Employment Agreement - Iguana Entertainment Inc. and Darrin Stubbington
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on December 20,
1994 to be effective as of January 1, 1995 by and between IGUANA ENTERTAINMENT,
INC. a Texas corporation ("Company"), and Darrin Stubbington ("Employee"), in
connection with Company's engagement of Employee's personal services.
WHEREAS, Company is engaged in the business of the development and
design of computer and video game software and systems;
WHEREAS, Jeff Spangenberg ("JS"), Company's president and the prior
owner of One Hundred (100%) percent of all the issued and outstanding stock in
Company (herein "Company Stock"), has entered into an agreement (the
"Acquisition Agreement") with Acclaim Entertainment, Inc. ("Acclaim") whereby JS
has, inter alia, transferred, assigned and conveyed to Acclaim all the Company
Stock;
WHEREAS, Employee has prior hereto been employed by Company;
WHEREAS, as part of such Acquisition Agreement, Company and Employee
are desirous of formalizing their employment relationship all upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration the receipt and
legal sufficiency of which are hereby acknowledged, it is hereby mutually agreed
by and between the parties hereto as follows:
1. DEFINITIONS:
The following terms shall, where the context allows, have the following
meanings whether such terms shall appear in lower case or with the first letter
of each word capitalized (the foregoing shall apply to all other defined terms
used herein):
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(a) "Assembly Code" shall mean the form of computer
program which is translatable to object form by simple substitution algorithms.
Such form is often an intermediate form between source form and object form as
it directly conveys the exact operation of the computer when the object program
is executed.
(b) "Company Client" shall mean any person, business or
entity to or through whom any Company Product or Service is sold or brought to
market prior to or during Employee's employment under this Agreement.
(c) "Company Product or Service" shall mean any product or
service developed and/or sold or otherwise provided by Company during or prior
to Employee's employment under this Agreement, and all other products and/or
services which are similar to such products or services, and shall include, but
not necessarily be limited to, computer game software of all kinds.
(d) "Competitor" shall mean any person, business or other
entity which is engaged in the development or sale of products or services like
or similar to those products or services developed or sold by Company or Acclaim
during the course of Employee's employment with Company, and shall include but
not necessarily be limited to any and all persons, businesses and entities
engaged in the development or sale of computer and video game software.
(e) "Computer software" or "Software" shall mean any
computer software containing full and complete computer code, including the
Source Code, the Assembly Code, the Object Code and such data files and other
files as are deemed necessary for such computer software to achieve its
functional purpose.
(f) "Object Code" shall mean the form of computer program
which can be directly executed by the computer without translation by other
computer programs (without regard to the media it is conveyed in). Such form is
dictated by the designer of the computer and is usually in a coded form
convenient to the machine, but not particularly suited for human interpretation.
(g) "Software Product" shall mean any product or Computer
software developed by Company during the Term (as defined in paragraph 3 below).
(h) "Source Code" shall mean the form of computer Program
as prepared by the programmer. Such form may be processed by algorithmic means
to -produce the object program.
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2. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) Employment by Company: Company hereby engages Employee
and Employee hereby agrees to provide to Company his full-time services as Vice
President of Product Development or such other position as Company shall direct,
in accordance with the terms and conditions of this Agreement. In such capacity
Employee will report to, and serve under the direction and subject to the
control of the President of Company or his designee.
(b) Acceptance of Employment by the Employee: The Employee
accepts such employment. Throughout the Term (as defined below) of this
Agreement, Employee shall devote his full working time and energy exclusively to
performing the services and duties of his employment hereunder to the best of
his ability and utilizing all of his skills, experience and knowledge; and
Employee shall not engage in or participate in the operation or management of,
or render any services to, any other business, enterprise or individual,
directly or indirectly.
(c) Location of Employment: Company acknowledges that
Employee presently resides in Austin, Texas and that Company is located in
Austin, Texas. Company agrees that during the Term Employee and the Company
shall continue to be located in Austin, Texas and Company shall have no right to
require Employee to locate outside of Austin, Texas; provided, however, that
Employee agrees to travel at Company's expense (as provided in Paragraph 5 (c)
below) to such other locations from time-to-time as the proper performance of
Employee's duties may reasonably require.
3. TERM:
The term of Employee's employment hereunder shall commence as of the
date of this Agreement and continue through and including December 31, 1999 (the
"Term") unless sooner terminated pursuant to the provisions hereof. It is
understood and agreed however, that the covenants of the Employee set forth in
paragraph 7, and all other provisions of this Agreement related to the
enforcement thereof, shall continue throughout the full Term of this Agreement,
surviving any termination of Employee's employment under the provisions of
paragraph 9 hereof.
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4. COMPENSATION:
(a) Salary: Company shall pay to Employee during the Term, a salary
(the "Annual Salary") at the rate of not less than One Hundred Five Thousand
Dollars ($105,000.00) per annum. Employee's salary shall be increased by six
percent (6%) over the prior years salary on January 1 during each year of the
Term. Within one hundred (120) days following the expiration of any Fiscal Year
during the Term hereof, Company shall review Employee's performance during such
Fiscal Year and the success of Company's business and make a determination,
which determination shall be solely within Company's discretion,
whether Employee shall receive a bonus for such Fiscal Year.
(i) Employee's Annual Salary shall be payable in accordance with the
Company's customary employee payroll policy as in effect from time to time, but
not less frequently than monthly. Such Annual Salary, together with any other
compensation which may be payable to Employee hereunder shall be less such
deductions as shall be required to be withheld by applicable law and regulations
and shall be pro-rated for any period that does not constitute a full twelve
(12) month period.
(b) Acclaim Stock/Escrow Agreement: Acclaim has issued to, registered
with Acclaim's transfer agent and delivered to Employee Fifty Five Thousand Five
Hundred Fifty Six (55,556) shares of Common Stock of Acclaim. Simultaneously
herewith, Employee has deposited such shares with Texas Commerce Bank National
Association (the "Escrow Agent") pursuant to the terms of an Escrow Agreement
(herein so called) of even date among Acclaim, Company, Employee and the Escrow
Agent. Such shares shall be released to Employee or forfeited to JS or Acclaim
(as the case may be) pursuant to the terms of the Escrow Agreement. Registration
rights with respect to such shares shall be governed by a Registration Rights
Agreement of even date between Employee and Acclaim. Such shares were duly
authorized and are validly issued and outstanding, fully paid and nonassessable.
If the Employee forfeits (in accordance with the terms of this Agreement and his
Escrow Agreement) any escrowed shares of Common Stock of Acclaim issued to him
as provided for herein, then the forfeited shares shall be deemed conveyed to,
and shall be reissued and re-registered in the name of, JS and delivered to
Escrow Agent to be held in escrow and released to JS or forfeited to Acclaim
pursuant to the terms of an escrow agreement of even date herewith among
Company, Acclaim, Escrow Agent and JS as if originally deposited with Escrow
Agent pursuant to JS's escrow agreement.
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5. BENEFITS, VACATION, EXPENSES, OVERHEAD:
(a) Medical Benefits: Company agrees to procure and maintain
medical and hospital insurance, disability insurance and life insurance and to
include Employee and his immediate family (but only for medical and hospital
insurance) thereunder during the Term.
(b) Vacation: Employee shall accrue, in addition to sick days and
days in which Company is closed, paid vacation days at the rate of 1 day per
month up to a maximum of twelve (12) work days per year, provided that Employee
shall only have the right to carry over up to one (1) week of unused vacation
per year. Employee will secure consent from Company prior to taking any vacation
and agrees that he shall not take more than 10 consecutive days of vacation at
any one time.
(c) Expenses: Company will reimburse Employee for actual, ordinary
and necessary travel and accommodation costs, entertainment and other expenses
incurred as a necessary part of discharging the Employee's duties hereunder,
subject to the Company's prior approval and receipt of reasonable and
appropriate documentation as required from time-to-time by the Company.
6. PROPRIETARY INFORMATION/OWNERSHIP OF SOFTWARE:
(a) Except for the items set forth on Exhibit 6(a), any Software
developed by or under the supervision of Employee, including, without
limitation, all Software developed by or under the supervision of Employee since
the commencement of Employee's association with the Company shall be owned
exclusively by the Company (including the copyright therein) in perpetuity. All
Software, as well as any and all characters, objects, sound and music embodied
in any such Software or trade names, trademarks, names or other identifications
used with or in conjunction with the such Software created, designed and/or
developed by Employee from the inception of the development of the concept and
all the Documentation therefor and each Software Product, and all copyrights and
patents therein and thereto, and all renewals and extensions thereof, shall be
entirely Company's property, throughout the world in perpetuity, free of any
claims whatsoever by Employee or any other person, firm, or corporation. Company
shall accordingly have the sole and exclusive right to copyright or patent the
Software (as well as any and all characters, objects, sounds and music embodied
therein and Documentation thereto, or other reproductions embodying the
Software thereof, and any other material capable of copyright protection created
in connection with the Software) in Company's name, as the owner and author
thereof, and to secure any and all renewals and extensions
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of such copyrights and patents. Company shall have the exclusive
worldwide right in perpetuity to manufacture, sell, distribute, lease, license,
rent and advertise the Software Products, or other reproductions (visual and
non-visual) embodying all or any portion of all Software designed and developed
by or under the direction of Employee hereunder or any derivative works thereof
or any of the sound, music, or characters derived from the Software under any
trademarks, trade names, or labels, to perform such Software Products or other
reproductions publicly, and to permit the public performance thereof by radio or
television broadcast, or any other method now or hereafter known, all upon such
terms and conditions as Company and/or Acclaim may approve, and to permit any
other person, firm or corporation to do any or all of the foregoing, or refrain
from doing any or all of the foregoing.
(b) Employee acknowledges and agrees that the success of the Company
depends, among other things, upon maintaining strict secrecy with respect to its
trade secrets and confidential information relating to the design, development
and marketing of its products and services, and other, confidential information
relating to the business of the Company, and to which trade secrets and
confidential information Employee may acquire knowledge of or have access to
during the course of his employment by the Company. (Such trade secrets and
confidential information are hereinafter referred to as "Proprietary
Information"). Employee shall use his best efforts to exercise utmost diligence,
as an individual as well as part of a working group, to protect and guard the
Proprietary Information of the Company. Employee agrees not to disclose to any
outside party either during or after his employment, nor to use, for himself or
another, during or after his employment, without the Company's written consent,
any information of the Company obtained by him during his employment, whether
developed by him or not, which is, or is treated as, Proprietary Information by
the Company; and Employee agrees to hold all Proprietary Information in strict
confidence. The provisions of this paragraph shall continue in full force and
effect after Employee's termination of employment for whatever reason.
(c) In the course of its business, the Company may receive confidential
disclosures of the trade secrets and confidential information of other persons
and entities. In such event, when instructed by the Company, Employee shall
receive and treat the trade secrets and confidential information of such other
persons and entities with the same obligation and degree of care as Employee
treats the Proprietary Information of the Company.
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(d) Employee further acknowledges and agrees that the
success of the Company also depends upon the timely receipt of
disclosures of inventions, know-how, discoveries and developments
usable in or relating to the business of Company (all of which
shall hereinafter be referred to collectively as "Innovations")
made or conceived by him in the course of employment by the
Company, and in appropriate circumstances, his full cooperation
in filing, maintaining and enforcing in the United States and
foreign countries, applications for copyrights and patents, and
patents and copyrights which may issue, covering such
Innovations. Employee agrees to disclose and assign and does
hereby assign to the Company or its nominee all Innovations and
rights pertaining thereto, whether patentable or not, which,
during the period of his employment by the Company, Employee has
made or conceived or may hereafter make or conceive either solely
or jointly with others and which:
(i) were made using equipment, supplies,
facilities or trade secret information of the Company, or
(ii) were developed at least in part on the
Company's time, or
(iii) relate either to the business of the Company
or to the Company's actual or demonstrably anticipated research
or development, or
(iv) which results from any work Employee performs
or performed for the Company.
(e) In order to allow the Company to claim rights in
those Innovations which it owns or owns an interest in, Employee
agrees that he will promptly and fully disclose in writing to the
Company the subject matter of every Innovation made or conceived
by Employee, either solely or jointly with others, and all
copyrights and patent applications naming Employee as an author,
co-author, inventor or a co-inventor during the period of his
employment with the Company whether or not the same are required
by this Agreement to be assigned to the Company. Upon the
request of the Company, Employee shall make all reasonable
efforts to provide further disclosure of the aforesaid
Innovations in which the Company may reasonably claim ownership
or for which the Company requires additional information in order
to determine its ownership rights. The Company shall maintain
all disclosures made hereunder of Innovations owned by Employee
in confidence.
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(f) For the purpose of this Agreement, an Innovation
shall be deemed to have been made during the period of Employee's
employment if during such period the Innovation was conceived,
first actually reduced to practice or otherwise put in a tangible
form and Employee agrees that any patent application or copyright
application filed within 4 months after termination of Employee's
employment shall be presumed to relate to an Innovation which was
made during the term of Employee's employment unless Employee can
provide satisfactory evidence to the contrary.
(g) With respect to any Innovations in which the
Company owns an interest under this Agreement, Employee agrees
either during or after his employment, without charge to the
Company (but at the Company's sole expense), and upon the
Company's request, to execute, acknowledges, and deliver all such
further documents including applications for Letters Patent,
and/or copyright registration, as may be necessary or, in the
opinion of the Company advisable, to obtain Letters Patent and/or
copyright registration for Innovations in the United States and
in any other country, and the right to claim priority based on
the first filed patent application anywhere in the world, and to
vest title thereto in the Company and its successors, assigns or
nominee.
(h) Employee agrees that upon leaving the employment
of the Company, Employee shall not take with him any of the
Company's property including, but not limited to, new product
information, blueprints, drawings, sketches, notebooks, computer
programs, formulas, data, listings, specifications and documents,
or copies thereof, and any items relating to or exhibiting the
company's Proprietary Information.
(i) Further, as to any Innovations in which Employee
owns an interest and the Company does not, whether invented,
created or acquired prior to or during Employee's employment by
the Company, Employee will not incorporate or use, or participate
in the incorporation or use, of any such Innovations into any
products or services of the Company, and upon discovery that any
such Innovations have been, or are being, or are about to be,
incorporated or used in the Company's products or services or a
product or service being designed or planned for or by the
Company in violation of any rights Employee may claim, Employee
shall give the Company written notice of that fact, together with
such detail as is then known, within fourteen (14) days of such
discovery. Employee agrees that if, in breach of these
provisions, Employee incorporates or uses, or participates in the
incorporation or use, of any such Innovations in any products or
services of the Company, or upon discovery that such Innovations
have been, are being or are about to be incorporated or used in a
Company product or service or a product or service being designed
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or planned for or by the Company, and Employee does not give
the Company written notice of that fact, together with such
detail as is then known, within fourteen (14) days of such
discovery, then to that extent, the Company shall have a
royalty free, transferable, non-exclusive license to make,
have made, reproduce, use and sell and otherwise practice any
such Innovations only in connection with such product or
service in which such Innovation has been incorporated.
7. CERTAIN COVENANTS OF EMPLOYEE:
Without in any way limiting or waiving any right or
remedy accorded to Company or any limitation placed upon Employee
by law, Employee agrees as follows:
(a) Acknowledgment: Employee understands and agrees
that Company (for the purpose of this paragraph 7 Company shall
also include Acclaim) is engaged in the highly competitive
business of computer software development; that Company's success
is highly dependent upon the protection of Company's trade
secrets and confidential information; and, that Company has
invested considerable resources of its time and money in
developing its products, services, good will, procedures,
clients, techniques, special training, client lists, manuals,
records, documents, and other trade secrets and confidential
information. Company and Employee agree that upon and during
employment under this Agreement Company has provided and will
provide Employee access to and valuable knowledge regarding
Company's trade secrets and confidential information. Company
and Employee further acknowledge and agree that by virtue of
employment with Company under this Agreement Employee will be
provided the opportunity to develop and refine valuable skills,
including but not limited to skills relating to the development
of computer software. Employee acknowledges and agrees that the
use of such valuable skills, trade secrets or confidential
information, or of Employee's expertise or leadership, for the
benefit of Company's Competitors would be greatly harmful to
Company, and that company's willingness to enter into business
with Employee and to provide Employee access to its trade secrets
and confidential information and to the opportunity to develop
and refine valuable skills in computer software development, is
conditioned upon (i) the protection of Company's trade secrets
and confidential information for Company's sole and exclusive
benefit, (ii) the retention of Employee's expertise and
leadership during the Term of this Agreement for the sole and
exclusive benefit of Company, and not for any Competitor, and
(iii) the protection of Company against Employee's use for the
benefit of any Competitor of the valuable skills Employee will
acquire, develop and/or refine by virtue of employment with
Company under this Agreement. Employee therefore agrees that the
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covenants and confidentiality provisions set forth in this
Agreement are reasonable and necessary for the protection of
Company's legitimate interests, and further agrees that his
employment under this Agreement, and the training, opportunities
for professional growth, and the knowledge of Company's
confidential information and trade secrets to which he will gain
access by virtue of employment under this Agreement, constitute
good, sufficient and adequate consideration for the covenants and
confidentiality provisions set forth in this Agreement.
(b) Limited Non-Competition. Employee expressly
covenants and agrees that upon the termination of his employment
with Company, for any reason or no reason, with or without cause,
Employee shall not, directly or indirectly, alone or in concert
with others, for a period of one (1) year from the effective date
of such termination, compete with Company in any manner or form,
including but not limited to serving in the capacity of employee,
agent, consultant, owner, investor, stockholder, partner, and/or
independent contractor for any Competitor, nor will Employee
within said period, except for or on behalf of Company, solicit
or attempt to solicit clients, business or patronage for the
development or sale of any product or service of Company.
Employee acknowledges and agrees that the computer software
development industry in which Company is engaged is not confined
to any particular geographic market, but rather is global in
geographic scope, and that a global geographic scope to the
limited covenant of non-completion set forth herein is therefore
reasonable and necessary for the protection of Company's assets,
trade secrets, confidential information, and other legitimate
business interests. Accordingly, the absence of a more
restricted geographic scope for the limited covenant of non-
competition set forth herein shall not be invoked as or provide a
defense to the enforceability of this Agreement or any provision
hereof. Notwithstanding the foregoing to the contrary, Employee
shall have the right to own as a passive investment up to five
(5%) of any Competitor, provided such Competitor is a public
company.
(c) Limited Non-Solicitation of Company Clients:
Employee expressly covenants and agrees that for the Term of this
Agreement or for the twelve (12) month period following the
termination of his employment with Company, for any or no reason,
with or without cause, whichever is later, Employee shall not,
directly or indirectly, alone or in concert with others, solicit
or induce, or attempt to solicit or induce any Company Client to
obtain or secure computer software or its development from or
through a Competitor.
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(d) Limited Non-Solicitation of Company Employees:
Employee expressly covenants and agrees that for the Term of this
Agreement or for the twelve (12) month period following the
termination of his employment with Company, for any or no reason,
with or without cause, whichever, is later, Employee shall not,
directly or indirectly, alone or in concert with others, recruit,
solicit or induce, or attempt to recruit, solicit or induce any
employee or officer of Company to terminate, alter, or modify
their employment or relationship with Company.
(e) Reasonableness of Post-Employment Restrictions.
The covenants set forth in this Paragraph 7 are ancillary to this
Agreement. Employee agrees and understands that these covenants
are necessary for the protection of Company due to Company's legitimate
interest in protecting its products, product development, good will,
business practices, confidential information, trade secrets, and client
base. Employee acknowledges and agrees that the restrictions set forth in
these covenants are reasonable in scope, time, territory, and type of
activity.
(f) Confidential Information: The Employee agrees
that, neither during the Term nor at any time thereafter shall
the Employee (A) disclose to any person, firm, or corporation not
employed by the Company or not engaged to render services to the
Company or any parent, subsidiary or affiliate of Company
(hereinafter individually referred to as a "Protected Company") or
(B) use for the benefit of himself, or others, any confidential information
of any Protected Company obtained by the Employee prior to the execution of
this Agreement or during the Term, including, without limitation,
"know-how", trade secrets, details of supplier's, manufacturer's,
Employee's or distributor's contracts, pricing policies, financial data,
operational methods, marketing and sales information or strategies,
product development techniques or plans, or any strategies relating
thereto, technical processes, designs and design projects, and other
proprietary information of any Protected Company; provided, however, that
this provision shall not preclude the Employee from making, upon advice of
counsel, any disclosure required by any applicable law or using or
disclosing information known generally to the public (other than
information known generally to the public as a result of any violation of
this Paragraph 7(f)) by or on behalf of the Employee. For the purpose of
this Agreement, Company's confidential information includes, but is not
necessarily limited to, any and all information not lawfully and generally
available to the public concerning Company or any of its products,
services, clients, affairs, personnel or suppliers. Company's confidential
information shall at all times, both during the term of this Agreement and
at all times thereafter, be and remain the
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property of Company for its sole and exclusive use and benefit,
and Employee shall deliver all documents containing or reflecting
such information to Company at any time upon request of Company,
and in any event shall deliver all such documents to Company upon
the termination of his employment regardless of whether or not
expressly requested to do so at the time employment pursuant to
this Agreement ceases.
(g) Breach of Covenants. In the event of any breach
or threatened breach of any covenant or promise set forth herein,
Company shall be entitled to seek judicial remedies in any
appropriate court for the redress of such breach, and Employee
further agrees that he will submit to the rendition of a
temporary restraining order, without prior notice, and thereafter
to temporary and permanent injunctions against any and all such
breaches.
S. OTHER PROVISIONS:
(a) Rights and Remedies Upon Breach: If the Employee
breaches, or threatens to commit a breach of, any of the
provisions of paragraph 7 hereof (the "Restrictive Covenants"),
the Company shall have the following rights and remedies, each of
which rights and remedies shall be independent of the other and
severally enforceable, and all of which rights and remedies shall
be in addition to, and not in lieu of, any other rights and
remedies available to the Company at law or in equity.
(b) Specific Performance: The right and remedy to have
the Restrictive Covenants specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable
injury to the Company and that money damages will not provide an
adequate remedy to the Company.
(c) Severability of Covenants: If any court determines
that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
(d) Blue-Pencilling: If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable
because of the duration or geographical scope of such provision,
such court shall have the power to reduce the duration or scope
of such provision and, in its reduced form, such provision shall
then be enforceable.
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(e) Enforceability in Jurisdictions: The parties
intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within
the geographical scope of such Restrictive Covenants. If the
courts of any one or more of such jurisdictions hold the
Restrictive Covenants unenforceable by reason of the breadth of
such scope or otherwise, it is the intention of the parties that
such determination not bar or in any way affect Company's right
to the relief provided in this paragraph 8. in the courts of any
other jurisdiction within the geographical scope of such
Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdiction being,
for this purpose, severable into diverse and independent
covenants.
(f) No Waiver, Cumulative Remedies: The failure of any
party to this Agreement to seek redress for a violation of or to
insist upon the strict performance of any covenant or condition
of this Agreement shall not prevent a subsequent act, which would
have originally constituted a violation, from having the effect
of an original violation. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or
remedy by any party shall not preclude or waive the right to use
any or all other remedies. Said rights and remedies are given in
addition to any other rights or remedies the parties may have by
law, statute, ordinance or otherwise.
(g) Life/Disability Insurance: During the term
hereof, Company shall have the right to obtain insurance on the
life, or for disability, of Employee at Company's sole cost and
expense, with Company being the sole beneficiary thereof.
Employee agrees to fully cooperate with Company, at Company's
sole cost and expense, in connection with the obtaining of such a
policy, including, without limitation, Employee's submission to a
physical examination and the completion of any and all documents
necessary or desirable in respect thereof. Neither Employee nor
Employee's estate shall have any right to claim the benefit of
any such policy that company obtains.
9. TERMINATION/SUSPENSION:
(a) Termination Upon Death or Disability: If during
the Term, Employee should die this Agreement shall be deemed to
have terminated on the date of Employee's death. If during the
Term, Employee should become so physically or mentally disabled
whether totally or partially, that Employee is unable to perform
the duties, functions and responsibilities required hereunder for
(aa) a period of two (2) consecutive months or (bb) shorter
periods aggregating to three (3) months within any period of
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twelve (12) months ("Disability"), then in such event, Company
may, at any time thereafter, by written notice to Employee,
either suspend the Term hereof and Company's (other than
Company's obligations as set forth in paragraphs 5 and 9(a)(i)
below) and Employee's obligations hereunder or terminate
Employee's employment hereunder. Employee agrees to submit to
reasonable medical examinations upon the request of Company. The
existence of Employee's Disability for the purposes of this
Agreement shall be determined by a reputable physician selected
by Company who is experienced in the relevant field of medicine.
In the event that Company initially elects to suspend the Term it
may at any time thereafter elect to terminate this Agreement.
Further in the event Company elects to suspend the Term hereof
and Company's obligations hereunder, then such suspension shall
be for the duration of such Disability (or such shorter period of
Company thereafter elects to terminate the Term) and the Term
shall be automatically extended by a number of days equal to the
total number of days of the suspension, or such fewer number of
days of which Company may advise Employee in writing but in no
event shall this Agreement expire later than December 31, 2000.
Employee may only return to work following such Disability upon
submission to Company of a certificate from the physician
selected by the Company as aforesaid certifying that Employee is
able to return to work. No suspension shall in any manner
suspend or otherwise impair Company's or Employee's rights under
this Agreement except as may be modified by this paragraph 9(a).
(i) In the event Company elects to suspend the
Term of this Agreement as provided herein, then Employee's
compensation shall on the sixtieth day following the inception of
the illness or accident which precipitated such Disability be
reduced to a sum equal to Sixty Five Thousand ($65,000.00)
Dollars less any sums received by him from any disability
insurance. If Company elects to suspend the Term and such
suspension period includes a date on which Employee is otherwise
entitled to have Acclaim shares of Common Stock released to him
pursuant to the terms of the Escrow Agreement, Employee shall
continue to be entitled to such shares and shall have the right
to send the appropriate notice to the Escrow Agent under the
Escrow Agreement to authorize the release of such shares to him.
(b) Termination for Cause: Company may terminate this
Agreement and Employee's employment hereunder, without any
further obligation to Employee after the date of termination
(except as expressly provided herein) for "cause" which includes,
but shall not be limited to, any of the following; (i) a material
breach of this Agreement by Employee; (ii) the failure of
Employee to perform services and duties exclusively for Company;
(iii) the failure or inability of Employee to provide services of
a quality sufficient to meet the reasonable business needs of
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Company; (iv) a material failure by Employee to comply with any
material rule or regulation of Company reasonably related to his
employment; (v) Employee's willful insubordination; or (vi)
Employee's commission of a felony. Any termination of Employee's
services hereunder shall be effected by notice in writing stating
the reason therefor, which notice shall be given to Employee as
provided in paragraph 12 hereof. To the extent practicable,
Employee shall have the opportunity to cure any breach within ten
(10) days after receiving written notice thereof from Company.
The foregoing cure provision will not be applicable to conduct
which had previously been the subject of such notification. In
the event Employee is terminated for "cause", Company's
obligations to Employee shall be limited to the payment to
Employee of the salary through such effective date of termination
(but no "incentive type compensation") and all of Employee's
Fringe Benefits.
(c) Designation of Beneficiary: The parties hereto
agree that the Employee shall designate, by written notice to the
Company, a beneficiary to receive any payments described in
paragraph 9 in the event of his death. The designation of any
such beneficiary may be changed by the Employee from time to time
by written notice to the Company. In the event the Employee
fails to designate a beneficiary as herein provided, any payments
which are to be made to the Employee's designated beneficiary
under this paragraph 9 shall be made to the Employee's widow. If
the Employee has no designees or widow, such payments shall be
paid to the Employee's estate.
10. Employee'S REPRESENTATIONS, WARRANTIES AND INDEMNITIES:
(a) Right to Enter Into Agreement: Employee is under
no disability, restriction or prohibition, whether contractual or
noncontractual (i) with respect to his right to execute this
Agreement, (ii) to grant the rights granted by him to the Company
hereunder, and (iii) with respect to his right to perform each
and every term and provision hereof, and to develop and design
the Software.
(b) Breach Under Other Agreement or Arrangement:
Neither the execution and delivery of this Agreement nor the
performance by Employee of any of his obligations hereunder will
constitute a violation or breach of, or a default under, any
agreement, arrangement or understanding, or any other restriction
of any kind, to which Employee is a party or by which Employee is
bound.
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(c) Services Rendered Deemed Special, Etc: Employee
acknowledges and agrees that the services to be rendered by him
hereunder are of a special, unique, extraordinary and intellectual
character which gives them peculiar value, the loss of which cannot be
adequately compensated for in an action at law and that a breach of any
term, condition or covenant hereof will cause irreparable harm and injury
to Company and in addition to any other available remedy Company will be
entitled to seek injunctive relief.
(d) Indemnity: Employee hereby agrees and does hereby
indemnify save and hold Company harmless from and against any and
all damages, liabilities, costs, losses and expenses (including
legal costs and reasonable attorney's fees) arising out of or in
connection with any claim, demand or action by a third party
which is inconsistent with any of the warranties, representations
or agreements made by Employee in this Agreement. Employee
agrees to reimburse Company, on demand, for any payment made by
Company at any time with respect to any such demand, liability,
costs, loss or expense to which the foregoing indemnity applies;
provided, such payment arises from a final non-appealable
judgment or arbitration or a settlement made with Employee's
prior consent, which consent Employee shall not unreasonably
withhold. Company shall notify Employee in writing of any such
claim, demand or action promptly after Company has been formally
advised thereof and Employee shall have the right, at his
expense, to participate in the defense thereof with counsel of
his choice.
11. COMPANY'S INDEMNITY:
Company shall indemnify and hold harmless the Employee
to the fullest extent permitted by the laws of the State of Texas
and its existing articles of incorporation and by-laws, and
Employee shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the
benefit of its officers and/or employees, against all costs,
charges and expenses whatsoever incurred or sustained by him in
connection with any action, suit or proceeding to which he may be
made a party by reason of his being or having been an officer
and/or employee of the Company and its subsidiaries and
affiliates.
12. NOTICES:
Any notice, consent or other communication under this
Agreement shall be in writing and shall be delivered personally,
sent by facsimile transmission (and confirmed in writing) or
overnight courier (regularly providing proof of delivery) or sent
by registered, certified, or express mail and shall be deemed
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given when so delivered personally, sent by facsimile
transmission and confirmed in any other manner permitted in this
Paragraph 12 or overnight courier, or if mailed two (2) days
after the date of deposit in the United States mail as follows:
to the parties at the following addresses (or at such other
address as a party may specify by notice in accordance with the
provisions hereof to the other):
(i) If to Employee, to his address at:
306 Lake Creek Drive
Round Rock, TX 78681
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(ii) If to Company, to its address at:
3410 Far West Boulevard, Suite 301
Austin, Texas 78731
With copies to:
Acclaim Entertainment, Inc.
71 Audrey Avenue
Oyster Bay, NY 11771
Attention: President
-and-
Fischbach, Perlstein & Yanny
1925 Century Park East, Suite 1260
Los Angeles, CA 90067
Attention: Bernard J. Fischbach, Esq.
Either party may change its address for notice hereunder by
notice to the other party in accordance with this paragraph 14.
13. ASSIGNMENT:
Company shall have the right, at its election, to
assign any of its rights or obligations hereunder, in whole or in
part to any parent or wholly or majority owned subsidiary or to
any person, firm, or corporation owning or acquiring all or
substantially all of Company's stock or assets, and, to the
extent of such assignment, Company shall thereafter be relieved
of their obligations hereunder. Employee shall not have the
right to assign any of his rights or obligations hereunder.
14. FURTHER INSTRUMENTS:
Each party shall furnish any other party with any
further instruments, in such form and substance as shall be
reasonably approved or designated by the requesting party, which
the requesting party may reasonably require or deem necessary,
from time to time, in its discretion, to evidence, establish,
protect, enforce, defend or secure to the requesting party any or
all of its rights, titles, properties or interests or more fully
to effectuate or carry out the purposes, provisions or intent of
this Agreement.
15. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:
This Agreement contains a complete statement of all the
arrangements between the parties with respect to Employee's
employment by Company, supersedes all existing agreement between
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them concerning Employee's employment. This Agreement may be
amended, modified, superseded or cancelled, and the terms and
conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party
waiving compliance. The failure of any party to this Agreement
to seek relief for any breach of this Agreement will not operate
as a waiver of any other breach, nor prevent any subsequent act
which would have originally been a violation, from having the
effect of an original violation of the Agreement, nor shall any
waiver on the part of any party of any right or remedy hereunder,
nor any single or partial exercise of any such right or remedy
preclude any other or further exercise thereof or the exercise of
any other right or remedy. Except as otherwise provided in this
Agreement, all rights and remedies herein or otherwise shall be
cumulative and none of them shall be in limitation of any other
right or remedy. The headings in this Agreement are solely for
the convenience of reference and shall not affect its
interpretation.
16. GOVERNING LAW:
This Agreement shall interpreted with, and governed by,
the laws of the State of Texas, without regard to conflicts of
law doctrines.
WHEREFORE, the parties hereto have executed this Agreement
as of the day and year first above written.
IGUANA ENTERTAINMENT, INC.
By: /s/
---------------------------
Its: President
/s/
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Darrin Stubbington
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