EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of February 1, 1998, between
NOODLE KIDOODLE, INC., a Delaware corporation (the "Company"),
and Xxxxxxx Xxxxxxxx (the "Executive").
It is hereby agreed as follows:
1. Nature of Employment: the Company hereby employs
Executive as its Chairman and Chief Executive Officer and confirms the
election of Executive by the Company's Board of Directors as its
Chairman and Chief Executive Officer, and agrees to use its best efforts
to cause Executive to be reelected as during the term of this Agreement
as its Chairman and Chief Executive Officer. Executive accepts
employment upon the terms and conditions hereinafter set forth and
agrees to serve the Company as its its Chairman and Chief Executive
Officer and as a member of its Board of Directors so long as so elected
during the term of this Agreement. The Executive shall report to the
Board of Directors of the Company.
The Executive shall also serve without additional
compensation as an officer and director of all corporations from time to
time owned or controlled by the Company if so elected or appointed. The
Executive shall devote his full time, energies, skills and attention to the
performance of his duties and responsibilities hereunder, and shall
perform them faithfully and diligently. The office of the Executive shall be
located within a 20 mile radius of the Executive's residence on the date of
this Agreement and the Executive shall not be required to locate his office
elsewhere without his prior written consent.
2. Term of Employment: The term of the Executive's
employment under this Agreement shall be for the period commencing as
of February 1, 1998 and terminating on January 31, 2001 unless sooner
terminated by either party for cause or as hereinafter provided.
(a) In the event of the death or "total disability" (as defined
below) of the Executive, the Executive's employment shall terminate as
of the date of his death or the date of his certification of total disability,
in either of which events, Executive, his estate, legal representative or
designee, as the case may be, shall receive the full salary compensation
provided for the Executive in Section 3 below for a period of six (6)
months from the date of the Executive's death or total disability.
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(b) In the event the Board of Directors of the Company shall
determine, as confirmed by competent medical evidence (which shall
include a certificate from Executive's then personal physician) , that
Executive has become "totally disabled" and, on the same or
subsequent occasion, shall determine that such disability shall have
continued for a period of three (3) consecutive months, then Executive's
employment shall terminate thirtty (30) days after the date upon which
the Company shall have given notice to the Executive of its election to
terminate his employment because of such total disability, provided,
however, that prior to termination the Board of Directors shall have
received confirming competent medical evidence as to the existence of
the Executive's total disability at such time. Any controversy arising in
the determination of whether the Executive shall be deemed to be
"totally disabled" for purposes of his being terminated as provided for
herein shall be settled by an independent physician licensed to practice
medicine selected by the Board of Directors of the Company and
approved by the Executive. Prior to any such termination, the
Company's obligations with respect to compensation and benefits shall
continue during the period of disability.
(c) In the event of a change in control (as defined herein) of
the Company, which results in an actual or constructive termination of
employment, the Executive shall have the right within six (6) months
after any such termination, to terminate his employment hereunder and
to receive an amount, payable in a lump sum as severance pay within
10 days after he shall have given notice of his election to terminate,
equal to the amount by which two hundred ninety-nine percent (299%) of
the base amount exceeds the present value of all other payments which
would be considered as contingent on a change of ownership or control
(other than payments which would not be treated as parachute
payments) under section 280G of the Internal Revenue Code. The
"base amount" for purposes of this subsection (c) shall mean the
average annual compensation which was payable by the Company and
was includable in the Executive's gross income for tax purposes for the
most recent five (5) taxable years of the Executive ending before the
date on which a change in control occurs. A "change in control" for
purposes of this subsection (c) shall mean (i) the acquisition (directly or
indirectly) by any person, entity or group of more than twenty-five
percent (25%) of the outstanding voting stock of the Company
(acquisition shall include accumulation in one or more transactions,
including, without limitation, any issuance, transfer or purchase of stock.,
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reclassification of securities, stock split, stock dividend or distribution,
reverse stock split, recapitalization, merger or consolidation with
subsidiaries, and any transaction which has the direct or indirect effect of
increasing the proportionate share of the outstanding voting stock of the
Company held by such person, entity or group) , or (ii) the individuals
who currently constitute the directors of the Company, or individuals
elected by more than two-thirds of such current directors to replace any
of such current directors, no longer constitute a majority of the directors
of the Company. A "constructive termination of employment" for
purposes of this subsection (c) shall mean any of the following, if done
without the Executive's consent and having a material adverse effect on
his employment or the conditions under which he works: (i) a change in
the title, duties or responsibilities of the Executive, including the person
or body to whom the Executive reports, (ii) a change in the location
where the Executive's services are rendered, (iii) a change in the office
or secretarial arrangements affecting the Executive, or (iv) any reduction
in compensation or fringe benefits or change of any other term of this
Agreement, or any other breach of this Agreement by the Company. A
constructive termination shall be determined by the Executive in his sole,
reasonable discretion.
3. Compensation:
(a) Subject to the provisions of Section 2, as compensation
for his services hereunder the Company agrees to pay the Executive a
salary, payable at such times as may be customary for the payment of
compensation to other the Company employees, or at such times as the
Executive and the Company shall agree upon, at the rate of $300,000 per
annum during the Term of this Agreement, or at such increased rate as
the Board, with the advice of the Compensation Committee, may from
time to time determine.
(b) In addition to the salary to be paid pursuant to Section 3
(a) , the Executive shall be eligible to participate in the Company's Bonus
Incentive Plan (the "Bonus Plan") or any successor plan thereto, pursuant
to the terms of such Bonus Plan.
(c) The Executive shall also be eligible for grants of stock
options to acquire shares of Common Stock of the Company ("Options")
pursuant to the Company's 1994 Stock Incentive Plan (the "Plan"), or any
successor plan thereto, pursuant to the terms of the Plan.
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4. Additional Compensation; Benefits: The Board of
Directors of the Company, in its sole and absolute discretion, may at any
time and from time to time pay to the Executive such additional incentive
payments, bonuses and/or profit sharing distributions, in addition to the
compensation provided in Section 3, as the Board of Directors, with the
advice of the Compensation Committee, may determine. The stock
option and compensation committee of the Company in its sole and
absolute discretion may at any time and from time to time award to the
Executive such stock options or other stock based pay under the
Company's stock option plan or otherwise, in addition to the
compensation provided for in Section 3, as such committee or board
may from time to time determine.
The Executive shall, in any event, be entitled to the
continuation of any employee benefits, including life, disability or
accident insurance coverage, currently being received by the
Executive, and shall be eligible to participate in any plan of the
Company available to the employees of the Company and any other
plan which may be adopted in the future with respect to employees or
executives of the Company or any of its operating divisions if he shall
be eligible under the terms of such plan without restriction or limitation
by reason of this Agreement.
The Executive shall also be entitled to paid vacation for
such periods and times as have been heretofore customary for the
Executive.
5. Expenses: the Company shall promptly reimburse the
Executive for all specified items of travel, entertainment and
miscellaneous expenses reasonably incurred by him in connection with
the performance of his duties hereunder upon presentation of vouchers
therefor in accordance with normal procedures and standards
established by the Company for such purposes. the Company shall
also, at its own expense, provide Executive with a new automobile of
the Company's choice and shall bear all expenses of maintaining and
insuring such automobile.
6. Nondisclosure; Noncompetition:
(a) Executive shall not, at any time during or following
expiration or termination of Executive's employment (regardless of the
reason therefor), directly or indirectly, disclose to any person (except in
the regular course of the Company's business), or use in competition
with the Company, any of the Company's trade secrets or confidential
information.
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(b) For a period of one (1) year following expiration of his
employment or termination of employment for any reason other than (i)
termination by the Company without cause, or (ii) termination by the
Executive in accordance with Section 2(c) hereof, the Executive shall not,
without the Company's written consent, (A) enter into the employ of or
render any services to any person, firm or corporation engaged in any
"Competitive Business" (as defined below); (3) engage in any Competitive
Business for his own account or (C) become interested in any
Competitive Business as an individual, partner, shareholder, creditor,
director, officer, principal, agent, employee, consultant, advisor or in any
other relationship or capacity. As used herein, "Competitive Business"
shall mean operating stores for the retail sale of educationally oriented
products for children, including without limitation, toys, games, books,
video and audio tapes, computer software, crafts, and science and
construction merchandise. The geographic locations in which this
covenant shall be operative shall include a fifty (50) mile radius of any
Noodle Kidoodle store then operated by the Company, or then planned by
the Company to be opened within a twelve month period.
7. Fees and_Expenses: the Company shall pay all legal
fees and related expenses incurred by the Executive as a result of (i)
termination of his employment following a change in control of the
Company (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or incurred by the Executive
in seeking advice with respect to tax matters relating thereto) or (ii) the
Executive's seeking to obtain or enforce any right or benefit provided by
this Agreement, if the Company shall have denied such right or withheld
such benefit, and if the Executive shall prevail in obtaining or enforcing it.
8. Miscellaneous:
(a) the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets, by agreement in form and
substance satisfactory to the Executive, 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.
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(b) This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee or other designee or, if there be no
such designee, to the Executive's estate.
(c) No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer as may be
specifically designated by the Board of Directors of the Company. 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. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement.
(d) The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of New York.
(e) In the event that any provision of this Agreement is held
to be invalid or unenforceable in any jurisdiction for any reason unless
narrowed by construction, this Agreement shall, as to such jurisdiction,
be construed as if such invalid or unenforceable provision had been
more narrowly drawn so as not to be invalid or unenforceable; and such
provision, as to such jurisdiction, shall be ineffective to the extent of
such invalidity, prohibition or unenforceability, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provisions in any other jurisdiction.
(f) The invalidity or unenforcibility of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
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(g) Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in New York, New York in accordance with the rules of the
American Arbitration Association then in effect.
(h) The Executive or his estate or designee shall be entitled
to receive reasonable attorneys' fees, costs and expenses incurred in
enforcing the Executive's rights under this Agreement..
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
NOODLE KIDOODLE, INC.
By:/s/ Xxxxxxx Xxxx
ATTEST: Name: Xxxxxxx Xxxx
Title: President
By:/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Executive:
/s/ Xxxxxxx Xxxxxxxx
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