This excerpt taken from the KIDS 10-K filed May 1, 2008.
Section 1. Definitions.
(a) Accrued Obligations shall mean (i) all accrued but unpaid Base Salary through the date of termination of Employees employment, (ii) any unpaid or unreimbursed expenses incurred in accordance with Section 6 below, (iii) all accrued but unused vacation time earned by Employee during the fiscal year in which the termination of Employees employment occurs, and (iv) any other benefits (without duplication) provided under the Companys employee benefit plans upon a termination of employment, in accordance with the terms therein.
(b) Base Salary shall mean the salary provided for in Section 4(a) below or any increased salary granted to Employee pursuant to Section 4(a).
(c) Board shall mean the Board of Directors of the Company.
(d) Cause shall mean a good faith determination by the Board of: (i) gross negligence or willful misconduct by Employee in connection with Employees duties hereunder; (ii) repeated failure by Employee to perform (other than due to Disability) in any material respect his duties or responsibilities after notice and a fifteen (15) day opportunity to cure; (iii) misappropriation by Employee of the assets or business opportunities of the Company or its affiliates; (iv) any fraud or any other act or omission involving dishonesty or bad faith with respect to the Company or its affiliates or any of their respective customers or suppliers committed by Employee or at his or her direction, or with his or her knowledge; (v) Employees indictment for, charge with, conviction of, admission to, or entry of pleas of no contest to any felony or any other crime involving dishonesty, breach of trust, moral turpitude, or physical harm to any person; (vi) Employees use of illegal drugs which, in the Companys judgment, interferes with the performance of Employees duties; (vii) conduct which brings the Company or any of its affiliates into public disgrace or disrepute in any material respect, or (viii) Employees breach of any material provision of this Agreement or of any policy of the Company or its affiliates established by their boards of directors, which breach, if curable, is not cured within 15 days after written notice thereof to Employee. A motor vehicle felony will not constitute Cause, unless associated with a sentence of incarceration.
(e) Commerce shall mean and refer to the marketing, sale, or distribution of products or services through retail sales, internet sales, or any other network or vehicle for the marketing, sale, or distribution of products or services.
(f) Competitive Activities shall mean any business activities that are competitive with any business that the Company and its subsidiaries engage in or plan to engage in, including but not limited to (A) any business activities providing or developing either Content or Commerce in the direct to consumer toy and childrens products business or the pregnancy, baby and toddler areas or (B) business activities of any kind for WalMart, Toys R Us, Babies R Us, Target, KB Toys, Sears/Kmart, Amazon.com, or JC Penny either (i) during the Term of Employment up to and including termination of employment, or (ii) for purposes of Employees obligations under Section 8(c) after the Term of Employment.
(g) Confidential Information shall have the meaning set forth in Section 8(a) below.
(h) Content shall mean and refer information or data that is developed, distributed, assembled, transmitted, or communicated and relates to the needs, interests, purchases, or networks of customers, potential customers, members, or participants of any type.
(i) Developments shall mean any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registerable under copyright or similar laws, which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice during the Term of Employment, whether or not during regular working hours.
(j) Disability shall mean any physical or mental disability or infirmity that prevents the performance of Employees duties for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period. Any question as to the existence, extent or potentiality of Employees Disability upon which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and approved by Employee (which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.
(k) Good Reason means the occurrence, without Employees consent, of any item referred to in clauses (i) through (iv) below, of any of the following: (i) the assignment to the Employee of any significant duties materially inconsistent with the Employees previous position, duties, responsibilities or status with the Company that reflects a substantial diminution in the nature of the Employees position, duties, responsibilities or status; (ii) a significant adverse change in Employees reporting
responsibilities, titles or offices, or any removal of Employee from or any failure to re-elect Employee to any position with the Company or any subsidiary that Employee previously held (except in connection with Employees promotion or the termination of Employees employment), (iii) a reduction in the Employees annual base salary as in effect on the date of this Agreement (or as subsequently modified), except for across-the-board salary reductions similarly affecting all similarly situated employees, (iv) the taking of any action by the Company or any subsidiary which would adversely affect Employees participation in or materially reduce Employees benefits under any employee benefit or compensation plan except for across-the-board changes similarly affecting all similarly situated employees, or (v) the Companys or any subsidiarys requiring Employee to be based anywhere other than (aa) a location within 40 miles of Employees previous job location or (bb) Denver, Colorado (reasonably required travel on Company business shall not be considered to impact where Employee is required to be based); or requiring Employee to travel on the Companys or any subsidiarys business to an extent substantially more burdensome than Employees previous travel obligations.
(l) Promissory Note shall mean, when applicable, that certain Secured Limited Recourse Promissory Note and Pledge Agreement, dated May 10, 2004, between Employee, as the maker, and D. E. Shaw Laminar Lending, Inc., as the holder.
(m) Restricted Period shall mean one (1) year plus the Severance Period.
(n) Severance Period shall mean a period of 9 months commencing on the date employment terminates.
(o) Shares shall mean shares of the Companys common stock, $0.001 par value per share.
(p) Term of Employment shall mean the period specified in Section 2 below.
Section 2. Acceptance and Term of Employment.
The Company agrees to employ Employee and Employee agrees to serve the Company on the terms and conditions set forth herein. Unless sooner terminated as provided in Section 7 hereof, the Term of Employment shall commence on the date Employee began or will begin employment with the Company or its affiliates, and shall end at 5:00 p.m. Mountain Time on January 31, 2011.
Section 3. Position, Duties and Responsibilities.
(a) During the Term of Employment, Employee shall be employed and serve as Senior Vice President e Toys Merchandising of the Company (together with such other position or positions consistent with Employees title as the Board shall specify from time to time) and shall perform such duties typically associated with such title. Employees duties as of the date hereof are set forth on Exhibit A hereto.
(b) Employee shall devote his/her full business time (except for permitted vacation periods, periods of illness or other Disability), attention, skill and best efforts to the performance of his/her duties under this Agreement and shall not engage in any other business or occupation or otherwise take any actions during the Term of Employment, including, without limitation, any activity that (i) materially conflicts with the interests of the Company, (ii) materially interferes with the proper and efficient performance of his/her duties for the Company, or (iii) materially interferes with the exercise of his/her judgment in the Companys best interests.
Section 4. Compensation. During the Term of Employment, Employee shall be entitled to the following compensation:
(a) Base Salary. Employee shall be paid an annualized Base Salary, payable in accordance with the regular payroll practices of the Company, of Two Hundred and thirty-five thousand dollars, ($235,000), with increases, if any, as may be approved in writing by the Board, and subject to customary withholding of applicable taxes, governmental charges, and other withholdings in accordance with federal and state law.
(b) Annual Bonus. For each fiscal year during the Term of Employment, Employee shall be eligible to receive an annual bonus pursuant to the annual bonus plan adopted by the Board for such year, subject to its terms and conditions. For fiscal year 2007, Employee shall be eligible to receive a Bonus with respect to that portion of 2007 during which Employee was employed by either the Company or by eToys Direct, Inc. without duplicating any payments owing or made by the Company or by eToys Direct, Inc. to Employee under any prior employment agreement or arrangement with either the Company or eToys Direct, Inc. Any such bonus, if determined by the Company to be payable, shall be payable within 90 days following the end of each fiscal year during the Term of Employment. If Employees employment terminates before the date of actual payment of Bonuses then Employees right to receive and entitlement to such Bonus for the current or prior fiscal year shall not have accrued and such Bonus will not be payable to Employee unless otherwise provided for in this Agreement. If Employee is party to a Promissory Note, for so long as the Promissory Note remains in effect, one third (1/3) of the amount of any such bonus, net of income taxes due on such bonus, shall be allocated as payment of accrued but unpaid interest and principal on the Promissory Note, as provided in Section 1(c)(ii) of the Promissory Note.
This excerpt taken from the KIDS 8-K filed Jan 20, 2006.
11.1 Defined Terms. As used herein, the following terms shall have the following meanings:
11.2 Other Definitional Provisions. All terms defined in this Agreement shall have the defined meanings when used in any certificates, reports or other documents made or delivered pursuant hereto or thereto, unless the context otherwise requires. Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. As used herein, the neuter gender shall also denote the masculine and feminine, and the masculine gender shall also denote the neuter and feminine, where the context so permits.