EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is hereby entered into by and between Interplay
Entertainment Corp., a Delaware corporation (the "Company"), and Herve Caen (the
"Executive"), as of the 2nd day of November, 1999.
WHEREAS, the Company and the Executive are entering into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with Titus Interactive SA, a French
corporation ("Titus"), pursuant to which Titus will purchase 6,250,000 shares of
Common Stock of the Company from the Company (the "Stock Purchase");
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 consummation of the Stock Purchase; and
WHEREAS, it is a condition to the obligation of Titus 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 third anniversary of such date (the "Employment
Period").
2. Position and Duties.
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(a) Executive shall be employed by the Company as President of the
Company, with the duties and responsibilities set forth on Exhibit A attached
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hereto and made a part hereof.
(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 attention and time to the business and affairs of (i) the Company,
(ii) Titus and (iii) all subsidiaries and affiliates of the Company or Titus.
The Executive shall use his reasonable best efforts to carry out faithfully and
efficiently the responsibilities assigned to the Executive under this Agreement,
and shall devote such portion of his attention and time to the Company as
Executive reasonably determines necessary to carry out such responsibilities. It
shall not be considered a violation of the foregoing for the Executive to (i)
serve as an officer and director of Titus, and subsidiaries and affiliates of
Titus, (ii) serve on other corporate boards with the approval of the Company,
(iii) serve on civic or charitable boards or committees, (iv) deliver lectures
or fulfill speaking engagements, (v) manage his personal holdings in the capital
stock of Titus and (vi) manage other 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.
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3. Compensation.
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(a) Base Salary. During the Employment Period, subject to the
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provisions of this Section 3(a), the Executive shall receive an annual salary
(the "Annual Base Salary") in an amount not less than Two Hundred Fifty Thousand
Dollars ($250,000), payable in accordance with the Company's payroll 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 Two Hundred Fifty Thousand Dollars ($250,000). After any
such increase (or decrease), the term "Annual Base Salary" shall refer to the
Annual Base Salary as so increased (or decreased). Executive shall have the
option to decline any portion of the Annual Base Salary otherwise payable during
any calendar month by giving notice thereof to the Company at least five (5)
business days prior to the beginning of such month.
(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 of Directors of the Company.
(c) Other Benefits. The Executive shall be entitled to participate
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in any of the Company's medical, dental or other benefit plans approved by the
Company's Board of Directors.
(d) Expenses. During the Employment Period, the Executive shall be
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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 provided by the Company from time to
time to its other executive officers.
(f) Vacation. During the Employment Period, the Executive shall be
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entitled to vacations in accordance with Company policies then in effect and, in
no event, shall such vacation time be less than four (4) weeks per calendar
year.
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 one hundred eighty (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
Executive's legal representative, has determined that the Executive's incapacity
constitutes a disability for purposes of the Company's
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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 (as set forth on Exhibit A hereto)
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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 one hundred eighty (180)
days' 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) removal of duties set forth on Exhibit A hereto from the
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Executive, or the assignment to the Executive of duties inconsistent in any
material respect with the duties set forth on Exhibit A hereto, other than
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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;
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(C) 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 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 of
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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. If, during the Employment
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Period, the Executive's employment is terminated by the Company or Executive for
any reason or no reason, 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.
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 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 amounts 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.
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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 business 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) 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) The validity of this Agreement, the construction of its terms
and the determination of the rights and duties of the parties hereto shall all
be governed by the laws of the State of California, without reference to
principles of conflicts of laws. The parties hereby consent and agree that the
United States District Court for the Central District of California, or the
Superior Court of California for the County of Orange will have exclusive
jurisdiction over any legal action or proceeding arising out of or relating to
this Agreement, and each party consents to the in personam jurisdiction of such
courts for the purpose of any such action or proceeding and agrees that venue is
proper in such courts. 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
the parties hereto.
(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:
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If to the Executive:
Herve Caen
c/o Titus Software Corporation
20432 Corisco Street
Chatsworth, CA 91311
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street, 23rd Floor
Los Angeles, CA 90071
Attention: Robert A. Miller, Jr., Esq.
If to the Company:
Interplay Productions, Inc.
16815 Von Karman Avenue
Irvine, CA 92606
Attention: President
with a copy to:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attention: K.C. Schaaf, Esq.
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 prejudiced by such failure.
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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.
INTERPLAY ENTERTAINMENT CORP.
By: /s/ MANUEL MARRERO
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Manuel Marrero, Chief Financial Officer
EXECUTIVE:
/s/ HERVE CAEN
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Herve Caen
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EXHIBIT A
Duties of Executive
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Executive shall have primary responsibility and authority in the Company
with respect to the following management functions:
1. Finance. Supervision of all financial expenditures of the Company and
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related matters, including establishment of fiscal policies of the Company. The
Company's Chief Financial Officer will report to Executive.
2. Sales and Distribution. Supervision of all sales and distribution
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activities of the Company, including without limitation negotiation and
monitoring of distributor relationships. The Company's Vice President of Sales
will report to Executive.
3. Operations. Supervision of the operating activities of the Company. The
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Company's Chief Operating Officer will report to Executive.
4. International. Development and monitoring of the business relationships
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with and operational activities of Interplay OEM. The President of Interplay OEM
will report to Executive.
5. Legal. Supervision of Company's legal affairs as they relate to the
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other management functions of Executive.
6. Consultation with Chief Executive Officer. The Executive shall consult
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with the Chief Executive Officer of the Company in the development of all
operating plans for the Company, and shall not take any action which constitutes
a material deviation from any operating plan without the concurrence of the
Chief Executive Officer.
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