EXHIBIT 10(hh)
CONSULTING AGREEMENT
Consulting Agreement, entered into as of this 31st day of January, 1998,
by and between Hasbro, Inc., a Rhode Island corporation (the
"Corporation"), and Xxxxxx X. Xxxxxxxxx, Xx., an individual residing at 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the "Consultant")
WITNESSETH:
WHEREAS, the Corporation is primarily engaged in the manufacturing,
merchandising, marketing, distribution, developing and licensing of toys,
games, puzzles and related products (the "Business"); and
WHEREAS, the Consultant is a skilled and experienced businessman who
served from 1960 through the date hereof as an employee and senior
executive officer of the Corporation; and
WHEREAS, the Corporation desires to retain the Consultant to render
the consulting services set forth herein to the Corporation for a period
commencing on the date hereof, and continuing through October 31, 1999,
subject to extension by mutual agreement; and
WHEREAS, the Consultant and the Corporation are willing to enter into
this consulting agreement (the "Agreement") on the terms and conditions as
provided herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term.
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The term of the Agreement shall commence as of February 1, 1998 and,
unless otherwise terminated as hereinafter provided, shall continue through
October 31, 1999 (the period from the date hereof through termination or
expiration, whichever occurs first, to be hereinafter referred to as the
"Term"), provided that the Term may be extended for such additional periods
as may be agreeable to the Consultant and the Corporation.
2. Services.
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2.1 The Consultant shall provide the following services:
(a) to provide business advice and project coordination for the
Corporation's implementation of SAP integrated enterprise system;
(b) to provide counsel on corporate charitable contributions by the
Corporation in the Springfield, MA community consistent with the
Corporation's established practice and procedure for granting such
contributions;
(c) to provide such services as determined and reasonably requested
by the Chairman and Chief Executive Officer of the Corporation; and
(d) to provide such other business advice and counsel as the
Corporation may reasonably request of the Consultant from time to time.
2.2 The Consultant shall provide his services hereunder at such
places and at such times as he shall determine, provided that the
Consultant shall reasonably make himself available for meetings with senior
management of the Corporation as may be scheduled from time to time. The
Corporation shall have no right to direct or control the manner in which
the services by Consultant are performed hereunder.
2.3 The Corporation acknowledges that Consultant may provide
consulting services to non-competitors of the Corporation, sits on a number
of boards of directors of publicly and privately held companies who are
non-competitors of the Corporation and devote considerable time to
charitable and community work.
3. Remuneration.
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3.1 As basic compensation for the Consultant's services, the
Corporation hereby agrees to pay the Consultant a monthly fee of $5,000.00
subject to the terms hereof, less such deductions or amounts to be withheld
as shall be required by applicable law and regulations.
3.2 A lump sum payment in March 1999 and March 2000 comparable to a
management incentive award for the previous fiscal year had the Consultant
been employed as an executive officer of the company will be paid to the
Consultant. The determination of this payment will be made by the Chairman
and Chief Executive Officer of the Company. The minimum amount of the lump
sum payment made in March 1999 shall be $150,000 and in March 2000 shall be
$125,000. The lump sum payment for any year shall be prorated based upon
the number of months fees for consulting or other services were paid in the
previous calendar year. This provision shall survive the termination of
this agreement.
3.3 The Corporation agrees to reimburse the Consultant for reasonable
travel expenses actually incurred by the Consultant in the performance of
the Consultant's duties hereunder upon the submission of appropriate
receipts, expense statement or vouchers.
3.4 Nothing in this Agreement shall reduce the benefits or amounts to
which the Consultant is entitled by virtue of his prior employment with the
Corporation, including without limitation, pension, profit-sharing and
savings plan distributions and life, health care and dental benefits.
4. Confidentiality and Other Terms and Conditions.
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4.1 The Consultant agrees that all ideas, suggestions, discoveries,
inventions, copyrights, copyrightable materials, secret processes,
formulae, trademarks, trade secrets, and the like (the "Intellectual
Property") created, discovered or developed by the Consultant during the
performance of activities pursuant to this Agreement shall be the exclusive
property of and are hereby assigned to the Corporation, and the Consultant
agrees to execute such instruments of transfer, assignment, conveyance and
confirmation and such other documents as may reasonably be requested by the
Corporation to transfer, assign, convey, confirm and perfect in the
Corporation all legally protectable rights in such Intellectual Property.
4.2 The Consultant will regard and preserve as confidential all
information pertaining to the Corporation that may be obtained by the
Consultant as a result of the Consultant's services hereunder and will not
disclose such information to any person, or use it for the Consultant's own
benefit, during the term hereof or thereafter, except as may be necessary
in connection with the performance of the Consultant's services hereunder.
References to the "Corporation" in this Agreement, and particularly in this
Section 4.2 and in Section 6.1, shall include all divisions of the
Corporation, all corporations that are affiliates or subsidiaries of the
Corporation, and any divisions of such subsidiaries and affiliates.
Information covered hereby shall include, without limitation, information
relating to the Corporation's products, processes, services, inventions,
research, development, manufacturing or subcontracting methods, financial
matters, future plans or other materials conceived, designed, created or
heretofore or hereafter used or developed by the Corporation, any customer
lists, pricing and pricing methods, marketing, merchandising or
distribution methods, sourcing or other supplier or purchaser related
information or other information that is the property of the Corporation or
otherwise marked "Confidential". Moreover, during the Term and thereafter
for a period of one year, the consultant will not solicit or in any manner
encourage employees of the Corporation to leave the employ of the
Corporation. Any and all documentation containing such information in the
possession or under the control of the Consultant at the end of the Term
shall be returned to the Corporation. This Section 4.2 shall not apply to
any information which is or becomes part of the public domain other than as
a result of a breach of this Agreement by the Consultant or that may be
required to be disclosed by a duly authorized order requiring such
disclosure by any judicial or administrative proceeding.
4.3 This Section 4 shall survive the termination of this Agreement.
5. Termination of Consulting Arrangement.
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5.1 Death.
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In the event of the death of the Consultant, this Agreement shall
thereupon be terminated and the Term shall end and the Corporation shall
only be obligated to pay the fee set forth in Section 3.1 above to the
Consultant for the month in which death occurs.
5.2 Consultant Initiation.
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The Consultant has the right to terminate this Agreement with effect at
any time after June 30, 1998 upon 30 days advance written notice.
5.3 Inability to Perform.
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In the event that, during the Term, the Consultant is unable to furnish
the services described in Section 2.1, the Corporation shall have the
option to terminate the Consultant's services and thereby terminate this
Agreement, as follows: A termination as a result of the inability of the
Consultant to provide the services described in Section 2.1 shall occur
upon delivery by the Corporation of a termination notice in writing to the
Consultant following a period of (a) 45 consecutive days, or (b) 90 days
(irrespective of whether such days are consecutive) occurring during any
period of 365 consecutive days during which the Consultant has been
requested to but has been unable to provide such services. The
Consultant's vacation periods shall not be included within the foregoing
computation. The Consultant shall continue to receive the remuneration
provided for in Section 3.1 only for the period ending with the date of
such termination as provided in this paragraph 5.3.
5.4 Termination by the Corporation for Due Cause.
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Nothing herein shall prevent the Corporation from terminating the
Consultant's services and this Agreement for Due Cause. The Consultant
shall continue to receive remuneration provided for in Section 3.1 only for
the period ending with the date of such termination as provided in this
Section 5.3. "Due Cause" , as used herein, shall be deemed to exist in the
event (a) the Consultant is convicted of a felony or of fraud or, (b) in
connection with the Business, commits acts of gross negligence, willful
misconduct or dishonesty or (c) the Consultant neglects to perform the
services required to be performed hereunder for a period of 30 days after
written notice by the Corporation to the Consultant of such neglect.
6. Covenant Not to Compete and Other Covenants.
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6.1 The Consultant agrees that, except as otherwise provided in this
Section 6, the Consultant will not, without the prior written consent of
the Corporation, at any time during the Term and thereafter for a period of
one year, in any country in which the Corporation (as defined in Section
4.2 hereof ) is engaged in business, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management,
operation or control of, render services or advice to, or be connected
with, as partner, stockholder, director, officer, agent, employee,
consultant or otherwise, any business, firm or corporation which competes
with the Business as conducted during the Term or on the date of such
termination, as the case may be. The Consultant shall not be deemed under
this Section 6 to be competing with the Business solely by reason of
ownership of less than one percent of the outstanding amount of any
securities of any corporation regularly traded on a national stock exchange
or over-the-counter.
6.2 The Consultant agrees that during the Term and thereafter for a
period of one year, he will not interfere with any relationship,
contractual or otherwise, between the Corporation and any other party,
including, without limitation, any employee, customer, supplier,
distributor, lessor or lessee, licensor or licensee, commercial or
investment banker.
6.3 The provisions of this Section 6 shall survive the termination of
this Agreement.
7. Remedies.
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The Consultant acknowledges that the services to be rendered hereunder
are of a special and unique character and recognizes that, in the event of
any breach or threatened breach by the Consultant of the provisions of
Sections 4 or 6 hereof, damages would be difficult, if not impossible, to
ascertain; and it is therefore agreed that the Corporation, in addition to
and without limiting any other remedy or right it may have under this
Agreement or al law or in equity, shall be entitled to injunctive relief
against the Consultant issued by any court of competent jurisdiction
enjoining any such breach or threatened breach. This Section 7 shall
survive the termination of this Agreement.
8. Indemnification.
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The Corporation shall indemnify and hold the Consultant harmless from and
against all liabilities, losses, costs, judgments and expenses (including
reasonable attorney's fees and reasonable disbursements) to which the
Consultant may become subject as a result of the performance of his
obligations under this Agreement or as a result of the performance of his
obligations under this Agreement or as a result of his connection with the
business and affairs of the Corporation, except for acts or omissions
constituting negligence, willful misconduct or acts beyond the scope of the
consulting arrangement,. This indemnification provision shall bind the
Corporation only if the Consultant gives the Corporation prompt notice of
any claims with respect to which it may seek indemnification and permits
the Corporation to defend such claim with counsel of its own selection,
reasonably satisfactory to the Consultant. The Consultant agrees to
cooperate with the Corporation in connection with the defense of any such
action.
9. Relationship of the Parties.
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9.1 In all activities hereunder the Consultant shall be an
independent contractor and the Corporation shall, unless otherwise required
by law, have no liability whatsoever for withholding, collection or payment
of income taxes or for taxes of any other nature on behalf of the
Consultant.
9.2 Nothing contained herein shall be deemed to (i) make either party
the agent, employee, joint venturer or partner of the other party or (ii)
provide either party or any employee of such party with the power or
authority to act on behalf of the other party or to bind the other party to
any contract, agreement or arrangement with any other person.
9.3 All personnel employed or otherwise engaged by either party shall
be the agents, servants and employees of such party only, and their other
party shall incur no obligations or liabilities, express or implied, by
reason of, or with respect to, the conduct of such personnel.
10. Representation and Warranty of Consultant.
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Consultant represents and warrants that he has full legal right and
authority to enter into this Agreement and to fully perform the
Consultant's obligation hereunder without breach by the Consultant of any
legal obligations to any other persons, firm or entity, and there is no
agreement to which the Consultant is a party or to which the Consultant is
otherwise bound, or any order, arbitration award or injunction of any
court, arbitrator or governmental agency to which the Consultant is
subject, which would prevent or limit Consultant from fully performing the
Consultant's obligations under this Agreement. Consultant hereby agrees to
indemnify and hold the Corporation harmless from and against all
liabilities, losses, costs, claims, judgments and expenses (including
reasonable attorney's fees and reasonable disbursements) to which the
Corporation may become subject as a result of a breach of this
representation and warranty.
11. Notices.
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Any notice to be given hereunder shall be given in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below
or to such other address as such party may subsequently give written notice
pursuant hereto:
If to the Corporation:
To: Hasbro, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Vice Chairman
With a copy to: Hasbro, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Senior Vice President,
Corporate Legal Affairs
and Secretary
If to the Consultant:
To: Xxxxxx X. Xxxxxxxxx, Xx.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxx X. Xxxxxxx
Doherty, Wallace, Pillsbury and Xxxxxx, P.C.
One Monarch Place
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
12. Miscellaneous.
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12.1 If any section, subsection or other provision of this Agreement
is determined by a court of competent jurisdiction to be unenforceable for
any reason, such section, subsection or provision shall be deemed to be
severable and this Agreement shall otherwise continue in full force and
effect.
12.2 This Agreement shall be binding upon the Consultant, the
Corporation, its successors and any corporation which acquires, by merger
or otherwise, all or substantially all of the assets of the Corporation,
and shall inure to the benefit of (a) the Consultant and the Consultant's
legal representatives and (b) the Corporation and its successors and
permitted assigns. Except as set forth in the preceding sentence, neither
this Agreement nor any rights or obligations thereunder shall be assignable
by either party without the prior written consent of the other party.
12.3 No modification, amendment or waiver of any of the provisions of
this Agreement shall be effective unless in writing and signed by bother
parties hereto.
12.4 The failure to enforce at any time any of the provisions of this
Agreement or the failure to require at any time performance of any of the
provisions of this Agreement shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any
part hereof, or the right thereafter to enforce each and every such
provision in accordance with the terms of this Agreement.
12.5 This Agreement constitutes the entire understanding of the
parties hereto with respect to the Consultant's consulting services and the
Consultant's remuneration therefor.
12.6 Whenever a provision of this Agreement governs periods following
the termination or conclusion of this Agreement, such provisions shall
survive such termination or conclusion whether or not such survival is
otherwise specifically provided for herein.
12.7 This Agreement may be executed in one or more counterparts, each
of which shall be considered an original, but all of which together shall
constitute one and the same document.\
12.8 The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
12.9 This Agreement shall be governed by and construed in accordance
with the laws of the State of Rhode Island applicable to agreements made
and to be performed entirely within such state.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HASBRO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice Chairma
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxxx, Xx.