EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), between Collectibles USA, Inc., a
Delaware corporation (the "Company"), and W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the
"Executive") entered into as of this 11th day of August, 1997.
WHEREAS, the Company will be engaged primarily in the business of marketing
collectible merchandise and animation art products; and
WHEREAS, the Executive will be employed by the Company in a confidential
relationship wherein the Executive, in the course of his employment with the
Company, will become familiar with and aware of information as to the Company
and its subsidiaries and affiliates and their respective customers, the specific
manner of doing business, including the processes, techniques and trade secrets
utilized by the Company and its subsidiaries and affiliates, and future plans
with respect thereto, all of which has been and will be established and
maintained at great expense to the Company, which information is a trade secret
and constitutes the valuable good will of the Company; and
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:
1. AGREEMENT SUPERSEDES ALL OTHER PRIOR UNDERSTANDINGS UPON EFFECTIVE DATE;
REPRESENTATIONS OF EXECUTIVE. This Agreement shall supersede any and all other
prior employment agreements, letters of intent, term sheets, arrangements,
and/or any other understanding, whether written or oral, between the Executive
and the Company or any subsidiary or affiliate thereof regarding any and all
matters relating to employment, compensation, benefits or similar matters. The
Executive hereby represents and warrants to the Company that the execution of
this Agreement by the Executive and his employment by the Company and the
performance of his duties hereunder will not violate or be a breach of any
agreement with a former employer, client or any other person or entity. Further,
the Executive agrees to indemnify the Company for any claim, including, but not
limited to, attorneys' fees and expenses of investigation and all fees and
expenses incurred by the Company, by any such third party that such third party
may now have or may hereafter come to have against the Company based upon or
arising out of any non-competition agreement, invention or secrecy agreement
between the Executive and such third party.
2. EMPLOYMENT AND DUTIES.
(a) Employment. The Company hereby employs the Executive as President and
Chief Executive Officer of the Company, and the Executive will report directly
to the Board of
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Directors of the Company (the "Board"). The Executive hereby accepts this
employment upon the terms and conditions herein contained and, subject to
Section 2(b), agrees to devote his working time, attention and efforts to
promote and further the business of the Company.
(b) Exclusivity of Services. The Executive shall not, during the Term, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage except to the extent that such activity does not interfere
with the Executive's duties and responsibilities hereunder. The foregoing
limitations shall not be construed as prohibiting the Executive from making
personal investments in such form or manner as will neither require his services
in the operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 5 of this Agreement.
(c) Location for Services. The Executive shall perform his services
hereafter at the Company's corporate headquarters which shall be located in such
metropolitan area as the Executive shall choose, subject to the consent of RGR
Financial Group, which consent shall not be unreasonably withheld. In the event
that the Executive must relocate his personal residence to a new geographical
area, the Company will pay all relocation costs to move Executive, his immediate
family and their personal property and affects. Such costs may include, by way
of example, but are not limited to, pre-move visits to search for a new
residence, investigate schools or for other purposes; temporary lodging and
living costs prior to moving into a new permanent residence; duplicate home
carrying costs; all closing costs on the sale of the Executive's present
residence and on the purchase of a comparable residence in the new location; and
added income taxes that Executive may incur if any relocation costs are not
deductible for tax purposes. The general intent of the foregoing is that
Executive shall not personally bear any out-of-pocket cost as a result of
relocation, with an understanding that Executive will use his best efforts to
incur only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation, with minimal disruption to the business
affairs of the company and the personal life of Executive and his family.
3. TERM. The term of this Agreement shall commence on the date hereof (the
"Effective Date") and shall end on the date which is the third anniversary of
the Effective Date (the "Initial Term"); provided, however, that in the event
that the Company or the Executive does not notify the other party on or prior to
the date which is one year prior to the expiration of the Initial Term (such
date, the "Notification Date") that it or he (as the case may be) desires that
the Initial Term not be extended beyond the termination of the Initial Term, the
term of this Agreement shall automatically be extended beyond the Initial Term
for successive one year periods on each anniversary of the Notification Date,
until either party gives notice to the other of its desire not to extend further
the term of this Agreement beyond the end of the then-extended term (the term of
this Agreement, whether during the Initial Term or any extension thereof, the
"Term").
4. COMPENSATION. For all services rendered by the Executive, the Company
shall compensate the Executive as follows:
(a) Base Salary. The base salary payable to the Executive during the Term
shall be at the rate of $150,000 per year, payable on a regular basis in
accordance with the Company's standard payroll procedures, but not less
frequently than on a monthly basis (the "Base Salary"). On at least an annual
basis, the Board shall review the Executive's performance and may make increases
to the Base Salary if, in its discretion, any such increase is warranted. Such
recommended increase shall require approval by the Board or a duly constituted
committee thereof.
(b) One Time Lump-Sum Payment. Within five business days after the date of
consummation of the Company's initial public offering (the "IPO") of Common
Stock, par value $.01 per share (the "Common Stock"), the Company shall pay to
the Executive a lump-sum amount equal to $50,000.
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(c) Incentive Bonus. It is the Company's intent to develop a written
Incentive Bonus Plan setting forth the criteria under which the Executive and
other key employees of the Company will be eligible to receive year-end bonus
awards.
(d) Executive Perquisites, Benefits And Other Compensation. The Executive
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for the Executive and his
dependent family members under health, hospitalization, disability, dental,
life and other insurance plans that the Company may have in effect from
time to time, which benefits provided to the Executive under this clause
(i) shall be at least equal to such benefits provided to Company
executives.
(ii) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by the Executive in the performance of his
services pursuant to this Agreement. All reimbursable expenses shall be
appropriately documented in reasonable detail by the Executive upon
submission of any request for reimbursement, and in a format and manner
consistent with the Company's expense reporting policy.
(iii) Four (4) weeks paid vacation for each year during the period of
employment or such greater amount as may be afforded officers and key
employees generally under the Company's policies in effect from time to
time (pro-rated for any year in which the Executive is employed for less
than the full year).
(iv) The Company shall provide the Executive with other executive
perquisites as may be available to or deemed appropriate for the Executive
by the Board and participation in all other Company-wide employee benefits
as available from time to time, which may include participation in the
Company's Long-Term Incentive Plan.
(e) $7 Options. Promptly after the date hereof, the Executive shall be
granted stock options to purchase 125,000 shares of the Company's Common Stock,
at an exercise price of $7.00 per share (the "$7 Options"). Such options shall
vest immediately and the terms and conditions of such options shall be set forth
in an option grant between the parties hereto. In the event that (i) the
Executive's employment is terminated under the circumstances set forth in
Section 6(c), 6(d) or 6(f) of this Agreement, prior to the consumation of the
IPO (unless the IPO is not consummated within 60 days of the date hereof) or
(ii) the Executive's Employment is terminated under the circumstances set forth
in Section 6(c) or 6(f) of this Agreement prior to the date six months after the
consummation of the IPO, the Executive shall have five business days in which to
exercise the $7 Options and thereafter such options shall terminate and be of no
further force or effect. In the event that the Exeuctive's employment is
terminated under any other circumstances, the Executive shall have five years in
which to exercise the $7 options.
(f) IPO Stock Options. The Executive shall be granted additional stock
options (the "Additional Options") to purchase 125,000 shares of Common Stock
following the IPO, at the price per share offered to the public at the
commencement of the IPO, the terms and conditions of which shall be set forth in
an option agreement between the parties hereto. The Additional Options shall
vest over a three year period, with one-third of the options vesting on the
first anniversary of
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the Effective Date, one-third on the second anniversary of the Effective Date
and the remainder on the third anniversary of the Effective Date. Such options
may be exercised by the Executive any time prior to the later of (i) one year
after the end of the Initial Term or (ii) on year after the end of the
termination of the Executive's employment hereunder.
5. NON-COMPETITION AGREEMENT.
(a) General. Subject to Section 5(c), the Executive shall not, during the
period of his employment by or with the Company, and for a period of two (2)
years immediately following the termination of his employment under this
Agreement (such period, the "Restricted Period"), for any reason whatsoever,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person, persons, company, partnership, corporation, entity or business of
whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in any other capacity, whether as an agent, employee,
independent contractor, consultant or advisor, or as a sales
representative, in any collectibles or animation art business in
competition with the Company or its subsidiaries or affiliates, within 100
miles of (i) the principal executive offices of the Company or (ii) any
place to which the Company or its subsidiaries or affiliates provides
products or services or in which the Company is in the process of
initiating business operations during the Restricted Period (the
"Territory");
(ii) call upon or interview any person who is, at that time, within
the Territory, an employee of the Company (including the subsidiaries or
affiliates thereof) in a managerial capacity for the purpose or with the
intent of enticing such employee away from or out of the employ of the
Company (including the subsidiaries or affiliates thereof), provided that
the Executive shall be permitted to call upon and hire any member of his
immediate family;
(iii) call upon any person or entity which is, at that time, or which
has been, within one (1) year prior to that time, a customer of the Company
(including the subsidiaries or affiliates thereof) within the Territory for
the purpose of soliciting or selling products similar in nature to those
which are or were provided by the Company to such customer within the
Territory; or
(iv) call upon any prospective acquisition candidate, on the
Executive's own behalf or on behalf of any competitor, which candidate was,
to the Executive's actual knowledge after due inquiry, either called upon
by the Company (including the subsidiaries or affiliates thereof) or for
which the Company made an acquisition analysis, for the purpose of
acquiring such entity, provided that the Executive shall not be charged
with violating this section unless and until the Executive shall have
knowledge or notice that such prospective acquisition candidate was called
upon, or that an acquisition analysis was made for the purpose of acquiring
such entity; or
(v) disclose any information regarding customers, whether in existence
or proposed, of the Company (or the respective subsidiaries or affiliates
thereof) to any person, firm, partnership, corporation or business for any
reason or purpose whatever .
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Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit the Executive from acquiring as an investment not more than one
percent (1%) of the capital stock of a competing business, whose stock is
traded on a national securities exchange or over-the-counter.
(b) Equitable Remedies. Because of the difficulty of measuring economic
losses to the Company as a result of a breach of the foregoing covenants, and
because of the immediate and irreparable damage that could be caused to the
Company for which they would have no other adequate remedy, the Executive agrees
that the foregoing covenants may be enforced by the Company in the event of
breach by the Executive, by injunctions and restraining orders.
(c) Reasonable Restraint. It is agreed by the parties that the foregoing
covenants in this Section 5 impose a reasonable restraint on the Executive in
light of the activities and business of the Company (including the Company's
subsidiaries and affiliates) on the date of the execution of this Agreement and
the current plans of the Company (including the Company's subsidiaries and
affiliates); but it is also the intent of the Company and the Executive that
such covenants be construed and enforced in accordance with the changing
activities, business and locations of the Company (including the Company's
subsidiaries and affiliates) throughout the term of these covenants, whether
before or after the date of termination of the employment of the Executive. For
example, if, during the term of this Agreement, the Company (including the
Company's subsidiaries or affiliates) engages in new and different activities,
enters a new business or establishes new locations for its current activities or
business in addition to or other than the activities or business enumerated
under the whereas clauses above or the locations currently established therefor,
then the Executive will be precluded from soliciting the customers or employees
of such new activities or business or from such new location and from directly
competing with such new business within the territory through the Restricted
Period.
It is further agreed by the parties hereto that, in the event that the
Executive shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries or affiliates), or similar activities or business in
locations the operation of which, under such circumstances, does not violate
clause (a)(i) of this Section 5, and in any event such new business, activities
or location are not in violation of this Section 5 or of employee's obligations
under this Section 5, if any, the Executive shall not be chargeable with a
violation of this Section 5 if the Company (including the Company's subsidiaries
or affiliates) shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.
(d) Severability. The covenants in this Section 5 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions of
any specific covenant as set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
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(e) Independent Provisions. All of the covenants in this Section 5 shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of the Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of any of such covenants. It is
specifically agreed that the period of two (2) years following termination of
employment stated at the beginning of this Section 5, during which the
agreements and covenants of the Executive made in this Section 5 shall be
effective, shall be computed by excluding from such computation any time during
which the Executive is in violation of any provision of this Section 5.
6. TERMINATION; RIGHTS ON TERMINATION. This Agreement and the Executive's
employment may be terminated in any one of the followings ways:
(a) Death. The death of the Executive shall immediately terminate this
Agreement, with no severance compensation due to the Executive's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, the Executive shall have been absent from his full-time
duties hereunder for four (4) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
four (4) month period, but which shall not be effective earlier than the last
day of such four (4) month period), the Company may terminate the Executive's
employment hereunder provided the Executive is unable to resume his full-time
duties at the conclusion of such notice period. In addition, the Executive may
terminate his employment hereunder if his health should become impaired to an
extent that makes the continued performance of his duties hereunder hazardous to
his physical or mental health or his life, provided that the Executive shall
have furnished the Company with a written statement from a qualified doctor to
such effect and provided, further, that, at the Company's request made within
thirty (30) days of the date of such written statement, the Executive shall
submit to an examination by a doctor selected by the Company who is reasonably
acceptable to the Executive and such doctor shall have concurred in the
conclusion of the Executive's doctor. In the event this Agreement is terminated
as a result of the Executive's disability, the Executive shall receive from the
Company, in a lump-sum payment due within ten (10) days of the effective date of
termination, the Base Salary at the rate then in effect for whatever time period
is remaining under the Term of this Agreement or for one (1) year, whichever
amount is greater. For the purposes of this Section 6(b), the Base Salary shall
be deemed to be not less than $200,000 per year.
(c) Cause. The Company may terminate the Agreement ten (10) days after
written notice to the Executive for "Cause," which shall be: (1) the Executive's
willful, material and irreparable breach of this Agreement; (2) the Executive's
gross negligence in the performance or intentional nonperformance continuing for
ten (10) days after receipt of written notice of need to cure of any of the
Executive's material duties and responsibilities hereunder; (3) the Executive's
willful dishonesty, fraud or misconduct with respect to the business or affairs
of the Company or its subsidiaries or affiliates which materially and adversely
affects the operations or reputation of the Company or its subsidiaries or
affiliates; (4) the Executive's conviction of a felony crime; or (5) chronic
alcohol abuse or illegal drug abuse by the Executive. In the event of a
termination for Cause, as enumerated above, the
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Executive shall receive no severance compensation, and all unvested stock
options granted pursuant to Section 4(f) hereof shall be forfeited to the
Company.
(d) Without Cause. At any time after his commencement of employment, the
Company may, without Cause, terminate this Agreement and the Executive's
employment, effective thirty (30) days after written notice is provided to the
Executive. In the event that the Executive is terminated by the Company without
Cause, the Executive shall receive from the Company the Base Salary for whatever
time period is remaining under the Term of this Agreement (not to exceed two
years) or for one (1) year, whichever amount is greater. For purposes of this
Section 6(d), the Base Salary shall be deemed to be not less than $200,000 per
year. Any termination without Cause by the Company shall operate to immediately
vest the Executive in his invested stock options granted pursuant to Section
4(f) hereof. Further, any termination without Cause by the Company shall operate
to shorten the Restricted Period set forth in Section 5 and during which the
terms of Section 5 apply to one (1) year from the date of termination of
employment.
(e) Change In Control Of The Company. In the event of a "Change in Control"
of the Company (as defined in Section 11 of this Agreement) during the Term,
refer to Section 11 of this Agreement.
(f) Resignation by Executive. If the Executive resigns or otherwise
terminates his employment hereunder (i) the Executive shall receive no severance
compensation, (ii) all unvested stock options granted pursuant to Section 4(f)
shall be forfeited to the Company and (iii) the Restricted Period shall remain
as set forth in Section 5 hereof.
(g) Survival and Continuing Obligations. Upon termination of this Agreement
for any reason provided above, the Executive shall be entitled to receive all
compensation earned and all benefits and reimbursements due through the
effective date of termination. Additional compensation subsequent to
termination, if any, will be due and payable to the Executive only to the extent
and in the manner expressly provided in this Section 6 or in Section 11. All
other rights and obligations of the Company and the Executive under this
Agreement shall cease as of the effective date of termination, except that the
Company's obligations under Section 6 herein and the Executive's obligations and
other matters under Sections 5, 7, 8 and 9 herein shall survive such termination
in accordance with their terms.
7. RETURN OF COMPANY PROPERTY. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by the Executive by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, as the case may be, and
be subject at all times to their discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of the
Company which is collected by the Executive shall be delivered promptly to the
Company without request by it upon termination of the Executive's employment for
any reason.
8. INVENTIONS. The Executive shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by the
Executive, solely or jointly with
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another, during the period of employment or within one (1) year thereafter, and
which are related to the business or activities of the Company or its
subsidiaries or affiliates and which the Executive conceives as a result of his
employment by the Company. The Executive hereby assigns and agrees to assign all
his interests therein to the Company or its nominee. Whenever requested to do so
by the Company, the Executive shall execute any and all applications,
assignments or other instruments that the Company shall deem necessary to apply
for and obtain Letters Patent of the United States or any foreign country or to
otherwise protect the Company's or its subsidiaries or affiliates interest
therein.
9. TRADE SECRETS. Executive agrees that during the course of performing
services for the Company, he has had and will have substantial access to and
contact with information or documents, including but not limited to trade
secrets, patents, copyrighted materials, proprietary computer software, systems
analyses, lists of actual or prospective customers, contracts, Company books and
records, financial data and other Confidential and Proprietary Information and
Materials (as that term is defined below) of the Company, the disclosure of
which to competitors of the Company or others would cause the Company to suffer
substantial and irreparable damage. Executive recognizes, therefore, that it is
in the Company's legitimate business interest to restrict his disclosure or use
of Confidential and Proprietary Information and Materials for any purposes other
than the services provided by him to the Company under this Agreement, and to
limit any potential appropriation of such Confidential and Proprietary
Information and Materials by him for the benefit of the Company's competitors
and to the detriment of the Company. Therefore, it is agreed that unless
Executive shall first secure the Company's written consent, Executive shall not
publish, disclose or use, or authorize any other person or entity to publish,
disclose or use, at any time before, during or subsequent to the Term of this
Agreement, any secret or confidential information, whether patentable or not, of
or about the Company, including any Confidential and Proprietary Information and
Materials (as that term is defined below) and any other secret or confidential
information of which Executive becomes aware of or informed during the Term of
this Agreement, whether or not developed by Executive, except as required in
Executive's duties to the Company. For purposes of this Agreement, "Confidential
and Proprietary Information and Materials" shall include, without limitation,
formulas, patterns, compilations, studies, strategies, programs, devices,
methods, techniques, and processes of or about or its business, customers or
suppliers, which derive independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from their disclosure or
use and which are the subject of efforts to maintain their secrecy that are
reasonable under the circumstances.
All Confidential and Proprietary Information and Materials and all copies
of such information and materials relating to the Company's business, whether
prepared by Executive or otherwise coming into his possession, shall remain the
exclusive property of the Company and shall be returned to the Company upon the
Company's request or the termination of Executive's employment.
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10. ASSIGNMENT; BINDING EFFECT. The Executive understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. The Executive agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement.
11. CHANGE IN CONTROL.
(a) General. Unless he elects to terminate this Agreement pursuant to (c)
below, the Executive understands and acknowledges that the Company may be merged
or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) Severance Payments. In the event of a pending Change in Control wherein
the Company and the Executive have not received written notice at least five (5)
business days prior to the anticipated closing date of the transaction giving
rise to the Change in Control from the successor to all or a substantial portion
of the Company's business and/or assets that such successor is willing as of the
closing to assume and agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent that the Company is hereby
required to perform, then such Change in Control shall be deemed to be a
termination of this Agreement by the Company without Cause during the Term and
the applicable portions of Section 6(d) will apply under such circumstances,
provided, however that the amount of the lump-sum severance payment due to the
Executive shall be three times the Base Salary at the rate then in effect (with
the Base Salary being deemed to be not less than $200,000 per year) and the
non-competition provisions of Section 5 shall not apply whatsoever.
(c) Voluntary Resignation. In any Change in Control situation, the
Executive may, at his sole discretion, elect to terminate this Agreement by
providing written notice to the Company at least five (5) business days prior to
the anticipated closing of the transaction giving rise to the Change in Control.
In such case, the applicable provisions of Section 6(d) will apply as though the
Company had terminated the Agreement without Cause during the Term.
(d) Application of Termination Provisions. For purposes of applying Section
6 under the circumstances described in Sections (b) and (c) above, the effective
date of termination will be the closing date of the transaction giving rise to
the Change in Control and all compensation, reimbursements and lump-sum payments
due the Executive must be paid in full by the Company at or prior to such
closing. Further, the Executive will be given sufficient time and opportunity to
elect whether to exercise all or any of his vested options to purchase the
Company's Common Stock, including any options with accelerated vesting under the
provisions of the Company's Long-Term Incentive Compensation Plan, such that he
may convert the options to shares of Company Common Stock at or prior to the
closing of the transaction giving rise to the Change in Control, if he so
desires.
(e) Definition. A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or any employee benefit plan of
the Company, acquires directly or indirectly Beneficial Ownership (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of the Company
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and immediately after such acquisition such person is, directly or
indirectly, the Beneficial Owner of voting securities representing 50% or
more of the total voting power of all of the then-outstanding voting
securities of the Company, unless the transaction pursuant to which such
acquisition is made is approved by at least two-thirds (2/3) of the Board;
(ii) the following individuals no longer constitute a majority of the
members of the Board of Directors of the Company: (A) the individuals who,
as of the closing date of the Company's initial public offering, constitute
the Board of Directors of the Company (the "Original Directors"); (B) the
individuals who thereafter are elected to the Board of Directors of the
Company and whose election, or nomination for election, to the Board of
Directors of the Company was approved by a vote of at least two-thirds
(2/3) of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following their
election); and (C) the individuals who are elected to the Board of
Directors of the Company and whose election, or nomination for election, to
the Board of Directors of the Company was approved by a vote of at least
two-thirds (2/3) of the Original Directors and Additional Original
Directors then still in office (such directors also becoming "Additional
Original Directors" immediately following their election).
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not obtained, other than
any such transaction which has been either (x) approved by at least 66% of
the members of the Board or (y) which would result in at least 50% of the
total voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being Beneficially
Owned by at least 50% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power of
each such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
12. COMPLETE AGREEMENT. This written Agreement is the final, complete and
exclusive statement and expression of the agreement between the Company and the
Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and the
Executive, and no term of this Agreement may be waived except by writing signed
by the party waiving the benefit of such term.
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13. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Collectibles USA, Inc.
c/o RGR Financial Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To the Executive: Mr. W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
#▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or if sooner, when actually received.
Either party may change the address for notice by notifying the other party of
such change.
14. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
15. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in New York, NY, in accordance
with the rules of the American Arbitration Association then in effect. The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof nor to award punitive damages to any injured party. The
arbitrators shall have the authority to order back-pay, severance compensation,
vesting of options (or cash compensation in lieu of vesting of options), and
reimbursement of costs, including those incurred to enforce this Agreement. A
decision by the arbitration panel shall be final and binding. Judgment may be
entered on the arbitrators' award in any court having jurisdiction.
16. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of New York.
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17. COUNTERPARTS. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLLECTIBLES USA, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Chairman of the Board
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W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ W. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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