Service Agreement - Acclaim Entertainment Ltd. and Rodney Peter Cousens
SERVICE AGREEMENT
relating to
ACCLAIM ENTERTAINMENT LIMITED (1)
RODNEY PETER COUSENS (2)
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DATE
26 February 1999
PARTIES
(1) ACCLAIM ENTERTAINMENT LIMITED (no 2616245) whose registered office is
at Moreau House 112 - 120 Brompton Road, Knightsbridge, London,
SW3 1JJ ("the Company")
(2) RODNEY PETER COUSENS of The Glebe House, Pettworth Road, Chiddingfold,
Godalming, Surrey, GU8 4US ("the Executive")
INTERPRETATION
(1) In this Agreement, unless the context otherwise requires, the
following expressions have the meanings set out below:
the Acclaim Board the directors for the time being of
Acclaim Entertainment Inc. present at a
duly convened meeting for the directors;
Acclaim Entertainment, Inc. a company incorporated under the laws of
Delaware and registered with IRS
Employment Identification Number
38-2698904;
Acclaim International the international division of the
Acclaim Group which represents the
business of Acclaim Entertainment, Inc.
outside the US;
the Acclaim Group Acclaim Entertainment, Inc. and its
subsidiaries engaged in the business of
selling and exploiting video and
computer games, including the Company;
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the Appointment the employment of the Executive pursuant
to this Agreement;
the Board the directors for the time being of the
Company present at a duly convened and
quorate meeting of the directors or of a
committee of the directors duly
appointed for the purpose in question;
the Commencement Date 1 January 1998;
the Compensation Committee a committee of the Acclaim Board which
determines the annual salary, any
bonuses and other remuneration payable
to the Executive and other members of
the Acclaim Board and of which a
majority consists of non-executive
directors;
Confidential Information all information which may be imparted in
confidence or be of a confidential
nature relating to the business or
prospective business, current or
projected plans or internal affairs of
the Company or any Group Company and, in
particular, but not limited to all
Know-how, Marketing Information, trade
secrets, unpublished information
relating to the Company's or any Group
Company's intellectual property and any
other commercial, financial or technical
information relating to the business or
prospective business of the Company or
any Group Company or to any customer or
potential customer or supplier or
potential supplier, licensee, officer or
employee of the Company or any Group
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Company or to any member or person
interested in the share capital of the
Company or any Group Company. In this
definition "prospective business" means
business in respect of which the Company
or any Group Company is engaged in
negotiations with third parties;
Documents documents, disks, memory, notebooks,
tapes or any other medium, whether or
not eye-readable, on which information
(whether confidential or otherwise) may
from time to time be referred to,
written or recorded;
the ERA the Employment Rights Act 1996;
Group all companies being any of a subsidiary
or subsidiary undertaking of the Company
or a holding company or parent
undertaking of the Company or a
subsidiary or subsidiary undertaking of
any such holding company or parent
undertaking which company is engaged in
the sale and exploitation of video and
computer games;
Group Company any company within the Group and
references to the "Group Companies"
shall be construed accordingly;
Key Employee any employee of the Company or any Group
Company who is or was (in the period of
12 months prior to the Termination Date)
employed to the knowledge of the
Executive;
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(a) at management grade; or
(b) in a senior capacity; or
(c) in a capacity in which he has access
to or obtained Confidential
Information and in respect of whom
the Executive exercised control or
had managerial responsibility.
Know-how information (including without
limitation that comprised in formulae,
specifications, designs, drawings,
component lists, databases, software (or
pre-cursor documents), databases,
manuals, instructions and catalogues
held in whatever form relating to the
creation, production or supply of any
products or services by the Company or
any Group Company, or by or to any of
the suppliers, customers, partners or
joint ventures of such company;
Marketing Information information relating to the marketing
or sales of any products or services of
the Company or any Group Company,
including lists of customers' and
suppliers' names, addresses and
contacts, sales targets and statistics,
market share and pricing statistics,
marketing surveys, research and reports
and advertising and promotional
material; and
Termination Date the date of termination or expiration of
the Appointment.
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(2) The expressions "subsidiary" and "holding company" have the meanings
given to them by Sections 736 and 736A of the Companies Act 1985; the
expressions "parent undertaking" and "subsidiary undertaking" have the
meanings given to them by Sections 258, 259 and 260 of the Companies
Act 1985; and the expression "financial year" has the meaning given by
Section 223 of the Companies Act 1985.
(3) The provisions of Sections 324 and 328 of the Companies Act 1985 apply
in determining for the purpose of Clauses 8 and 9 whether the
Executive has an interest in any shares or other securities.
(4) References to Clauses, Parties and the Schedules are respectively to
Clauses of and the Parties and the Schedules to this Agreement.
(5) References to any enactment are to be construed as referring also to
any enactment or re-enactment thereof (whether before or after the
date hereof), and to any previous enactment which such enactment has
replaced (with or without amendment provided that the amendment does
not change the law as at the date hereof) and to any regulation or
order made thereunder.
(6) The clause headings are for ease of reference only and shall not
affect the interpretation of this Agreement.
OPERATIVE PROVISIONS
1 Job Title
1.1 The Company shall employ the Executive and the Executive shall serve
the Company as President and Chief Operating Officer of Acclaim
International or in such other capacity as the Board may reasonably
require.
1.2 The Executive shall be the third most senior employee within the Group
after the Chief Executive Officer and Co-Chairman of the Acclaim Board
and the Senior Executive Vice President & Co-Chairman of the Acclaim
Board and shall be remunerated commensurately with this position. The
Executive shall report directly to Greg Fischbach. Neither the Company
nor any Group Company shall appoint any other person to a position
more senior than, or equivalent in status to, that held
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by the Executive, or to act jointly with the Executive, without the
prior written consent of the Executive.
1.3 In the event that both Co-Chairmen of the Acclaim Board cease to be
employed by Acclaim Entertainment, Inc. the Executive may terminate
the Appointment by not less than six months' Notice in writing to the
Company to expire at any time and neither the Company nor any Group
Company shall have any claim for damages or otherwise against the
Executive in respect of the termination of the appointment under this
clause. The Executive will be notified by the Company as soon as
practicable and, in any event within two weeks, if both the
Co-Chairmen of the Acclaim Board shall for any reason cease to be
employed by Acclaim Entertainment, Inc. The Executive Shall exercise
his right to give notice under this Clause within three months of
being notified of the cessation of the employment of the Co-Chairmen
of the Acclaim Board or else he shall lose his entitlements under this
Clause.
2 Period of Employment
2.1 The Appointment shall be deemed to have commenced on the Commencement
Date and will continue until terminated in accordance with Clause 2.2
or Clause 11.
2.2 Either party may terminate this Agreement by giving to the other not
less than six months' prior written notice to expire at any time after
the third anniversary of the Commencement Date.
3 Duties
3.1 The Executive shall faithfully and diligently perform the duties of
President and Chief Operating Officer of Acclaim International. The
Executive shall be directly responsible for supervising and
co-ordinating the activities of the Group Companies within Acclaim
International and shall use his best efforts to facilitate the
generation of profits within those Group Companies. The Executive
shall also perform such additional or other duties consistent with his
position as President and Chief Operating Officer of Acclaim
International as may be reasonably assigned to or vested in him by the
Co-Chairman of the Acclaim Board. Subject to the approval of the
Acclaim Entertainment, Inc. shareholders, the Company shall procure
that the Executive is appointed as a director of the Acclaim Board,
following the appointment of an outside director.
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3.2 During the term of the Appointment, the Executive shall have (in
addition to his implied duty of fidelity and his duties as a director
at law) the following duties and obligations:
(a) at all times to use all reasonable endeavours in the
performance of the duties of the Appointment to promote the
interests and welfare and maintain the goodwill of the
Company and any other Group Company and not to do and to
exercise all reasonable endeavours to prevent there being
done anything which may be prejudicial or detrimental to the
Company or any Group Company;
(b) to devote the whole of his time and attention and the full
benefit of his knowledge, expertise and skills in the proper
performance of his duties (unless on holiday as permitted by
this Agreement or prevented by ill-health or accident or as
permitted by Clause 7.2);
(c) to report to the Co-Chairmen of Acclaim Entertainment, Inc.
and to give (in writing if so requested) to the Board, or to
such person(s) as it may direct, such information and
explanations regarding the affairs of the Company or any
other Group Company or matters relating to the Appointment
as the Board may require;
(d) to comply with any applicable code relating to dealings in
securities of the Company and with all lawful directions
from time to time given to him by or under the authority of
the Acclaim Board and, save as inconsistent with the express
terms of this Agreement, all applicable rules and
regulations from time to time laid down by the Company
concerning its employees;
(e) to comply with the provisions of Schedule 2 (Copyright and
Inventions); and
(f) to prepare budgets and projections for Acclaim International
for approval by the Chief Executive Officer and the Acclaim
Board and, if approved, to implement the same.
3.3 The Executive shall attend and work at any of the places of business
of the Company and/or the Group within the UK as the Board may from
time to time reasonably determine and shall travel to and work at such
places (whether within or outside the United Kingdom) in the manner
and on the
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occasions reasonably required from time to time by the Board. The
Executive may only be required by the Board to re-locate outside the
United Kingdom with his prior written consent. The Board shall give
the Executive reasonable notice of any requirement to re-locate and
the proposed terms of his employment outside the United Kingdom
including additional allowances and benefits payable to the Executive
and conditions relating to the re-patriation of the Executive to the
United Kingdom in the event of termination of the overseas
appointment. The expenses incurred by the Executive, his spouse and
dependents in complying with any requirements to re-locate shall be
reimbursed by the Company in accordance with its policy determined
from time to time for meeting such expenses.
3.4 The hours of work of the Executive are not fixed but are the usual
working hours of the Company and such additional hours as may be
reasonably necessary to enable him properly to discharge his duties.
3.5 The Company shall maintain for the Executive directors' and officers'
insurance in respect of those liabilites which he may incur in or
about the discharge of his office as a director or officer of the
Company or as a director or officer of any Group Company for which
such insurance is normally available.
4. Pay and Expenses
4.1 The Company shall pay to the Executive for the proper performance of
his duties under this Agreement a fixed salary ("Fixed Salary") at the
rate of 366,000 pounds per annum (or such higher rate as the Company
may from time to time notify in writing to the Executive).
4.2 The Fixed Salary of the Executive will:
(a) accrue from day to day and be payable by equal monthly
installments in arrears by not later than the last working
day of each month;
(b) notwithstanding anything to the contrary contained in the
Articles of Association of the Company or of any other Group
Company, be inclusive of any other fees or remuneration of
any description which the Executive might be entitled to
receive from
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the Company or any Group Company or other company or
association in which he holds office as a nominee or
representative of the Company or any Group Company (and the
Executive shall, at the discretion of the Board, either
waive his right to any such remuneration or account to the
Company for the same forthwith upon receipt); and
(c) be paid by credit transfer to the account nominated by the
Executive from time to time.
4.3 On each anniversary of the Commencement Data the Fixed Salary shall be
increased by a minimum amount equal to ten per cent of the Fixed
salary at the rate payable on such anniversary.
4.4 The Executive hereby authorizes the Company to deduct from any
remuneration accrued and due to him under the terms of this Agreement
(whether or not actually paid during the appointment) or from any pay
in lieu of notice:
(a) any overpayment of salary or expenses or payment made to the
Executive by mistake or through any misrepresentation;
(b) any debt arising from terms agreed between the Executive and
the Company owed by the Executive to the Company or any
Group Company;
(c) any other sum or sums which the Executive has authorised
pursuant to Section 13 of the ERA; and
(d) any tax or Social Security contributions required by law to
be made in respect of remuneration or any other monies
received or receivable by the Executive from the Company.
4.5 The Executive shall, subject to complying with the rules of the
Company relating to the reimbursement of expenditure in force from
time to time be reimbursed all travelling, accomodation, reasonable
entertainment and other out of pocket expenses wholly, exclusively and
necessarily incurred in the performance of the duties of the
Appointment.
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4.6 The Company shall reimburse to the Executive the cost of two first
class return flights to the US for his wife annually during the course
of the Appointment on submission to the Company of evidence of actual
payment for such flights.
4.7 The Company shall for so long as the Executive continues to perform
the duties of the Appointment provide for the Executive a BMW 750 or
equivalent car of a value not less than 80,000 pounds to be replaced
from time to time in accordance with the policy of the Company as to
the provision and replacement of cars determined by the Board from
time to time and shall provide a driver therefor and shall maintain,
license and insure the car and shall pay for all fuel and other
running expenses provided that the Executive shall pay and indemnify
the Company against all income tax properly payable by reason of the
provision of the motor car and the Executive authorizes the Company to
make such deductions from the Fixed Salary as may be required for
payment of such Income tax.
4.8 The Company shall reimburse to the Executive the cost of the annual
membership fee of a gymnasium or health and fitness club of his choice
up to the value of 3,000 pounds in respect of each year during the
Appointment.
4.9 The Company will meet the reasonable professional legal costs
incurred by the Executive in negotiating the terms of this Agreement
up to a maximum of 10,000 pounds which amount shall be paid on
presentation of the relevant invoice(s) within 14 days of the
execution by the Executive of this Agreement.
4.10 The Company shall during the Appointment contribute monthly at the
rate of 15% per annum of the Fixed salary ("the Contribution") to a
pension scheme nominated by the Executive provided that any part of
the Contribution which cannot be paid to an Inland Revenue approved
scheme will be paid to such pension fund or savings arrangement as
the Executive may nominate and which is approved by the Company.
4.11 The executive shall during the Appointment be entitled to membership
for him, his spouse and unmarried dependent children below the age of
22 of the WTA Health Insurance Scheme or any other scheme with
reputable insurers as the Executive may nominate and the Company may
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approve and the Company shall contribute to such scheme so that the
Executive shall be provided with benefits in accordance with the
clause at the SC1 or equivalent rate.
4.12 The Company shall provide the Executive with life assurance covered
under policies with such reputable insurers as the Executive may
nominate and the Company may approve and shall bear all premiums
required to keep such life assurance policies in force and to enable
payment of a total sum of not less than four times salary (at the rate
in force at the date of death for the purposes of Clause 4.1) to be
made in the event of his death during the Appointment.
5. Holiday
5.1 In addition to the usual public and bank holidays, the Executive shall
be entitled to 25 days' paid holiday in each complete holiday year
worked (and pro rata for part of each holiday year worked) to be
taken at such time or times as shall be agreed by the Board.
5.2 The Holiday year runs from 1 September each year to the following
31 August. Holiday entitlement may be carried forward from one holiday
year to the next provided that such holiday entitlement carried
forward is used within the following holiday year.
5.3 Upon termination of the Appointment, other than pursuant to Clause
11.1, the Executive's entitlement to holiday will be calculated on the
basis of 2.1 working days for each calendar month of service completed
during the holiday year in which termination occurs and payment in
lieu of untaken holiday entitlement will be made.
6 Confidentiality
6.1 Neither during the continuances of the Appointment, other than in the
proper course of his duties and for the benefit of the Company or any
Group Companies, nor after the Termination Date for any reason
whatsoever, shall the Executive:
(a) use, disclose or communicate to any person any Confidential
Information which he shall have come to know or have
received or obtained at any time (before or after the date
of this Agreement) by reason of or in connection with his
service with the Company; or
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(b) copy or reproduce in any form or by or on any media or
device or allow others access to or to copy or reproduce
Documents containing or referring to Confidential
Information.
6.2 The Executive acknowledges that all Documents containing or referring
to Confidential Information at any time in his control or possession
are and shall at all times remain the absolute property of the Company
and the Executive undertakes, both during the Appointment and after
the Termination Date:
(a) to exercise due care and diligence to avoid any unauthorised
publication, disclosure or use of Confidential Information
and any Documents containing or referring to it;
(b) at the direction of the Board, to deliver up any
Confidential Information (including all copies of all
Documents whether or not lawfully made or obtained) or to
delete Confidential Information from any re-usable medium;
and
(c) to do such things and sign such documents at the expense of
the Company as shall be reasonably necessary to give effect
to this Clause and/or to provide evidence that it has been
complied with.
6.3 The restrictions in Clause 6.1:
(a) will not restrict the Executive from disclosing (but only to
the proper recipient) any Confidential Information which the
Executive is required to disclose by law or any order of the
court or any relevant regulatory body, provided that the
Executive shall have given prior written notice to the
Company of the requirement and of the information to be
disclosed and allowed the Company an opportunity to comment
on the requirement before making the disclosure; and
(b) will not apply to Confidential Information which is or which
comes into the public domain otherwise than as a result of
an unauthorised disclosure by the Executive or any other
person who owes the Company an obligation of confidentiality
in relation to the information disclosed.
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6.4 The Executive agrees that the restrictions set out in this Clause 6
are without prejudice to any other duties of confidentiality owed to
the Company whether express or implied and are to survive the
termination of the Appointment.
7 Restrictions during employment
7.1 Save as permitted under Clause 7.2, the Executive shall not during the
Appointment carry on or be concerned, engaged or interested directly
or indirectly (whether as principal, shareholder, partner, employee,
officer, agent or otherwise) in any trade or business other than that
of the Company and shall not engage in any other activity which the
Company reasonably considers may impair his ability to perform his
duties under the Agreement.
7.2 The Executive may:
(a) hold or be interested in securities whether quoted or
unquoted in any company provided that such company is not in
competition with the business of the Company or Acclaim
Entertainment, Inc. in which case the Executive must obtain
the prior written consent of the Company to such an
interest; and/or
(b) carry on or be concerned, engaged or interested in any other
trade or business if he shall have:
(i) provided, on the basis of the utmost good faith,
full particulars of its nature and of the likely
demands it will make on his time and abilities;
and
(ii) obtained the prior written consent of the Board
(such consent not to be unreasonably withheld),
which consent may be given subject to such terms
or conditions as it may decide (each of which
shall be considered to be a term of this
Agreement) and the Company shall have the right
to reconsider the consent or the terms if it
reasonably considers that it is in the interests
of the Company to do so.
7.3 The Executive shall not during the Appointment either on his own
behalf or on behalf of any person, firm or company:
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(a) solicit or endeavor to entice away from the Company or any
Group Company an actual employee, or discourage from being
employed by the Company or any Group Company any person who,
to the knowledge of the Executive, is an employee or a
prospective employee of the Company or any Group Company; or
(b) employ or procure another person to employ any such person.
7.4 The restrictions set out in this Clause 7 are without prejudice to any
other fiduciary duties owed to the Company whether express or implied.
8 Restrictions after employment
8.1 The Executive shall not, save in respect of a Permitted Interest or
with the prior written consent of the Board (which shall not be
unreasonably withheld), for a period of 3 months from the Termination
Date within the Restricted Area carry on or be concerned or engaged or
interested directly or indirectly (whether as principal, shareholder,
partner, employee, officer, agent or otherwise) in any part of any
trade or business which competes with any part of any trade or
business carried on by the Company in which the Executive shall have
been actively engaged or involved at any time during the period of 6
months prior to the Termination Date.
8.2 The Executive shall not for a period of 6 months from the Termination
Date either on his own behalf or on behalf of any person, firm or
company in relation to the business activities of the Company in which
the Executive has been engaged or involved, directly or indirectly:
(a) solicit, approach or offer goods or services to or entice
away from the Company any person, firm or company who was a
client or customer of the Company with whom the Executive
has been actively engaged or involved by virtue of his
duties hereunder at the Termination Date (or at any time
during 6 months prior to the Termination Date); or
(b) deal with or accept custom from any person, firm or company
who was a client or customer of the Company with whom the
Executive has been actively engaged or involved by virtue of
his duties hereunder at the Termination Date (or at any time
during 6 months prior to the Termination Date); or
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(c) solicit or approach or offer goods or services to or entice
away from the Company any person, firm or company who was a
supplier, agent or distributor of the Company with whom the
Executive has been actively engaged or involved by virtue of
his duties hereunder at the Termination Date (or at any time
during 6 months prior to the Termination Date); or
(d) deal with or interfere with any person, firm or company who
was a supplier, agent or distributor of the Company and in
each case with whom the Executive has been actively engaged
or involved by virtue of his duties hereunder at the
Termination Date (or at any time during 6 months prior to
the Termination Date);
PROVIDED THAT nothing contained in these paragraphs (a) to (d) shall
prohibit the Executive from carrying out any activities which are not
in competition with any part of the business of the Company with which
the Executive was involved in 6 months prior to the Termination Date.
8.3 The Executive shall not for a period of 6 months from the Termination
Date either on his own behalf or on behalf of any person, firm or
company in relation to the business activities of the Company or
Acclaim International in which the Executive has been engaged or
involved, directly or indirectly, approach, solicit, endeavour to
entice away, employ, offer employment to or procure the employment of
any person who is or was a Key Employee with whom the Executive has
had dealings within a period of 12 months prior to the Termination
Date whether or not such person would commit any breach of his
contract of employment by reason of so leaving the service of the
Company or any Group Company or otherwise.
8.4 The Executive shall not, at any time after the Termination Date,
either on his own behalf or on behalf of any other person, firm or
company directly or indirectly:
(a) interfere or seek to interfere with the continuance, or any
of the terms, of the supply of goods or services to the
Company; or
(b) represent himself as being in any way connected with or
interested in the business of the Company (other than as a
consultant or a member if such be the case) or use any name
which is identical or similar to or likely to be confused
with the name of the Company or
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any product or service produced or provided by the Company or which
might suggest a connection with the Company.
8.5 The Executive (who acknowledges that, in the course of the Appointment,
he is likely to have dealings with the clients, customers, suppliers
and other contacts of the Company) agrees that each of the restrictions
in Clauses 8.1, 8.2(a), 8.2(b), 8.2(c), 8.2(d), 8.3 and 8.4 is separate
and distinct, is to be construed separately from the other
restrictions, and is reasonable as regards its duration, extent and
application for the protection of the legitimate business interests of
the Company. However, in the event that any such restriction shall be
found to be void or unenforceable but would be valid or enforceable if
some part or parts of it were deleted, the Executive agrees that such
restriction shall apply with such deletions as may be necessary to make
it valid and effective.
9 Relevant Definitions
9.1 For the purpose of Clause 8 the following expression bears the meaning
shown:
"Restricted Area" The United Kingdom, the United States,
Spain, Germany, France, Holland, Belgium,
Australia, New Zealand and Japan.
9.2 For the purposes of the restrictions set out in Clauses 6, 7 and 8:
(a) the expression "Company" shall include any former owner or
transferor of a business acquired by the Company by which the
Executive shall have been employed under a contract of
employment in respect of which his service is included for the
purposes of calculating continuous employment with the
Company;
(b) any reference to the Company and to the Company's trade or
business shall be deemed to include any Group Company and its
trade or business and/or to apply to them as if the words were
repeated by reference to such company insofar as the Executive
shall have been performing services to any material extent for
a period of not less than three months for such Group Company
at any time during the period of one year prior to the
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Termination Date and the Executive hereby undertakes to
execute any further documents which the Company may require to
confirm this; and
(C) where references to the Company and Company's trade or
business are deemed to include and/or apply to a Group Company
and to a Group Company's business pursuant to paragraph (b) of
this Clause 9.2, the Executive convenants with the Company for
itself and in the same terms in relation to each such Group
Company and each Group Company's business as he does with the
Company and in respect of the Company's business.
10 Absence, Illness and Incapacity
10.1 If at any time the Executive is prevented by reason of ill-health,
accident or other incapacity from properly performing his duties he
shall promptly furnish to the Company, if required, evidence of such
incapacity in a form satisfactory to the Board. If the Executive is
absent from work for two months or more then the Executive hereby
agrees that the Company can require him to submit to a full medical
examination by a doctor, the choice of whom will be mutually agreed
between the Executive and the Company.
10.2 The Executive shall, subject to complying with Clause 10.1 be entitled
to payment of salary in respect of absence by reason of ill-health,
accident or other incapacity as follows:
10.2.1 full salary in respect of the first six months' absence in any
period of twelve months;
10.2.2 one-half salary in respect of the next six months' absence in
any period of twelve months;
10.2.3 no salary in respect of any following period should the
absence continue
PROVIDED THAT:-
while the Executive is entitled to be paid during absence on
account of ill-health, accident or other incapacity there
shall be deducted therefrom the aggregate of any amounts
receivable by the Executive by virtue of any sickness,
accident benefit or
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permanent health scheme operated by or on behalf of the
Company (except insofar as such amounts represent
reimbursement of medical or nursing fees or expenses incurred
by the Executive) and the amount of any social security
sickness or other benefit to which the Executive may be
entitled.
10.3 The Company shall maintain a permanent health insurance policy (the
"Policy") for the benefit of the Executive and shall bear all premiums
required to keep the Policy in force throughout the period of the
Appointment so that the Executive shall be provided with benefits under
the Policy at a rate and on terms which shall be consistent with the
most favorable rate on terms available on the market for the Executive
from time to time. The Company shall not terminate the Appointment by
account of the Executive's ill-health or incapacity unless the Company
has procured the continued payment of benefits under the policy for the
period of ill-health or incapacity or until such benefits would, apart
from such termination, have ceased to be payable had the appointment
continued.
11 Termination
11.1 The Company may at any time terminate the Appointment with immediate
effect (or by such longer period of notice as the Company shall see
fit) by giving the Executive written notice in any of the following
events:
(a) if the Executive at the time the notice is given is prevented
by reason of ill-health or accident or other incapacity from
properly performing his duties and has been so prevented
(whether by the same or another reason) for at least a
continuous period of 180 days or for an aggregate period of at
least 180 days (whether or not, in either case, working days)
in the preceding 12 months;
(b) if the Executive shall have:
(i) committed any material breach after having been given
warning in writing, any repeated or continued breach
of any of his duties or any of his express or implied
obligations arising from the Appointment or otherwise
as a director of the Company or Group Company;
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(ii) committed any act of fraud or dishonesty (whether or
not connected with the Appointment);
(iii) been convicted of a criminal offence (excluding an
offence under road traffic legislation in respect of
which he is not sentenced to a term of imprisonment,
whether immediate or suspended); or
(iv) become of unsound mind or a patient as defined in
either Section 112 or Section 145 of the Mental
Health Act 1983 or been admitted to a hospital in
pursuance of an application made under Part 11 of
that Act.
11.2 Upon termination of the Appointment however arising:
(a) the Executive shall, without prejudice for any claim he may
have arising out of the termination of this employment
hereunder, forthwith at the request of the Board and without
further claim for compensation resign as a director of the
Company and from all offices held by him in any Group Company
and from all other appointments or offices which he holds as
nominee or representative of the Company or any Group Company
and, if he fails so to do, the Company is irrevocably
authorised by the Executive to appoint some person in his name
and on his behalf to execute such documents and to do such
other things as are reasonably necessary to give effect to
such resignations; and
(b) the Executive (or, if he shall be dead, of unsound mind, his
personal representatives or such other persons as shall be
appointed to administer his estate and affairs) shall deliver
up to the Company in accordance with the directions of the
Board all keys, security passes, credit cards, Documents and
other property belonging to or relating to the businesses or
affairs of the Company or any Group Company, including all
copies of all Documents containing or referring to
Confidential Information which may be in his possession or
under his control (or that of his personal representatives or
such other persons), and shall not retain copies, extracts or
notes of any of the same.
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11.3 The Executive shall have no claim against the Company in respect of the
termination of the Appointment in relation to any provision in any
articles of association, agreement or arrangement which has the effect
of requiring the Executive to sell or give up any shares, securities,
options or rights at any price or which causes any options or other
rights granted to him to become prematurely exercisable or lapse.
11.4 The Board, if it has reasonable grounds to suspect that any one or more
of the events set out in Clause 11.1(b) has or may have occurred, may
suspend the Executive pending the making and completion of such
investigation(s) as the Board thinks fit. While the suspension
continues, the Company shall, unless specifically otherwise provided in
this Agreement, pay to the Executive his fixed salary and provide to
him the other benefits set out in this Agreement. During the period of
suspension the Company and relevant Group Companies shall not be
obliged to provide work to the Executive and may require the Executive
to comply with such conditions as the Company may specify in relation
to attending at or remaining away from the places of business of the
Company and/or the Group Companies. The Company may later terminate the
Appointment, pursuant to the terms of this Agreement, on the grounds of
the same or any other event.
12 Change of Control
12.1 If there shall occur a "Change in Control" (as defined below) of
Acclaim Entertainment, Inc. and the Executive's "Circumstances of
Employment" (as defined below) shall have changed:
(a) the Executive shall have the right to terminate his employment
pursuant to this Agreement by written notice to the Company;
and
(b) notwithstanding anything to the contrary contained in the
Company's 1988 Stock Option Plan, in the stock option
agreements between the Company and the Executive or in the
stock option certificates delivered to the Executive, all
options granted to the Executive prior to the effective date
of such Change in Control shall become immediately vested and
exercisable in full.
12.2 In the event of the termination by the Executive of his employment
pursuant to Clause 12.1 of this Agreement, or if within one year
following the Change in Control, the Company shall terminate the
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Executive's employment other than pursuant to Clause 11.1(b)(i) or
11.1(b)(ii) than the Company shall pay to the Executive, within 60 days
of such termination the "Special Severance Payment" (as defined below).
12.3 A "Change in Control" shall be deemed to occur upon:
(a) the sale by Acclaim Entertainment,Inc. of all or
substantially all of its assets to any person as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, the consolidation of Acclaim Entertainment, Inc.
with any person, or the merger of Acclaim Entertainment, Inc.
with any person as a result of which consolidation or merger
the Company is not the surviving entity as a publicly held
Company; or
(b) the sale or transfer or issue of shares of common stock, a
value US$0.02 per share ("Shares"), of Acclaim Entertainment,
Inc. by Acclaim Entertainment, Inc. and/or any one or more of
its stockholders (other than Greg Fischbach or James
Scoroposki), as the case may be, in one or more transactions,
related or unrelated, to one or more persons as a result of
which any person and its "affiliates" (as defined below),
other than Greg Fischbach or James Scoroposki, shall own more
than 15% of the outstanding Shares, unless such sale or
transfer has been approved in advance by the Acclaim Board.
An "affiliate" means any person that directly, or indirectly
controls, or is controlled by, or is under common control
with, any other person. Nothing contained in this Clause 12.3
shall limit or restrict the right of the Executive, in his
capacity as a member of the Acclaim Board, from participating
in any discussions or voting on any matter referred to in this
Clause 12 at any meeting of the Acclaim Board.
12.4 The Executive's "Circumstances of Employment" shall have changed if
there shall have occurred any of the following events:
(a) a material reduction or change in the Executive's duties or
reporting responsibilities;
(b) a breach by the Company of any provision of this Agreement;
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(c) a material diminution in the Executive's status, working
conditions, economic benefits or a reduction of fringe
benefits made available by the Company; or
(d) any action which substantially impairs the prestige or esteem
of the Executive in relation to any other employee of the
Acclaim Group.
12.5 The "Special Severance Payment" shall mean a lump sum payment equal to
the sum of:
(a) the product of three times the Fixed Salary;
(b) the product of three times the largest Bonus paid to or
accrued with respect to the Executive by the Company for the
three fiscal years immediately preceding the termination of
the Executive's employment; and
(c) any other compensation owed to the Executive pursuant to this
Agreement at the time of such termination.
12.6 It is agreed that the Special Severance Payment represents a genuine
pre-estimate of the loss which would otherwise be suffered by the
Executive in the event of the termination of the Appointment as a
result of a Change of Control and the Executive agrees to accept the
Special Severance Payment in full and final settlement of all or any
statutory or contractual claim which he might otherwise have against
the Company which arises or may arise in connection with the
termination of the Appointment.
13 The Employment Rights Act 1996
This Agreement contains the particulars required to be given under
Section 1 and 3 of the ERA.
14 Notices
Notices by either party:
(a) must be in writing addressed:
(i) to the Company at its registered office for the
time being; and
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(ii) to the Executive at his place of work or at the
address set out in this Agreement or such other
address as the Executive may from time to time have
notified to the Company for the purpose of this
Clause; and
(b) will be effectively served:
(i) on the day of receipt, where any hand-delivered
letter or a facsimile transmission is received on a
business day before or during normal working hours;
(ii) on the following business day, where any
hand-delivered letter or facsimile transmission is
received either on a business day after normal
working hours or on any other day;
(iii) on the second business day following the day of
posting from within the United Kingdom of any letter
sent by first class prepaid mail; or
(iv) on the fifth business day following the day of
posting to an overseas address of any prepaid airmail
letter.
15 General
15.1 This Agreement, which contains all the terms of employment of the
Executive, is in substitution for all existing contract(s) of
employment between the Company and any Group Company and the Executive
(whether written, oral or governed by a course of dealings) which
shall be deemed to have terminated with effect from the date of this
Agreement.
15.2 The waiver, express or implied, by either party of any right under this
Agreement or any failure to perform or breach by the other shall not
constitute or be deemed a waiver of any other right under this
Agreement or of the same right on another occasion.
15.3 No amendment, change or addition to the terms of this Agreement shall
be effective or binding on either party unless reduced to writing and
signed by each party adversely affected by such amendment, change or
addition.
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15.4 The Executive represents and warrants that he is not a party to any
agreement, contract (whether of employment or otherwise) or
understanding which would in any way restrict or prohibit him from
undertaking or performing any of the duties of the Appointment in
accordance with this Agreement.
15.5 The Executive and the Company undertake not to disclose or communicate
any terms of the Appointment to any other employee of any Group Company
or to any third party (other than for the purpose of obtaining
professional advice or complying with any law or regulation which
requires such disclosure).
15.6 The Company and the Executive acknowledge that the clauses and
sub-clauses and schedules of this Agreement are severable. If any
clause, sub-clause or identifiable part of any clause or sub-clause or
schedule or any paragraph of any schedule is held to be invalid or
unenforceable by an English court then such invalidity or
unenforceability shall not effect the validity or enforceability or the
remaining clauses or sub-clauses or the identifiable parts of such
clauses or sub-clauses.
15.7 This Agreement is governed by and is to be construed in accordance with
the laws of England and the Parties hereby submit to the non-exclusive
jurisdiction of the High Court of Justice of England and Wales.
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SCHEDULE 1
Group Companies in the International Division
Acclaim Entertainment, Ltd
Acclaim Japan Ltd
Acclaim Entertainment GmbH
Acclaim Entertainment Espana
Acclaim Entertainment SA
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SCHEDULE 2
Copyright and Inventions
1 In this Schedule "Intellectual Property" shall mean patents, trade
marks and service marks, rights in inventions, designs, rights,
registered designs, trade names and copyrights (whether or not any of
these is registered and including applications for registration of any
such thing) and all forms of protection of a similar nature which may
subsist anywhere in the world.
2 The Executive acknowledges, having regard to the nature of the business
of the Company and other Group Companies and the nature of the
Executive's expertise, that:
(a) the normal duties of the Executive under the Appointment may
include the making of inventions;
(b) inventions may reasonably be expected to result from the
carrying out by the Executive of such duties; and
(c) due to the nature of the Executive's duties and the particular
responsibilities arising from the nature of his duties, the
Executive has a special obligation to further the interests of
the Company's undertaking.
3 The Executive shall disclose to the Company any invention made or
discovered or produced by the Executive in the course of the
Appointment (whether or not during office hours or using office
stationery and equipment) in connection with or in any way affecting or
relating to or capable of being used or adapted for use in the business
of the Company or any other Group Company.
4 The Executive shall do all things and execute all documents that may be
reasonably necessary to enable the Company or its nominee to obtain the
benefit of every invention made by the Executive in the course of his
duties and to secure patent or other appropriate protection for it.
5 Without prejudice to the provisions of paragraph 2 of this Schedule,
the Executive shall disclose to the Company full details of any
copyright work or Intellectual Property made or created by the
Executive during the continuance of his Appointment either during
working hours or in the normal
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course of duties or with the Company's materials and/or facilities
and/or concerning or containing Confidential information and the
Executive hereby assigns to the Company, by way of assignment of future
copyright or other Intellectual Property rights, all rights of
copyright or other Intellectual Property rights throughout the world in
such copyright work or Intellectual Property.
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SCHEDULE 3
Note of additional particulars under Sections 1 and 3 of the ERA
1 For the purposes of the ERA the period of continuous employment of the
Executive began on [ ].
2 There are no disciplinary rules applicable to the Executive. Any matter
of discipline will be considered and determined by the Acclaim Board,
whose decisions shall be final.
3 If the Executive is dissatisfied with any disciplinary decision
relating to him or has any grievance relating to the Appointment, he
should apply in writing to either of the Co-Chairmen of Acclaim
Entertainment, Inc.
4 A contracting-out certificate under the Pension Schemes Act 1993 is
[not] in force in respect of the Appointment.
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ATTESTATIONS
EXECUTED as a DEED by )
ACCLAIM ENTERTAINMENT ) /s/
LIMITED )
by )
Director
Secretary
EXECUTED as a DEED and )
DELIVERED by )
RODNEY PETER COUSENS ) /s/
In the presence of: )
Name of witness:
Address:
Occupation:
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