directly or indirectly,
of any Confidential Information, except as required in connection with the
performance of his duties for the Corporation or its subsidiaries (including
SM). Nothing herein is intended to preclude Executive after termination of his
employment with the Corporation from being employed in a similar capacity by
others or for his own account and from using the business techniques, marketing
skills and contacts and relationships which Executive possesses.
9.3 After the termination of the Executive's employment with the
Corporation, upon the Corporation's request, the Executive shall immediately
deliver to the Corporation all Confidential Information (including all copies)
in his possession.
9.4 All copyrightable work by the Executive produced primarily during
business hours or relating to the Corporation's businesses, which is produced
during the Term, is intended to be "work made for hire" as defined in Section
101 of the Copyright Act of 1976, and shall be the property of the Corporation.
If the copyright to any such copyrightable work is not the property of the
Corporation by operation of law, the Executive will, without further
consideration, assign to the Corporation all right, title and interest in such
copyrightable work and will assist the Corporation and its nominees in every
way, at the Corporation's
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expense, to secure, maintain and defend for the Corporation's benefit copyrights
and any extensions and renewals thereof on any and all such work, including
translations thereof in any and all countries, such work to be and to remain the
property of the Corporation whether copyrighted or not.
10. GUARANTEE BY SUBSIDIARIES (INCLUDING SM)
SM hereby unconditionally guarantees the due and timely performance by
the Corporation of all of its obligations hereunder. If for any reason the
Corporation fails to perform such obligations, SM shall, upon notice thereof
from Executive, perform such obligations and Executive may proceed directly
against the Corporation or SM in the event of any breach of this Agreement by
the Corporation. The Corporation shall cause each new subsidiary which it
organizes to guarantee unconditionally the due and timely performance by the
Corporation of all of its obligations hereunder as soon as practicable after its
formation.
11. LOAN TO EXECUTIVE
11.1 EXECUTIVE LOAN
The parties to this Agreement hereby acknowledge that the
Corporation has made a loan to Executive secured by certain shares of the common
stock of the Corporation owned by Executive, which such loan has an outstanding
balance as of the date of this Agreement of $575,000. The parties to this
Agreement agree that such loan shall be extended until the expiration of the
Term of this Agreement on the same terms and conditions as were in effect as of
the date of this Agreement. The parties to this Agreement further agree that
such loan shall be forgiven on the expiration of the Term of this Agreement, or
on the earlier termination of this Agreement pursuant to Sections 6.4, 6.5 or
6.6.
11.2 LINE OF CREDIT
Upon request from Executive, the Corporation will make
available to Executive a revolving line of credit (the "Line of Credit") of up
to $2,000,000. The Line of Credit (i) shall bear interest at the applicable
federal rate and be payable at maturity, (ii) may be drawn upon up through and
including the date of the annual meeting of the shareholders of the Corporation
in 2001 at which directors are elected, provided that Executive shall not be
entitled to draw on the Line of Credit after (A) the date of termination as to
Executive of the Voting Agreement of even date herewith by and among Overseas
Toys, L.P., Executive and other stockholders of the Corporation listed on the
signature page thereof, or (B) the effective date of Executive's termination of
employment by the Corporation for "cause" under Section 6.3 or of Executive's
voluntary termination of his employment without "good reason," as defined in
Section 6.6, (iii) will provide that amounts borrowed and repaid may
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be reborrowed, (iv) will be due and payable six months after the earliest
applicable date specified in clause (ii) of this sentence (including subclauses
(A) and (B) thereof), and (v) will otherwise be on commercially reasonable terms
and conditions. The Line of Credit will be full recourse and will be secured by
a pledge of the minimum number of shares of common stock of the Corporation
owned by Executive required to be pledged under applicable Federal margin
requirements to secure the Line of Credit (or, if Federal margin requirements
are not applicable to the Line of Credit, the minimum number of shares which
would be required to be pledged to secure the Line of Credit if such Federal
margin requirements were applicable).
12. MISCELLANEOUS
12.1 ARBITRATION
Except for equitable relief as provided in Section 8.3 and
provisional relief by a court pending arbitration, arbitration in accordance
with the then most applicable rules of the American Arbitration Association
shall be the exclusive remedy for resolving any dispute or controversy between
the parties, including, but not limited to, any dispute of any nature between
the parties as well as any dispute regarding the termination of Executive's
employment, or the application, interpretation or validity of this Agreement. If
the parties are unable to agree upon an arbitrator, they shall select a single
arbitrator from a list of nine arbitrators designated by the office of the
American Arbitration Association having responsibility for Century City,
California, all of whom shall be retired judges who are actively involved in
hearing private employment cases or who are members of the American Arbitration
Association's employment panel. If the parties are unable to agree upon an
arbitrator from the list, they shall each strike names alternatively from the
list, with the first to strike being determined by lot. The remaining name on
the list shall be the arbitrator. The Corporation shall initially bear the fees
and expenses of the arbitrator and all other expenses of the arbitration other
than any filing fees required of claimants by the American Arbitration
Association. Each party shall be responsible for the payment of his, her or its
attorney's fees and the costs associated with the preparation and presentation
of his, her or its case; provided, however, the arbitrator may, to the extent
permitted by law, award attorneys fees, costs and expenses to the prevailing
party. Judgment may be entered on the award of the arbitrator in any court
having jurisdiction. Unless mutually agreed otherwise by the parties, any
arbitration shall be conducted in Century City, California. The arbitrator shall
be empowered to grant only such relief as would be available in a court of law.
The arbitrator shall, upon an appropriate motion, dismiss any claim without an
evidentiary hearing if the party bringing the motion establishes that he or she,
or it would be entitled to summary judgement if the matter had been pursued in
court litigation. In the event of any conflict between this Section 12.1 and the
rules of the American Arbitration Association, the provisions of this Section
12.1 shall be determinative. The arbitrator shall render an award and written
opinion, and the award shall be final and binding upon the parties. If any of
the provisions of the Agreement are determined to be unlawful or otherwise
unenforceable, in whole or in part, such determination shall not affect the
validity of the remainder of this Agreement, and this Agreement shall be
reformed to the extent necessary to carry out its provisions to the greatest
extent possible and to insure that the resolution of all conflicts
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between the parties, including those arising out of statutory claims, shall be
resolved by neutral, binding arbitration. If a court should find that this
arbitration provision is not absolutely binding, then the parties intend any
arbitration decision and award to be fully admissible in evidence in any
subsequent action, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law.
12.2 NO THIRD-PARTY BENEFICIARIES
This Agreement shall not confer any rights or remedies upon
any person other than the parties and their respective successors and permitted
assigns.
12.3 ENTIRE AGREEMENT
This Agreement (including the documents referred to herein)
constitutes the entire agreement between the parties and supersedes any prior
understandings, agreements, or representations between the parties, written or
oral, to the extent they have related in any way to the subject matter hereof.
12.4 SUCCESSION AND ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit
of the parties named herein and their respective successors and permitted
assigns. No party may assign either this Agreement or any of his or its rights,
interests, or obligations hereunder without the prior written approval of the
Corporation and Executive; provided, however, that the Corporation may (i)
assign any or all of its rights and interests hereunder to one or more of its
affiliates, (ii) designate one or more of its affiliates to perform its
obligations hereunder (in any or all of which cases the Corporation nonetheless
shall remain responsible for the performance of all of its obligations
hereunder); and (iii) assign its rights and interests hereunder to any entity
into which the Corporation may be merged or which may succeed to substantially
all of its assets or business.
12.5 COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
12.6 HEADINGS
The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this agreement.
12.7 NOTICES
All notices, requests, demands, claims, and other
communications required or permitted hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it
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is sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
IF TO CORPORATION:
CYRK, INC.
0 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Financial Officer
with copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn. Xxxxxxx X. Xxxxx
and
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn. Cameron Read
IF TO EXECUTIVE:
XXXXX XXXXX
00000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
with copy to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail) , but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving notice in the
manner herein set forth.
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12.8 GOVERNING LAW
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.
12.9 AMENDMENTS AND WAIVERS
No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by Corporation and Executive. No
waiver by any party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
12.10 SEVERABILITY
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
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IN WITNESS THEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"THE CORPORATION"
CYRK, INC.
By: ____________________________
Its: ____________________________
"SM"
SIMON MARKETING, INC.
By: ____________________________
Its: ____________________________
"EXECUTIVE"
--------------------------------
Xxxxx Xxxxx
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