EXHIBIT 10.28
EMPLOYMENT AGREEMENT
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AGREEMENT by and between Interplay Productions, Inc., a California
corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Executive"), dated as of
the 28th day of March 1994.
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WHEREAS, the Company and its controlling stockholder have entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") with MCA INC., a
Delaware corporation ("MCA"), pursuant to which MCA will purchase shares of
stock of the Company from the Company and from such stockholder (the "Stock
Purchase"); and
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the terms and conditions under which the Executive will continue to be
employed by the Company after the Stock Purchase; and
WHEREAS, it is a condition to the obligation of MCA to consummate the Stock
Purchase that the Executive and the Company enter into this Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
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Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period commencing on the date of consummation of the Stock
Purchase and ending on the fifth anniversary of such date (the "Employment
Period").
2. Position and Duties.
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(a) During the Employment Period, the Executive shall be employed by
the Company as Executive Vice President, with such duties and responsibilities
as may be determined by the Board of Directors of the Company (the "Board").
(b) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
devote full business attention and time to the business and affairs of the
Company, using the Executive's reasonable best efforts to carry out faithfully
and efficiently the responsibilities assigned to the Executive under this
Agreement. It shall not be considered a violation of the foregoing for the
Executive to (i) serve on corporate boards with the approval of the Company,
(ii) serve on civic or charitable boards or committees, (iii) deliver lectures
or fulfill speaking engagements and (iv) manage personal investments, so long as
such activities do not interfere with the performance of the Executive's
responsibilities under this Agreement or otherwise violate the terms of this
Agreement.
(c) The Executive's services shall be performed primarily at the
location specified on Schedule A. Travel in connection with the business of the
Company may be reasonably requested from time to time by the Board.
3. Compensation.
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(a) Base Salary. During the Employment Period, the Executive
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shall receive an annual base salary (the "Annual Base Salary") in an amount not
less than $200,000, payable in accordance with the Company's payroll practices
for executives, as in effect from time to time. During the Employment Period,
the Annual Base Salary shall be reviewed for possible increase at least
annually. Any increase in the Annual Base Salary shall not limit or reduce any
other obligation of the Company under this Agreement. [The Annual Base Salary
shall not be reduced after any such increase, unless the annual base salaries of
all executives of the Company are proportionately reduced, and in any event
shall not be reduced below the amount specified in the first sentence of this
paragraph.] After any such increase (or decrease), the term "Annual Base
Salary" shall refer to the Annual Base Salary as so increased (or decreased).
(b) Annual Bonus. In addition to the Annual Base Salary, the
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Executive shall be eligible to receive annual bonuses (each, an "Annual Bonus")
at the discretion of the Board. Notwithstanding the foregoing, the Executive
shall receive an annual bonus for each year in which the Company earns profits
in excess of $622,000 in an amount not less than ten percent (10%) of the amount
by which the Company's profits exceed $622,000, but in no event shall such bonus
be greater than $134,000. If the Executive becomes deceased or suffers a
Disability (as defined in Section 4(a) of this Agreement) during a year in which
he would have received a bonus based on the annual profits of the Company, the
Executive, or the Executive's estate if the Executive is deceased, shall be
entitled to an amount equal to the bonus the Executive would have received
multiplied by a fraction, the numerator of which is the number of days in that
year prior to Executive's death or Disability and the denominator of which is
the total number of days in that year (365 or 366).
(c) Other Benefits. The Executive shall be entitled to
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participate in any of the Company's medical, dental or other benefit plans
approved by the Board.
(d) Expenses. During the Employment Period, the Executive shall
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be entitled to receive prompt reimbursement for all normal and customary
expenses incurred by the Executive in carrying out the Executive's duties under
this Agreement, provided that the Executive complies with the policies,
practices and procedures of the Company for submission of expense reports,
receipts, or similar documentation of such expenses.
(e) Fringe Benefits. During the Employment Period, the Executive
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shall be entitled to the fringe benefits approved from time to time by the
Board.
(f) Vacation. During the Employment Period, the Executive Shall
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be entitled to vacations in accordance with Company policies then in effect.
4. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall terminate
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automatically upon the Executive's death during the Employment Period. The
Company shall be entitled to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that (i)
the Executive has failed, over a period of 180 consecutive days, to perform the
Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its
insurers, and reasonably acceptable to the Executive or the
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Executive's legal representative, has determined that the Executive's incapacity
constitutes a disability for purposes of the Company's long-term disability
insurance coverage. A termination of the Executive's employment by the Company
for Disability shall be communicated to the Executive by written notice, and
shall be effective upon receipt of such notice by the Executive (the "Disability
Effective Date").
(b) By the Company
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(i) The Company may terminate the Executive's employment during
the Employment Period for Cause or without Cause. "Cause" shall mean (A) fraud,
embezzlement or willful misconduct materially injurious to the Company on the
part of the Executive, (B) the Executive's (x) persistent and continued failure
to substantially perform his material duties for the Company when and to the
extent reasonably requested by the Board to do so and (y) failure to correct
same within thirty (30) days after notice from the Board requesting the
Executive to do so (it being understood that this standard is intended to assure
the Company of the reasonable attendance, efforts and good faith business
attention of the Executive to his duties on behalf of the Company, but may not
be relied upon by the Company to terminate the Executive based upon the
operating performance of the Company), or (C) the Executive's breach of any
material provision of this Agreement, which breach has not been cured in all
material respects within thirty (30) days after notice of such breach is given
to the Executive by the Company. No act or failure to act on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
executive's action or omission was in the best interests of the Company. Any act
or failure to act that is based upon authority given pursuant to a resolution
duly adopted by the Board or the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The Executive shall not be
deemed to have been terminated for Cause unless such notice is accompanied by a
copy of a resolution duly adopted by the Board to such effect.
(ii) A termination of the Executive's employment by the Company
without Cause shall be effected by giving the Executive written notice of the
termination.
(c) Good Reason
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(i) The Executive may terminate employment for Good Reason. "Good
Reason" means:
(A) the assignment to the Executive of duties inconsistent in
any material respect with paragraph (a) of Section 2 of this Agreement, other
than actions that are not taken in bad faith and are remedied by the Company
within five (5) business days after receipt of notice thereof from the
Executive;
(B) any failure by the Company to comply with any provision
of Section 3 of this Agreement other than failures that are not taken in bad
faith and are remedied by the Company within five (5) business days after
receipt of notice thereof from the Executive;
(C) any requirement by the Company that the Executive's
services be rendered primarily at a location or locations not complying with the
provisions of paragraph (c) of Section 2 of this Agreement; or
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(D) any failure by the Company 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 expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform if no such
succession had taken place.
(ii) A termination of employment by the Executive for Good Reason
shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective on
the tenth business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given); provided,
that such a termination of employment shall not become effective if the Company
shall have previously corrected to the reasonable satisfaction of the Executive
the circumstance giving rise to the Notice of Termination.
(d) Date of Termination. The "Date of Termination" means the date
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of the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or by the
Executive for Good Reason is effective, or the date on which the Company gives
the Executive notice of a termination of employment without Cause, as the case
may be.
5. Obligations of the Company upon Termination.
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(a) Death, Disability, Cause. If, during the Employment Period, the
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Executive's employment is terminated because of death, Disability or for Cause,
then except as provided in Section 8 and Section 3(b), the Executive shall not
be entitled to any compensation provided for under this agreement, other than
Annual Base Salary through the effective date of any such termination or
resignation, benefits under the long-term disability insurance coverage in the
case of termination because of Disability, and (without limiting the provisions
of Section 6 hereof) vested benefits, if any, required to be paid or provided by
law.
(b) Without Cause; Good Reason. If, during the Employment Period, the
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Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any
compensation provided for under this Agreement except as set forth in the
following sentence. For the remainder of the Employment Period, the Executive
shall continue to be considered an employee of the Company, and the Company (i)
shall continue to pay the Executive for and with respect to the unexpired
portion of the Employment Period (in the same manner as specified herein) (A) an
amount equal to [one hundred and fifty percent (150%)] of his Annual Base Salary
and (B) an amount equal to [seventy-five percent (75%)] of the Executive's
Imputed Annual Bonuses and (ii) shall continue during the unexpired portion of
the Employment Period the welfare benefits set forth in Section 3 (in the same
manner as specified herein); provided that (x) if any such benefits cannot be
provided under the terms of the applicable plans or applicable law, the Company
shall provide the Executive with substitute benefits that are comparable and
equal in value to such benefits, and (y) during any period when the Executive is
eligible to receive any such benefits under another employer-provided plan, the
benefits provided by the Company under
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this paragraph may be secondary to those provided under such other plan. As
used herein, "Imputed Annual Bonuses" shall mean the "target" bonuses or similar
amounts under any Company bonus plan then in effect approved by the Board that
the Executive would have received had he not been terminated.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company for which the Executive may qualify,
nor, subject to paragraph (f) of Section 10, shall anything in this Agreement
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Vested benefits and other amounts that
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of, or any contract or agreement with, the Company on or after the
Date of Termination shall be payable in accordance with such plan, policy,
practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
7. No Mitigation or Reduction. In no event shall the Executive be
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obligated to seek other employment or take any other action by way of mitigation
of the amount payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced, regardless of whether the
Executive obtains other employment.
8. Confidential Information; Other Covenants.
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(a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company all secret or confidential information, knowledge or data
relating to the Company and its businesses that the Executive has obtained
during the Executive's employment by the Company and that is not public
knowledge (other than as a result of the Executive's violation of this paragraph
(a) of Section 8) ("Confidential Information"), unless disclosure of such
information is required by court order. The Executive shall not communicate,
divulge or disseminate Confidential Information at any time during or after the
Executive's employment with the Company, except with the prior written consent
of the Company or as otherwise required by law or legal process.
(b) During the full original term of this Employment Period, except as
otherwise provided in paragraph (d) of this Section 8, the Executive shall not,
without the prior written consent of the Board, engage in or become associated
with a Prohibited Activity. For purposes of this paragraph (b) of Section 8:
(i) a "Prohibited Activity" means any business or other endeavor that engages in
the interactive entertainment or educational software business in which the
Company is at the date hereof, or at any time during the Employment Period,
engaged in the United States (including Puerto Rico); and (ii) except as
provided on Schedule A, the Executive shall be considered to have become
"associated with a Prohibited Activity" if he becomes directly or indirectly
involved as an owner, employee, officer, director, independent contractor,
agent, partner, advisor, lender, or in any other capacity with any individual,
partnership, corporation or other organization that is engaged in an Prohibited
Activity. Notwithstanding the foregoing: (i) the Executive may make and retain
investments during the Employment Period in not more than five percent (5%) of
the equity of any entity engaged in a Prohibited Activity, if such equity is
listed on a national securities exchange or regularly traded in an over-the-
counter market; and (ii) if the Executive's employment is terminated because of
Disability, the provisions of this paragraph (b) of Section 8 shall only apply
if, following notice from the Executive that his disability has ended and that
he intends to seek employment in a Prohibited Activity, the
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Company commences payment and continues to pay from the date of such notice
throughout the remainder of the Employment Period the compensation and benefits
provided for hereunder in respect of such remaining term.
(c) The Executive agrees that he will not, at any time during the full
original term of the Employment Period, without the prior written consent of the
Company, whether directly or indirectly, solicit the employment of, whether as
an employee, officer, director, agent, consultant or independent contractor, any
person who was or is at any time during the previous twelve (12) months an
employee, representative, officer or director of the Company or any of its
affiliates.
(d) The Executive acknowledges and agrees that the Company's remedy at
law for any breach of the Executive's obligations under this Section 8 would be
inadequate and agrees and consents that temporary and permanent injunctive
relief may be granted in any proceeding which may be brought to enforce any
provision of such Section without the necessity of proof of actual damage. With
respect to any provision of this Section 8 finally determined by a court of
competent jurisdiction to be unenforceable, the Executive and the Company hereby
agree that such court shall have jurisdiction to reform this Agreement or any
provision hereof so that it is enforceable to the maximum extent permitted by
law, and the parties agree to abide by such court's determination.
9. Successors.
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(a) This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors.
10. Miscellaneous.
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(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended,
modified, terminated or waived except with the prior written consent of MCA, and
then only by a written agreement executed by the parties hereto or their
respective successors and legal representatives. MCA is intended to be and
shall be a third-party beneficiary of the preceding sentence.
(b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
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▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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If to the Company:
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Interplay Productions, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Camps
With a copy to:
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MCA INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 10. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 4 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement except to the extent any
other party hereto is materially prejudged by such failure.
(f) The Executive and the Company acknowledges that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof. Notwithstanding the foregoing, the provisions of the Executive's
Employment Agreement with the Company, dated December 11, 1991 and amended March
30, 1992 (the "Old Agreement") under which the Executive is entitled to receive
securities of the Company shall remain in full force and effect. Specifically,
the Company acknowledges that Executive owns options to purchase, in the
aggregate, 861,156 shares of common stock of the Company (prior to the closing
of the transactions with MCA pursuant to the Stock Purchase Agreement).
Further, notwithstanding anything stated to the contrary in this Agreement, the
Executive shall be entitled to the same disability insurance as he was entitled
to under the Old Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
INTERPLAY PRODUCTIONS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE A
TO
EMPLOYMENT AGREEMENT
BETWEEN
▇▇▇▇ ▇▇▇▇▇▇▇▇ AND INTERPLAY PRODUCTIONS
This Executive's services shall be performed in Palo Alto, California.
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement ("First Amendment") dated as
of the 2nd day of March, 1998, is made and entered into by INTERPLAY
PRODUCTIONS, a California corporation (the "Company"), ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Executive"), and UNIVERSAL STUDIOS, INC., a Delaware corporation formerly known
as MCA, INC. ("Universal").
WHEREAS, Executive is presently employed by the Company pursuant to a
written Employment Agreement ("Employment Agreement") dated as of March 28,
1994; and
WHEREAS, the parties desire to amend the Employment Agreement to reflect
certain new terms for Executive's continued employment, while leaving all
remaining terms of the Employment Agreement in effect;
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Section 3(b) of the Employment Agreement concerning Executive's Annual
Bonus is hereby amended to read as follows:
(b) Annual Bonus. In addition to the Annual Base Salary,
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the Executive shall be eligible to receive annual bonuses (each, an "Annual
Bonus") based on achievement of goals and objectives to be mutually agreed
upon by Executive and the Company, up to a maximum of One Hundred
Thirty-Four Thousand Dollars ($134,000) per year.
2. In all other respects, the Employment Agreement shall remain in full
force and effect according to its terms, except as so amended.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed on their behalf as of the date and year first written above.
/s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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INTERPLAY PRODUCTIONS
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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UNIVERSAL STUDIOS, INC., formerly known as MCA, INC
