| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) |
(I.R.S. Employer ID) | |
( | ||
(Address of principal executive offices) (Zip Code) |
(Registrant’s telephone number) | |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| ☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
| Emerging Growth Company | ||||||
Page |
||||||
| PART I |
3 |
|||||
| Item 1. |
3 |
|||||
| Item 2. |
18 |
|||||
| Item 3. |
31 |
|||||
| Item 4. |
32 |
|||||
| PART II |
32 |
|||||
| Item 1. |
32 |
|||||
| Item 1A. |
32 |
|||||
| Item 2. |
33 |
|||||
| Item 6. |
34 |
|||||
35 |
||||||
Item 1. |
Financial Statements |
October 31, |
January 31, |
|||||||
2021 |
2021 |
|||||||
(unaudited) |
(audited) |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | $ | ||||||
| Inventories |
||||||||
| Prepaid expenses |
||||||||
| Income taxes receivable |
||||||||
| Other current assets |
||||||||
| |
|
|
|
|||||
| Total current assets |
||||||||
| Property and equipment (net of $ |
||||||||
| Operating lease right of use assets |
||||||||
| Deferred tax assets |
||||||||
| Tradenames |
||||||||
| Goodwill |
||||||||
| Other assets and deferred charges |
||||||||
| |
|
|
|
|||||
| Total assets |
$ | $ | ||||||
| |
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | $ | ||||||
| Accrued liabilities |
||||||||
| Income taxes payable |
||||||||
| |
|
|
|
|||||
| Total current liabilities |
||||||||
| Deferred income taxes |
||||||||
| Operating lease liabilities |
||||||||
| Other liabilities |
||||||||
| Long-term debt, net |
||||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, par value $ |
||||||||
| Preferred stock, |
||||||||
| Paid-in capital |
||||||||
| Treasury stock, |
( |
) | ( |
) | ||||
| Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
| Retained earnings |
||||||||
| |
|
|
|
|||||
| Total stockholders’ equity |
||||||||
| |
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | $ | ||||||
| |
|
|
|
|||||
Thirteen Weeks |
Thirteen Weeks |
|||||||
Ended |
Ended |
|||||||
October 31, 2021 |
November 1, 2020 |
|||||||
| Food and beverage revenues |
$ | $ | ||||||
| Amusement and other revenues |
||||||||
| |
|
|
|
|||||
| Total revenues |
||||||||
| Cost of food and beverage |
||||||||
| Cost of amusement and other |
||||||||
| |
|
|
|
|||||
| Total cost of products |
||||||||
| Operating payroll and benefits |
||||||||
| Other store operating expenses |
||||||||
| General and administrative expenses |
||||||||
| Depreciation and amortization expense |
||||||||
| Pre-opening costs |
||||||||
| |
|
|
|
|||||
| Total operating costs |
||||||||
| |
|
|
|
|||||
| Operating income (loss) |
( |
) | ||||||
| Interest expense, net |
||||||||
| Loss on debt extinguishment / refinancing |
||||||||
| |
|
|
|
|||||
| Income (loss) before benefit for income taxes |
( |
) | ||||||
| Benefit for income taxes |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net income (loss) |
( |
) | ||||||
| |
|
|
|
|||||
| Unrealized foreign currency translation gain (loss) |
( |
) | ||||||
| Unrealized gain on derivatives, net of tax |
||||||||
| |
|
|
|
|||||
| Total other comprehensive income |
||||||||
| |
|
|
|
|||||
| Total comprehensive income (loss) |
$ | $ | ( |
) | ||||
| |
|
|
|
|||||
| Net income (loss) per share: |
||||||||
| Basic |
$ | $ | ( |
) | ||||
| Diluted |
$ | $ | ( |
) | ||||
| Weighted average shares used in per share calculations: |
||||||||
| Basic |
||||||||
| Diluted |
||||||||
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|||||||
Ended |
Ended |
|||||||
October 31, 2021 |
November 1, 2020 |
|||||||
| Food and beverage revenues |
$ | $ | ||||||
| Amusement and other revenues |
||||||||
| |
|
|
|
|||||
| Total revenues |
||||||||
| Cost of food and beverage |
||||||||
| Cost of amusement and other |
||||||||
| |
|
|
|
|||||
| Total cost of products |
||||||||
| Operating payroll and benefits |
||||||||
| Other store operating expenses |
||||||||
| General and administrative expenses |
||||||||
| Depreciation and amortization expense |
||||||||
| Pre-opening costs |
||||||||
| |
|
|
|
|||||
| Total operating costs |
||||||||
| |
|
|
|
|||||
| Operating income (loss) |
( |
) | ||||||
| Interest expense, net |
||||||||
| Loss on debt extinguishment / refinancing |
||||||||
| |
|
|
|
|||||
| Income (loss) before provision (benefit) for income taxes |
( |
) | ||||||
| Provision (benefit) for income taxes |
( |
) | ||||||
| |
|
|
|
|||||
| Net income (loss) |
( |
) | ||||||
| |
|
|
|
|||||
| Unrealized foreign currency translation gain (loss) |
( |
) | ||||||
| Unrealized gain (loss) on derivatives, net of tax |
( |
) | ||||||
| |
|
|
|
|||||
| Total other comprehensive income (loss) |
( |
) | ||||||
| |
|
|
|
|||||
| Total comprehensive income (loss) |
$ | $ | ( |
) | ||||
| |
|
|
|
|||||
| Net income (loss) per share: |
||||||||
| Basic |
$ | $ | ( |
) | ||||
| Diluted |
$ | $ | ( |
) | ||||
| Weighted average shares used in per share calculations: |
||||||||
| Basic |
||||||||
| Diluted |
||||||||
Thirteen Weeks Ended October 31, 2021 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance August 1, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Unrealized foreign currency translation loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
| Unrealized gain on derivatives, net of tax |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
| Repurchase of common stock |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance October 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Thirteen Weeks Ended November 1, 2020 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance August 2, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
| Unrealized foreign currency translation gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Unrealized gain on derivatives, net of tax |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
| Repurchase of common stock |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance November 1, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Thirty-Nine Weeks Ended October 31, 2021 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance January 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Unrealized foreign currency translation gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Unrealized gain on derivatives, net of tax |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
| Repurchase of common stock |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance October 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Thirty-Nine Weeks Ended November 1, 2020 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance February 2, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
| Unrealized foreign currency translation loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
| Unrealized loss on derivatives, net of tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
| Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
| Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
| Repurchase of common stock |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance November 1, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Thirty-Nine Weeks Ended October 31, 2021 |
Thirty-Nine Weeks Ended November 1, 2020 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | $ | ( |
) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization expense |
||||||||
| Non-cash interest expense |
||||||||
| Impairment of long-lived assets |
— | |||||||
| Deferred taxes |
( |
) | ( |
) | ||||
| Loss on disposal of fixed assets |
||||||||
| Loss on debt extinguishment or refinancing |
||||||||
| Share-based compensation |
||||||||
| Other, net |
||||||||
| Changes in assets and liabilities: |
||||||||
| Inventories |
( |
) | ||||||
| Prepaid expenses |
( |
) | ||||||
| Income tax receivable |
( |
) | ||||||
| Other current assets |
( |
) | ||||||
| Other assets and deferred charges |
( |
) | ( |
) | ||||
| Accounts payable |
( |
) | ( |
) | ||||
| Accrued liabilities |
||||||||
| Income taxes payable |
( |
) | ( |
) | ||||
| Other liabilities |
( |
) | ||||||
| |
|
|
|
|||||
| Net cash provided by (used in) operating activities |
( |
) | ||||||
| |
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
( |
) | ( |
) | ||||
| Proceeds from sales of property and equipment |
||||||||
| |
|
|
|
|||||
| Net cash used in investing activities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from debt |
||||||||
| Payments of debt |
( |
) | ( |
) | ||||
| Net proceeds from the issuance of common stock |
— | |||||||
| Proceeds from the exercise of stock options |
||||||||
| Dividends paid |
— | ( |
) | |||||
| Repurchases of common stock to satisfy employee withholding tax obligations |
( |
) | ( |
) | ||||
| Debt issuance costs and prepayment premiums |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Net cash provided by (used in) financing activities |
( |
) | ||||||
| |
|
|
|
|||||
| Increase (decrease) in cash and cash equivalents |
( |
) | ||||||
| Beginning cash and cash equivalents |
||||||||
| |
|
|
|
|||||
| Ending cash and cash equivalents |
$ | $ | ||||||
| |
|
|
|
|||||
| Supplemental disclosures of cash flow information: |
||||||||
| Increase (decrease) in fixed asset accounts payable |
$ | $ | ( |
) | ||||
| Cash paid (refund received) for income taxes, net |
$ | $ | ( |
) | ||||
| Cash paid for interest, net |
$ | $ | ||||||
Fair Value |
||||||||||||
Balance Sheet Location |
October 31, 2021 |
January 31, 2021 |
||||||||||
| Interest rate swaps |
Accrued liabilities | $ | ( |
) | $ | ( |
) | |||||
| Interest rate swaps |
Other liabilities | — | ( |
) | ||||||||
| |
|
|
|
|||||||||
| Total derivatives |
$ | ( |
) | $ | ( |
) | ||||||
| |
|
|
|
|||||||||
Thirteen weeks ended |
Thirty-nine weeks ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
October 31, 2021 |
November 1, 2020 |
|||||||||||||
| Loss recorded in accumulated other comprehensive income |
$ | $ | $ | — | $ | |||||||||||
| Loss reclassified into income (1) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Income tax expense (benefit) in accumulated income |
$ | $ | $ | $ | ( |
) | ||||||||||
(1) |
Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). |
Thirteen weeks ended |
Thirty-nine weeks ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
October 31, 2021 |
November 1, 2020 |
|||||||||||||
| Basic weighted average shares outstanding |
||||||||||||||||
| Weighted average dilutive impact of awards (1) |
||||||||||||||||
| Diluted weighted average shares outstanding |
||||||||||||||||
(1) |
Amounts exclude all potential common and common equivalent shares for periods when there is a net loss. |
October 31, 2021 |
January 31, 2021 |
|||||||
| Deferred amusement revenue |
$ | $ | ||||||
| Current portion of operating lease liabilities, net (1) |
||||||||
| Compensation and benefits |
||||||||
| Current portion of deferred occupancy costs |
||||||||
| Property taxes |
||||||||
| Deferred gift card revenue |
||||||||
| Current portion of derivatives |
||||||||
| Utilities |
||||||||
| Current portion of long-term insurance |
||||||||
| Sales and use taxes |
||||||||
| Customer deposits |
||||||||
| Accrued interest |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total accrued liabilities |
$ | $ | ||||||
| |
|
|
|
|||||
| (1) | The balance of leasehold incentive receivables of $ . |
October 31, 2021 |
January 31, 2021 |
|||||||
| Senior secured notes |
$ | $ | ||||||
| Credit facility - revolver |
||||||||
| |
|
|
|
|||||
| Total debt outstanding |
||||||||
| Less debt issuance costs |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Long-term debt, net |
$ | $ | ||||||
| |
|
|
|
|||||
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
October 31, 2021 |
November 1, 2020 |
|||||||||||||
| Interest expense on debt |
$ | $ | $ | $ | ||||||||||||
| Interest associated with swap agreements |
||||||||||||||||
| Amortization of issuance cost |
||||||||||||||||
| Interest income |
— | — | — | ( |
) | |||||||||||
| Capitalized interest |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total interest expense, net |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
October 31, 2021 |
November 1, 2020 |
|||||||||||||
| Operating lease cost |
$ | $ | ||||||||||||||
| Variable lease cost |
||||||||||||||||
| Short-term lease cost |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
October 31, 2021 |
November 1, 2020 |
|||||||||||||
| Stock options |
$ | $ | ||||||||||||||
| Restricted stock units |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Share-based compensation expense |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
2014 Stock Incentive Plan |
2010 Stock Incentive Plan |
|||||||||||||||
Number |
Wtd. Avg. |
Number |
Wtd. Avg. |
|||||||||||||
of Options |
Exercise Price |
of Options |
Exercise Price |
|||||||||||||
| Outstanding at January 31, 2021 |
$ | $ | ||||||||||||||
| Granted |
— | — | — | — | ||||||||||||
| Exercised |
( |
) | ( |
) | ||||||||||||
| Forfeited |
( |
) | — | — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Outstanding at October 31, 2021 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Exercisable at October 31, 2021 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Wtd. Avg. |
||||||||
Shares |
Fair Value |
|||||||
| Outstanding at January 31, 2021 |
$ | |||||||
| Granted |
||||||||
| Performance adjusted units |
||||||||
| Vested |
( |
) | ||||||
| Forfeited |
( |
) | ||||||
| |
|
|
|
|||||
| Outstanding at October 31, 2021 |
$ | |||||||
| |
|
|
|
|||||
| |
||||||||
| • | Revenues totaled $317,976 compared with $299,352 in the third quarter of 2019. Revenues totaled $109,052 in the third quarter of 2020, which ended with 104 of our 137 stores open and operating in limited capacity. |
| • | Overall comparable store sales were relatively flat, decreasing 0.4% compared with the same period in 2019 and increased 189.3% compared with the same period in 2020, which ended with 84 of our 114 comparable stores open and operating in limited capacity. |
| • | Net income totaled $10,585, or $0.21 per diluted share, compared with net income of $482, or $0.02 per diluted share in the same period of 2019. In the same period of 2020, we recorded a net loss of $48,043. |
| • | EBITDA totaled $58,850, or 18.5% of revenues, compared with EBITDA of $39,839 or 13.3% of revenues in the third quarter of 2019. The increase in EBITDA over fiscal 2019 is largely driven by the higher mix of amusements, reductions in hourly labor costs, and reduced discretionary marketing spend. We recorded an EBITDA loss of $21,659 in the third quarter of 2020. |
| • | Ended the quarter with $27,005 in cash and approximately $340,000 of liquidity available under the Company’s revolving credit facility, net of a $150,000 minimum liquidity covenant and $10,486 in letters of credit. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Food and beverage revenues |
$ | 107,747 | 33.9 | % | $ | 38,346 | 35.2 | % | ||||||||
| Amusement and other revenues |
210,229 | 66.1 | 70,706 | 64.8 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total revenues |
317,976 | 100.0 | 109,052 | 100.0 | ||||||||||||
| Cost of food and beverage (as a percentage of food and beverage revenues) |
30,082 | 27.9 | 10,664 | 27.8 | ||||||||||||
| Cost of amusement and other (as a percentage of amusement and other revenues) |
22,531 | 10.7 | 7,244 | 10.2 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total cost of products |
52,613 | 16.5 | 17,908 | 16.4 | ||||||||||||
| Operating payroll and benefits |
78,995 | 24.8 | 27,704 | 25.4 | ||||||||||||
| Other store operating expenses |
103,322 | 32.5 | 70,783 | 64.9 | ||||||||||||
| General and administrative expenses |
22,104 | 7.0 | 11,746 | 10.8 | ||||||||||||
| Depreciation and amortization expense |
34,381 | 10.8 | 34,384 | 31.5 | ||||||||||||
| Pre-opening costs |
2,092 | 0.7 | 2,570 | 2.4 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating costs |
293,507 | 92.3 | 165,095 | 151.4 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income (loss) |
24,469 | 7.7 | (56,043 | ) | (51.4 | ) | ||||||||||
| Interest expense, net |
13,423 | 4.2 | 8,213 | 7.6 | ||||||||||||
| Loss on debt extinguishment / refinancing |
2,829 | 0.9 | 904 | 0.8 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income (loss) before benefit for income taxes |
8,217 | 2.6 | (65,160 | ) | (59.8 | ) | ||||||||||
| Benefit for income taxes |
(2,368 | ) | (0.7 | ) | (17,117 | ) | (15.7 | ) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | 10,585 | 3.3 | % | $ | (48,043 | ) | (44.1 | )% | |||||||
| |
|
|
|
|
|
|
|
|||||||||
| Change in comparable store sales (1) |
189.3 | % | (65.6 | )% | ||||||||||||
| Company-owned stores at end of period (1) |
143 | 137 | ||||||||||||||
| Comparable stores at end of period (1) |
114 | 114 | ||||||||||||||
(1) |
As of the end of the third quarter of fiscal 2020, 104 of our 137 total stores and 84 of our 114 comparable stores were open and operating in limited capacity. Our comparable store count as of the end of the third quarter of fiscal 2020 excludes a store in Chicago, Illinois and a store in Houston, Texas, which were at or near the end of their respective lease terms, when the Company decided not to re-open. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Net income (loss) |
$ | 10,585 | 3.3 | % | $ | (48,043 | ) | -44.1 | % | |||||||
| Interest expense, net |
13,423 | 8,213 | ||||||||||||||
| Loss on debt extinguishment / refinancing |
2,829 | 904 | ||||||||||||||
| Benefit for income taxes |
(2,368 | ) | (17,117 | ) | ||||||||||||
| Depreciation and amortization expense |
34,381 | 34,384 | ||||||||||||||
| |
|
|
|
|||||||||||||
| EBITDA |
58,850 | 18.5 | % | (21,659 | ) | -19.9 | % | |||||||||
| Loss on asset disposal |
377 | 124 | ||||||||||||||
| Share-based compensation |
3,778 | 2,999 | ||||||||||||||
| Pre-opening costs |
2,092 | 2,570 | ||||||||||||||
| Other costs (1) |
3,112 | (5 | ) | |||||||||||||
| |
|
|
|
|||||||||||||
| Adjusted EBITDA |
$ | 68,209 | 21.5 | % | $ | (15,971 | ) | -14.6 | % | |||||||
| |
|
|
|
|||||||||||||
(1) |
Primarily represents costs related to currency transaction (gains) or losses. The third quarter of fiscal 2021 includes a $3,230 severance obligation to the Company’s former Chief Executive Officer, who terminated his service in this position effective September 30, 2021. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Operating income (loss) |
$ | 24,469 | 7.7 | % | $ | (56,043 | ) | -51.4 | % | |||||||
| General and administrative expenses |
22,104 | 11,746 | ||||||||||||||
| Depreciation and amortization expense |
34,381 | 34,384 | ||||||||||||||
| Pre-opening costs |
2,092 | 2,570 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Store Operating Income Before Depreciation and Amortization |
$ | 83,046 | 26.1 | % | $ | (7,343 | ) | -6.7 | % | |||||||
| |
|
|
|
|||||||||||||
Thirteen Weeks |
Thirteen Weeks |
|||||||
Ended |
Ended |
|||||||
October 31, 2021 |
November 1, 2020 |
|||||||
| New store and operating initiatives |
$ | 20,616 | $ | 7,700 | ||||
| Games |
195 | 361 | ||||||
| Maintenance capital |
8,402 | 1,208 | ||||||
| |
|
|
|
|||||
| Total capital additions |
$ | 29,213 | $ | 9,269 | ||||
| |
|
|
|
|||||
| Payments from landlords |
$ | 5,717 | $ | 4,709 | ||||
Thirteen Weeks Ended |
||||||||||||
October 31, 2021 |
November 1, 2020 |
Change |
||||||||||
| Total revenues |
$ | 317,976 | $ | 109,052 | $ | 208,924 | ||||||
| Total store operating weeks |
1,854 | 1,221 | 633 | |||||||||
| Comparable store revenues |
$ | 259,206 | $ | 89,592 | $ | 169,614 | ||||||
| Comparable store operating weeks |
1,482 | 993 | 489 | |||||||||
| Noncomparable store revenues |
$ | 55,356 | 20,092 | $ | 35,264 | |||||||
| Noncomparable store operating weeks |
372 | 228 | 144 | |||||||||
| Other revenues and deferrals |
$ | 3,414 | $ | (632 | ) | $ | 4,046 | |||||
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Food and beverage revenues |
$ | 316,511 | 32.9 | % | $ | 119,268 | 37.3 | % | ||||||||
| Amusement and other revenues |
644,443 | 67.1 | 200,423 | 62.7 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total revenues |
960,954 | 100.0 | 319,691 | 100.0 | ||||||||||||
| Cost of food and beverage (as a percentage of food and beverage revenues) |
86,366 | 27.3 | 32,667 | 27.4 | ||||||||||||
| Cost of amusement and other (as a percentage of amusement and other revenues) |
63,729 | 9.9 | 21,997 | 11.0 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total cost of products |
150,095 | 15.6 | 54,664 | 17.1 | ||||||||||||
| Operating payroll and benefits |
209,897 | 21.8 | 85,197 | 26.6 | ||||||||||||
| Other store operating expenses |
292,883 | 30.5 | 229,137 | 71.8 | ||||||||||||
| General and administrative expenses |
57,665 | 6.0 | 35,587 | 11.1 | ||||||||||||
| Depreciation and amortization expense |
104,355 | 10.9 | 104,896 | 32.8 | ||||||||||||
| Pre-opening costs |
5,427 | 0.6 | 8,781 | 2.7 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating costs |
820,322 | 85.4 | 518,262 | 162.1 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income (loss) |
140,632 | 14.6 | (198,571 | ) | (62.1 | ) | ||||||||||
| Interest expense, net |
41,971 | 4.3 | 22,491 | 7.0 | ||||||||||||
| Loss on debt extinguishment / refinancing |
2,829 | 0.3 | 904 | 0.3 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income (loss) before provision (benefit) for income taxes |
95,832 | 10.0 | (221,966 | ) | (69.4 | ) | ||||||||||
| Provision (benefit) for income taxes |
12,842 | 1.4 | (71,777 | ) | (22.4 | ) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | 82,990 | 8.6 | % | $ | (150,189 | ) | (47.0 | )% | |||||||
| |
|
|
|
|
|
|
|
|||||||||
| Change in comparable store sales (1) |
195.8 | % | (70.2 | )% | ||||||||||||
| Company-owned stores at end of period (1) |
143 | 137 | ||||||||||||||
| Comparable stores at end of period (1) |
114 | 114 | ||||||||||||||
(1) |
As of the end of the third quarter of fiscal 2020, 104 of our 137 total stores and 84 of our 114 comparable stores were open and operating in limited capacity. Our comparable store count as of the end of the third quarter of fiscal 2020 excludes a store in Chicago, Illinois and a store in Houston, Texas, which were at or near the end of their respective lease terms, when the Company decided not to re-open. |
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Net income (loss) |
$ | 82,990 | 8.6 | % | $ | (150,189 | ) | -47.0 | % | |||||||
| Interest expense, net |
41,971 | 22,491 | ||||||||||||||
| Loss on debt extinguishment / refinancing |
2,829 | 904 | ||||||||||||||
| Provision (benefit) for income taxes |
12,842 | (71,777 | ) | |||||||||||||
| Depreciation and amortization expense |
104,355 | 104,896 | ||||||||||||||
| |
|
|
|
|||||||||||||
| EBITDA |
244,987 | 25.5 | % | (93,675 | ) | -29.3 | % | |||||||||
| Loss on asset disposal |
634 | 541 | ||||||||||||||
| Impairment of long-lived assets and lease termination costs |
— | 13,727 | ||||||||||||||
| Share-based compensation |
9,936 | 5,344 | ||||||||||||||
| Pre-opening costs |
5,427 | 8,781 | ||||||||||||||
| Other costs (1) |
3,082 | 54 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Adjusted EBITDA |
$ | 264,066 | 27.5 | % | $ | (65,228 | ) | -20.4 | % | |||||||
| |
|
|
|
|||||||||||||
(1) |
Primarily represents costs related to currency transaction (gains) or losses. The third quarter of fiscal 2021 includes a $3,230 severance obligation to the Company’s former Chief Executive Officer, who terminated his service in this position effective September 30, 2021. |
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
October 31, 2021 |
November 1, 2020 |
|||||||||||||||
| Operating income (loss) |
$ | 140,632 | 14.6 | % | $ | (198,571 | ) | -62.1 | % | |||||||
| General and administrative expenses |
57,665 | 35,587 | ||||||||||||||
| Depreciation and amortization expense |
104,355 | 104,896 | ||||||||||||||
| Pre-opening costs |
5,427 | 8,781 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Store Operating Income Before Depreciation and Amortization |
$ | 308,079 | 32.1 | % | $ | (49,307 | ) | -15.4 | % | |||||||
| |
|
|
|
|||||||||||||
Thirty-Nine Weeks |
Thirty-Nine Weeks |
|||||||
Ended |
Ended |
|||||||
October 31, 2021 |
November 1, 2020 |
|||||||
| New store and operating initiatives |
$ | 40,372 | $ | 48,222 | ||||
| Games |
12,809 | 9,079 | ||||||
| Maintenance capital |
16,692 | 2,988 | ||||||
| |
|
|
|
|||||
| Total capital additions |
$ | 69,873 | $ | 60,289 | ||||
| |
|
|
|
|||||
| Payments from landlords |
$ | 7,802 | $ | 8,723 | ||||
Thirty-Nine Weeks Ended |
||||||||||||
October 31, 2021 |
November 1, 2020 |
Change |
||||||||||
| Total revenues |
$ | 960,954 | $ | 319,691 | $ | 641,263 | ||||||
| Total store operating weeks |
5,304 | 2,682 | 2,622 | |||||||||
| Comparable store revenues |
$ | 794,033 | $ | 268,426 | $ | 525,607 | ||||||
| Comparable store operating weeks |
4,243 | 2,184 | 2,059 | |||||||||
| Noncomparable store revenues |
$ | 179,603 | 54,763 | $ | 124,840 | |||||||
| Noncomparable store operating weeks |
1,061 | 498 | 563 | |||||||||
| Other revenues and deferrals |
$ | (12,682 | ) | $ | (3,498 | ) | $ | (9,184 | ) | |||
| • | sold shares of our common stock, generating gross proceeds of $185,600; |
| • | negotiated two amendments with our lenders, resulting in an extension of the maturity date of our revolving credit facility to August 17, 2024 and relief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022; |
| • | issued $550,000 of senior secured notes, maturing November 1, 2025; and |
| • | negotiated with our landlords, vendors, and other business partners to temporarily reduce our lease and contract payments and obtain other concessions. During fiscal 2020, a total of 126 initial rent relief agreements related to our operating locations and corporate headquarters were initially executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. As the COVID-19 pandemic continued to impact our business into the fourth quarter, the Company renewed negotiations with the majority of these landlords in order to provide additional rent relief, generally seeking to delay or extend the terms of deferral pay back periods and/or provide rent relief beyond the periods in the initial agreements. The second phase of negotiations resulted in 99 additional rent relief agreements, the last of which were executed in the third quarter of fiscal 2021. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities |
Item 6. |
Exhibits |
| * | Filed herein |
| DAVE & BUSTER’S ENTERTAINMENT, INC., a Delaware corporation | ||||||
| Date: December 7, 2021 | By: | /s/ Kevin Sheehan | ||||
| Kevin Sheehan | ||||||
| Interim Chief Executive Officer | ||||||
| Date: December 7, 2021 | By: | /s/ Scott J. Bowman | ||||
| Scott J. Bowman | ||||||
| Chief Financial Officer | ||||||
Exhibit 10.1
TRANSITION AND SEPARATION AGREEMENT AND RELEASE
This Transition and Separation Agreement and Release (this “Agreement”) is made and entered into by and between Brian A. Jenkins (“Executive”) and Dave & Buster’s Entertainment, Inc. (“D&B”) and Dave & Buster’s Management Corporation (“D&B Management”) (D&B and D&B Management are collectively referred to as the “Company”). Executive and the Company are hereinafter collectively referred to as the “Parties.”
RECITALS:
WHEREAS, Executive is currently employed as Chief Executive Officer pursuant to his Employment Agreement dated August 5, 2018 (the “Employment Agreement”);
WHEREAS, Executive plans to retire and resign from his position on the D&B Board of Directors (“Board”) and from all officer and any other director positions at D&B, D&B Management or any of their respective subsidiaries and affiliates, as of the close of business on September 30, 2021;
WHEREAS, Executive shall remain employed as a non-officer Senior Advisor to the interim Chief Executive Officer (or any subsequent Chief Executive Officer) through, and retire and resign from employment with D&B, D&B Management and all of their respective subsidiaries and affiliates at the close of business on November 30, 2021 (the “Last Day of Employment”);
WHEREAS, the Parties agree that the Company is not requiring that Executive execute this Agreement to obtain any wages and bonus payments otherwise owed to him; and
WHEREAS, the Parties desire to settle fully and finally, in the manner set forth herein, all differences between them which have arisen, or which may arise, prior to, or at the time of, the execution of this Agreement, including, but in no way limited to, any and all claims and controversies arising out of the employment relationship between Executive and the Company and the termination thereof.
NOW THEREFORE, in consideration of the Recitals and the mutual promises, covenants and agreements set forth herein and in full compromise, release and settlement, accord and satisfaction, and discharge of all the claims or causes of action, known or unknown, possessed by or belonging to the Parties hereto, and intending to be legally bound hereby, the Parties covenant and agree as follows:
TERMS OF AGREEMENT:
1. Retirement and Resignation. Effective as of the close of business on September 30, 2021, Executive shall retire and resign from the Board, and from all officer and any other director positions at D&B, D&B Management or any of their respective subsidiaries and affiliates. Executive shall remain employed (at the same rate of base salary as in effect on the date hereof) as a non-officer Senior Advisor to the interim Chief Executive Officer (or any subsequent Chief Executive Officer) (as applicable, the “Appointed Successor”) through, and retire and resign from employment with D&B, D&B Management and all of their respective subsidiaries and affiliates at the close of business on November 30, 2021. In all events, Executive shall be paid all base salary earned through the Last Day of Employment.
2. No Admission. This Agreement and compliance with this Agreement shall not be construed as an admission by the Company of any liability whatsoever, or as an admission by the Company of any violation of the rights of Executive or any violation of any order, law, statute, duty, or contract whatsoever against Executive or any person. The Company specifically denies and disclaims any liability to Executive for any alleged violation of any rights of Executive, or for any alleged violation of any order, law, statute, duty, common law rule or contract on the part of the Company.
3. Consideration. In consideration for this Agreement and Executive’s release and other promises set forth herein, the Company shall pay or provide Executive with the following:
| (1) | Three Million One Hundred Twenty Thousand Dollars ($3,120,000.00) (the “Severance Amount”), subject to all applicable withholdings, representing an amount equivalent to two (2) times the sum of Executive’s base salary and target annual bonus, to be made in equal, pro rata amounts according to the Company’s normal payroll schedule and procedures over the course of the twenty-four (24) months commencing on the first payroll date of the Company following the sixtieth (60th) day after the Last Day of Employment (the “First Payroll Date”); |
| (2) | Fifteen Thousand Six Hundred Ninety-Seven Dollars and Twenty Cents ($15,697.20) (the “COBRA Amount”), subject to all applicable withholdings, representing the total monthly premiums required by Executive to maintain his health insurance benefits provided by the Company’s group health insurance plan for twelve (12) months, in accordance with the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), to be made in equal, pro rata amounts according to the Company’s normal payroll schedule and procedures over the course of the twelve (12) months commencing on the First Payroll Date; |
| (3) | Thirty Thousand Dollars ($30,000.00) (the “Executive Allowance Amount”), subject to all applicable withholdings, representing twelve (12) months of executive allowance, to be made in equal, pro rata amounts according to the Company’s normal payroll schedule and procedures over the course of the twelve (12) months commencing on the First Payroll Date; |
| (4) | To the extent not previously paid, payment of the annual bonus under the Company’s existing annual bonus plan, which has two six-month components, for the amount accrued and earned for the first half of the Company’s 2021 fiscal year (which earned amount has been determined by the Company pursuant to the terms of such plan to be equal to Seven Hundred Eighty Thousand Dollars ($780,000)), subject to all applicable withholdings, at the time bonuses for such period are paid to bonus participants generally; |
2
The payments under this Section shall not be due, owed, or payable to Executive until each of the following has occurred: (a) the Company’s receipt of this Agreement, signed by Executive; and (b) the Bring-Down Release Effective Date; and the timing of such payments and benefits (and coordination with the release of claims hereunder and the Bring-Down Release) shall be as set forth in Paragraph 8 of the Employment Agreement. Executive agrees to return to the Company any payments received pursuant to this Section 3 in the event that Executive does not materially comply with all post-employment obligations set out in this Agreement, including, but not limited to, the restrictive covenants and the restrictions on disclosure of the Confidential Information of the Company set forth herein and in Paragraph 7 of the Employment Agreement, which are incorporated by reference into and hereby made a part of this Agreement. Nothing herein is intended to limit the protections afforded to Executive upon a change of control pursuant to the Equity Agreements.
In addition, Executive’s separation from employment shall be deemed a “termination without cause” (or words of similar import) and a “retirement” following Executive’s 60th birthday for purposes of each of Executive’s outstanding equity awards, and Executive’s entitlement to additional equity compensation will be governed by and subject to the terms and conditions set forth in each of his previous Equity Agreements (for the sake of clarity, as set forth on Annex A hereto). Nothing herein is intended to limit the protections afforded to Executive upon a change of control pursuant to the Equity Agreements.
4. Tax Indemnification. Executive acknowledges and agrees that the Company has made no representations to Executive regarding the tax consequences of any amounts received by Executive pursuant to this Agreement. Aside from any tax withholdings as set forth above, Executive agrees that he will pay any and all taxes that may be due on account of any sums of money he receives pursuant to this Agreement and that the Company shall not be liable for any portion of any such taxes. In the event any governmental agency asserts that the Company, or the Released Parties (as defined below), are liable for any taxes on account of any sums of money paid to and/or received by Executive pursuant to or as a result of this Agreement, Executive further agrees that he shall indemnify and hold the Company, and/or the Released Parties (as defined below) harmless from and for any and all claims, obligations and/or liabilities for any and all federal, state and or local taxes which may be or may become due on account of any such sums of money paid to and/or received by Executive under the terms of this Agreement.
5. Total Consideration. Executive agrees that the foregoing shall constitute an accord and satisfaction and a full and complete severance amount and consideration for his release of all claims and said payment shall constitute the entire amount of monetary consideration provided to him under this Agreement, and Executive will not seek any further compensation for any other claimed damage, costs, or attorneys’ fees in connection with the matters encompassed in this Agreement.
6. No Monies Owed & Duty of Cooperation. Executive agrees to facilitate a smooth transition of his duties (including to the Appointed Successor, if applicable) and to perform all business-related tasks reasonably requested of him through his Last Day of Employment. Executive acknowledges that his severance payments are conditioned on his fulfilment of these duties and tasks. Executive also represents that, after his Last Day of Employment, no earned
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wages, bonuses, stock awards, vacation, sick leave, overtime, premium pay and/or other monies or any other form of compensation of any kind, will be due to him except as described in this Agreement, and also agrees that no additional amounts will be owed under the Company’s annual bonus plan for FY 2021 other than those earned during the first six-month plan. To the extent Executive has been granted Restricted Stock Units (“RSUs”), Management Share Units (“MSUs”), Performance Share Units (“PSUs”) or Stock Options (“SOs”), the award agreements specific to each of such grants (collectively, the “Equity Agreements”) shall govern the vesting and/or payout of any such RSUs, MSUs, PSUs and SOs.
7. Release of Claims. Executive, to the extent permitted by law, without limitation, hereby irrevocably and unconditionally releases and forever discharges the Company, its current and former employees, its officers, agents, Board of Directors, supervisors, representatives, attorneys, divisions, parents, subsidiaries, parents’ subsidiaries, affiliates, joint ventures, partners, limited partners and successors, insurers, and all persons acting by, through, under, or in concert with any of them (all together collectively, the “Released Parties”) from any and all charges, complaints, claims, causes of action, debts, sums of money, controversies, agreements, promises, damages and liabilities of any kind or nature whatsoever, both at law and equity, known or unknown, suspected or unsuspected (hereinafter referred to as “claim” or “claims”), arising from conduct occurring on or before the date of this Agreement or arising in any contract between Executive and the Company or the Released Parties, which Executive at any time heretofore had or claimed to have or which he may have or claim to have regarding events that have occurred from the beginning of time through the date this Agreement is signed. Such claims include, but are not limited to, all actions, complaints, claims and grievances, whether actual or potential, known or unknown, and specifically but not exclusively all claims that could potentially be brought arising out of Executive’s employment with the Company. This provision is intended by the Parties to be all-encompassing and to act as a full and total release of any claim and any right to monetary or other recovery arising from any claim, whether specifically enumerated herein or not, that Executive might have or has had, that exists or ever has existed on or prior to the date of this Agreement. All such claims, including related attorneys’ fees and costs, are forever barred by this Agreement (with the exception of any attorneys’ fees and costs incurred to enforce this Agreement) without regard to whether those claims are based on any alleged breach of a duty arising in contract (including but not limited to claims arising under the Employment Agreement) or tort; any alleged unlawful act, any other claim or cause of action; and regardless of the forum in which it might be brought. This release specifically extends to, without limitation, claims or causes of action for wrongful termination, constructive discharge, impairment of ability to compete in the open labor market, breach of an express or implied contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation, defamation, slander, infliction of emotional distress, discrimination, harassment, retaliation, disability, loss of future earnings, and claims under the Texas Constitution, the United States Constitution, and applicable state and federal fair employment laws, federal equal employment opportunity laws, and federal and state labor statutes and regulations, including, but not limited to, the Civil Rights Act of 1964, as amended, the Worker Retraining and Notification Act of 1988, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Racketeer Influenced and Corrupt Company Act, the Family and Medical Leave Act, the Americans With Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as amended, the National Labor Relations Act, the Texas Worker’s Compensation Act, the Texas Health and Safety Code, the Texas Minimum Wage Act, the Texas Payday Law, the Texas Commission on Human Rights Act, and the Texas Labor Code, as amended.
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Executive also waives and releases to the maximum extent allowed by law all monetary and other relief that may be sought on Executive’s behalf by other persons or agencies. However, notwithstanding the foregoing, nothing in this Agreement shall be construed to affect the rights and responsibilities of the Equal Employment Opportunity Commission (“EEOC”) or Department of Fair Employment and Housing (“DFEH”) to enforce the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, or any other applicable law, nor shall anything in this Agreement be construed as a basis for interfering with Executive’s protected right to file a timely charge with, or participate in an investigation or proceeding conducted by the EEOC or DFEH, or any other state, federal or local government entity; provided, however, if the EEOC, DFEH, or any other state, federal or local government entity commences an investigation on Executive’s behalf, Executive specifically waives and releases his right, if any, to recover any monetary or other benefits of any sort whatsoever arising from any such investigation or otherwise.
To the extent applicable, nothing in this Agreement is intended to waive claims: (i) for unemployment or workers’ compensation benefits; (ii) for vested rights under ERISA-covered employee benefit plans and/or the Equity Agreements as applicable on the date of this Agreement; (iii) that may arise after the date of this Agreement; or (iv) which cannot be released by private agreement.
Executive agrees that he: (a) received all wages, bonuses, overtime payments, and other monetary compensation, and other employee benefits to which he was entitled as a result of his employment and/or separation of employment with the Company (other than the amounts payable at a future date as set forth in Section 3 and compensation due under his outstanding Equity Agreements); and (b) has not suffered any on the job injury for which he has not already filed a claim.
Notwithstanding the foregoing paragraphs, Executive agrees to waive any right to recover monetary damages in any charge, complaint, report, or lawsuit against the Company filed by Executive or by anyone else on Executive’s behalf, or based on any report or complaint made by Executive about the Company.
8. Release of Age Claims. Executive understands and agrees that he is knowingly and voluntarily entering into this Agreement with the purpose of releasing and waiving any claims he may have against Released Parties under the Age Discrimination in Employment Act of 1967 (the “ADEA”) and/or age discrimination claims under Chapter 21 of the Texas Labor Code, Tex. Lab. Code §§ 21.001, et. seq. (“Chapter 21”). Executive acknowledges and agrees that:
| (a) | This Agreement is written in a manner that he fully understands; |
| (b) | Executive specifically releases and waives any rights or claims against the Released Parties arising for age claims under the ADEA or Chapter 21; |
| (c) | This Agreement does not waive any rights or claims under the ADEA or Chapter 21 that may arise after the date this Agreement is executed; |
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| (d) | The rights and claims Executive is releasing and waiving in this Agreement are in exchange for consideration over and above anything to which he is already entitled; |
| (e) | Executive is hereby advised in writing to consult with an attorney prior to executing this Agreement; |
| (f) | Executive has been given a period of at least twenty-one (21) days within which to consider this Agreement; and |
| (g) | Executive understands and acknowledges that he has a period of seven (7) days after executing this Agreement within which he can revoke the release of claims under Section 7 of this Agreement, and the Agreement shall not become effective or enforceable until the revocation period has expired. |
To the extent Executive seeks to revoke his release of any age discrimination claims under the ADEA and/or Chapter 21 under this Section, any such revocation must be made in writing and sent to counsel for the Company, Celeste R. Yeager, 2001 Ross Avenue, Suite 1500, Dallas, TX 75201, within the seven (7) day time limit set forth above. Executive understands that nothing in this Agreement is intended to interfere with his right to later challenge his waiver of an ADEA or Chapter 21 claim for age discrimination.
9. No Pending Claims. Executive represents that he has not filed any complaints, claims, or actions against the Company and/or the Released Parties with any state, federal, or local agency or court or any other forum, and that he will not do so at any time hereafter based upon conduct occurring prior to the date that he executes this Agreement. Executive acknowledges and agrees that, to his present knowledge, he did not sustain any workplace injury during his employment with the Company for which he has not already filed a claim. Executive acknowledges that he has not made a claim or complaint of sexual harassment against the Company or any of its employees.
10. No Assignment of Claims. Executive represents that he has not made, and will not make, any assignment of any claim, cause or right of action, or any right of any kind whatsoever, embodied in any of the claims and obligations that are released herein, and that no other person or entity of any kind, other than Executive, had or has any interest in any claims that are released herein. Executive agrees to indemnify and hold the Company harmless from any and all claims, demands, expenses, costs, attorneys’ fees, and causes of action asserted by any person or entity due to a violation of this non-assignment provision.
11. Non-Disclosure/Confidentiality. Executive represents that as of the date hereof he has not disclosed the amount or terms of this Agreement and/or any aspect of the Parties’ negotiations that resulted in the Agreement to any other person other than his counsel, accountants, tax advisers, executive coach, or spouse, if any.
Executive agrees that he, his counsel, accountants, tax advisers, executive coach, and spouse, will keep completely confidential and will not disclose to any person or entity the facts and allegations giving rise to any dispute between the Parties, previous severance or settlement negotiations except as required or authorized by law or pursuant to court order.
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| i. | Executive acknowledges that these Non-Disclosure/Confidentiality provisions are a material part of the inducement for the Company to enter into this Agreement. |
| ii. | Executive agrees that the failure to comply with the terms of the Agreement’s Non-Disclosure/Confidentiality provisions shall amount to a material breach of this Agreement. Executive and the Company specifically agree that it would be impossible to accurately calculate or assess the actual damages sustained by the Company in the event of such a breach and therefore agree that any and each such breach shall entitle the Company to recover from Executive Twenty Thousand Dollars per proven breach as liquidated damages. |
| iii. | In any action for enforcement of these Non-Disclosure/Confidentiality provisions, the prevailing party (which shall only include the Parties) shall be entitled to recover its reasonable attorneys’ fees and costs. |
12. Non-Disparagement. Executive agrees to refrain from making any derogatory comment in any format, whether written or oral, to the press or any publication, whether paper or electronic, or to any individual or entity regarding the Company or any of its officers or members of the Board that relates to the Company’s business or related activities or the relationship between the Parties. Executive further and specifically agrees to refrain from any online posts or communications, including, but not limited to, posts on Yelp.com, Glassdoor.com, or any other website; as well as on any social media sites (i.e., Facebook) that disparage the Company or any of its officers or members of the Board. The Company shall instruct its senior vice presidents and members of the Board to refrain from making any derogatory comment in any format, whether written or oral, to the press or any publication, whether paper or electronic, or to any individual or entity regarding Executive, the Executive’s employment with the Company, or the relationship between the Parties. Nothing in the foregoing shall or shall be deemed to prevent or impair any person from testifying truthfully in any legal or administrative proceeding if such testimony is compelled, requested or nonwaivable under applicable law.
13. Future Employment. After Executive’s execution of this Agreement, he shall not seek employment or re-employment with the Company or any of its subsidiaries or parents as an employee. Should Executive become employed in contradiction of this Agreement, the fact of this Agreement will constitute a legitimate, non-discriminatory, non-retaliatory reason for terminating such employment and the Company or any of its subsidiaries or parents will have the absolute right to terminate such employment.
14. Employment Verification. Executive should direct any requests for verification of his employment with the Company to Rob Edmund, the Company’s General Counsel and Senior Vice President of Human Resources. If Mr. Edmund is contacted for a reference or verification of employment, the Company shall only verify Executive’s job title and dates of employment.
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15. Entirety of Agreement and Waiver. The Parties affirm that this Agreement constitutes the entire agreement between the Parties and supersedes any previous negotiations, agreements, or understandings of any kind relating to the subject matter hereof including but not limited to Executive’s Employment Agreement, subject to the limitation that Paragraphs 7, 8(e) (only the last sentence thereof), 9, 10, 11, and 12 of the Employment Agreement and the obligations therein as well as the Equity Agreements in their totality shall remain in full force and effect and are hereby incorporated into this Agreement, including but not limited to the restrictions on competition, solicitation, and hiring in Paragraph 7(f)-(g) of the Employment Agreement; that no other promise or agreement of any kind has been made to or with Executive by any person or entity to cause him to execute this Agreement. This Agreement may not be amended except by an instrument in writing, signed by each of the Parties. No failure to exercise and no delay in exercising any right, remedy, or power under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, or power under this Agreement preclude any other or further exercise thereof, or the exercise of any other right, remedy, or power provided herein or by law or in equity.
16. Severability. Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining parts, terms, or provisions shall not be affected thereby and shall remain fully valid and enforceable, and said illegal, unenforceable, or invalid part, term, or provision shall be deemed not to be a part of this Agreement.
17. Governing Law and Waiver of Jury Trial. This Agreement is made and entered into in the State of Texas and shall in all respects be interpreted, enforced and governed by and under the laws of the State of Texas, without regard to conflicts of law. If any action is brought to enforce this Agreement, the prevailing party (which only includes the Parties) shall be entitled to reasonable attorneys’ fees and costs. The Parties waive any right to jury trial.
18. Confidential Arbitration. Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Agreement, including the arbitrability of any controversy or claim, which cannot be settled by mutual agreement will be finally settled by confidential and binding arbitration in accordance with the Federal Arbitration Act. Further, notwithstanding the preceding sentence, in the event disputes arise that relate in any way to and concern this Agreement and also relate in any way to and concern one or more other Equity Agreements, the Parties agree that such disputes may be joined in a single binding arbitration if doing so would not result in unreasonable delay. All arbitrations shall be administered by a panel of three neutral arbitrators (the “Panel”) admitted to practice law in Texas for at least ten (10) years, in accordance with the American Arbitration Association Rules. Any such arbitration proceeding shall be administered by the American Arbitration Association and all hearings shall take place in Dallas County, Texas. The arbitration proceeding and all related documents will be confidential, unless disclosure is required by law. The Panel will have the authority to award the same remedies, damages, and costs that a court could award, including but not limited to the right to award injunctive relief in accordance with the other provisions of this Agreement. Further, the Parties specifically agree that, in the interest of minimizing expenses and promoting early resolution of claims, the filing of dispositive motions shall be permitted and that prompt resolution of such motions by the Panel shall be encouraged. The Panel shall issue a written reasoned award
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explaining the decision, the reasons for the decision, and any damages awarded. The Panel’s decision will be final and binding. The judgment on the award rendered by the Panel may be entered in any court having jurisdiction thereof. This provision can be enforced under the Federal Arbitration Act. The Panel shall be permitted to award only those remedies in law or equity that are requested by the Parties, appropriate for the claims and supported by evidence, and each Party shall be required to bear its or his own arbitration costs, attorneys’ fees and expenses.
| (a) | The decision of the arbitrator on the points in dispute will be final, unappealable and binding, and judgment on the award may be entered in any court having jurisdiction thereof. The Parties agree that this provision has been adopted by the Parties to rapidly and inexpensively resolve any disputes between them and that this provision will be grounds for dismissal of any court action commenced by any Party with respect to this Agreement, other than post-arbitration actions seeking to enforce an arbitration award. |
| (b) | The Parties will keep confidential, and will not disclose to any person, except as may be required by law, the existence of any controversy under this Section 18, the referral of any such controversy to arbitration or the status or resolution thereof. In addition, the confidentiality restrictions set forth in this Agreement shall continue in full force and effect. |
| (c) | As the sole exception to the exclusive and binding nature of the arbitration commitment set forth above, the Parties agree that the Company may resort to Texas state courts having equity jurisdiction in and for Dallas County, Texas and the United States District Court for the Northern District of Texas, Dallas Division, at its sole option, to request temporary, preliminary, and/or permanent injunctive or other equitable relief, including, without limitation, specific performance, to enforce the postemployment restrictions and other non-solicitation and confidentiality obligations set forth in this Agreement, without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond or giving notice, to the maximum extent permitted by law. However, nothing in this Section 18 should be construed to constitute a waiver of the Parties’ rights and obligations to arbitrate as set forth in this Section 18. |
| (d) | IN THE EVENT THAT ANY COURT OF COMPETENT JURISDICTION OR ARBITRATOR DETERMINES THAT THE SCOPE OF THE ARBITRATION OR RELATED PROVISIONS OF THIS AGREEMENT ARE TOO BROAD TO BE ENFORCED AS WRITTEN, THE PARTIES INTEND THAT THE COURT REFORM THE PROVISION IN QUESTION TO SUCH NARROWER SCOPE AS IT DETERMINES TO BE REASONABLE AND ENFORCEABLE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTY HERETO THAT THIS SECTION 18 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH IT OR HE IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. BEFORE ACCEPTING THE TERMS OF THIS AGREEMENT, INCLUDING THE RESTRICTIVE COVENANT TERMS, PLEASE READ AND UNDERSTAND YOUR CONTINUING OBLIGATIONS TO THE COMPANY AND ITS AFFILIATES. |
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19. Interpretation. This Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against the drafter or any of the Parties.
20. Voluntary Agreement. Executive represents that he has reviewed all aspects of this Agreement, that he has carefully read and fully understands all the provisions of this Agreement, including its final and binding effect, that he understands that in agreeing to this document he is releasing the Released Parties from any and all claims he may have against them, that he voluntarily agrees to all the terms set forth in this Agreement, that he knowingly and willingly intends to be legally bound by the same, that he was given the opportunity to consider the terms of this Agreement and discuss them with his legal counsel, that he does not rely and has not relied upon any statement made by any other party or its respective agents, representatives or attorneys with regard to any aspect of this Agreement, including its effect, and that the terms of this Agreement were determined through negotiation between counsel for Executive and the Company’s counsel.
21. Binding Agreement. It is expressly understood and agreed by the Parties hereto that this Agreement shall be binding upon and will inure to the benefit of Executive’s individual and/or collective heirs, successors, agents, executors, and administrators if any, and will inure to the benefit of the individual and/or collective successors, assigns, fiduciaries and insurers of the Parties, their present and former affiliated business entities, their successors, assigns, fiduciaries and insurers, and all of their present and former proprietors, partners, shareholders, directors, officers, employees, agents, and all persons acting by, through, or in concert with any of them.
22. Attorneys’ Fees and Costs. The Parties shall each bear their own attorneys’ fees and costs incurred in connection with this Agreement. However, in any subsequent proceeding or action to interpret or enforce the terms of the Agreement, the prevailing party (which only includes the Parties) shall be entitled to an award of reasonable attorney’s fees and costs.
23. Counterparts. This Agreement may be executed in counterparts and each counterpart, when executed, shall have the validity of a second original. Photographic or facsimile copies of any such signed counterparts may be used in lieu of the original for any purpose.
24. Acknowledgment. By signing below, Executive unconditionally represents and warrants that: (a) he has been advised to consult with an attorney regarding the terms of this Agreement; (b) he has consulted with, or has had sufficient opportunity to consult with his own counsel or other advisors regarding the terms of this Agreement; (c) he has relied solely on his own judgment and that of his attorneys, advisors, and representatives regarding the consideration for, and the terms of, this Agreement; (d) any and all questions regarding the terms of this Agreement have been asked and answered to his complete satisfaction; (e) he has read this Agreement and fully understand its terms and their import; and (f) he is entering into this Agreement voluntarily, of his own free will, and without any duress, coercion, fraudulent inducement, or undue influence exerted by or on behalf of any other Party or any other person or entity.
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25. Cooperation in Litigation. Executive agrees to cooperate fully with the Company and its counsel with respect to any matter (including litigation, investigation, government proceedings and general claims) which relates to matters with which he was involved during the term of his employment with the Company, subject to reimbursement of reasonable out-of-pocket travel costs and expenses, and, to the extent Executive is required to spend substantial time on such matters following his service as Senior Advisor, the Company shall agree to compensate Executive for such time at an hourly rate (based on Executive’s annual base salary as of the date hereof, divided by 2080). Further, as noted in Section 15 of this Agreement, the Company incorporates Paragraph 11 of Executive’s Employment Agreement herein, which entitles Executive to continuing rights for indemnification as articulated therein and to the extent permitted under the Company’s insurance and Company policies. Such cooperation may include appearing from time to time at the offices of the Company or its counsel, or telephonically, for conferences and interviews and providing testimony in depositions, court proceedings and administrative hearings as necessary for the Company to defend claims, and in general providing the Company and its counsel with the full benefit of Executive’s knowledge with respect to any such matter. Executive agrees to render such cooperation in a timely fashion and at such times as may be mutually agreeable to the parties concerned.
25. Medicare. This Agreement is based upon a good faith determination of the Parties to resolve a disputed claim. The Parties have not shifted responsibility of medical treatment to Medicare in contravention of 42 U.S.C. Sec. 1395y(b). The Parties resolved this matter in compliance with both state and federal law. The Parties made every effort to adequately protect Medicare’s interest and incorporate such into the terms of this Agreement.
Executive warrants that he is not a Medicare beneficiary as of the date of this release. Because Executive is not a Medicare recipient as of the date of this release, no conditional payments have been made by Medicare.
While it is impossible to accurately predict the need for medical treatment, this Agreement is based upon a good faith determination of the Parties in order to resolve a disputed claim. The Parties have attempted to resolve this matter in compliance with both state and federal law and it is believed that the terms adequately consider and protect Medicare’s interest and do not reflect any attempt to shift responsibility of treatment to Medicare pursuant to 42 U.S.C. Sec. 1395y(b). The Parties acknowledge and understand that any present or future action or decision by CMS or Medicare on this Agreement, or Executive’s eligibility or entitlement to Medicare or Medicare payments, will not render this release void or ineffective, or in any way affect the finality of this Agreement.
26. Effective Date. The Agreement is not effective or enforceable until expiration of seven (7) calendar days following Executive’s execution of the Agreement. The eighth (8th) day following Executive’s execution of the Agreement, if he has not revoked his Agreement within the seven-day revocation period, shall be the “Effective Date” of the Agreement. If Executive revokes his agreement within the seven-day revocation period, this Agreement will not be effective and the Company will have no obligation to comply with the terms herein, including but not limited to the payments under Section 3.
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27. Bring-Down Release. Subject to and conditioned upon the Company’s continued compliance with the terms of this Agreement, Executive agrees to extend (the “Extension”) Executive’s release and waiver of claims hereunder (and the related representations, acknowledgements, and covenants as set forth herein) effective as of the Last Day of Employment (the “Bring-Down Release”), in each case, to include all claims not otherwise excluded from such release arising through and including the Last Day of Employment. The Extension shall be effected by Executive’s re-executing (but not earlier than the Last Day of Employment) the signature page to this Agreement where indicated (such date of re-execution, the “Bring-Down Release Effective Date”).
The remainder of this page is left intentionally blank.
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PLEASE READ CAREFULLY. THIS TRANSITION AND SEPARATION AGREEMENT AND RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. YOU HAVE 21 DAYS TO CONSIDER THIS AGREEMENT. YOU MAY REVOKE YOUR AGREEMENT WITHIN 7 DAYS OF EXECUTING THIS AGREEMENT.
To reflect their agreement to each of the terms set forth above, the Parties have signed this Agreement as of the dates set forth below.
AGREED:
| Dated: September 21, 2021 | /s/ Brian A. Jenkins | |||||
| BRIAN A. JENKINS | ||||||
| Dated: September 21, 2021 | DAVE & BUSTER’S ENTERTAINMENT, INC. | |||||
| By: /s/ Robert W. Edmund | ||||||
| Name: Robert W. Edmund | ||||||
| Title: General Counsel, Secretary & SVP of HR | ||||||
| Dated: September 21, 2021 | DAVE & BUSTER’S MANAGEMENT, INC. | |||||
| By: /s/ Robert W. Edmund | ||||||
| Name: Robert W. Edmund | ||||||
| Title: General Counsel, Secretary & SVP of HR | ||||||
BRING-DOWN RELEASE:
(NOT TO BE EXECUTED BEFORE THE LAST DAY OF EMPLOYMENT)
| Dated: , 2021 |
| |
| BRIAN A. JENKINS |
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ANNEX A
TREATMENT UNDER EQUITY AGREEMENTS
The below sets forth the treatment in accordance with the existing terms of
Executive’s outstanding Equity Agreements that apply
in the event of a “termination without cause” or “retirement” after age 60 (as applicable)
| • | Under Executive’s June 2018 RSU grant, Executive will receive a pro-rata share of the 16,795 original RSU award (pro-rated through his Last Day of Employment); |
| • | Under Executive’s 2020 RSU grant, Executive will receive accelerated vesting of the rest of the original award amount at the time the next vesting tranche is settled for similarly situated executives, which is expected to be in or around May of 2022; |
| • | Under Executive’s 2020 MSU grant, Executive will receive accelerated vesting of the rest of the full earned award amount, to be accelerated and settled within 30 days of separation; |
| • | Under Executive’s 2021 April MSU award, Executive will receive a pro-rated portion of the earned award (pro-rated through his Last Day of Employment), to be settled after the performance period concludes in or around April of 2024. |
| • | Under Executive’s 2021 April PSU award, Executive will receive a pro-rated portion of the earned award (pro-rated through his Last Day of Employment), to be settled after the performance period concludes in or around April of 2022. |
| • | Executive will receive continued vesting following his separation of both his April 2019 stock options and the remainder of his 2021 RSU grant. |
| • | For all outstanding vested and unvested options, instead of having to exercise them within 90 days of separation, Executive’s will have the full original terms (10 years from date of grant) to exercise them. |
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Exhibit 10.2
|
Robert W. Edmund General Counsel & SVP of HR |
September 21, 2021
Via Hand Delivery
Mr. Kevin M. Sheehan
Chair, Board of Directors
Dave & Buster’s Entertainment, Inc.
| Re: | Appointment as Interim CEO |
Dear Kevin:
This letter agreement (this “Agreement”) sets forth our mutual understandings and agreements regarding your appointment, effective October 1, 2021 (the “Effective Date”), as Interim Chief Executive Officer (“Interim CEO”) of Dave & Buster’s Management Corporation, Inc., a Delaware corporation (“D&B Management”), and Dave & Buster’s Entertainment, Inc., a Delaware corporation (“D&B”), in addition to also serving as the Chairman of the Board of Directors of D&B (the “Board”). D&B Management and D&B are collectively referred to below as the “Company.” D&B Management, D&B and you are collectively referred to below as the “Parties.”
In consideration of the promises below, the sufficiency of which all Parties acknowledge, D&B, D&B Management, and you agree as follows:
1. Title; Duties; Term. You agree to serve as Interim CEO, and shall perform those duties that are customarily associated with the position of Interim CEO. This Agreement shall be in effect until the earlier of (i) the appointment of a permanent Chief Executive Officer of the Company or (ii) June 30, 2022, unless earlier terminated as provided below. During the course of your employment, you will devote your full business time and best efforts and abilities to the performance of your duties for the Company. You will comply with all applicable laws and all of the Company’s and its affiliates’ then-current policies and procedures. So long as you comply with the terms and provisions of D&B’s Code of Business Ethics, as the same may be revised from time-to-time and your activities do not interfere with your obligations to the Company, then, during the term of your employment you may: (x) engage in charitable, civic, fraternal and professional activities and (y) manage personal investments; provided that you disclose any conflicts of interest that cause your personal endeavors to be in material conflict with the business of the Company and/or its affiliates. You may not serve on the board of directors of any national charitable, civic or fraternal organization, any privately owned business, or any publicly-traded company without the prior written approval of the Board of Directors of D&B, in its sole discretion, and then only to the extent that any such enterprise does not compete with the Company or its affiliates. Your existing memberships on boards of directors as of the Effective Date as previously disclosed to the Company are deemed approved.
DAVE & BUSTER’S ENTERTAINMENT, INC. • 2481 MANANA DR. • DALLAS, TEXAS 75220-1203 • (214) 357-9588
• daveandbusters.com •
2. Compensation and Benefits. During the term of this Agreement, in lieu of any compensation that would otherwise be payable to you in your capacity as a member of the Board of Directors of D&B (which shall cease and be suspended during the period in which he serves as Interim CEO, except for continued vesting of previously granted restricted stock units and cash compensation already paid for the current fiscal quarter), you will receive the following compensation and benefits in consideration of your service as Interim CEO:
Base Salary. You will receive a base salary at an annual rate of $780,000. The base salary will be paid bi-weekly on regularly scheduled paydays determined by the Company.
Annual Bonus. You will be eligible to receive an annual bonus as approved by the Board and, if so approved, as determined by the Company based upon the attainment Company goals during the fiscal year set forth in the bonus plan approved by the Board of Directors of D&B Management, payable in accordance with such bonus plan. Your individual participation percentage in the bonus plan is equal to 100% of your base salary for the fiscal year. Any earned bonus shall be pro-rated to reflect the elapsed time you served as Interim CEO.
Equity Awards. As of the Effective Date, you shall be awarded under the Company’s Amended and Restated 2014 Omnibus Incentive Plan (the “Plan”) special one-time grants of time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) as follows:
(i) RSUs with respect to a number of shares of D&B common stock equal to $2,000,000 divided by the closing price of a share of D&B common stock on the date of execution of this Agreement. Such RSUs shall cliff vest upon the earliest to occur of (x) the first anniversary of the Effective Date, (y) the commencement date of employment of the permanent Chief Executive Officer of the Company (other than you), or (z) the termination of your employment as Interim CEO in connection with a Change in Control (as defined in the Plan).
(ii) PSUs with respect to up to 20,000 shares of D&B common stock. The PSUs will be subject to a one-year performance period and shall be earned upon the achievement of specified stock price levels and vesting terms to be established by the Compensation Committee of the Board of Directors of D&B.
(iii) The RSUs and PSUs shall otherwise be subject to the terms of the Plan and the customary form of award agreement approved by the Committee (as defined in the Plan), with the same terms relating to forfeiture upon resignation, death, disability, for cause termination, and termination for any other reason as were included in the Company’s FY 2021 RSU and PSU Award Agreements.
Retirement and Welfare Plans. You shall be eligible to participate in any profit sharing, qualified and nonqualified retirement plans, and any health, life, accident, disability
insurance, sick leave, or other benefit plans or programs made available to similarly situated employees of the Company as of the Effective Date, as may be amended, supplemented or modified from time to time as long as they are kept in force by the Company and provided that you meet the eligibility requirements of the respective plans. Nothing contained herein shall limit the right of the Company, in its sole and absolute discretion, to modify, amend or discontinue any of the plans.
Vacation. Subject to the Company’s generally applicable policies relating to vacations, you shall be entitled to paid vacation commensurate with the Company’s policy for senior management and your position and tenure with the Company.
Other Benefits. The Company will reimburse you for your commuting expenses and reasonable housing expenses (either a maximum of three days per week at a hotel mutually agreed with the Company and meals, or a standard corporate apartment lease). The Parties shall use their commercially reasonable efforts to structure the foregoing arrangements on a tax neutral basis to you.
Expenses. The Company shall reimburse you for all reasonable business expenses incurred by you in connection with the performance of your duties under this Agreement, in each case subject to the Company’s then current policies and procedures. Any expenses, including commuting and Other Benefits described in the prior paragraph, over $15,000 in a given month must be pre-approved by the Company’s Lead Independent Director.
3. Nondisclosure of Confidential Information. During the term of this Agreement, D&B, any subsidiary and any successor to any of the foregoing (the “Company Group”) agrees to continue to provide, and you will acquire, certain Confidential Information. As a material incentive for the Company Group to enter into this Agreement, as well as in exchange for the consideration specified herein (including, without limitation substantial amounts of compensation, benefits and access to the Confidential Information, in each case, as set forth herein), you agree to maintain in strict confidence and shall not disclose to third parties or use in any task, work or business (except on behalf of the Company Group) any proprietary or confidential information regarding the Company Group and/or your work with the Company Group, including, without limitation, trade secrets, current and future business plans, customers, customer lists, customer information, vendors, vendor lists, vendor information, employees, employee information, sales, purchasing, pricing determinations, price points, internal and external cost structures, operations, marketing, financial and other business strategies, positioning of stores, information and plans, products and services, games and amusement, development of games and amusement, food and beverage, financial performance and other financial data and compilations of data, new store development and locations, pipeline, information regarding the Company Group’s processes, computer programs and/or records, software programs, intellectual property, business development opportunities, acquisitions, acquisition targets, confidential information developed by consultants and contractors, manuals, memoranda, projections, and minutes (“Confidential Information”), without the express written permission of the Board. Your confidentiality obligation in this paragraph shall include, but not be limited to, any Confidential Information to which the you have access to, had access to, will have access to, receives, or received in connection with your employment by Company Group, and any information designated as confidential by the Company Group. Notwithstanding the foregoing, the term Confidential Information shall not include
information that (i) is publicly disclosed through no fault of you, either before or after it becomes known to you, (ii) was known to you prior to the date of this Agreement, which knowledge was acquired independently and not from the Company Group or its directors or employees or (iii) became available to you on a non-confidential basis from a source other than the Company Group, provided such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company Group or any other party with respect to such information. The Company Group and you acknowledge and agree that the Confidential Information is continually evolving and changing and that some new Confidential Information will be needed by you and provided by the Company Group for the first time in the course of the term of this Agreement. You expressly acknowledge the trade secret status of the Confidential Information and agree that your access to such Confidential Information constitutes a protectable business interest of the Company Group. Notwithstanding the foregoing restrictions, you may disclose any Confidential Information (a) to your legal advisors subject to such advisor’s agreement to maintain the information as confidential, (b) to the extent required for your enforcement of your rights hereunder (provided that such information be submitted under seal or otherwise not publicly disclosed), (c) to the extent required by an order of any court or other governmental authority, but in each case only after the Company Group has been so notified in writing and has had five (5) business days to obtain reasonable protection for such information in connection with such disclosure, and (d) if such disclosure is protected under the whistleblower provisions of federal law or regulation.
4. Acknowledgment of the Company Group’s Right In Work Product. During the term of this Agreement, you will create, develop and contribute for consideration certain ideas, plans, calculations, technical specifications, works of authorship, inventions, information, data, formulas, models, reports, processes, photographs, marks, designs, computer code, concepts and/or other proprietary materials to the Company Group related to the operation or promotion of the business of the Company Group (collectively, the “Work”). All of the Work is, was and shall hereafter be, a commissioned “work for hire” owned by the Company Group within the meaning of Title 17, Section 101 of the United States Code, as amended. You agree that all Work is created or developed for the sole use of the Company Group, and that you have no right to market in any manner whatsoever any such Work.
5. Noncompete. To protect the Company Group’s interest in its Confidential Information, contacts and relationships and as a material inducement for the Company Group to enter into this Agreement, as well as in exchange for the consideration specified herein (including, without limitation, substantial amounts of compensation, benefits and access to and provision of the Confidential Information, in each case, as set forth herein), and your employment under this Agreement, you agree and covenant that during the term of this Agreement and for a time period equal to the time of your service as Interim CEO following your termination for any reason under this Agreement (including, without limitation, your resignation (the “Non-Compete Period”), you shall not directly or indirectly, for yourself or others, within the United States or Canada, own, manage, operate, join, control, or participate in the ownership, management, operation or control of, or engage in any activity, work, business, or investment with any other Competitive Business (or for or on behalf of any other entity or person or any other Competitive Business), including, without limitation, any attempted or actual activity as an employee, officer, director, advisor, agent, equityholder, consultant or independent contractor (whether or not compensated for any of the foregoing); provided, however, that you may own an investment interest of less than 2% in a
publicly-traded company. As used in this Agreement, “Competitive Business” shall mean the owners or operators of venues in either the United States or Canada that combine a dining offering with games, entertainment, sports attractions or sports viewing, but shall not include (x) dining establishments that derive less than 20% of their aggregate revenues from games, entertainment and sports attractions and have not highlighted sports viewing as a core offering in their consumer marketing or (y) entertainment concepts that derive less than 20% of their aggregate revenues from dining operations. For the avoidance of doubt, Competitive Business shall include, without limitation, the companies identified in Appendix A to the minutes of the Company’s compensation committee meeting whereby the Company’s standard-form executive employment agreements were approved.
6. Non-Solicitation and Non-Hire. Additionally, during the term of this Agreement and for a period of twelve (12) months from the termination of this Agreement for any reason (the “Non-Solicitation and Non-Hire Period”), you shall not, directly or indirectly, on your own behalf or on behalf of any other person, partnership, entity, association, or corporation, induce or attempt to influence, induce, encourage, any employee of the Company Group at or above the managerial level (including, without limitation, store managers and regional managers), supplier, vendor, licensee, distributor, contractor or other business relation of the Company Group to cease doing business with, adversely alter or interfere with its business relationship with, the Company Group. Further, during the Non-Solicitation and Non-Hire Period, you shall not, on your own behalf or on behalf of any other person, partnership, entity, association, or corporation, (i) solicit or seek to hire any employee of the Company Group at or above the store general manager level for operations employees and the officer level for non-operations employees or in any other manner attempt directly or indirectly to influence, induce, or encourage any employee of the Company Group at or above the store general manager level for operations employees and with a title of “Director” or more senior for non-operations employees to leave their employ (provided, however, that nothing herein shall restrict you from engaging in any general solicitation that is not specifically targeted at such persons), nor shall your use or disclose to any person, partnership, entity, association, or corporation any information concerning the names, addresses or personal telephone numbers of any employees of the Company Group, or (ii), without the Company’s prior written consent, hire, employ or engage as a consultant any employee of the Company Group with a title of “Director” or more senior.
7. Reasonableness of Restrictions; Relief. It is the desire and intent of the Parties to this Agreement that the provisions of the foregoing paragraphs 4 and 5 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. It is expressly understood and agreed that the Company Group and you consider such restrictions to be reasonable and necessary for the purposes of preserving and protecting the Confidential Information and other legitimate business interests of the Company Group. Nevertheless, if any of the aforesaid restrictions is found to be unreasonable, over-broad as to geographic area, duration or scope of activity, or otherwise unenforceable, the Company Group and you intend for the restrictions herein set forth to be modified to be reasonable and enforceable and, as so modified, to be fully enforced. The Parties acknowledge that money damages would not be a sufficient remedy for any breach or threatened breach of such restrictions; therefore, notwithstanding the arbitration provisions in this Agreement, you and the Company Group agree that the Company Group may resort to a court to enforce such restrictions by injunctive relief. The Parties agree that the Company Group may enforce this promise without
posting a bond and without giving notice to the maximum extent permitted by law. The foregoing remedies are not the exclusive remedies but shall be in addition to all remedies available at law or in equity to the Company Group. You agree that the Non-Solicitation Period shall be tolled during any period of violation of the restrictions of paragraph 5 by you.
8. Termination. This Agreement shall automatically terminate upon your death or upon your becoming disabled. The determination of your disability shall be made in good faith by a physician reasonably acceptable to the Company. In addition, either the Company or you may terminate this Agreement at any time during the term by giving the other Party no less than thirty (30) days’ prior written notice of the date of termination. The Company may terminate this Agreement without any prior written notice to you if the termination is “for cause.” For purposes of this Agreement “for cause” shall be defined as the willful and continued failure by you to perform the duties assigned by the Board of Directors of D&B, gross insubordination, theft from the Company or its affiliates, habitual absenteeism or tardiness, conviction or plea of a felony, or any other reckless or willful misconduct that is contrary to the best interests of the Company or materially and adversely affects the reputation of the Company. If the Company believes that an event constituting “for cause” under this section has occurred and such event (i) is not a criminal offense and (ii) is readily curable by you, then the Company shall provide written notice to you setting forth: (A) the Company’s intent to terminate your employment for cause, and (B) the reasons for the Company’s intent to terminate your employment for cause. You shall have ten (10) business days following the receipt of such notice to cure the alleged breach. The Company may terminate this Agreement without any further notice to you if such cure has not occurred within such ten (10) business day period. In the event that the Company contends that the event is not readily curable by you, the Company shall provide written notice to you setting forth: (X) the reasons for the Company’s intent to terminate your employment “for cause” and (Y) the basis for the Company’s determination that such event is not readily curable. In the event your employment with the Company under this Agreement is terminated for any reason, the Company’s obligations to provide any payments or benefits to you shall be limited to payment of only that base salary which has been earned through the date of termination payable in accordance with the Company’s normal payroll practice, and such other payments or benefits required to be paid or provided under applicable law. Your RSUs and PSUs shall be treated in accordance with their respective terms upon termination of your employment as Interim CEO.
9. Section 409A. All payments hereunder that are determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) are intended to be exempt from or in compliance with Section 409A. If any payment, compensation or other benefit provided to you in connection with your employment termination is and you are a specified employee as defined in Section 409A(a)(2)(B)(i), then no portion of such “nonqualified deferred compensation” shall be paid before the earlier of (i) the day that is six (6) months plus one (1) day after the date of termination or (ii) five (5) days following your death (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to you during the period between the date of termination and the New Payment Date shall be paid to the Employee in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement. The Company makes no guarantee of any federal, state or local tax consequences with respect to the interpretation of Section 409A and its application to the terms of this Agreement, and the Company shall have no liability for any adverse tax consequences to you, as a result of any violation of Section 409A.
10. Confidential Arbitration. You and the Company hereby agree that any controversy or claim arising out of or relating to this Agreement, including the arbitrability of any controversy or claim, which cannot be settled by mutual agreement will be finally settled by confidential and binding arbitration in accordance with the Federal Arbitration Act. Further, notwithstanding the preceding sentence, in the event disputes arise that relate in any way to and concern this Agreement and also relate in any way to and concern one or more RSUs or PSUs, the Parties agree that such disputes may be joined in a single binding arbitration if doing so would not result in unreasonable delay. All arbitrations shall be administered by a panel of three neutral arbitrators (the “Panel”) admitted to practice law in Texas for at least ten (10) years, in accordance with the American Arbitration Association Rules. Any such arbitration proceeding shall be administered by the American Arbitration Association and all hearings shall take place in Dallas County, Texas. The arbitration proceeding and all related documents will be confidential, unless disclosure is required by law. The Panel will have the authority to award the same remedies, damages, and costs that a court could award, including but not limited to the right to award injunctive relief in accordance with the other provisions of this Agreement. Further, the Parties specifically agree that, in the interest of minimizing expenses and promoting early resolution of claims, the filing of dispositive motions shall be permitted and that prompt resolution of such motions by the Panel shall be encouraged. The Panel shall issue a written reasoned award explaining the decision, the reasons for the decision, and any damages awarded. The Panel’s decision will be final and binding. The judgment on the award rendered by the Panel may be entered in any court having jurisdiction thereof. This provision can be enforced under the Federal Arbitration Act. The Panel shall be permitted to award only those remedies in law or equity that are requested by the Parties, appropriate for the claims and supported by evidence, and each Party shall be required to bear its or your own arbitration costs, attorneys’ fees and expenses. The decision of the arbitrator on the points in dispute will be final, unappealable and binding, and judgment on the award may be entered in any court having jurisdiction thereof. The Parties agree that this provision has been adopted by the Parties to rapidly and inexpensively resolve any disputes between them and that this provision will be grounds for dismissal of any court action commenced by any Party with respect to this Agreement, other than post-arbitration actions seeking to enforce an arbitration award. The Parties will keep confidential, and will not disclose to any person, except as may be required by law, the existence of any controversy under this paragraph, the referral of any such controversy to arbitration or the status or resolution thereof. In addition, the confidentiality restrictions set forth in this Agreement shall continue in full force and effect.
As the sole exception to the exclusive and binding nature of the arbitration commitment set forth above, the Parties agree that the Company Group may resort to Texas state courts having equity jurisdiction in and for Dallas County, Texas and the United States District Court for the Northern District of Texas, Dallas Division, at its sole option, to request temporary, preliminary, and/or permanent injunctive or other equitable relief, including, without limitation, specific performance, to enforce the post-employment restrictions and other non-solicitation and confidentiality obligations set forth in this Agreement, without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond or giving notice, to the maximum extent permitted by law. However, nothing in this paragraph should be construed to constitute a waiver of the Parties’ rights and obligations to arbitrate as set forth in this paragraph.
IN THE EVENT THAT ANY COURT OF COMPETENT JURISDICTION OR ARBITRATOR DETERMINES THAT THE SCOPE OF THE ARBITRATION OR RELATED PROVISIONS OF THIS AGREEMENT ARE TOO BROAD TO BE ENFORCED AS WRITTEN, THE PARTIES INTEND THAT THE COURT REFORM THE PROVISION IN QUESTION TO SUCH NARROWER SCOPE AS IT DETERMINES TO BE REASONABLE AND ENFORCEABLE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTY HERETO THAT THIS PARAGRAPH CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH IT OR HE IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT.
BEFORE ACCEPTING THE TERMS OF THIS AGREEMENT, INCLUDING THE RESTRICTIVE COVENANT TERMS, PLEASE READ AND UNDERSTAND YOUR CONTINUING OBLIGATIONS TO THE COMPANY AND ITS AFFILIATES.
11. Indemnification. The Company shall indemnify you to the fullest extent permitted by Section 145 of the Delaware General Corporation Law against all costs, expenses, liabilities and losses, including but not limited to, attorneys fees, judgments, fines, penalties, taxes and amounts paid in settlement, reasonably incurred by you in conjunction with any action, suit, or proceeding, whether civil, criminal, administrative, or investigative in nature, which you are made or threatened to be made a party or witness by reason of your position as officer, employee or agent of the Company or otherwise due to your association with the Company or due to your position or association with any other entity, at the request of the Company. The Company shall advance to you all reasonable costs and expenses incurred in connection with such action within twenty (20) days after receipt by the Company of your written request. The Company shall be entitled to be reimbursed by you and you agree to reimburse the Company if it is determined that you are not entitled to be indemnified with respect to an action, suit, or proceeding under applicable law. The Company shall not settle any such claim in any manner which would impose liability, including monetary penalties or censure, on you without your prior written consent, unless your would be harmed by such action.
12. Governing Law; Submission to Jurisdiction; Jury Waiver. THIS AGREEMENT SHALL BE EXCLUSIVELY GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAW DOCTRINE. THE VENUE FOR ANY ENFORCEMENT OF THE ARBITRATION AWARD SHALL BE EXCLUSIVELY IN THE COURTS IN DALLAS, TEXAS, AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. THE PARTIES WAIVE ANY RIGHT TO A JURY TRIAL.
13. Entire Agreement; Miscellaneous. This Agreement represents the entire agreement relating to employment between the Company and you and supersedes all previous oral and written and all contemporaneous oral negotiations or commitments, writings and other understandings which, at the Effective Date, shall be deemed to be terminated and of no further force or effect. No prior or subsequent promises, representation, or understandings relative to any terms or conditions of employment are to be considered as part of this Agreement or as binding. This Agreement may be amended or modified only in a writing signed by the Parties hereto. The Company shall be
entitled to withhold from any amounts to be paid or benefits provided to you hereunder any federal, state, local, or foreign withholding or other taxes or charges which it is from time to time required to withhold. The Company shall be entitled to rely on an opinion of counsel or tax preparer if any question as to the amount or requirement of any such withholding shall arise. This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this Agreement.
| COMPANY: | ||
| DAVE & BUSTER’S MANAGEMENT | ||
| CORPORATION, INC. | ||
| By: |
/s/ Robert W. Edmund | |
| Name: |
Robert W. Edmund | |
| Title: |
President | |
| Address: |
2481 Manana Drive | |
| Dallas, Texas 75220 | ||
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
/s/ Robert W. Edmund | |
| Name: |
Robert W. Edmund | |
| Title: |
General Counsel & SVP of HR | |
| Address: |
2481 Manana Drive | |
| Dallas, Texas 75220 | ||
| INTERIM CEO: | ||
| /s/ Kevin M. Sheehan | ||
| Kevin M. Sheehan | ||
|
September 21, 2021 | ||
| (Date) |
||
Exhibit 10.3
Dave & Buster’s Entertainment, Inc.
2014 Omnibus Incentive Plan
RESTRICTED STOCK UNIT AGREEMENT
(Time-Based)
THIS RESTRICTED STOCK UNIT AGREEMENT (this “Award Agreement”) is made effective as of (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and [●] (the “Participant”).
R E C I T A L S:
WHEREAS, the Company has adopted the Dave & Buster’s Entertainment, Inc. 2014 Omnibus Incentive Plan (as amended from time to time, the “Plan”); and
WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined that it would be in the best interests of the Company and its stockholders to grant the award (the “Award”) of restricted stock units (each, an “RSU”) provided for herein to the Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:
1. Grant of Award. The Company hereby grants to the Participant [●] RSUs. All of the RSU Award will vest on , subject to earlier vesting in accordance with Section 3 below (the date of vesting, the “Vesting Date”). Each RSU represents one notional share of common stock, par value $.01 per share, of the Company (each, a “Share”), provided that the RSUs shall be settled in Shares in accordance with Section 2 below.
2. Settlement; Payment.
(a) RSUs. Subject to the terms of the Plan and this Award Agreement, including, without limitation, Section 4 hereof, and to the extent that it would not cause a violation of Section 409A, each RSU shall be settled by the issuance of a Share as soon as practicable following the Vesting Date, and in all events no later than sixty (60) days following the Vesting Date, as determined solely by the Company (the date of settlement, the “Settlement Date”). RSUs settled via Share issuance shall be distributed to the Participant or the Participant’s legal representative; provided, that the Company may, at its election, either (a) on or after the Settlement Date, issue a certificate representing the Shares subject to this Award Agreement, or (b) not issue any certificate representing Shares subject to this Award Agreement and instead document the Participant’s or the Participant’s legal representative’s interest in the Shares by registering the Shares with the Company’s transfer agent (or another custodian selected by the Company) in book-entry form.
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(b) Award Subject to Clawback Policy. The Participant agrees and acknowledges that the Participant is bound by, and the Award is subject to, any clawback policy adopted by the Committee from time to time.
3. Termination of Service. Notwithstanding anything herein to the contrary:
(a) Termination of Service Due to Death or Disability. Upon a termination of the Participant’s Service by reason of death or Disability that occurs at any time prior to the Settlement Date, then the Award shall be settled in accordance with Section 2 above in respect of the number of then-outstanding RSUs, except that notwithstanding Section 1, such RSUs shall be immediately fully vested and settled on the Settlement Date next following such termination of Service, subject to the applicable limitations set forth in Section 2 above.
For purposes of this Award Agreement, “Disability” means (i) “Disability” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (ii) if there is no such employment agreement or if it does not define Disability: the Participant is disabled to the extent that he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or is receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Dave & Buster’s Management Corporation, Inc. The determination of the Participant’s Disability shall be made in good faith by a physician reasonably acceptable to the Company.
(b) Termination upon hiring permanent CEO or expiration of Interim CEO Agreement. Upon the termination of the Participant’s Service by the Company or one of its successors or Affiliates by reason of (i) the hiring by the Company of a permanent CEO (other than the Participant) or (ii) the expiration of the Interim CEO Agreement dated September 21, 2021, either of which that occurs at any time prior to the Settlement Date, then the Award shall be settled in accordance with Section 2 above in respect of the number of then-outstanding RSUs, except that notwithstanding Section 1, such RSUs shall be immediately fully vested and settled on the Settlement Date next following such termination of Service, subject to the applicable limitations set forth in Section 2 above.
(c) Termination without Cause or for Good Reason related to a Change of Control. Upon (i) a termination of the Participant’s Service by the Company or one of its successors or Affiliates without Cause or due to the Participant’s resignation for Good Reason (excluding termination by reason of death or Disability), in either case prior to the Settlement Date (a “Specified Termination”) and (ii) the Specified Termination occurs either within ninety (90) days before or within twelve (12) months following the occurrence of a Change of Control of the Company (the “Protected Period”), that occurs at any time prior to the Settlement Date, then the Award shall be settled in accordance with Section 2 above in respect of the number of then-outstanding RSUs, except that notwithstanding Section 1, such RSUs shall be immediately fully vested and thereafter settled on the Settlement Date next following such termination of Service, subject to the applicable limitations set forth in Section 2 above; provided, that if a Specified Termination should occur prior to a Change of Control of the Company, the Award shall remain outstanding for up to ninety (90) days following such Specified Termination in order to determine whether such Specified Termination shall have occurred during a Protected Period such that the Award shall be eligible for settlement pursuant to this Section 3(b).
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(d) Termination without Cause. Upon a termination of the Participant’s Service by the Company or one of its successors or Affiliates without Cause, that occurs at any time prior to the Settlement Date, then the Award shall be settled in accordance with Section 2 above in respect of the number of then-outstanding RSUs that would have vested on the applicable date of vesting coincident with or next following such termination of Service, multiplied by a fraction, the numerator of which is the number of days elapsed after the immediately preceding date of vesting through and including the date of termination of Service, and the denominator of which is 272, except that notwithstanding Section 1, such RSUs shall be fully vested and settled on the Settlement Date next following such termination of Service, subject to the applicable limitations set forth in Section 2 above.
(e) For purposes of this Award Agreement, “Cause” means (x) “Cause” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (y) if there is no such employment agreement or if it does not define Cause: the willful and continued failure by the Participant to perform the duties assigned by the Company, failure to follow reasonable business-related directions from the Company, gross insubordination, theft from the Company or its Affiliates, habitual absenteeism or tardiness, conviction or plea of guilty or nolo contendere to a felony, misdemeanor involving fraud, theft or moral turpitude, or any other reckless or willful misconduct that is contrary to the best interests of the Company or materially and adversely affects the reputation of the Company.
(f) For purposes of this Award Agreement, “Good Reason” means (i) “Good Reason” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (ii) if there is no such employment agreement or if it does not define Good Reason: Without the Participant’s consent, (A) a material reduction in the Participant’s annual base salary or (B) a relocation of the Participant’s primary place of employment with the Company by more than fifty (50) miles from that in effect as of the Date of Grant; provided, however, that neither item (A) nor item (B) shall constitute Good Reason unless the Participant has provided written notice to the Company within thirty (30) days of the occurrence of such event and the Company shall have failed to cure such event within thirty (30) days of receipt of such written notice.
(g) Other Terminations of Service. Upon a termination of the Participant’s Service prior to the Settlement Date for any reason other than pursuant to Sections 3(a), 3(b), 3(c) and 3(d) above, the Award, including any then-outstanding RSUs, shall immediately terminate and be forfeited without consideration.
(h) Release. Upon a termination of the Participant’s Service prior to the Settlement Date for termination without Cause pursuant to Section 3(c), settlement of any Award shall be conditioned first upon the Participant’s execution of a fully effective and non-revocable general release (“Release”) in favor of the Company, its Board of Directors, Affiliates, and employees, in such form as reasonably approved by the Company and the Participant within sixty (60) days of the Participant’s termination of Service, which Release shall be provided to the Participant within five (5) days of the Participant’s termination of Service.
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4. No Right to Continued Service. The granting of the Award evidenced hereby and this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the Service of such Participant.
5. Shareholder Rights. Neither the Participant nor the Participant’s representative shall have any rights as a shareholder of the Company with respect to the RSUs until such Person receives the Shares, if any, issued upon settlement.
6. Non-Solicitation and Non-Hire. If the Participant has an employment agreement with the Company or any of its Subsidiaries that contains non-solicitation and/or non-hire covenants, the covenants are incorporated into this Award Agreement by reference. To the extent the Participant does not have an employment agreement containing such covenants, the following restrictive covenants shall apply:
As a material incentive for the Company to enter into this Award Agreement, during the term of the Participant’s employment with the Company or any of its Subsidiaries and for a period of twelve (12) months from the termination of the Participant’s employment for any reason (including, without limitation, resignation by the Participant) (the “Non-Solicitation and Non-Hire Period”) the Participant shall not, directly or indirectly, on the Participant’s own behalf or on behalf of any other person, partnership, entity, association, or corporation, induce or attempt to influence, induce, or encourage anyone who is or, within the six (6) months prior to the date of termination was, an employee of the Company or any of its Subsidiaries at or above the managerial level (including, without limitation, General Managers, Assistant General Managers, store departmental managers, and all higher-ranking managers) (for purposes of this Section 6, an “Employee”), client, supplier, vendor, licensee, distributor, contractor or other business relation of the Company or any of its Subsidiaries to cease doing business with, adversely alter or interfere with its business relationship with, the Company or any of its Subsidiaries. Further, during the Non-Solicitation and Non-Hire Period, the Participant shall not, on the Participant’s own behalf or on behalf of any other person, partnership, entity, association, or corporation, (i) solicit or seek to hire any Employee, or in any other manner attempt directly or indirectly to influence, induce, or encourage any Employee to leave their employ (provided, however, that nothing herein shall restrict the Participant from engaging in any general solicitation that is not specifically targeted at such persons), nor shall the Participant use or disclose to any person, partnership, entity, association, or corporation any information concerning the names, addresses or personal telephone numbers of any Employee, (ii) without the Company’s prior written consent, hire, employ or engage as a consultant any Employee, or (iii) directly or indirectly solicit, induce, or attempt to influence, induce, or encourage any person, partnership, entity, association, or corporation that is a client or customer of the Company or its Subsidiaries and who or which the Participant helped to schedule or conduct a special event or corporate teambuilding while employed by the Company or its Subsidiaries to schedule or conduct a special event or corporate teambuilding through another person, partnership, entity, association, or corporation.
This Section 6 shall survive termination or settlement of the Award and termination or satisfaction of the Award Agreement.
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7. Securities Laws/Legend on Certificates. The issuance and delivery of Shares shall comply with all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. If the Company deems it necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, the Participant shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company which satisfies such requirements. The certificates representing the Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
8. Transferability. Unless otherwise provided by the Committee, the Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Award to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.
9. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold any applicable withholding taxes in respect of the Award, its exercise or transfer and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.
10. Notices. Any notification required by the terms of this Award Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. A notice shall be addressed to the Company, Attention: General Counsel, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.
11. Entire Agreement. This Award Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof and supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.
12. Waiver. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.
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13. Successors and Assigns. The provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Award Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.
14. Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Award Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Award Agreement shall be governed by the internal laws of the State of Delaware, excluding any conflicts or choice-of-law rule or principle that might otherwise refer construction or interpretation of the Award Agreement to the substantive law of another jurisdiction. Each party to this Award Agreement agrees that it shall bring all claims, causes of action and proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or be related to the Award Agreement exclusively in the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject-matter jurisdiction over such claim, cause of action or proceeding, exclusively in the United States District Court for the District of Delaware (the “Chosen Court”) and hereby (i) irrevocably submits to the exclusive jurisdiction of the Chosen Court, (ii) waives any objection to laying venue in any such proceeding in the Chosen Court, (iii) waives any objection that the Chosen Court is an inconvenient forum or does not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such claim or cause of action shall be effective if notice is given in accordance with this Award Agreement.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY CLAIM OR CAUSE OF ACTION (WHETHER IN CONTRACT, IN TORT, AT LAW OR OTHERWISE) INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS, HIS OR HER OBLIGATIONS HEREUNDER.
15. Award Subject to Plan. By entering into this Award Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Award is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
16. No Guarantees Regarding Tax Treatment. The Participant shall be responsible for all taxes with respect to the Award. The Committee and the Company make no guarantees regarding the tax treatment of the Award.
17. Amendment. The Committee may amend or alter this Award Agreement and the Award granted hereunder at any time, subject to the terms of the Plan.
18. Signature in Counterparts. This Award Agreement may be signed in counterparts, manually or electronically, and each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.
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19. Electronic Signature and Delivery. This Award Agreement may be accepted by return signature or by electronic confirmation. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Award Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Delivery of a copy of this Agreement or any other document contemplated hereby bearing an original or electronic signature by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original or electronic signature.
20. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
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IN WITNESS WHEREOF, the Company and the Participant have executed this Restricted Stock Unit Agreement as of the date first set forth above.
PARTICIPANT
| By: |
| |
| [●] |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Name: [●] | ||
| Title: [●] | ||
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Exhibit 10.4
Dave & Buster’s Entertainment, Inc.
2014 Omnibus Incentive Plan
(Performance Based)
RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Award Agreement”) is made effective as of (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and [●] (the “Participant”).
R E C I T A L S:
WHEREAS, the Company has adopted the Dave & Buster’s Entertainment, Inc. 2014 Omnibus Incentive Plan (as amended from time to time, the “Plan”); and
WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined that it would be in the best interests of the Company and its stockholders to grant the award (the “Award”) of performance-vesting restricted stock units (each, an “RSU”) provided for herein to the Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:
1. Grant of Award. The Company hereby grants to the Participant RSUs on the following terms:
(a) Upon achievement of target-level performance set forth in this Agreement, [●] RSUs may be earned under this Award (the “Target Achievable RSUs”) in respect of the one-year performance period commencing on and ending on or prior to (the “Performance Period,” and the last day, the “Closing Date”).
(b) Each RSU represents one notional share of common stock, par value $.01 per share, of the Company (each, a “Share”).
2. Terms and Conditions.
(a) Calculation of Earned Portion. The Award shall be one hundred percent (100%) unvested as of the Date of Grant. Pursuant to the terms of the Plan and this Award Agreement, including, without limitation, Sections 3 and 4 below, as soon as reasonably practicable following the Closing Date, the Committee shall determine and certify the number of RSUs, if any, that shall be deemed earned and eligible for vesting and settlement (such RSUs, “Earned RSUs”) in accordance with subsection (c) below. Any and all RSUs that are not deemed to be Earned RSUs shall be forfeited and canceled immediately without consideration and shall not be eligible for settlement in accordance with Section 3 hereof.
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(b) Service Vesting. The Earned RSUs shall vest on , subject to earlier vesting in accordance with Section 4 below (the date of vesting, the “Vesting Date”).
(c) Performance Calculation. All or a portion of the RSUs shall be deemed earned as set forth in the table below based on the volume-weighted average closing price of a share of the Company’s common stock for any consecutive 10-trading day period (the “Average Share Price”) during the Performance Period. If during the Performance Period, the Average Share Price fails to achieve the maximum level but falls between the minimum level and maximum level (each such level as set forth below), then the percentage of RSUs that shall be deemed earned shall be determined using straight-line interpolation between the two applicable levels. The RSUs that are deemed earned in accordance with this Section 2(c) shall be payable as of (and not before) the Settlement Date (defined below).
| Average Share Price |
Earned Percentage of RSUs |
|||
| [●] or greater (maximum level) |
100 | % | ||
| [●] (minimum level) |
50 | % | ||
| Less than [●] |
0 | % | ||
3. Settlement.
(a) Share Settlement. Pursuant to the terms of the Plan and this Award Agreement, including, without limitation, Sections 3(b) and 4 below, and to the extent that it would not cause a violation of Section 409A, each vested Earned RSU shall be settled by the issuance of a Share as soon as practicable following the Vesting Date, and in all events no later than the June 30 next following the Vesting Date, as determined solely by the Company (the date of settlement, the “Settlement Date”). Vested and Earned RSUs settled via Share issuance shall be distributed to the Participant or the Participant’s legal representative; provided, that the Company may, at its election, either (a) on or after the Settlement Date, issue a certificate representing the Shares subject to this Award Agreement, or (b) not issue any certificate representing Shares subject to this Award Agreement and instead document the Participant’s or the Participant’s legal representative’s interest in the Shares by registering the Shares with the Company’s transfer agent (or another custodian selected by the Company) in book-entry form.
(b) Limitations. The maximum number of Shares issuable under this Award Agreement (the “Maximum Share Limit”) shall equal 100% of the Target Achievable RSUs.
(c) Award Subject to Clawback Policy. The Participant agrees and acknowledges that the Participant is bound by, and the Award is subject to, any clawback policy adopted by the Committee from time to time.
4. Termination of Service. Notwithstanding anything herein to the contrary:
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(a) Termination of Service Due to Death or Disability. Upon a termination of the Participant’s Service by reason of death or Disability that occurs:
(i) at any time prior to the expiration of the Performance Period, then the Award shall be settled in accordance with Section 3 above in respect of 100% of the Target Achievable RSUs, notwithstanding the termination of the Participant’s Service, except that notwithstanding Section 2(b), such RSUs shall be immediately fully vested and thereafter settled within sixty (60) days following such termination of Service, subject to the applicable limitations set forth in Section 3 above; and
(ii) after the expiration of the Performance Period and prior to the Settlement Date, then the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs, except that notwithstanding Section 2(b), such RSUs shall be immediately fully vested and settled within thirty (30) days following such termination of Service, subject to the applicable limitations set forth in Section 3 above.
For purposes of this Award Agreement, “Disability” means (i) “Disability” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (ii) if there is no such employment agreement or if it does not define Disability: the Participant is disabled to the extent that he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or is receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Dave & Buster’s Management Corporation, Inc. The determination of the Participant’s Disability shall be made in good faith by a physician reasonably acceptable to the Company.
(b) Termination upon hiring permanent CEO or expiration of Interim CEO Agreement. Upon the termination of the Participant’s Service by the Company or one of its successors or Affiliates by reason of (i) the hiring by the Company of a permanent CEO (other than the Participant), or (ii) the expiration of the Interim CEO Agreement dated September 21, 2021, either of which that occurs at any time prior to the Settlement Date, then the Award shall be settled in accordance with Section 3 above following the end of the Performance Period in respect of the number of Earned RSUs.
(c) Termination without Cause or for Good Reason related to a Change of Control. Upon (i) a termination of the Participant’s Service by the Company or one of its successors or Affiliates without Cause or due to the Participant’s resignation for Good Reason (excluding termination by reason of death or Disability) (a “Specified Termination”) and (ii) the Specified Termination occurs either within ninety (90) days before or within twelve (12) months following the occurrence of a Change of Control of the Company (the “Protected Period”), then:
(i) If the Change in Control occurs at any time prior to the expiration of the Performance Period, the Award shall be converted to restricted stock units (“RSUs”) in respect of the Target Achievable RSUs, notwithstanding the termination of the Participant’s Service, except that notwithstanding Section 2(b), such RSUs shall be immediately fully vested and be settled on the Settlement Date following such termination of Service, subject to the applicable limitations set forth in Section 3 above; and
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(ii) If the Change in Control occurs after the expiration of the Performance Period and prior to the Settlement Date, the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs, except that notwithstanding Section 2(b), such RSUs shall be fully vested upon such termination (or, if later, such Change of Control) and settled within ten (10) days following such termination (or, if later, such Change of Control), subject to the applicable limitations set forth in Section 3 above;
provided, that if a Specified Termination should occur prior to a Change of Control of the Company, the Award shall remain outstanding for up to ninety (90) days following such Specified Termination in order to determine whether such Specified Termination shall have occurred during a Protected Period such that the Award shall be eligible for settlement pursuant to this Section 4(c).
(d) Termination of Service without Cause. Upon a termination of the Participant’s Service by the Company or one of its successors or Affiliates without Cause that occurs:
(i) at any time prior to the expiration of the Performance Period, then the Award shall be settled in accordance with Section 3 above in respect of the number of RSUs that would have been earned pursuant to this Agreement based on actual performance during the full Performance Period, notwithstanding the termination of the Participant’s Service, multiplied by a fraction, the numerator of which is the number of days in the Performance Period through and including the date of termination of Service, and the denominator of which is 272, except that notwithstanding Section 2(b), such RSUs shall be fully vested and settled on the Settlement Date following such termination of Service, subject to the applicable limitations set forth in Section 3 above; and
(ii) after the expiration of the Performance Period and prior to the Settlement Date, then the Award shall be settled in accordance with Section 3 above.
(e) For purposes of this Award Agreement, “Cause” means (x) “Cause” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (y) if there is no such employment agreement or if it does not define Cause: the willful and continued failure by the Participant to perform the duties assigned by the Company, failure to follow reasonable business-related directions from the Company, gross insubordination, theft from the Company or its Affiliates, habitual absenteeism or tardiness, conviction or plea of guilty or nolo contendere to a felony, misdemeanor involving fraud, theft or moral turpitude, or any other reckless or willful misconduct that is contrary to the best interests of the Company or materially and adversely affects the reputation of the Company.
(f) For purposes of this Award Agreement, “Good Reason” means (i) “Good Reason” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (ii) if there is no such employment agreement or if it does not define Good Reason: Without the Participant’s consent, (A) a material reduction in the Participant’s annual base
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salary or (B) a relocation of the Participant’s primary place of employment with the Company by more than fifty (50) miles from that in effect as of the Date of Grant; provided, however, that neither item (A) nor item (B) shall constitute Good Reason unless the Participant has provided written notice to the Company within thirty (30) days of the occurrence of such event and the Company shall have failed to cure such event within thirty (30) days of receipt of such written notice.
(g) Other Terminations of Service. Upon a termination of the Participant’s Service prior to the Settlement Date for any reason other than pursuant to Sections 4(a), 4(b) and 4(c) above, the Award, including any then-outstanding Earned RSUs, shall immediately terminate and be forfeited without consideration.
(h) Release. Upon a termination of the Participant’s Service prior to the final Settlement Date for termination without Cause pursuant to Section 4(c), settlement of any Award shall be conditioned first upon the Participant’s execution of a fully effective and non-revocable general release (“Release”) in favor of the Company, its Board of Directors, Affiliates, and employees, in such form as reasonably approved by the Company and the Participant within sixty (60) days of the Participant’s termination of Service, which Release shall be provided to the Participant within five (5) days of the Participant’s termination of Service.
5. No Right to Continued Service. The granting of the Award evidenced hereby and this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the Service of such Participant.
6. Shareholder Rights. Neither the Participant nor the Participant’s representative shall have any rights as a shareholder of the Company with respect to the RSUs until such Person receives the Shares, if any, issued upon settlement.
7. Non-Solicitation and Non-Hire. If the Participant has an employment agreement with the Company or any of its Subsidiaries that contains non-solicitation and/or non-hire covenants, the covenants are incorporated into this Award Agreement by reference. To the extent the Participant does not have an employment agreement containing such covenants, the following restrictive covenants shall apply:
As a material incentive for the Company to enter into this Award Agreement, during the term of the Participant’s employment with the Company or any of its Subsidiaries and for a period of twelve (12) months from the termination of the Participant’s employment for any reason (including, without limitation, resignation by the Participant) (the “Non-Solicitation and Non-Hire Period”) the Participant shall not, directly or indirectly, on the Participant’s own behalf or on behalf of any other person, partnership, entity, association, or corporation, induce or attempt to influence, induce, or encourage anyone who is or, within the six (6) months prior to the date of termination was, an employee of the Company or any of its Subsidiaries at or above the managerial level (including, without limitation, General Managers, Assistant General Managers, store departmental managers, and all higher-ranking managers) (for purposes of this Section 7, an
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“Employee”), client, supplier, vendor, licensee, distributor, contractor or other business relation of the Company or any of its Subsidiaries to cease doing business with, adversely alter or interfere with its business relationship with, the Company or any of its Subsidiaries. Further, during the Non-Solicitation and Non-Hire Period, the Participant shall not, on the Participant’s own behalf or on behalf of any other person, partnership, entity, association, or corporation, (i) solicit or seek to hire any Employee, or in any other manner attempt directly or indirectly to influence, induce, or encourage any Employee to leave their employ (provided, however, that nothing herein shall restrict the Participant from engaging in any general solicitation that is not specifically targeted at such persons), nor shall the Participant use or disclose to any person, partnership, entity, association, or corporation any information concerning the names, addresses or personal telephone numbers of any Employee, (ii) without the Company’s prior written consent, hire, employ or engage as a consultant any Employee, or (iii) directly or indirectly solicit, induce, or attempt to influence, induce, or encourage any person, partnership, entity, association, or corporation that is a client or customer of the Company or its Subsidiaries and who or which the Participant helped to schedule or conduct a special event or corporate teambuilding while employed by the Company or its Subsidiaries to schedule or conduct a special event or corporate teambuilding through another person, partnership, entity, association, or corporation.
This Section 7 shall survive termination or settlement of the Award and termination or satisfaction of the Award Agreement.
8. Securities Laws/Legend on Certificates. The issuance and delivery of Shares shall comply with all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. If the Company deems it necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, the Participant shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company which satisfies such requirements. The certificates representing the Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
9. Transferability. Unless otherwise provided by the Committee, the Award may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Award to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.
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10. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold any applicable withholding taxes in respect of the Award, its exercise or transfer and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.
11. Notices. Any notification required by the terms of this Award Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. A notice shall be addressed to the Company, Attention: General Counsel, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.
12. Entire Agreement. This Award Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof and supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.
13. Waiver. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.
14. Successors and Assigns. The provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Award Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.
15. Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Award Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Award Agreement shall be governed by the internal laws of the State of Delaware, excluding any conflicts or choice-of-law rule or principle that might otherwise refer construction or interpretation of the Award Agreement to the substantive law of another jurisdiction. Each party to this Award Agreement agrees that it shall bring all claims, causes of action and proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or be related to the Award Agreement exclusively in the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject-matter jurisdiction over such claim, cause of action or proceeding, exclusively in the United States District Court for the District of Delaware (the “Chosen Court”) and hereby (i) irrevocably submits to the exclusive jurisdiction of the Chosen Court, (ii) waives any objection to laying venue in any such proceeding in the Chosen Court, (iii) waives any objection that the Chosen Court is an inconvenient forum or does not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such claim or cause of action shall be effective if notice is given in accordance with this Award Agreement.
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(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY CLAIM OR CAUSE OF ACTION (WHETHER IN CONTRACT, IN TORT, AT LAW OR OTHERWISE) INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS, HIS OR HER OBLIGATIONS HEREUNDER.
16. Award Subject to Plan. By entering into this Award Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Award is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
17. No Guarantees Regarding Tax Treatment. The Participant shall be responsible for all taxes with respect to the Award. The Committee and the Company make no guarantees regarding the tax treatment of the Award.
18. Amendment. The Committee may amend or alter this Award Agreement and the Award granted hereunder at any time, subject to the terms of the Plan.
19. Signature in Counterparts. This Award Agreement may be signed in counterparts, manually or electronically, and each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.
20. Electronic Signature and Delivery. This Award Agreement may be accepted by return signature or by electronic confirmation. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Award Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Delivery of a copy of this Agreement or any other document contemplated hereby bearing an original or electronic signature by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whether mediated by the worldwide web), by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original or electronic signature.
21. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
[signature page follows]
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IN WITNESS WHEREOF, the Company and the Participant have executed this Restricted Stock Unit Award Agreement as of the date first set forth above.
PARTICIPANT
|
|
| [●] |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| [●] | ||
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Exhibit 31.1
CERTIFICATION
I, Kevin Sheehan, Interim Chief Executive Officer of Dave & Buster’s Entertainment, Inc., certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Dave & Buster’s Entertainment, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 7, 2021 | /s/ Kevin Sheehan | |||||
| Kevin Sheehan | ||||||
| Interim Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Scott J. Bowman, Chief Financial Officer of Dave & Buster’s Entertainment, Inc., certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Dave & Buster’s Entertainment, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 7, 2021 | /s/ Scott J. Bowman | |||||
| Scott J. Bowman | ||||||
| Chief Financial Officer |
Exhibit 32.1
CERTIFICATION
In connection with the Quarterly Report of Dave & Buster’s Entertainment, Inc. (the “Company”) on Form 10-Q for the period ended October 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin Sheehan, Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:
| (1) | The Report fully complies with the applicable requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: December 7, 2021
| /s/ Kevin Sheehan |
| Kevin Sheehan |
| Interim Chief Executive Officer |
Exhibit 32.2
CERTIFICATION
In connection with the Quarterly Report of Dave & Buster’s Entertainment, Inc. (the “Company”) on Form 10-Q for the period ended October 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott J. Bowman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:
| (1) | The Report fully complies with the applicable requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: December 7, 2021
| /s/ Scott J. Bowman |
| Scott J. Bowman |
| Chief Financial Officer |