EXHIBIT 10(bb)
SEVERANCE AND SETTLEMENT AGREEMENT AND RELEASE
AGREEMENT made as of the 20th day of December, 1995, by and between
Hasbro, Inc. (the "Company") and Xxx X. Xxxx ("the Employee").
WHEREAS, the parties wish to establish the terms of the Employee's
severance arrangement and to provide severance compensation to the Employee
in consideration for restricting his right to compete with the Company;
NOW, THEREFORE, in consideration of the promises and conditions set
forth herein, the sufficiency of which is hereby acknowledged, the Company
and the Employee agree as follows:
1. Monetary Consideration. In the event of the involuntary
termination without cause of the Employee's employment by the Company or
the Employee's constructive termination, the Company agrees to continue to
pay the Employee an amount equal to the equivalent of two years' base
salary in effect on the date of termination, plus any applicable bonuses,
less all applicable state and federal taxes as severance pay ("severance
pay"). The severance pay will be paid to the Employee in equal periodic
payments which correspond to the payment periods then in effect at the time
of his termination. In addition to severance pay, in the event of any such
termination, the Employee will also receive for the period of one year, in
accordance with the Company's policies then in effect, (a) use of a leased
car and (b) health insurance. In addition, the Employee shall have the
right to exercise all stock options for the Company's stock in accordance
with the terms of the applicable stock option plans. In the event the
Employee obtains employment during the first year following his
termination, his use of a leased car and health insurance shall immediately
terminate.
A termination shall be deemed to be "for cause" if based upon a
good faith finding by the Company of a material failure of the Employee to
perform his assigned duties for the Company, dishonesty, gross negligence
or misconduct. For the purposes of this Agreement, a constructive
termination of the Employee's employment shall occur if the Employee
terminates employment within one year after the occurrence of any of the
following without the explicit written consent of the Employee:
(a) substantial diminution of responsibilities or compensation or (b) a
change in work location beyond a 100 mile radius from the Employee's
current location of employment. In the event the Employee's employment
terminates due to death, the Employee or his estate shall receive an amount
equivalent to four months' salary and any applicable bonus, on a prorated
basis, less all applicable state and federal taxes, as severance pay.
In the event the Employee's employment is terminated by either
the Company or the Employee due to disability, the Employee shall be
entitled to receive severance pay in the same amount, on the same terms and
paid on the same basis, as if he had been involuntarily terminated without
cause; provided, however, that the amount of the Employee's severance pay
shall be reduced by any amounts he is eligible to receive under the
Company's long-term disability plan or any other similar insurance plans of
the Company in which the Employee participates. As used in this Agreement,
the term disability shall mean the inability of the Employee to perform his
assigned duties, due to a physical or mental disability, for a period of
120 days, whether or not consecutive, during any 360-day period. A
determination of disability shall be made by a physician satisfactory to
both the Employee and the Company, provided that if the Employee and the
Company do not agree on a physician, the Employee and the Company shall
each select a physician and these two together shall select a third
physician, whose determination as to disability shall be binding on all
parties. In the event the Employee is terminated without cause or is
constructively terminated, the Company shall be obligated to pay what would
otherwise be the Employee's obligation to make payments for medical
insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).
2. Release. Immediately following his termination without cause or
constructive termination, the Employee agrees to sign a release and
covenant not to xxx (the "Release") in the form appended hereto as
Exhibit A or in such other form as may be requested by the Company. The
Company shall not be obligated to make any payments pursuant to paragraph 1
of this agreement unless and until it receives a release in a form
satisfactory to the Company. The other provisions of this Agreement,
including but not limited to paragraphs 3 and 4, shall be in force and
effect even if the Employee does not sign the Release and covenant not to
xxx as required by this paragraph.
3. Non-Compete.
(a) During the period of the severance agreement, the Employee
will not directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other
capacity whatsoever (other than as the holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company), engage in
directly or indirectly the marketing, distribution or sale of toys, or any
enterprise whose business, in whole or in substantial part, is the
development, manufacture or sale of toys in competition with Hasbro, Inc.
or any of its subsidiaries or affiliates; or
(ii) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment with, or
otherwise cease their relationship with, the Company; or
(iii) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts, or active prospects, customers or accounts, of the Company which
were contacted, solicited or served by the Employee while employed by the
Company.
(b) If any restriction set forth in this Section is found by any
court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which
it may be enforceable.
(c) The restrictions contained in this Section are necessary for
the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. The Employee
agrees that any material breach of this Section will cause the Company
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the
Company shall have the right to seek specific performance and injunctive
relief.
4. Proprietary Information.
(a) Employee agrees that all information and know-how, whether or
not in writing, of a private, secret or confidential nature concerning the
Company's business or financial affairs (collectively, "Proprietary
Information") is and shall be the exclusive property of the Company. By
way of illustration, but not limitation, Proprietary Information may
include inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, and
customer and supplier lists. Employee will not disclose any Proprietary
Information to others outside the Company or use the same for any
unauthorized purposes without written approval by an officer of the
Company, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by the
Employee.
(b) Employee agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings,
or other written, photographic, or other tangible material containing
Proprietary Information, whether created by the Employee or others, which
shall come into his custody or possession, shall be and are the exclusive
property of the Company to be used by the Employee only in the performance
of his duties for the Company.
(c) Employee agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (a)
and (b) above, also extends to such types of information, know-how, records
and tangible property of customers of the Company or suppliers to the
Company or other third parties who may have disclosed or entrusted the same
to the Company or to the Employee in the course of the Company's business.
5. No Reinstatement. The Employee understands and agrees that, as a
condition for payment to him of the above-described sums, he shall not be
entitled to any employment with the Company or with any of its corporate
affiliates at any time in the future, and that he will not apply for
employment with the Company or with any of its corporate affiliates unless
the Company requests in writing that he apply for such employment.
6. Nature of Agreement. The Employee understands and agrees that
this Agreement is a severance and settlement agreement and does not
constitute an admission of liability or wrongdoing on the part of the
Company.
7. Amendment. This Agreement shall be binding upon the parties and
may not be abandoned, supplemented, changed or modified in any manner,
orally or otherwise, except by an instrument in writing of concurrent or
subsequent date signed by a duly authorized representative of the parties
hereto. This Agreement is binding upon and shall inure to the benefit of
the parties and their respective agents, assigns, heirs, executors,
successors and administrators.
8. Validity. Should any provision of this Agreement be declared or
be determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms, or provisions shall
not be affected thereby and said illegal and invalid part, term or
provision shall be deemed not to be a part of this Agreement.
9. Confidentiality. The Employee understands and agrees that the
terms and contents of this Agreement, and the contents of the negotiations
and discussions resulting in this Agreement, shall be maintained as
confidential by the Employee, his agents and representatives, and the
dispute resolved by this Agreement shall also remain confidential, and none
of the above shall be disclosed except to the extent required by federal or
state law or as otherwise agreed to in writing by the authorized agent of
each party.
10. Entire Agreement. This Agreement contains and constitutes the
entire understanding and agreement between the parties hereto with respect
to the severance and settlement and cancels all previous oral and written
negotiations, agreements, commitments, and writings in connection
therewith.
11. References. In the event of any termination of the Employee's
employment, for any reason whatsoever, the Company will respond to all
inquiries for recommendations, references, or other information about the
Employee with the specific dates of his employ, position, title, and
responsibilities, and will provide no evaluation, assessment, reference, or
other information without the prior written consent of the Employee.
12. Applicable Law. This Agreement shall be governed by the laws of
the State of Rhode Island.
13. Acknowledgments. The Employee acknowledges that he has been
given twenty-one (21) days to consider this Agreement and that the Company
advised him to consult with an attorney of his own choosing prior to
signing this Agreement. The Employee may revoke this Agreement for a
period of seven (7) days after the execution of this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of
this seven (7) day revocation period.
14. Voluntary Assent. The Employee affirms that no other promises or
agreements of any kind have been made to or with him by any person or
entity whatsoever to cause him to sign this Agreement, and that he fully
understands the meaning and intent of this Agreement. The Employee states
and represents that he has had an opportunity to fully discuss and review
the terms of this Agreement with an attorney. The Employee further states
and represents that he has carefully read this Agreement, understands the
contents herein, freely and voluntarily assents to all of the terms and
conditions hereof, and signs his name of his own free act.
IN WITNESS WHEREOF, all parties have set their hand and seal to this
Agreement as of the date written above.
By: /s/ Xxx X. Xxxx Date: December 14, 1995
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By: /s/ Xxxxxx X. Xxxxxxxxxx Date: December 20, 1995
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Exhibit A
Release. The Employee hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Company, its officers,
directors, stockholders, corporate affiliates, agents and employees from
any and all claims, charges, complaints, demands, actions, causes of
action, suits, rights, debts, sums of money, costs, accounts, reckonings,
covenants, contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including attorneys'
fees and costs), of every kind and nature which he ever had or now has
against the Company, its officers, directors, stockholders, corporate
affiliates, agents and employees, including, but not limited to, all claims
arising out of his employment, all employment discrimination claims under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e et seq.,
the Age Discrimination in Employment Act, 29 U.S.C. Section 621 et seq.,
and M.G.L. c.151B, Section 1 et seq., the Americans With Disabilities Act,
29 U.S.C. Section 706 et seq., damages arising out of all employment
discrimination claims, wrongful discharge claims or other statutory or
common law claims and damages. This paragraph shall not release the
Employee's right to enforce the terms of the Agreement by and between
Hasbro, Inc. and Xxx X. Xxxx dated December 20, 1995.
Covenant Not To Xxx. The Employee further represents and warrants
that he has not filed any complaints, charges, or claims for relief against
the Company, its officers, directors, stockholders, corporate affiliates,
agents or employees with any local, state or federal court or
administrative agency which currently are outstanding. If he has done so,
he will forthwith dismiss all such complaints, charges, or claims for
relief with prejudice. The Employee further agrees and covenants not to
bring any complaints, charges or claims against the Company, its officers,
directors, stockholders, corporate affiliates, agents or employees with
respect to any matters arising out of his employment with or termination by
the Company. This paragraph shall not release the Employee's right to
enforce the terms of the Agreement by and between Hasbro, Inc. and Xxx X.
Xxxx dated December 20, 1995.
By: Date:
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Xxxxx 00, 0000
Xxxxxx, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention Xxxxxx X. Xxxxxxxxxx
Chief Operating Officer
Domestic Toy Operations
Dear Al:
I refer to my employment agreement (the "Change of Control Agreement"),
dated as of August 3, 1995 and my Severance and Settlement Agreement and
Release dated as of December 20, 1995 (the "Severance Agreement"). This
will confirm that upon the "Effective Date" of the Change of Control
Agreement, as defined in the Change of Control Agreement, the Change of
Control Agreement shall supersede my Severance Agreement and the Severance
Agreement shall, as of the Effective Date, no longer be in effect.
Very truly yours,
/s/ Xxx X. Xxxx
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Xxx X. Xxxx
ACCEPTED AND AGREED:
HASBRO, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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