SERVICE AGREEMENT
(1) Combined Distribution (Holdings) Limited
(2) Xxxxxxx Xxxxxx Xxxxxx
Dated 24 November 1997
XXXXXXX XXXXXX
LONDON OFFICE
Xxxxxxxx Xxxxx, 00 Xxx Xxxxxx, Xxxxxx XX0X 0XX
Telephone 0000 000 0000 Facsimile 0171 248 9934
BRISTOL OFFICE
00 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxx XX0 0XX
Telephone 0000 000 0000 Facsimile 0117 927 9209
CONTENTS
1. Definitions and interpretation......................................1
2. Appointment.........................................................5
3. Term................................................................5
4. Duties of the Executive.............................................5
5. Hours of work.......................................................6
6. Principal place of work.............................................6
7. Salary..............................................................6
8. Expenses............................................................7
9. Other benefits......................................................7
10. Holidays...........................................................9
11. Sickness or injury................................................10
12. Termination of and suspension from Employment.....................11
13. Acknowledgement by the Executive..................................14
14. Obligations during Employment.....................................15
15. Obligations after Employment......................................18
16. Grievance procedure...............................................20
17. General...........................................................20
18. Governing law and jurisdiction....................................22
The Schedule..........................................................23
Bonus.................................................................23
THIS AGREEMENT is made the 24th day of November 1997
BETWEEN:
(1) COMBINED DISTRIBUTION (HOLDINGS) LIMITED (company number: 3136477) whose
registered office is at Xxxx 0/0 Xxxxxxx Xxx Xxxxxxx Xxxxxxxxxx X0 0XX
("THE COMPANY"); and
(2) Xxxxxxx Xxxxxx Xxxxxx of 000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx, X00 0XX
("THE EXECUTIVE").
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
expressions have the following meanings:
"ACTIVISION" Activision Inc., a Delaware corporation and the
holding company of the Company;
"THE BOARD" the board of directors of the Company from time
to time and includes any committee of the Board
duly appointed by it;
"BUSINESSES" any trade or other commercial activity of any
Group Company:
(a) with which the Executive is concerned or
involved to any material extent at any time
during his Employment; or
(b) which any Group Company shall at the
Termination Date have determined to carry on
with a view to profit in the immediate or
foreseeable future and in relation to which
the Executive, at the Termination Date,
possesses any Confidential Information;
1
"COMPANY INVENTION" any improvement, invention or discovery made by
the Executive which in accordance with Section
39, Patents Xxx 0000 is the property of the
Company or any Group Company ;
"CONFIDENTIAL any information relating to the business methods,
INFORMATION" corporate plans, management systems, finances,
new business opportunities, research and
development projects, marketing or sales of any
past, present or future product or service,
trade secrets, secret formulae, processes,
inventions, designs, know-how discoveries,
technical specifications and other technical
information relating to the creation, production
or supply of any past, present or future product
or service of any Group Company and any other
information (whether or not recorded in
documentary form or on computer disk or tape)
which any Group Company identifies or treats as
confidential or in respect of which it owes an
obligation of confidentiality to any third party;
"CUSTOMER" any person:
(a) with whom or which the Executive has dealt
or of whom or of which he has knowledge by
virtue of his Duties in the 12 months preceding
the Termination Date; and
(b) either:
(i) who or which shall at the Termination
Date be negotiating with any Group
Company for the supply of any Restricted
Products or the provision of any
Restricted Services; or
2
(ii) to whom or which any Group Company
shall at any time during the period of
12 months prior to the Termination Date
have supplied any Restricted Products or
Restricted Services;
"DUTIES" the duties of the Executive as set out in clause 4;
"EMPLOYMENT" the Executive's employment under this Agreement;
"ERA96" Employment Rights Xxx 0000;
"GROUP COMPANIES" the Company, its subsidiaries or subsidiary
undertakings, any holding company or parent
undertaking and any subsidiary or subsidiary
undertaking of any holding company or parent
undertaking and "GROUP COMPANY" means any of
them;
"MATERIAL INTEREST" (a) the holding of any position as director,
officer, employee, consultant, adviser,
partner, principal or agent;
(b) the direct or indirect control or ownership
(whether jointly or alone) of any shares (or
any voting rights attached to them) or
debentures save for the ownership for
investment purposes only of not more than
5 per cent of the issued ordinary shares of
any company whose shares are listed on any
Recognised Investment Exchange; or
(c) the provision of any financial assistance;
3
"NOTICE" includes any notice, demand, consent or other
communication;
"RECOGNISED INVESTMENT as defined in Section 207, Financial
EXCHANGE" Services Act, 1986;
"RESTRICTED AREA" the United Kingdom of Great Britain and Northern
Ireland;
"RESTRICTED PRODUCTS" any products of a kind which are the same or
substantially the same as those dealt in,
marketed or sold by any Group Company in the
ordinary course of the Businesses;
"RESTRICTED SERVICES" any services of a kind which are the same or
substantially the same as those provided by any
Group Company in the ordinary course of the
Businesses; and
"TERMINATION DATE" the date on which the Employment terminates.
1.2 In this Agreement, unless the context otherwise requires:
(a) words in the singular include the plural and vice versa and words in
one gender include any other gender;
(b) a reference to a statute or statutory provision includes:
(i) any subordinate legislation (as defined in Section 21(1),
Interpretation Act 1978) made under it; and
(ii) any statute or statutory provision which modifies, consolidates,
re-enacts or supersedes it;
(c) a reference to:
(i) a "PERSON" includes any individual, firm, body corporate,
association or partnership, government or state
(whether or not having a separate legal personality);
(ii) clauses and schedules are to clauses and schedules of this
Agreement and references to sub-clauses and paragraphs are
references to sub-clauses and paragraphs of the clause or
schedule in which they appear;
4
(d) the table of contents and headings are for convenience only and shall
not affect the interpretation of this Agreement; and
(e) words and phrases defined in the City Code on Take-overs and Mergers
or in the Companies Xxx 0000 have the same meaning in this Agreement.
2. APPOINTMENT
2.1 The Company appoints the Executive and the Executive agrees to serve as
Managing Director of the Company.
2.2 The Executive warrants that he is not bound by, nor subject to, any
court order, arrangement, restriction or undertaking which prohibits or
restricts him from entering into this Agreement or performing his Duties.
3. TERM
3.1 The Employment shall commence on 24 November 1997 and, unless
terminated in accordance with clause 12 (Termination of and suspension
from Employment), shall continue for a fixed period , to terminate on 30
November 1999. The Company shall have the option, at its absolute
discretion, to extend the fixed term for up to three additional
successive one year periods by not less than four months prior notice
before each such relevant one year period.
3.2 The Executive's previous employment with Combined Distribution
(Holdings) Limited shall be treated as part of his continuous period of
employment, which accordingly began on 1 July 1985.
4. DUTIES OF THE EXECUTIVE
4.1 RELATING TO THE COMPANY
The Executive shall at all times during his Employment:
(a) unless prevented by ill health and except during holidays taken in
accordance with clause 10 (Holidays), devote the whole of his working
time and attention to the service of the Company;
(b) faithfully and diligently perform the duties attaching to his office
or which are from time to time assigned to or vested in him and
exercise the powers consistent with them;
(c) obey all lawful and reasonable directions of the Board and
5
implement and abide by any relevant Company policy which may be
promulgated or operated in practice from time to time;
(d) use all reasonable endeavours to promote the interests of each Group
Company; and
(e) keep the Board fully informed (in writing if so requested) of his
conduct of the business or affairs of each Group Company and provide
such explanations as the Board may require.
4.2 RELATING TO THE GROUP COMPANIES
The Executive shall (without further remuneration and in addition to his
duties to the Company) if and for so long as the Company requires during
his Employment:
(a) carry out any duties as may from time to time be assigned to him in
relation to any Group Company; and
(b) act as an officer of any Group Company or hold any other appointment
or office as nominee or representative of any Group Company; and
in each case as if they were to be performed or held by him for or in
relation to the Company.
5. HOURS OF WORK
The normal business hours of the Company are 9.00am to 5.30p.m. Monday
to Friday. The Executive shall work such further hours as may be
necessary for the proper discharge of his Duties and he shall not be
entitled to receive any additional remuneration for work outside normal
business hours
6. PRINCIPAL PLACE OF WORK
6.1 The Executive's principal place of work shall be at Xxxxxxx Way,
Xxxxxxx, Birmingham, or such other location in the U.K. as constitutes
the Company's principal place of business from time to time.
6.2 The Company may require the Executive to work at a location other than
the principal place of work for a period not exceeding 2 weeks as the
Company may determine. The Executive shall travel in the UK and abroad
as the Board may reasonably require for the performance of his Duties.
6
7. SALARY
7.1 During his Employment the Company shall pay to the Executive:
(a) a basic salary at the rate of L84,500 per annum. This salary shall
accrue from day to day, be payable by equal monthly instalments in
arrears on or about the last Friday of each month and shall include any
fees to which the Executive is entitled as a director of any Group
Company ; and
(b) a bonus calculated in accordance with the provisions of the schedule
to this Agreement.
7.2 The Executive's basic salary shall be reviewed with effect from 1 July
in each year. The review shall be at the discretion of Activision,
provided that the annual basic salary increase shall not be less than 6%
of the immediately preceding basic salary.
8. EXPENSES
8.1 Subject to clause 8.2 below, the Company shall reimburse to the
Executive all hotel, travelling, entertainment and other out of pocket
expenses reasonably and properly incurred by him in the performance of
his Duties subject to him producing to the Company any vouchers or other
evidence of actual payment of the expenses as the Company may reasonably
require.
8.2 The Company shall reimburse the Executive in respect of his home
telephone xxxx and private and business petrol expenses, provided that
such reimbursements shall not be made at a level materially greater than
that at which they were made in the six months prior to the date of this
Agreement.
8.3 Any credit card or charge card supplied to the Executive by the Company
shall be used solely for expenses incurred by him in carrying out his
Duties and for private petrol.
9. OTHER BENEFITS
During his Employment the Executive shall be entitled to the following
benefits:
9.1 MOTOR CAR
(a) The Company shall provide and maintain for the sole use of the
Executive a Motor Car and all expenses and petrol in
7
connection with its private and business use shall be paid or
reimbursed to the Executive by the Company on presentation of
appropriate receipts if required, subject to the provisions of
clause 8.2 above.
(b) A new Motor Car will be supplied to the Executive after 3 years or
75,000 miles, whichever occurs first.
(c) The Motor Car may be used by persons other than the Executive with
the Executive's permission and provided that such use is in compliance
with the Company's motor insurance policy covering the Motor Car.
(d) The Executive shall not authorise any person to use the Motor Car
who is not in possession of a valid driving licence.
(e) The Company reserves the right to vary the terms and/or rules
regarding Company vehicles.
(f) The Executive shall abide by the Company's Car Scheme Rules in force
from time to time.
9.2 MOBILE TELEPHONE
The Company shall provide to the Executive a mobile telephone and will pay
all running expenses except the cost of non-business calls made by him in
connection with it.
9.3 PENSION
(a) Subject to the terms of its deed and rules from time to time, the
Executive shall be eligible to join the Stanplan A Pension Scheme
details of which are available from the Company Secretary.
(b) The Company shall pay into the Scheme or a pension scheme of the
Executive's choice an annual sum not less than 10% of the Executive's
annual basic salary.
(c) On the Executive's election to cease to be a member of the Scheme or
on termination of this Agreement, benefits accrued under the Scheme
shall be capable of transfer to alternative pension arrangements of the
Executive's direction subject to the rules of the Scheme.
8
(d) No contracting-out certificate pursuant to the Xxxxxxx Xxxxxxx Xxx
0000 is in force in respect of the Employment.
9.4 STOCK OPTIONS
You will be granted, under Activision's existing or modified stock
option plan, options to purchase 50,000 shares of Activision's common
stock. The options will be issued on the commencement date of your
employment under this Agreement and will vest rateably over five years,
with one fifth (1/5) of the amount granted vesting at the end of each
such year. Such options will have an exercise price that will be the
market price of such common stock on the date the options are issued and
will be governed in all other respects by Activision's stock option plan
in effect at the time of grant. You also shall be eligible to receive
additional options, under Activision's existing or modified stock option
plan, if Activision's board of directors (or the compensation committee
of such board of directors), in its sole and absolute discretion,
determines that the grant to you of additional options is appropriate.
9.5 LIFE ASSURANCE
The Executive shall be entitled to participate during his employment in
the Company's group life assurance scheme from time to time whereby the
Executive's life is insured for the benefit of his estate for four times
his salary referred to in clause 7.1(a).
10. HOLIDAYS
10.1 The Company's holiday year runs from 1 January to 31 December.
10.2 In addition to public holidays and any other holidays observed by the
Company, the Executive is entitled to 30 working days' paid holiday in
each holiday year, to be taken at such time or times as are agreed with
the Board .
10.3 The Executive may not, without the consent of the Board:
(a) carry forward any unused part of his holiday entitlement to a
subsequent holiday year; or
(b) be entitled to payment in lieu for any unused holiday entitlement.
9
10.4 For the holiday year during which his Employment commences or
terminates, the Executive's entitlement to holiday shall accrue on a pro
rata basis for each complete month of his Employment during that holiday
year.
10.5 On the termination of his Employment the Executive shall be entitled to
pay in lieu of outstanding holiday entitlement and shall be required to
repay to the Company any salary received for holiday taken in excess of
his actual entitlement. The basis for calculating the payment and
repayment shall be 1/253 of the Executive's annual basic salary for each
day.
10.6 Other than at the request of, or with the permission of, the Company,
the Executive may not take holiday during a period of notice to
terminate his Employment.
11. SICKNESS OR INJURY
11.1 If the Executive is unable to perform his Duties due to sickness or
injury he shall report this fact as soon as possible and, if
practicable, by 10 am on the first working day of incapacity to the
Company Secretary, and provide, so far as practicable, an expected date
of return to work.
11.2 The Executive shall:
(a) if absent for under 7 days, on his return to work complete a
self-certification form detailing the reason for his absence; and
(b) if absent for 7 or more consecutive days and for shorter absence if
so required, produce a doctor's certificate on the eighth day and
weekly after that so that the whole period of absence is covered by
these certificates.
11.3 Except as set out in sub-clause 11.4, if the Executive is absent due to
sickness or injury duly certified in accordance with the provisions of
sub-clause 11.2, he shall be paid his full salary for up to 6 months
absence in any period of 12 consecutive months and after that such
remuneration, if any, as the Board shall determine from time to time.
11.4 Any remuneration paid under sub-clause 11.3 shall:
(a) not be less than any proceeds received by the Company in respect of
the Executive under the Company's permanent health insurance scheme;
and
10
(b) be inclusive of any Statutory Sick Pay to which the Executive is
entitled under the provisions of the Social Security and Housing
Benefits Xxx 0000 and any Social Security Sickness Benefit or other
benefits recoverable by the Executive (whether or not recovered) which
may be deducted from it.
11.5 For Statutory Sick Pay purposes, the Executive's qualifying days are his
normal working days.
11.6 At any time during the period of his Employment, (but not normally more
often than once every second year) the Executive shall, at the request
and expense of the Company:
(a) consent to an examination by a doctor to be selected by the Company;
and
(b) authorise this doctor to disclose to and discuss with the Company's
medical adviser, or other nominated officer of the Company, the results
of or any matter arising out from this examination.
11.7 The Company shall provide and maintain on behalf of the Executive
permanent health insurance.
11.8 The Company shall provide and maintain on behalf of the Executive, his
wife or partner and any dependent children membership in a BUPA Scheme
or any other scheme providing equivalent benefits.
12. TERMINATION OF AND SUSPENSION FROM EMPLOYMENT
12.1 AUTOMATIC TERMINATION
The Employment shall automatically terminate:
(a) when the Executive reaches the age of 60; or
(b) if the Executive becomes prohibited by law from being a director; or
(c) if the Executive resigns his office.
11
12.2 SUSPENSION
In order to investigate a complaint against the Executive of misconduct
the Company may suspend the Executive on full pay for so long as may be
necessary to carry out a proper investigation and hold a disciplinary
hearing.
12.3 IMMEDIATE DISMISSAL
The Company may by notice terminate the Employment with immediate effect
if the Executive:
(a) fails or neglects efficiently, diligently and competently to carry
out his Duties or repeats or continues (after a written warning) any
other material breach of his obligations under this Agreement;
(b) commits any act of gross misconduct or is guilty of any conduct
which in the opinion of the Board brings him or any Group Company into
disrepute or is calculated or likely prejudicially to affect the
interests of any Group Company, whether or not the conduct occurs
during or in the context of his Employment;
(c) is convicted of any criminal offence punishable with imprisonment
(other than an offence under road traffic legislation in the United
Kingdom or elsewhere for which he is not sentenced to any term of
imprisonment whether immediate or suspended);
(d) commits any act of dishonesty relating to any Group Company, any of
its employees or otherwise;
(e) becomes a patient within the meaning of the Mental Health Xxx 0000;
or
(f) becomes bankrupt or makes any arrangement or composition with his
creditors generally.
12.4 PAY IN LIEU
On serving notice for any reason to terminate the Employment or at any
time during the currency of the notice the Company may elect (but shall
not be obliged) to terminate the Employment forthwith and to pay to the
Executive his basic salary (at the rate then payable under sub-clause
7.1(a) for the unexpired portion of the duration of his
12
Employment or entitlement to notice as the case may be during this
period. The Company will pay the salary due and payable under this
sub-clause (subject to deduction of tax and national insurance
contributions at source) in 4 equal instalments at equally spaced
intervals in advance during the period.
12.5 GARDEN LEAVE
(a) After notice to terminate the Employment has been given by the
Executive or the Company, the Company may in its absolute discretion:
(i) require the Executive to perform only such duties (including
without limitation research projects) as it may allocate to him;
(ii) require the Executive not to perform any of his duties;
(iii) require the Executive not to have any contact with clients of
the Company;
(iv) require the Executive not to have any contact with such
employees of the Company as the Company shall determine;
(v) exclude the Executive from any Company premises
provided always that throughout the period of any such action referred
to in this clause 12.6(a), the Executive's salary and contractual
benefits shall not cease to accrue or be paid or provided subject
to the other provisions of this Agreement.
(b) The Executive acknowledges that such action taken on the part of the
Company shall not constitute a breach of this Agreement of any kind
whatsoever nor shall the Executive have any claim against the Company
in respect of any such action.
(c) The Executive shall during any such period of garden leave remain
readily contactable and available for work and, should he fail to make
himself available for work having been requested by the Company to
attend, he shall, notwithstanding any other provision of this
Agreement, forfeit his right to salary and contractual benefits in
respect of such period of non-availability.
13
12.6 EFFECT OF TERMINATION
On the Termination Date:
(a) the Executive shall at the request of the Company resign (without
prejudice to any claims which he may have against any Group Company
arising out of the Employment or its termination) from all and any
offices which he may hold as a director of any Group Company and from
all other appointments or offices which he holds as nominee or
representative of any Group Company and if he should fail to do so
within 7 days the Company is irrevocably authorised to appoint some
person in his name and on his behalf to sign any documents or do any
things necessary or requisite to effect such resignation(s) and/or
transfer(s);
(b) the Executive shall:
(i) return to the Company all documents, computer disks and tapes
and other tangible items in his possession or under his control
which belong to any Group Company or which contain or refer to
any Confidential Information; and
(ii) delete all Confidential Information from any computer disks,
tapes or other re-usable material in his possession or under
his control and destroy all other documents and tangible items
in his possession or under his control which contain or refer
to any Confidential Information; and
(c) the Company shall be entitled to deduct from any salary or other
sum due under to the Executive any sums owed by the Executive to any
Group Company.
13. ACKNOWLEDGEMENT BY THE EXECUTIVE
The Executive acknowledges that:
(a) each Group Company possesses a valuable body of Confidential
Information;
(b) each Group Company will give him access to Confidential Information
to enable him to carry out his Duties;
14
(c) his Duties include, amongst other things, a duty of trust and
confidence and a duty to act at all times in the best interests of
each Group Company;
(d) the Company requires all its senior employees to accept
restrictions which are similar to those set out in clause 14
(Obligations during Employment) and clause 15 (Obligations after
Employment) for the mutual protection of its Businesses and employees;
(e) the following would be likely to place that company at a serious
competitive disadvantage and cause immeasurable (financial and other)
damage to the Businesses:
(i) the disclosure of Confidential Information to any customer or
actual or potential competitor of any Group Company; and
(ii) if, on leaving the Employment, the Executive was to hold any
Material Interest in a Customer or any actual or potential
competitor of any Group Company;
(f) the Confidential Information known by the Executive enables him to
perform his management duties;
(g) the success of the Businesses depends, in part, on the Executive's
successor and/or fellow employees establishing business relationships
with the customers of and suppliers to the Businesses which are
similar to those established and maintained by the Executive during
his Employment for the purposes of ensuring an orderly hand over to a
successor.
14. OBLIGATIONS DURING EMPLOYMENT
14.1 INVENTIONS
(a) The Executive shall promptly disclose to the Company full details,
including drawings and models, of any improvement, invention or
discovery which he (whether alone or with any other person) makes at
any time during his Employment and which relates or could relate,
directly or indirectly, to the Businesses.
(b) If the improvement, invention or discovery is a Company Invention,
the Executive shall (to the extent that it does not automatically vest
in the Company by operation of law) hold it
15
in trust for the Company and, at the request and expense of the
Company, do all things necessary or desirable to enable the Company or
its nominee to obtain for itself the full benefit of and to secure
patent or other appropriate forms of protection for the Company
Invention throughout the world.
(c) If the improvement, invention or discovery is not a Company
Invention, the Company shall treat all information disclosed to it by
the Executive as confidential property of the Executive.
(d) The patenting and exploitation of any Company Invention shall be at
the sole discretion of the Company.
14.2 COPYRIGHT ETC
(a) The Executive shall promptly disclose to the Company all copyright
works or designs originated, conceived, written or made by him alone
or with others during his Employment which relate, or could relate,
to the Businesses and shall (to the extent that they do not
automatically vest in the Company by operation of law) hold them in
trust for the Company until such rights have been fully and absolutely
vested in the Company.
(b) The Executive assigns to the Company by way of future assignment
(to the extent not already vested in the Company by operation of law)
all copyright, design rights and other proprietary rights (if any) for
their full terms throughout the world in respect of all copyright
works and designs originated, conceived, written or made by him alone
or with others during his Employment which relate, or could relate,
to the Businesses.
(c) The Executive irrevocably and unconditionally waives in favour of
the Company any and all moral rights conferred on him by Chapter
IV, Part I, Copyright Designs and Patents Xxx 0000 and any other
moral rights provided for under the laws now or in future in force
in any part of the world for any work the rights in which are
vested in the Company whether by sub-clause (b) or otherwise.
(d) The Executive shall, at the request and expense of the Company, do
all things necessary or desirable to substantiate the rights of the
Company under sub-clauses (b) and (c).
16
14.3 SHARE DEALINGS ETC
(a) The Executive shall comply, where relevant, with every rule of law,
every requirement of the London Stock Exchange Limited, the United
States Security and Exchange Commission or any other Recognised
Investment Exchange and every regulation of any Group Company from
time to time in force relating to dealings in shares, debentures or
other securities of any Group Company and, in relation to overseas
dealings, the Executive shall also comply with all laws of the
state and all regulations of the stock exchange, market or dealing
system in which such dealings take place.
(b) The Executive shall not (and shall procure so far as he is able
that his spouse and children shall not) deal or become or cease to
be interested (within the meaning of Part I, Schedule 13,
Companies Act 1985) in any securities of Group Company without
complying with such Group Company rules or guidelines from time to
time relating to securities transactions by directors.
14.4 CONFLICT OF INTEREST
The Executive agrees that during his Employment:
(a) he shall not:
(i) directly or indirectly disclose to any person or use other
than for any legitimate purposes of any Group Company any
Confidential Information;
(ii) without the Board's prior written permission hold any
Material Interest in any person which:
(A) is or shall be wholly a party in competition with any of
the Businesses;
(B) impairs or might reasonably be thought by the Company to
impair his ability to act at all times in the best
interests of any Group Company; or
(C) requires or might reasonably be thought by the Company to
require him to disclose or make use of any Confidential
Information in order properly to discharge his duties to
or to further his interest in that person;
17
(iii) at any time make any untrue or misleading statement in
relation to any Group Company.
(iv) directly or indirectly receive or obtain in respect of any
goods or services sold or purchased or other business transacted
(whether or not by him) by or on behalf of any Group Company any
discount, rebate, commission or other inducement (whether in
cash or in kind) which is not authorised by any company rules or
guidelines from time to time and if he or any person in which he
holds any Material Interest shall obtain any such discount,
rebate, commission or inducement, he shall immediately account
to the Company for the amount so received;
(v) other than to carry out his Duties, without the prior
authority of the Company remove from the premises of any Group
Company or copy or allow others to copy the contents of any
document, computer disk, tape or other tangible item which
contains or refers to any Confidential Information or which
belongs to any Group Company;
(b) he shall, at the request of the Company:
(i) return to the Company all documents, computer disks and tapes
and other tangible items in his possession or under his control
which belong to any Group Company or which contain or refer to
any Confidential Information; and
(ii) delete all Confidential Information from any computer disks,
tapes or other re-usable material in his possession or under his
control and destroy all other documents and tangible items in
his possession or under his control which contain or refer to
any Confidential Information.
14.5 POWER OF ATTORNEY
The Executive irrevocably appoints the Company as his attorney in his
name and on his behalf to execute documents, to use his name and to do
all things which may be necessary or desirable for the Company to
obtain for itself or its nominee the full benefit of the provision of
sub-clause 14.1(b) and 14.2(b) and a certificate in writing signed by
any director or the Company Secretary that any instrument or act falls
18
within the authority conferred by this paragraph shall be conclusive
evidence that such is the case so far as any third party is concerned.
15. OBLIGATIONS AFTER EMPLOYMENT
15.1 The Executive shall not within the Restricted Area directly or
indirectly for the period of 12 months after the Termination Date, hold
any Material Interest in any person which:
(a) is or shall be wholly or partly in competition with any of the
Businesses; or
(b) requires or might reasonably be thought by the Company to require
him to disclose or make use of any Confidential Information in order
properly to discharge his duties to or to further his interest in that
person.
15.2 The Executive shall not directly or indirectly, whether on his own
behalf or on the behalf of another person:
(a) for the period of 12 months after the Termination Date:
(i) seek, canvass or solicit in any capacity whatsoever any
business, orders or custom for any Restricted Products or
Restricted Services from any Customer;
(ii) accept in any capacity whatsoever orders for any Restricted
Products or Restricted Services from any Customer; or
(iii) solicit or entice away or seek to entice away from any Group
Company any person who is and was at the Termination Date
employed by any Group Company in any of the Businesses in a
managerial, technical, supervisory, sales, marketing or senior
financial capacity;
(b) at any time after the Termination Date:
(i) induce or seek to induce by any means involving the
disclosure or use of Confidential Information any Customer to
cease dealing with any Group Company or to restrict or vary the
terms upon which it deals with any Group Company;
(ii) represent himself or permit himself to be held out by
19
any person, as being in any way connected with or interested in
any Group Company; and
(iii) disclose to any person, or make use of any Confidential
Information.
16. GRIEVANCE PROCEDURE
16.1 The Executive is subject to the Company's disciplinary rules and
procedures, poor performance procedure frequent sickness absence
Procedure for the time being in force a copy of which is available from
the Company Secretary and such other procedures of this nature as may
from time to time be adopted.
16.2 If the Executive has any grievance relating to his Employment (other
than one relating to a disciplinary decision) he should refer such
grievance to the Chairman of the Board and if the grievance is not
resolved by discussion with him it will be referred to the Board for
resolution.
17. GENERAL
17.1 PRIOR AGREEMENTS
This Agreement is in substitution for any previous contracts of
employment and such prior agreements are hereby terminated.
17.2 ACCRUED RIGHTS
The expiration or termination of the Employment or this Agreement
however arising shall not operate to affect such of the provisions of
this Agreement as are expressed to operate or have effect after that
date and shall be without prejudice to any accrued rights or remedies
of the parties.
17.3 VARIATION
No purported variation of this Agreement shall be effective unless it
is in writing and signed by or on behalf of each of the parties.
17.4 INVALIDITY
To the extent that any provision of this Agreement is found by any
court or competent authority to be invalid, unlawful or unenforceable
in any jurisdiction, that provision shall be deemed not to be a part of
this Agreement, it shall not affect the enforceability of the remainder
of
20
this Agreement nor shall it affect the validity, lawfulness or
enforceability of that provision in any other jurisdiction.
17.5 ASSIGNMENT
The rights and obligations of the Company under this Agreement shall be
transferred to its successors and assignors. The Executive may not,
however, transfer or assign his rights or obligations under this
Agreement.
17.6 UNDERTAKINGS
The Executive has given the undertakings contained in clause 15
(Obligations after Employment) to the Company as trustee for itself and
for each Group Company and will at the request and cost of the Company
enter into direct undertakings with any Group Company which correspond
to the undertakings in clause 15, (Obligations after Employment) or
which are less onerous only to the extent necessary (in the opinion of
the Company or its legal advisors) to ensure that such undertakings are
valid and enforceable.
17.7 INDEMNITY
The Executive will indemnify each Group Company from and against all
actions, claims, costs, proceedings, expenses, loss or damage
(including, without limitation, legal costs) which may arise directly
or indirectly from the unauthorised disclosure or use of the
Confidential Information by the Executive or directly from any other
breach of the terms of this Agreement by the Executive.
17.8 RELEASES AND WAIVERS
(a) The rights, powers and remedies conferred on any party by this
Agreement and remedies available to the Company are cumulative and
are additional to any right, power or remedy which it may have under
general law or otherwise.
(b) The Company may, in whole or in part, release, compound,
compromise, waive or postpone, in its absolute discretion, any
liability owed to it or right granted to it in this Agreement by the
Executive without in any way prejudicing or affecting its rights in
respect of that or any other liability or right not so released,
compounded, compromised, waived or postponed.
(c) No single or partial exercise, or failure or delay in exercising
any right, power or remedy by the Company shall constitute a
21
waiver by it of, or impair or preclude any further exercise of, that
or any right, power or remedy arising under this Agreement or
otherwise.
18. GOVERNING LAW AND JURISDICTION
18.1 This Agreement shall be governed by and construed in accordance with
English law.
18.2 Each of the parties irrevocably submits for all purposes in connection
with this Agreement to the exclusive jurisdiction of the courts of
England.
THIS AGREEMENT has been signed on the date appearing at the head of page 1.
22
THE SCHEDULE
BONUS
FOR THE FINANCIAL PERIOD FROM 1 MAY 1997 TO 30 APRIL 1998
1. Subject to the following provisions the Executive's entitlement to a
bonus under Clause 7.1(b) for the above financial period is as follows;
2. If Net Profits (as defined in paragraph 8 below) are less than L3.17
million ("the Target Profit") the Executive's bonus entitlement shall be
nil.
3. If Net Profits are equal to or greater than the Target Profit then the
Executive's basic bonus entitlement ("the Basic Bonus") shall be as
follows:
(a) 0.5 per cent of his basic salary for each L29,250 by which Net
Profits exceed L2,000,000 (the "Base Level Profit") up to a maximum
of 20 per cent of his basic salary in respect of any financial
period; and
(b) 0.833 per cent of his basic salary each month for achievement of the
targeted monthly closing cash position as agreed and set by the
Board by a Board Resolution dated 27 June 1997
(c) The Executive's entitlement to the Basic Bonus under this paragraph
is limited to a maximum of 30 per cent of his basic salary in respect
of any one financial period ("the Maximum Basic Bonus")
4.
4.1 If an Executive is entitled to a Maximum Basic Bonus in any one
financial year then subject to the following provisions the Executive's
entitlement to an additional bonus under Clause 7.1(b) ("the Additional
Bonus") shall be 25 per cent of x/y of the amount by which Net Profits
exceed the aggregate of the Target Profit and all Basic Bonuses payable
to Executives under paragraph 3 ("the Second Target Profit").
23
4.2 For the purposes of paragraph 4.1
x = Agreed basic salary of the Executive
y = the total of the basic salaries for X X Xxxxxx, N C Xxxxx, A R
Waterhouse, D Xxxx, X X Varnish, G Xxxxxxx and X X Xxxxxxxxx (or, in each
case, their replacements).
5. If during the currency of this Agreement any financial period of the
Company shall have a duration other than 365 days (or 366 days in the
case of a leap year) the Target Profit and the Second Target Profit shall
be adjusted in the same proportion as the number of completed days of the
financial period bears to 365.
6. If the Executive's employment is terminated during the course of a
financial year (save as a result of the Executive's resignation or if
the Executive's employment is terminated pursuant to clause 12.3 of the
Agreement), the Executive shall be entitled to a pro-rata bonus in
respect of the financial year in which his employment terminates
calculated by reference to the proportion of the financial year worked
by the Executive.
7. The certificate of the auditors of the Company as to the amount of the
Basic and Additional Bonuses payable shall, in the absence of manifest
error, be final and binding upon the parties and in so certifying the
auditors shall be deemed to be acting as experts and not liable in
negligence to any person in respect thereof.
8. "Net Profits" for the purpose of this Schedule means the consolidated
net revenue profits shown in the audited consolidated profit and loss
account of the Company and its subsidiaries for the relevant financial
period subject to the following adjustments (if not already taken into
account in the profit and loss accounts):
(a) before deducting taxation shown by the audited consolidated profit
and loss account of the Company and its subsidiaries;
(b) before deducting the bonus payable to the Executive and any other
remuneration calculated on or variable with profits payable to any
other director, officer or employee of the Company and its
subsidiaries;
(c) before adjustment for extraordinary items not deriving from
ordinary activities of the Company and its subsidiaries as required by
the Statement of Standard Accounting Practice No6 (SSAP6) save for any
charges actually arising from the
24
amortisation of a payment of L500,000 by the Company to EIDOS PLC as a
result of Activision's acquisition of the Company, but subject to a
maximum charge of L50,000;
(d) excluding profits or losses of a capital nature;
(e) before deducting any payments made to holders of preference shares,
whether by way of dividend or redemption;
(f) before deducting all payments to holders of fifteen per cent
Secured Subordinated Loan Stock whether by way of redemption or
interest;
(g) before deducting all payments made to the Company's bankers in
respect of fixed term loans, whether by way of interest or capital
repayments.
(h) subject to the provisions of clause 8(c) before deducting any
charge arising from the amortisation of goodwill purchased by the
Company upon the acquisition by the Company of CentreSoft Limited and
its subsidiaries on 28th June 1996.
(i) before deducting any directors fees paid or payable by the Company
to employees of Activision, Inc.
FOR EACH FINANCIAL PERIOD OF THE COMPANY SUBSEQUENT TO 30 APRIL 1998
The Target Profit, Base Level Profit and Second Target Profit
figures for each financial period shall be reviewed each year and
adjusted to take into account the reasonable projected growth rates
of the Company and its subsidiaries and such other areas of
responsibility assumed by the Executive during such financial
periods and shall be subject to the agreement and approval of such
figures by Activision having consulted with the Board and the
provisions of paragraph 5 - 8 above shall apply accordingly to the
revised bonus entitlement.
25
EXECUTED as a DEED )
(but not delivered until the date )
appearing at the head of page 1) )
by COMBINED DISTRIBUTION )
(HOLDINGS) LIMITED acting by: )
/s/ Xxxxxxxx Xxxxxxxx
----------------------------
Director Secretary
/s/ Xxxxxx Xxxxx
----------------------------
Director
EXECUTED as a Deed ) /s/ Xxxxxxx Xxxxxx
by XXXXXXX XXXXXX XXXXXX ) ----------------------------
in the presence of: )
Signature of witness:
Name:
Address:
Occupation:
26
