Exhibit 10.4
Execution
Copy
AMENDED AND RESTATED
AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT
(“Agreement”) is made as of the 12 th day of
April, 2006, by and between Festival Fun Parks, LLC (the
“Company”) and James Cleary
(“Executive”).
W I T N E S S E T H :
WHEREAS, Palace Entertainment, Inc.
(“Palace”) has entered into a Stock Purchase Agreement
dated as of February 9, 2006 pursuant to which Palace Entertainment
Holdings, Inc. (“Buyer”), has agreed to acquire, and
Palace has agreed to sell to Buyer, 100% of the equity interest of
the Company (the “Transaction”);
WHEREAS, the Executive currently is
employed by the Company as the Vice President of Operations —
Water Park Division;
WHEREAS, the Company and the
Executive are parties to that certain Agreement, dated July 22,
1999, as amended by that certain First Amendment to Employment
Agreement, dated July 21, 2002 (the “Existing
Agreement”); and
WHEREAS, the parties have agreed
that the Existing Agreement shall be deemed to have been amended
and restated and superceded by this Agreement upon the consummation
of the Transaction (the “Effective Date”).
NOW THEREFORE, in consideration of
the premises and the mutual covenants and obligations hereinafter
set forth, the Company and Executive hereby agree as
follows:
1.
Effectiveness.
Each of Executive
and the Company agree that as of the Effective Date, the Existing
Agreement is amended and restated as set forth herein, and that the
Existing Agreement is of no further force or effect. Unless and
until consummation of the Transaction, the Existing Agreement shall
remain in effect and govern the relationship between the
parties.
2.
Engagement.
The Company
agrees to engage the Executive and the Executive agrees to serve as
an employee of the Company and shall have the title “Senior
Vice President of New Business Development.”
3.
Engagement Period.
Except as
otherwise provided in this Agreement to the contrary, the terms and
conditions of this Agreement shall be and remain in effect during
the period of the engagement (“Engagement Period”)
established under this ¶3. The Engagement Period shall be for
a term of three (3) years from the Effective Date unless terminated
in accordance with the terms hereof. The term shall be
automatically renewed for successive one (1) year periods
thereafter, unless either party gives notice to the other that the
term shall not be renewed at least three (3) months before the
Engagement Period (including automatic renewal thereof)
expires.
4.
Duties. As of the date of this
Agreement, Executive shall act as Senior Vice President of New
Business Development for the Company, and, in such capacity, shall
assist with the general management, business, affairs and
operations of Company’s Family
Entertainment Centers and be
responsible for and assist with the acquisition, design and
development of new Family Entertainment Centers (as defined in
¶16 below), and shall have such power and authority as shall
reasonably be required to enable him to perform his duties
hereunder; provided, however, that in exercising such power and
authority and performing such duties, he shall at all times be
subject to the authority of the Chief Operating Officer, the Chief
Executive Officer and the Board of Directors of the Company. The
Executive shall report to the Chief Operating Officer and the Chief
Executive Officer of the Company. The Executive agrees to devote
substantially all of his business time, attention and services to
the diligent, faithful and competent discharge of such duties for
the successful operation of the Company’s business, and use
his best efforts to advance the Company’s
interests.
5.
Compensation.
(a) Base Salary
. In consideration of the services rendered by Executive under this
Agreement, the Company shall pay him a base salary at an annual
rate equal to $267,000.00. The Executive shall receive such
increases in his base salary as the Board of Directors of the
Company may from time to time approve in its discretion. The base
salary shall be payable in accordance with the Company’s
regular payroll practice, but in no event less frequently than
bi-weekly. All applicable withholding taxes and insurance
contributions shall be deducted from such payments.
(b)
Annual Bonus. Executive will be eligible to receive a
performance-based bonus based on achieving annual performance goals
that may be determined by the Board of Directors or the
compensation committee thereof on an annual basis and communicated
to Executive if established. The Board of Directors or its
compensation committee may establish an additional bonus pool for
any fiscal year to benefit members of management. Executive may
participate in such a bonus pool if and to the extent that the
Board of Directors or its compensation committee so
determines.
(c)
Stock Options. Executive will be eligible to receive
incentive units (as defined in the limited liability company
agreement of Palace Holdings Group, LLC (the “LLC
Agreement”) as may be awarded by its board of directors or
its compensation committee from time to time in accordance with the
terms of the LLC Agreement and any related incentive award program
adopted by its board of directors.
6.
Benefit Plan and
Program. Executive shall, during the
Engagement Period, be entitled to and receive benefits under the
Company’s 401(k) plan, group life, health (including
hospitalization, medial and major medical), prescription drug,
dental, vision and such other employee benefit plans and programs,
including but not limited to any other incentive compensation plans
or programs (whether or not employee benefit plan or programs) as
the Company may maintain from time to time, and in accordance with
the Company’s customary practices to the extent maintained by
the Company provided that Executive is a member of the class of
employees authorized to participate in such plan or
programs.
7.
Outside Activities.
While employed by
the Company, Executive shall not, directly or indirectly, provide
services on behalf of any competing Family Entertainment Center
business as defined in ¶16 below or on behalf for any
subsidiary or affiliate of any such competing Family Entertainment
Center business as an employee, consultant, independent contractor,
agent, sole proprietor, partner, joint venturer, corporate officer,
director or lender; nor
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shall Executive acquire
while employed by the Company, the ownership of more than 5% of the
outstanding equity interest in any such competitive entity. Subject
to the foregoing, Executive may serve on board of directors of
unaffiliated corporations, who do not compete with the Company,
subject to Company’s approval. Except as specifically set
forth herein, and subject to any restrictions thereon, Executive
may engage in personal business and investment activities that do
not conflict with the business of the Company. Notwithstanding the
foregoing, in no event shall Executive’s outside activities,
services, personal business and investments materially interfere
with the performance of his duties under this
Agreement.
8.
Working Facilities.
Executive shall
perform his duties at Splish Splash, Riverhead, New York. The
Company shall provide Executive with support services suitable and
appropriate to his position with the Company and necessary or
appropriate in connection with the performance of his assigned
duties under this Agreement.
9.
Vacation and Expenses.
(a)
Executive shall be entitled to a minimum of four (4) weeks of paid
vacation time each year during the Engagement Period to be taken at
a time which does not conflict with the Executive’s duties
hereunder. Accrued vacation may be carried forward and used in
subsequent calendar years.
(b)
The Executive shall also be entitled to reimbursement for all
reasonable and preapproved expenses necessarily incurred by him in
the performance of his duties upon presentation of a voucher
indicating the amount and business purposes and consistent with the
Company’s policies. The Executive’s reimbursement shall
include, but not be limited to, transportation costs, travel
expenses, trade show expenses, cellular phone expenses and expenses
incurred by Executive and his spouse in connection with IAAPA
functions and meetings.
10.
Termination of
Engagement. (a) Executive’s
engagement with the Company shall terminate during the Engagement
Period on account of Executive being convicted of a felony or
misdemeanor involving moral turpitude, including entry of a plea.
If the Executive’s employment terminates in accordance with
this ¶10(a), (x) the Company shall pay and provide to
Executive: (i) his earned but unpaid salary as of the date of
the termination of his engagement, (ii) the benefits, if any, to
which he is entitled under the Company’s benefit plan and
programs and compensation plan and programs; (iii) accrued but
unpaid bonus; and (iv) payment for unused vacation days through the
date of termination, and (y) the Executive shall not be entitled to
any severance or other benefits. For purposes of this Agreement,
moral turpitude shall include embezzlement of the Company’s
property.
(b)
The Company shall have the right to terminate this Agreement for
“good cause” upon twenty (20) days written notice to
the Executive setting forth the grounds for terminating the
Agreement. For purposes of this ¶10(b), “good
cause” shall be defined as the following: (i)
Executive’s failure to perform his duties in a manner
consistent with the Company’s performance standards and the
terms of this Agreement; (ii) Executive’s failure to devote
substantially all of his business time and attention to the
business of the Company and otherwise comply with his duties under
¶4; and (iii) Executive’s violation of ¶7 and
¶12 of this Agreement. In the event Executive fails to cure
his breach of the Agreement as set forth in the notice, then and in
that event, this Agreement shall automatically terminate at the
expiration of said twenty (20) day period. The Company shall pay
and provide to Executive: (i) his earned but
unpaid
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salary as of the date of the
termination of his engagement; (ii) the benefits, if any, to which
he is entitled under the Company’s benefit plan and programs
and compensation plan and programs; (iii) accrued but unpaid bonus;
and (iv) payment for unused vacation days through the date of
termination.
(c)
The Company may at any time during the Engagement Period, upon
twenty (20) days written notice to Executive, terminate this
Agreement. Except in the event of a termination of
Executive’s employment in accordance with the provisions of
¶10(a) and ¶10(b), the restrictive covenant set forth in
¶12 of this Agreement shall continue only so long as the
Company makes the payment set forth in ¶10(f).
(d)
This Agreement shall automatically terminate upon the death of
Executive.
(e)
Executive shall have the right to terminate this Agreement for
“good reason” upon twenty (20) days written notice to
the Company setting forth the grounds for terminating the
Agreement. For purposes of this ¶10(e), “good
reason” shall be defined as follows: (i) a material
breach of the Company’s obligations under this Agreement;
(ii) the Board by vote, but excluding those directors who are
officers or employees, or former officers or employees, of the
Company, or its subsidiaries, determines in its sole discretion
that the voluntary termination of the Executive is for “good
reason” under the circumstances then prevailing; (iii) a
material reduction in salary paid to the Executive; and (iv) a
material reduction in the Executive’s duties, authority or
responsibilities. In the event the Company fails to cure its breach
of the Agreement as se
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