Exhibit 10.5
AMENDED AND
RESTATED
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) was originally entered into between Tony
Bartel (“Executive”) and GameStop Corp. (the
“Company”), collectively referred to as the
“Parties,” with an “Original Effective
Date” of October 24, 2008 and is amended and restated as of
the 31 st day of December, 2008.
The Company has administered this
Agreement in good faith compliance with the requirements of Section
409A of the Internal Revenue Code of 1986, as amended
(“Code”), and the regulations and other guidance
promulgated thereunder, and the Parties wish to amend this
employment agreement to comply with the requirements of Code
Section 409A. Therefore, this Agreement is amended and restated to
read as follows:
1.
Executive’s
Position/Duties .
During the term of this Agreement, Executive will be employed as
the Executive Vice President – Merchandising and Marketing of
the Company, and shall have all of the duties and responsibilities
of that position. Executive shall be considered a key employee of
the Company and shall be entitled to all the Company benefits
afforded to key employees. Executive agrees to dedicate all of his
working time (during normal working hours other than during excused
absences such as for illness or vacation), skill and attention to
the business of the Company, agrees to remain loyal to the Company,
and not to engage in any conduct that creates a conflict of
interest to, or damages the reputation of, the Company. Executive
shall abide by the Company’s Code of Ethics and Code of
Ethics for Senior Financial Officers.
2.
Term of Employment . Executive’s employment
under this Agreement will commence on the Original Effective Date,
and will continue for a period of three years, unless terminated
earlier in accordance with the provisions of this Agreement. At the
expiration (but not earlier termination) of the term (including any
renewal term), the term of this Agreement shall automatically renew
for an additional period of one year, unless either party has given
the other party written notice of non-renewal at least six months
prior to such expiration.
a.
Base Salary . During the term of this Agreement, the
Company shall provide Executive with a base salary of no less than
four hundred thousand dollars ($400,000.00) per year, paid in
accordance with the Company’s normal payroll policies
(“Base Salary”).
b.
Bonuses/Distributions . Each year during the term of
this Agreement, the Company shall provide Executive with a bonus
based on the formula and targets established under and in
accordance with the Company’s Supplemental Compensation Plan.
Executive may receive additional bonuses at the discretion of the
Board of Directors of the Company (the
“Board”).
c.
Benefits . Executive shall be entitled to all
benefits, including, but not limited to, stock and stock option
benefits, insurance programs, pension plans, vacation, sick leave,
expense
accounts, and retirement benefits,
as afforded other management personnel or as determined by the
Board.
d.
Expenses . The Company shall reimburse Executive for
reasonable expenses incurred in the performance of his duties and
services hereunder and in furtherance of the business of the
Company, in accordance with the policies and procedures established
by the Company.
e.
Reimbursement of Expenses . Notwithstanding any
provision in this Section 3 to the contrary, no expenses incurred
after the term of this Agreement shall be subject to reimbursement,
except to the extent provided under this Section 3(e). The amount
of expenses eligible for reimbursement during a year shall not
affect the expenses eligible for reimbursement in any other year.
Reimbursement of an eligible expense shall be made in accordance
with the Company’s policies and practices and as otherwise
provided herein, provided that in no event shall reimbursement be
made after the last day of the year following the year in which the
expense was incurred. The right to reimbursement is not subject to
liquidation or exchange for another benefit.
4.
Termination of Employment . Executive’s
employment with the Company may be terminated as
follows:
a.
Death . In the event of Executive’s death,
Executive’s employment will be terminated
immediately.
b.
Disability . In the event of Executive’s
Disability, as defined below, Executive’s employment will be
terminated immediately. “Disability” shall mean a
written determination by a physician mutually agreeable to the
Company and Executive (or, in the event of Executive’s total
physical or mental disability, Executive’s legal
representative) that Executive is physically or mentally unable to
perform his duties of Executive Vice President –
Merchandising and Marketing under this Agreement and that such
disability can reasonably be expected to continue for a period of
six consecutive months or for shorter periods aggregating 180 days
in any 12-month period.
c.
Termination by the Company for Cause . The Company
shall be entitled to terminate Executive’s employment at any
time if it has “Cause,” which shall mean any of
the following: (i) conviction of, or plea of nolo contendere
to, a felony or any crime involving fraud or dishonesty; (ii)
willful misconduct that results in a material and demonstrable
damage to the business or reputation of the Company; (iii) breach
by Executive of any of the covenants contained in Sections 8,
10(c), 10(d) or 10(e) below; or (iv) willful refusal by Executive
to perform his obligations under this Agreement or the lawful
direction of the Board that is not the result of Executive’s
death, Disability, physical incapacity or Executive’s
termination of the Agreement, and that is not corrected within
thirty (30) days following written notice thereof to Executive by
the Company, such notice to state with specificity the nature of
the willful refusal.
d.
Without Cause . Either the Company or Executive may
terminate Executive’s employment at any time without cause
upon written notice.
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e.
Termination by Executive with Good Reason. Executive
shall be entitled to terminate his employment within 12 months
after any of the following events (each of which shall constitute
“Good Reason”):
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(i)
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a material diminution in Executive’s
compensation;
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(ii) a
material diminution in Executive’s authority, duties, or
responsibilities; or
(iii) the
Company requires Executive to move to another location of the
Company or any affiliate of the Company and the distance between
Executive’s former residence and new job site is at least 50
miles greater than the distance between Executive’s former
residence and former job site.
Notwithstanding the foregoing,
Executive shall notify Company in writing if he believes Good
Reason exists. Such notice shall set forth in reasonable detail why
Executive believes Good Reason exists and shall be provided to the
Company within a period not to exceed 90 days of the initial
existence of the condition alleged to give rise to Good Reason,
upon the notice of which the Company shall have a period of 30 days
during which it may remedy the condition.
f.
Termination by Executive Following a Change in
Control. Following a Change in Control of the Company,
Executive shall be entitled to terminate his employment within 30
days following the later of the end of the calendar year within
which such Change in Control occurs or the end of the taxable year
of the Company within which such Change in Control occurs (such
date, the “CIC Termination Date”). For purposes of this
Agreement, a “Change in Control” of the Company shall
be deemed to have occurred upon the occurrence of one of the
following events, provided such event constitutes a change in
control under Section 409A of the Code and the regulations and
other guidance issued thereunder:
(i) Any
one person or more than one person acting as a group (as defined in
accordance with Section 409A of the Code and the regulations and
other guidance issued thereunder), acquires ownership of stock of
the Company that, together with stock held by such person or group,
constitutes greater than fifty percent (50%) of the total fair
market value or total voting power of the stock of the
Company;
(ii) Any
one person or more than one person acting as a group (as defined in
accordance with Section 409A of the Code and the regulations and
other guidance issued thereunder), acquires (or has acquired during
the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the
stock of such Company; or a majority of the individuals
constituting the Board is replaced during any 12-month period by
members whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or
election; or
(iii) Any one
person or more than one person acting as a group (as defined in
accordance with Section 409A of the Code and the regulations and
other guidance issued
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thereunder), acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or
acquisitions. For this purpose, gross fair market value means the
value of the assets of the Company or the value of the assets being
disposed of determined without regard to any liabilities associated
with such assets.
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5.
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Compensation
and Benefits Upon Termination .
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a. If
Executive’s employment is terminated by reason of death or
Disability, the Company shall pay Executive’s Base Salary, at
the rate then in effect, in accordance with the payroll policies of
the Company, through the date of Executive’s death or
Disability (in the event of Executive’s death, the payments
will be made to Executive’s beneficiaries or legal
representatives) and Executive shall not be entitled to any further
Base Salary or any applicable bonus, benefits or other compensation
for that year or any future year, except as may be provided in an
applicable benefit plan or program, or to any severance
compensation of any kind, nature or amount.
b. If
Executive’s employment is terminated by Executive (i) without
Good Reason or (ii) other than by the CIC Termination Date
following a Change in Control; or by the Company for Cause, the
Company will pay to Executive all Base Salary, at the rate then in
effect, through the date of Executive’s termination of active
employment and Executive shall not be entitled to any further Base
Salary or any applicable bonus, benefits or other compensation for
that year or any future year, except as may be provided in an
applicable benefit plan or program, or to any severance
compensation of any kind, nature or amount.
c. If,
during the term of this Agreement, (i) Executive terminates his
employment for Good Reason, provided that such termination is
within 12 months following the initial existence of one or more
conditions giving rise to Good Reason; (ii) Executive terminates
his employment by the CIC Termination Date following a Change in
Control; or (iii) the Company terminates Executive’s
employment without Cause, the Company will pay to Executive all
amounts otherwise payable under this Agreement, at the rate then in
effect, through the date of Executive’s termination, and the
following paragraphs (i) through (vi) shall apply:
(i)
Base Salary and Payment Schedule . The Company shall pay
Executive an amount equal to the greater of: (A) Executive’s
Base Salary, at the rate then in effect, otherwise payable through
the term of this Agreement; or (B) Executive’s Base Salary,
at the rate then in effect, for one year. Such payment shall be
made to Executive in a lump sum within 30 days following the date
of Executive’s termination of employment.
(ii)
Bonus . The Company shall pay Executive an amount equal to
the average of the Executive’s last three (3) gross annual
bonuses multiplied by the greater of (A) one or (B) the number of
years (including any fraction thereof) otherwise remaining through
the term of this Agreement. Such payment shall be made to Executive
in a lump sum within 30 days following the date of
Executive’s termination of employment.
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(iii)
Medical Benefits . Upon Executive’s termination,
Executive will be eligible to elect individual and dependent
continuation group health and (if applicable) dental coverage, as
provided under Section 4980B(f) of the Code (“COBRA”),
for the maximum COBRA coverage period available, subject to all
conditions and limitations (including payment of premiums and
cancellation of coverage upon obtaining duplicate coverage or
Medicare entitlement). If Executive or one or more of
Executive’s covered dependents is eligible for and elects
COBRA coverage, then the Company shall pay the full cost of the
COBRA coverage for the eighteen (18) month period following
Executive’s termination date. Executive (or dependents, as
applicable) shall be responsible for paying the full cost of the
COBRA coverage (including the two percentage administrative charge)
after the earlier of (A) the expiration of eighteen months
following Executive’s termination date, or (B) eligibility
for coverage under another employer’s medical
plan.
(iv)
Vacation . Executive shall be entitled to a payment
attributable to Base Salary, at the rate then in effect, for unused
vacation accrued. Such payment shall be made to Executive in a lump
sum within 30