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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
September 1, 1999, by and between Patrick Brady (hereinafter referred to as
"Executive"), and Cyrk, Inc., a Delaware corporation (the "Corporation"), with
reference to the following facts:
A. Executive has been employed by the Corporation since 1989, and has
served as its Chief Executive Officer since December 31, 1998.
B. Executive remains a person whose skills, experience and training are
required by the Corporation. Executive and the Corporation wish to enter into an
employment agreement whereby Executive will serve as Co-Chief Executive Officer
and Co-President of the Corporation on the terms and conditions hereinafter set
forth.
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 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 shall report directly or indirectly to Executive or to the
other Co-Chief Executive Officer as the Board may from time to time determine.
The Corporation shall employ two administrative assistants to assist Executive
on substantially the same basis on which such administrative assistants were
employed by the Corporation 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 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.
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1.2 BOARD OF THE CORPORATION; ADDITIONAL DUTIES
So long as Executive is employed by the Corporation, the
Corporation shall nominate and recommend Executive for election to the Board,
Executive shall serve as a director of such subsidiaries of the Corporation as
the Board may designate, and Executive shall perform additional duties for the
Corporation and its subsidiaries 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.
2. TERM
Executive's employment under this Agreement shall commence on the date
of closing under the Securities Purchase Agreement of even date herewith by and
between Overseas Toys, L.P. and Cyrk, Inc. (the "Closing"), and shall continue
for a period of three (3) years unless sooner terminated as hereinafter provided
(the "Term"). This Agreement shall not be effective prior to the Closing or if
the Closing does not occur.
3. COMPENSATION
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 $600,000 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
Executive shall be entitled to participate in any bonus pool
or discretionary bonus arrangement of the Corporation or its subsidiaries at a
level commensurate with his position as Co-Chief Executive Officer and
Co-President of the Corporation; provided, however, that nothing contained in
this Section 3.2 shall require that the Corporation pay the same bonus to
Executive and the other Co-Chief Executive Officer and Co-President. Any bonus
paid to Executive pursuant to this Section 3.2 shall be based on reasonable
criteria pertaining to the Corporation's performance subject to the provisions
of the following sentence. For each full fiscal year of the Corporation during
the Term, Executive shall receive a bonus of $26,666.66 for each percentage
point (PRO RATED for partial percentage points) 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, up to a maximum
bonus of $400,000 if the Corporation's actual EBITDA for such fiscal year meets
or exceeds the Corporation's projected or targeted EBITDA for such fiscal year
as determined by the Board; provided, however, that Executive shall receive an
additional bonus of $80,000 if the Corporation's actual EBITDA for such fiscal
year equals or exceeds 115% of the Corporation's projected or targeted EBITDA
for such fiscal year as determined by the Board; provided
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further, however, that with respect to partial fiscal years during the Term
(i.e., from the date hereof until December 31, 1999 and from January 1, 2002
until the third anniversary of the date hereof), Executive shall receive a PRO
RATED portion of the bonus otherwise payable to Executive in accordance with
this sentence (i.e., (A) the amount of the bonus Executive would have received
with respect to the full fiscal year containing such partial fiscal year if the
Term had included the full fiscal year, multiplied by (B) the number of days
elapsed in such partial fiscal year, and divided by (C) 365) if the
Corporation's actual EBITDA for the full fiscal year containing such partial
fiscal year exceeds 85% of the Corporation's projected or targeted EBITDA for
such fiscal year as determined by the Board. If the Corporation's actual EBITDA
for any fiscal year during the Term does not exceed 85% of the Corporation's
projected or targeted EBITDA for such fiscal year as determined by the Board,
then the payment of any bonus to Executive for such fiscal year shall be subject
to the sole discretion of the Board.
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 may provide generally for their senior executives or for
employees of the Corporation or its subsidiaries 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 Corporation
immediately preceding the date of this Agreement. Subject to the last sentence
of Section 3.6 hereof, during the Term, the 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 the Corporation's practice immediately before the date
of this Agreement. The Corporation shall at all times, unless Executive's
employment is terminated by the Corporation for cause in accordance with the
provisions of Section 6.3 or by Executive without "good reason" as defined in
Section 6.6, 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"); provided, however, that
the ten remaining annual premium payments shall not exceed $80,000 per annum;
and provided further, however, that the Corporation may substitute such Split
Dollar Policies for similar policies of split dollar life insurance as long as
such substitution does not subject Executive to higher tax payments than
Executive currently is obligated to make with respect to the Split Dollar
Policies (unless the Corporation reimburses Executive on a "gross up" basis for
the difference in such tax payments). 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.
3.4 STOCK OPTIONS
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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, 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, automobile, parking, business meetings, professional
dues, club memberships, and credit cards, all in accordance with policies set by
the Board from time to time, provided that Executive shall be entitled to first
class travel, meals and lodging when traveling in the course of performing his
duties for the Corporation. 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 for their
senior executives. Executive shall be reimbursed for his reasonable estate
planning, legal representation and advice, tax planning and return preparation
and accounting fees and related expenses; provided that the maximum aggregate
reimbursement to Executive pursuant to this sentence, PLUS the aggregate amount
of any reimbursements to Executive pursuant to the second sentence of Section
3.3, shall not exceed $100,000 per year.
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
The Corporation's two primary places of business are in the
vicinities of Boston, Massachusetts and Los Angeles, California, and Executive
shall perform his primary duties at either or both of such locations as the
Board, acting through its Chairman, shall reasonably determine. In the event
that the Corporation relocates its headquarters to a location other than one
within the Boston or Los Angeles areas, Executive shall in no event be required
to move his residence to a location other than one within the Boston or Los
Angeles areas, nor perform his duties outside of Boston and Los Angeles, and
shall be allowed to function as Co-Chief Executive Officer and
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Co-President of the Corporation from an appropriate and satisfactory office, and
with an appropriate and satisfactory staff, provided to him in either Boston or
Los Angeles as determined by the Board.
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
5. INDEMNIFICATION
The Corporation, and its subsidiaries 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 subsidiaries. The Corporation and its
subsidiaries 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 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 Executive
or his habitual neglect of such duty to perform his duties under
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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 unexpired portion of the Term plus
an additional two (2) years. 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 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 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 (or any policies substituted therefor in accordance with the
provisions of 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, 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 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
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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, 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. 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 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 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, 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 or any of their affiliates
is engaging or is preparing to engage at the time of termination of Executive's
employment, anywhere in the United States or anywhere else in the world where
the Corporation or its subsidiaries or any of their affiliates do business.
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8.2 NON-SOLICITATION. Executive acknowledges that he has had and will
have extensive contacts with employees, customers and suppliers of the
Corporation and its subsidiaries. Accordingly, Executive covenants and agrees
that, during the Term and for an additional two (2) years thereafter, 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, who were employed
by the Corporation or its subsidiaries within the one (1) year period
immediately prior to the termination of 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 the
business of any person or entity who was a customer, or who had been actively
solicited by the Corporation or its subsidiaries to become a customer, of the
Corporation, or its subsidiaries within the one (1) year period immediately
prior to the termination of 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 the business of any person or entity who was a
supplier of the Corporation or its subsidiaries within the one (1) year period
immediately prior to the termination of Executive's employment with the
Corporation.
8.3 REMEDIES. Without limiting the remedies available to the
Corporation, 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 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 information
of others that the Corporation and its subsidiaries 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
Executive or which Executive is required to disclose by legal process or to
defend himself in a legal proceeding.
9.2 Executive shall make no use whatsoever, directly or indirectly, of
any Confidential Information, except as required in connection with the
performance of his
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duties for the Corporation or its subsidiaries. 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 Executive's employment with the
Corporation, upon the Corporation's request, Executive shall immediately deliver
to the Corporation all Confidential Information (including all copies) in his
possession.
9.4 All copyrightable work by 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, 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 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
The Corporation hereby unconditionally guarantees the due and timely
performance of all of its obligations hereunder. If for any reason the
Corporation fails to perform such obligations, the Corporation's subsidiaries
shall, upon notice thereof from Executive, perform such obligations and
Executive may proceed directly against the Corporation or its subsidiaries 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 $78,525. 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.
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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 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 date of Executive's termination of employment by the
Corporation for "cause" under Section 6.3 or of Executive's voluntarily
termination of his employment without "good reason," as defined in Section 6.6,
(iii) will provide that amounts borrowed and repaid may be reborrowed, (iv) will
be due and payable six months after the earliest applicable date specified in
clause (ii) (including subclauses (A) and (B) thereof) of this sentence, 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
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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 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.
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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 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.
3 Pond Road
Gloucester, Massachusetts 01930
Attn: Chief Financial Officer
with copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Attn: Richard D. Pritz
and:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attn: Cameron Read
IF TO EXECUTIVE:
Patrick Brady
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71 Eastern Point Blvd.
Gloucester, MA 01930
with copy to:
Stroock & Stroock & Lavan LLP
100 Federal Street
Boston, MA 02110-1813
Attn: Jeffery S. Laventhal
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.
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.
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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.
IN WITNESS THEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"THE CORPORATION"
CYRK, INC.
By: ____________________________
Its: ____________________________
"EXECUTIVE"
--------------------------------
Patrick Brady
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