KIDS » Topics » DEFINITIONS

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 Employee’s 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 Employee’s employment occurs, and (iv) any other benefits (without duplication) provided under the Company’s 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 Employee’s 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) Employee’s 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) Employee’s use of illegal drugs which, in the Company’s judgment, interferes with the performance of Employee’s duties; (vii) conduct which brings the Company or any of its affiliates into public disgrace or disrepute in any material respect, or (viii) Employee’s 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 children’s 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 Employee’s 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 Employee’s 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 Employee’s 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 Employee’s 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 Employee’s previous position, duties, responsibilities or status with the Company that reflects a substantial diminution in the nature of the Employee’s position, duties, responsibilities or status; (ii) a significant adverse change in Employee’s 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 Employee’s promotion or the termination of Employee’s employment), (iii) a reduction in the Employee’s 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 Employee’s participation in or materially reduce Employee’s benefits under any employee benefit or compensation plan except for across-the-board changes similarly affecting all similarly situated employees, or (v) the Company’s or any subsidiary’s requiring Employee to be based anywhere other than (aa) a location within 40 miles of Employee’s 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 Company’s or any subsidiary’s business to an extent substantially more burdensome than Employee’s 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 Company’s 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 Employee’s title as the Board shall specify from time to time) and shall perform such duties typically associated with such title. Employee’s 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 Company’s 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 Employee’s employment terminates before the date of actual payment of Bonuses then Employee’s 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.

DEFINITIONS

          11.1        Defined Terms.  As used herein, the following terms shall have the following meanings:

 

              “Affiliate” shall have the meaning ascribed to it in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date hereof.

 

 

 

              “Average Closing Sale Price” shall mean the average closing sale price of a share of BabyUniverse Common Stock as quoted on the American Stock Exchange for the fifteen (15) consecutive days that immediately precede the second (2nd) trading day prior to the Closing Date, as such closing sale prices are reported (absent manifest error in the printing thereof) at www.amex.com.

 

 

 

              “Code” means the Internal Revenue Code of 1986, as amended, and treasury regulations promulgated thereunder.

 

 

 

              “Company Working Capital” means (a) the value of the assets transferred to Purchaser at Closing that meet the definition of Current Assets in conformity with generally accepted accounting principles in the United States, minus (b) the value of the liabilities assumed by Purchaser at Closing that meet the definition of Current Liabilities in conformity with generally accepted accounting principles in the United States.

 

 

 

              “Contract” means any agreement, contract, lease, note, mortgage, indenture, loan agreement, franchise agreement, covenant, employment agreement, license, instrument, purchase and sales order, commitment, undertaking, obligation, whether written or oral, express or implied.




 

              “Environmental Costs” shall mean any and all expenses, costs, damages, liabilities, or obligations (including, without limitation, fees and expenses of counsel) incurred by, under or pursuant to any Environmental Laws or related to the Discharge, Handling, presence or clean up of Hazardous Substances arising as a result of events occurring or facts or circumstances arising or existing on or after the Company’s occupancy of the Leased Premises but prior to the Closing Date (whether or not in the ordinary course of business), and whether such costs arise before, on, or after the Closing Date and whether or not set forth on Schedule 3.12).

 

 

 

              “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

 

 

              “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 

 

              “GAAP” means generally accepted accounting principles in effect in the United States of America from time to time.

 

 

 

              “Governmental Authority” means any nation or government, any state, regional, local or other political subdivision thereof, and any entity or official exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

 

 

              “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

 

 

 

              “Indebtedness” of any entity means all obligations of such entity (i) should be classified upon a balance sheet of such entity as indebtedness, (ii) for borrowed money or purchase money financing which has been incurred in connection with the acquisition of property or services, guaranties, letters of credit, or deferred purchase price, including without limitation, accrued and unpaid interest, and prepayment or early termination penalties associated with any of the foregoing, (iii) secured by any lien or other charge upon property or assets owned by such entity, even though such entity has not assumed or become liable for the payment of such obligations, (iv) created or arising under any conditional sale or other title retention agreement with respect to property acquired by such entity, whether or not the rights and remedies of the lender or lessor under such agreement in the event of default are limited to repossession or sale of the property, and (v) for remaining payments under any leases (including, but not limited to, equipment leases), or rental purchase options.




 

              “Lien” means any mortgage, pledge, security interest, encumbrance, lien, restriction on transfer, right of refusal, preemptive right, claim or charge of any kind (including, but not limited to, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code or comparable law or any jurisdiction in connection with such mortgage, pledge, security interest, encumbrance, lien or charge).

 

 

 

              “Litigation Costs” shall mean any and all expenses, costs, damages, liabilities, or obligations (including, without limitation, fees and expenses of counsel) incurred in connection with any action, suit, or other legal or administrative proceeding or governmental investigation arising as a result of events occurring or facts or circumstances arising or existing on or prior to the Closing Date (whether or not in the ordinary course of business and whether arising before, on or after the Closing Date and whether or not set forth on Schedule 3.11).

 

 

 

              “Material Adverse Change (or Effect)” means a change (or effect), in the condition (financial or otherwise), properties, assets, liabilities, rights, obligations, operations, business or prospects which change (or effect) individually or in the aggregate, is materially adverse to such condition, properties, assets, liabilities, rights, obligations, operations, business or prospects.

 

 

 

              “Person” means an individual, partnership, corporation, business trust, joint stock company, estate, trust, unincorporated association, joint venture, Governmental Authority or other entity, of whatever nature.

 

 

 

              “Receivables” means all receivables of the Company, including all trade account receivables arising prior to Closing from the provision of services, sale of inventory, notes receivable, and insurance proceeds receivable.

 

 

 

              “SEC” means the U.S. Securities and Exchange Commission.

 

 

 

              “Securities Act” means the Securities Act of 1933, as amended.

 

 

 

              “Tax Return” means any tax return, filing or information statement required to be filed in connection with or with respect to any Taxes.

 

 

 

              “Taxes” means all taxes, fees or other assessments, including, but not limited to, income, excise, property, sales, franchise, intangible, withholding, social security and unemployment taxes imposed by any federal, state, local or foreign governmental agency, and any interest or penalties related thereto.

 

 

 

              “Transaction Fees” means all legal, accounting, tax consulting, financial advisory and other fees and expenses, including any transfer fees, government filing fees and the cost of title insurance and surveys, incurred, paid or payable by the Company in connection with the transactions contemplated by this Agreement and not paid by the Members.




 

              “Work-in-Process” means those terms reflected in the Company trial balance accounts for “sublet repairs” and “work-in-process” which relate to customer and warranty repair and modification jobs which, as at Closing, have been commenced but not consummated.

          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.



EXCERPTS ON THIS PAGE:

10-K
May 1, 2008
8-K
Jan 20, 2006
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