EXHIBIT 10.27(d)
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks ("*****"), and the omitted text has
been filed separately with the Securities and Exchange Commission.
February 9, 2009
Christie Hefner
CAH LLC
628 North State Street
Chicago, IL 60610
Dear Christie:
This letter, when the enclosed copy has been signed, dated and returned by you,
and the revocation period as set forth in paragraph 19. has passed, will
evidence the agreement (the "Agreement") between Playboy Enterprises, Inc.
("Playboy") and you, regarding your separation as an employee and officer of
Playboy and shall be binding on Playboy and you. You and Playboy agree as
follows:
1.a. Your employment with Playboy ended effective January 31, 2009 (the
"Employment End Date"). You will receive severance and termination
benefits only as described in this Agreement. In particular, and except as
provided in paragraph 2., you will receive severance pay in the amount of
$2 million. The total severance pay identified in this paragraph includes
all severance pay you might otherwise be entitled to under any policy,
plan or practice of Playboy and exceeds any severance pay that you might
otherwise be entitled to in consideration of the terms and covenants in
this Agreement.
1.b. The severance pay set out in paragraph 1.a. will be made in a lump sum
within 10 days after the revocation period set forth in paragraph 19. has
expired.
2.a. *****
2.b. You will receive a one-time grant of 30,000 Class B shares of Playboy's
common stock within 10 days after the revocation period set forth in
paragraph 19. has expired.
3. You will receive, at the same time you receive the payment under paragraph
1.b. above, a lump sum payment in the amount of $22,211.55, representing 7
vacation carryover days as indicated on Playboy's payroll system. You
certify that the vacation reports submitted by you to payroll are complete
and accurate insofar as the number of vacation days taken by you during
the period January 1, 2008 through the Employment End Date.
4. As of the Employment End Date, you will no longer remain covered by any of
Playboy's health insurance plans, and you will have the right to convert
your life insurance and long term disability insurance, applications for
which must be made within 31 days following the Employment End Date. All
other benefits, including participation in Playboy's 401(k) plan, will
cease as of the Employment End Date.
5. After the Employment End Date, you may elect to continue your health
insurance coverage under the Consolidated Omnibus Budget Reconciliation
Act (COBRA), paying premiums as they become due. Coverage may be continued
for you under COBRA for up to 18 months. You may contact Katy O'Mahony, at
312 373 2045 to discuss your coverage.
6. Any stock options that were granted to you and which were vested as of
January 31, 2009 are exercisable through the "Option Expiration Date,"
which is the 90th day following January 31, 2009. ***** This paragraph 6
shall apply notwithstanding any provision in any stock option plan or
agreement to the contrary. Your contact for any option questions is Bob
Campbell at 312 373 2180. Playboy has provided you with information
regarding your stock options and the exercise thereof.
7. *****
8. Playboy will reimburse you for all reasonable business expenses incurred
by you through January 31, 2009, and charged to your Diners Club Card or
other credit cards prior to the payment due date of such credit cards,
subject to submission of (I) the credit card bills and (ii) invoices or
other supporting documentation indicating the business purpose of each
charge,
9. *****
10. You shall be under no duty to mitigate any of the amounts received by you
hereunder by securing employment with a subsequent employer or otherwise,
nor shall any amounts received by you from any subsequent employment or
otherwise, if applicable, entitle Playboy to any right to off-set the
amount of severance pay or any other amount it owes you in accordance with
the terms of this Agreement.
11. You acknowledge that, as a result of your position with Playboy, you had
access to confidential information and trade secrets of Playboy, including
customer and employee identification and contacts, information about
customers or vendors, business relationships, contract provisions,
pricing, margins, business plans, marketing plans, financial data,
business and customer strategy, techniques, models, software, solutions,
discussion guides, personal or performance information about employees,
research and development, patent applications and plans or proposals
related to the foregoing, which in each instance is: (a) generated or
collected by or utilized in the operations of Playboy and relating to the
actual or anticipated business or research or development of Playboy or
Playboy's actual or prospective clients; (b) not generally known within
the industry; and (b) of commercial value to Playboy ("Confidential
Information"). You will not, without Playboy's prior written permission,
disclose Confidential Information to anyone outside
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of Playboy, either during or after your employment with Playboy, as long
as such matters remain trade secrets or confidential. Confidential
Information shall not include any information that: (a) is, or becomes,
generally known to the public without breach of the terms of this
Agreement; (b) was known to you prior to your employment with Playboy or
learned by you independently of your employment with Playboy; (c) is
lawfully obtained from a third party with no duty of confidentiality to
Playboy; or is required to be disclosed by law, provided that, you shall
if permitted by law promptly inform Playboy of any such situations and
shall, if permitted by law, take reasonable steps, at Playboy's expense,
to prevent disclosure of confidential information or trade secrets until
Playboy has been informed of such required disclosure and has had a
reasonable opportunity to seek a protective order. For purposes of this
paragraph:
12.a. (i) You agree that, at all times following the Employment End Date, you
will not (a) engage in any public vilification of, or (b) make any
false or disparaging public statements concerning Playboy or any of
its officers, directors, shareholders or employees of Playboy, or
any of their respective products, brands or trademarks, including
management style, methods of doing business, the quality of products
and services, role in the community or treatment of employees.
(ii) Playboy agrees that, at all times following the Employment End Date,
its directors and executive officers will not and Playboy will not
knowingly authorize any employee of Playboy to (a) engage in any
public vilification of, or (b) make any false, or disparaging public
statements concerning you or your management style, methods of doing
business, role in the community or treatment of employees.
(iii) The restrictions set forth in paragraphs 12.a.(i) and 12.a.(ii)
shall not apply to truthful or factual statements made as the result
of an order from a court, arbitration panel or governmental
authority to make such statements, or to truthful or factual
statements made in the course of your participation in legal
proceedings, or as otherwise required by law.
12.b. For a period of twelve (12) months after the Employment End Date, you will
not directly or indirectly:
(i) *****
(ii) (a) raid, hire, solicit, or attempt to persuade any employee of
Playboy (except Deb Parry) to leave the employ of Playboy; (b)
interfere with the performance by any such persons of their duties
for Playboy; or (c) communicate with any such persons for the
purposes described in items (a) and (b) in this paragraph;
(iii) interfere with Playboy's relationship with any person or entity that
was a vendor or supplier of Playboy's during your employment at
Playboy; or
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(iv) on behalf of yourself or in conjunction with any other person,
company or entity, own (other than less than 3% ownership in a
publicly traded company), manage, operate, or participate in the
ownership, management, operation, or control of, or be employed by
any Adult Entertainment Company.
For purposes of this paragraph 12 and paragraph 15 hereof, the term
"Playboy" includes any of Playboy's subsidiaries and affiliated companies,
and its and their officers, directors, employees and agents.
12.c. You agree that, at all times following the Employment End Date, you will
not make commercial use of Playboy's intellectual property without the
prior consent of Playboy.
13. From and after the Employment End Date and subject to your other
employment and vacation commitments, you will make yourself reasonably
available to Playboy by telephone or as otherwise provided below to
provide reasonable cooperation and assistance to Playboy with respect to
(i) transition advice to the new chief executive officer of Playboy (ii)
current litigation concerning Playboy (including attendance at out-of-town
proceedings for which travel may be required at the request of Playboy,
although satellite or telephone conferences will be used in lieu of such
travel where available and practical), and (iii) pending or threatened
litigation concerning Playboy which involves areas or matters in which you
were involved during your employment. Playboy agrees to pay in advance,
either to you or directly, the actual expenses you incur (including
reasonable travel expenses while traveling) as a result of your complying
with this paragraph 13., subject to your submission to Playboy of
documentation substantiating such expenses as Playboy may reasonably
require. It is expressly agreed, however, that notwithstanding Playboy's
policy in connection therewith, you shall be entitled to fly business
class when traveling for Playboy and shall be entitled to first-class
accommodations, and meals.
14. Should you die before all the cash payments including wire transfers,
checks or similar forms of payment due hereunder have been made, Playboy
shall pay the remainder of such amounts to such other person or entity
indicated by you to Playboy in writing (with the last such designation
prior to your death being the governing election). The treatment of your
stock options in the event of your death shall be governed by the terms of
the applicable stock option plans and agreements.
15.a. For and in consideration of your promises made hereunder, Playboy hereby
agrees not to sue or make any claim of any kind against you, your heirs,
agents, assignees, executors, administrators, beneficiaries, trustees, and
personal and legal representatives and anyone who could claim through you,
both past and present, and either personally or in any other capacity (the
"HEFNER RELEASEES") before any agency, court or other forum, and Playboy
releases and discharges the HEFNER RELEASEES, and each of them, from all
manner of action and actions, cause or causes of action in law or in
equity, administrative proceedings, suits, claims, debts, liens, sums of
money, accounts, reckonings, bonds, bills, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands whatsoever, whether known or
unknown, arising from acts or omissions of you in connection with your
employment and the
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termination thereof (except those relating to any breach of this Agreement
by you). In addition, for and in consideration of the payments and other
benefits provided to you hereunder, you agree not to sue or make any claim
of any kind against Playboy, its subsidiaries and affiliated and
predecessor companies, its and their successors and assigns and all its
and their past and present directors, officers, employees, agents and
attorneys, either personally or in their capacity as directors, officers,
employees, agents and attorneys (the "PLAYBOY RELEASEES") before any
agency, court or other forum, and you release and discharge the PLAYBOY
RELEASEES, and each of them, from all manner of action and actions, cause
or causes of action in law or in equity, administrative proceedings,
suits, claims, debts, liens, sums of money, accounts, reckonings, bonds,
bills, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims and demands
whatsoever, whether now known or unknown, arising from acts or omissions
of the PLAYBOY RELEASEES in connection with your employment and the
termination thereof. This includes without limitation any and all wage
claims, tort claims, contract claims, ERISA claims, wrongful termination
claims, retaliation claims, defamation claims, fraud claims, claims under
the Age Discrimination in Employment Act, 29 U.S.C. Section 621 at seq.,
claims under Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. Section 2000, et seq., the Americans with Disabilities Act of 1990,
42 U.S.C. Section 12101, et seq., and the Family and Medical Leave Act of
1993, 29 U.S.C. Section 2601, et seq., as well as all other federal, state
and local statutes and regulations, presently or hereafter enacted, and
any other claims, demands or causes of action for monetary or equitable
relief, including back pay, front pay, reinstatement, compensatory
damages, punitive damages, attorneys' fees, expenses and costs of
litigation. Notwithstanding any other provision of this Agreement, neither
this release nor any other provision of this Agreement shall operate to
release Playboy from (i) any such payments or benefits required to be
provided under this Agreement, (ii) any such claims relating to any breach
of this Agreement by Playboy, or (iii) to the extent arising out of your
service as an employee, officer or director of Playboy or any of its
subsidiaries or affiliates on or prior to January 31, 2009, any such
claims or potential claims for indemnification, advancement or to the
benefits of Playboy's directors' and officers' liability insurance
policies as in effect from time to time, in accordance with Playboy's
charter or by laws, or under any separate agreement between you and
Playboy.
15.b. THIS MEANS THAT, BY SIGNING THIS AGREEMENT, OTHER THAN AS SPECIFICALLY SET
FORTH HEREIN, YOU AND PLAYBOY EACH WILL HAVE WAIVED ANY RIGHT YOU OR THEY
MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM, AS SET FORTH IN
PARAGRAPH 15.(a) ABOVE, AGAINST THE PLAYBOY RELEASEES OR HEFNER RELEASEES,
RESPECTIVELY, BASED ON ANY ACTS OR OMISSIONS OF THE PLAYBOY RELEASEES OR
HEFNER RELEASEES, RESPECTIVELY, UP TO THE DATE OF THE SIGNING OF THIS
AGREEMENT. EXCLUDED FROM YOUR AGREEMENT TO RELEASE AND DISCHARGE THE
PLAYBOY RELEASEES ARE ANY CLAIMS OR RIGHTS WHICH CANNOT BE WAIVED BY LAW,
INCLUDING YOUR RIGHT TO FILE A CHARGE OF DISCRIMINATION WITH AN
ADMINISTRATIVE AGENCY OR PARTICIPATE IN ANY AGENCY INVESTIGATIONS. YOU
ARE, HOWEVER, WAIVING YOUR RIGHT TO RECOVER ANY MONEY IN CONNECTION WITH
SUCH A CHARGE OR INVESTIGATION. YOU ARE ALSO WAIVING YOUR RIGHT TO RECOVER
MONEY IN CONNECTION WITH A CHARGE FILED BY ANY OTHER INDIVIDUAL OR BY THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR ANY OTHER FEDERAL, STATE OR
LOCAL AGENCY THAT INVESTIGATES CLAIMS OF DISCRIMINATION.
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16. All payments due to you hereunder shall be subject only to such income tax
withholding, payroll taxes and any other withholdings required by law.
17. All payments due to you hereunder shall be made, at your election, by wire
transfer to an account designated by you in writing, and if you elect to
provide such instructions, shall be considered to have been "received,"
for purposes of this Agreement, when credited to such account. Until and
unless you notify Playboy otherwise in writing, Playboy shall make wire
transfers in accordance with the written instructions you provide to us.
18. If Playboy assigns this Agreement to any other person or entity, such
other person or entity must assume this Agreement in writing.
Notwithstanding such assignment, Playboy shall remain primarily liable for
all obligations under this Agreement (and Playboy may only assign this
Agreement in its entirety). Playboy shall give you contemporaneous written
notice of any such assignment.
19. You also agree that you have entered into this Agreement knowingly and
voluntarily and that you have been represented by and have consulted with
an attorney in connection with the negotiation and drafting of this
Agreement. You understand that you may take up to 21 days to consider this
Agreement before signing it. After you sign this Agreement, you will have
7 days to revoke it if you change your mind. If you want to revoke the
Agreement, you must deliver a written revocation to Howard Shapiro,
General Counsel, Playboy Enterprises, Inc., 680 North Lake Shore Drive,
Chicago, IL 60611 within 7 days after you sign it. If you do not revoke
this Agreement, the payments and other consideration referenced in
paragraphs 1., 2., 3., and 9. hereof shall be paid as provided herein and
the payments referenced in paragraphs 6. through 8., hereof shall be made
at the times provided herein irrespective of whether you revoke this
Agreement.
20. No waiver of any breach of any provision of this Agreement shall be
effective unless it is in writing and no waiver shall be construed to be a
waiver of any succeeding breach or as a modification of such provision.
The provisions or any part thereof of this Agreement shall be severable
and if any provision of this Agreement is found by any court to be
unenforceable, in whole or in part, the remainder of this Agreement shall
nevertheless be enforceable and binding on the parties. A court may modify
any invalid, overbroad or unenforceable term of this Agreement so that
such term, as modified, is valid and enforceable under applicable law.
Further, you and Playboy each affirmatively state that you have not, will
not and cannot rely on any representations not expressly made herein. The
terms of this Agreement shall not be amended by you or Playboy except by
the express written consent of Playboy and you. You and Playboy
acknowledge that each was represented by counsel and had an equal
opportunity to review and/or modify the provisions set forth in this
Agreement. Thus, in the event of any misunderstanding, ambiguity or
dispute concerning this Agreement's provisions or their interpretation, no
rule of construction shall be applied that would result in having this
Agreement interpreted against any party. This Agreement and all rights,
remedies, and obligations hereunder including, but not limited to, matters
of construction, validity and performance, shall be governed by the laws
of the State of Illinois and any actions arising out of this Agreement
shall exclusively be brought in the State of Illinois. Finally, except to
the extent specifically otherwise set forth herein, this Agreement
embodies the complete understanding between the undersigned parties. No
other promises or agreements, either express or implied, shall be binding
unless in writing and signed by these parties.
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21. In the event of a breach or a threatened breach of this Agreement by you,
you acknowledge that Playboy could face irreparable injury which may be
difficult to calculate in dollar terms and that Playboy shall be entitled
to seek, in addition to remedies otherwise available at law or in equity,
temporary restraining orders and. preliminary injunctions and final
injunctions without the posting of a bond enjoining such breach or
threatened breath. The prevailing party in any action taken by Playboy to
enforce any portion of this Agreement before a trier of fact shall be
entitled to all of its reasonable attorney's fees, expenses and costs
incurred as a result of enforcing or defending the claim based upon such
portion of this Agreement.
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If the above is acceptable to you, please sign, date and return an executed
original copy of this letter.
Very truly yours,
PLAYBOY ENTERPRISES, INC.
/s/ Howard Shapiro
-------------------------
Howard Shapiro
ACCEPTED AND AGREED TO:
PLAYBOY ENTERPRISES, INC.
/s/ Howard Shapiro
- ------------------------------------
By: Howard Shaprio
Title: Executive Vice President
ACCEPTED AND AGREED TO:
/s/ Christie Hefner
- ------------------------------------
Christie Hefner
Date: February 9, 2009
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