Dave & Buster's Entertainment, Inc 10-Q for FY2023 Q2
Dave & Buster's Entertainment, Inc. (PLAY)
About this 10-Q
Dave & Buster's Entertainment, Inc filed this 10-Q on September 7, 2022, covering the quarter ended July 31, 2022 (FY2023 Q2).
Headline figures
Quarter ended July 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $468.36M
- up 24.0% from $377.64M a year earlier
- Diluted EPS
- $0.59
- down 44.9% from $1.07 a year earlier
| 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 |
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Emerging Growth Company |
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Page |
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| PART I |
FINANCIAL INFORMATION |
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| Item 1. |
3 |
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| Item 2. |
19 |
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| Item 3. |
32 |
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| Item 4. |
32 |
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| PART II |
OTHER INFORMATION |
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| Item 1. |
33 |
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| Item 1A. |
33 |
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| Item 2. |
35 |
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| Item 6. |
36 |
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37 |
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Item 1. |
Financial Statements |
July 31, |
January 30, |
|||||||
2022 |
2022 |
|||||||
(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: |
||||||||
Current installments of long-term debt |
$ | $ | ||||||
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 |
|||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| Food and beverage revenues |
$ | $ | ||||||
| Amusement and other revenues |
||||||||
| |
|
|
|
|||||
| Total revenues |
||||||||
| Cost of food and beverage |
||||||||
| Cost of amusement and other |
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| |
|
|
|
|||||
| Total cost of products |
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| Operating payroll and benefits |
||||||||
| Other store operating expenses |
||||||||
| General and administrative expenses |
||||||||
| Depreciation and amortization expense |
||||||||
| Pre-opening costs |
||||||||
| |
|
|
|
|||||
| Total operating costs |
||||||||
| |
|
|
|
|||||
| Operating income |
||||||||
| Interest expense, net |
||||||||
| Loss on debt refinancing |
— | |||||||
| |
|
|
|
|||||
| Income before provision for income taxes |
||||||||
| Provision for income taxes |
||||||||
| |
|
|
|
|||||
| Net income |
||||||||
| |
|
|
|
|||||
| Unrealized foreign currency translation gain (loss) |
( |
) | ||||||
| Unrealized gain on derivatives, net of tax |
||||||||
| |
|
|
|
|||||
| Total other comprehensive income |
||||||||
| |
|
|
|
|||||
| Total comprehensive income |
$ | $ | ||||||
| |
|
|
|
|||||
| Net income per share: |
||||||||
| Basic |
$ | $ | ||||||
| Diluted |
$ | $ | ||||||
| Weighted average shares used in per share calculations: |
||||||||
| Basic |
||||||||
| Diluted |
||||||||
Twenty-Six Weeks |
Twenty-Six Weeks |
|||||||
Ended |
Ended |
|||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| 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 |
||||||||
| Interest expense, net |
||||||||
| Loss on debt refinancing |
||||||||
| |
|
|
|
|||||
| Income before provision for income taxes |
||||||||
| Provision for income taxes |
||||||||
| |
|
|
|
|||||
| Net income |
||||||||
| |
|
|
|
|||||
| Unrealized foreign currency translation gain (loss) |
( |
) | ||||||
| Unrealized gain on derivatives, net of tax |
||||||||
| |
|
|
|
|||||
| Total other comprehensive income |
||||||||
| |
|
|
|
|||||
| Total comprehensive income |
$ | $ | ||||||
| |
|
|
|
|||||
| Net income per share: |
||||||||
| Basic |
$ | $ | ||||||
| Diluted |
$ | $ | ||||||
| Weighted average shares used in per share calculations: |
||||||||
| Basic |
||||||||
| Diluted |
||||||||
Thirteen Weeks Ended July 31, 2022 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance May 1, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| 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 July 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Thirteen Weeks Ended August 1, 2021 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance May 2, 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 August 1, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Twenty-Six Weeks Ended July 31, 2022 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
| Balance January 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| 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 July 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Twenty-Six Weeks Ended August 1, 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 August 1, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Twenty-Six Weeks Ended July 31, 2022 |
Twenty-Six Weeks Ended August 1, 2021 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income 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 refinancing |
||||||||
Share-based compensation |
||||||||
Other, net |
||||||||
Changes in assets and liabilities , net of acquired 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 operating activities |
||||||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
Proceeds from sales of property and equipment |
||||||||
Acquisition of a business, net of cash acquired |
( |
) | ||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
||||||||
Payments of debt |
( |
) | ( |
) | ||||
Debt issuance costs |
( |
) | ||||||
Proceeds from the exercise of stock options |
||||||||
Repurchases of common stock under share repurchase program |
( |
) | ||||||
Repurchases of common stock to satisfy employee withholding tax obligations |
( |
) | ( |
) | ||||
Net cash provided by (used in) financing activities |
( |
) | ||||||
Increase in cash and cash equivalents |
||||||||
Beginning cash and cash equivalents |
||||||||
Ending cash and cash equivalents |
$ | $ | ||||||
Supplemental disclosures of cash flow information: |
||||||||
Increase in fixed asset accounts payable |
$ | $ | ||||||
Cash paid (refund received) for income taxes, net |
$ | ( |
) | $ | ( |
) | ||
Cash paid for interest, net |
$ | $ | ||||||
Thirteen weeks ended |
Twenty-six weeks ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
July 31, 2022 |
August 1, 2021 |
|||||||||||||
Loss reclassified or amortized into interest expense |
$ | $ | $ | $ | ||||||||||||
Income tax effect |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Thirteen weeks ended |
Twenty-six weeks ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
July 31, 2022 |
August 1, 2021 |
|||||||||||||
Basic weighted average shares outstanding |
||||||||||||||||
Weighted average dilutive impact of awards |
||||||||||||||||
Diluted weighted average shares outstanding |
||||||||||||||||
Amount |
||||
Gross cash consideration |
$ |
|||
Contingent consideration (1) |
||||
Less: cash acquired |
( |
) | ||
Total consideration paid |
$ |
|||
Assets: |
||||
Current assets |
||||
Property and equipment |
||||
Operating lease right |
||||
Deferred tax assets |
||||
Tradenames |
||||
Other assets and deferred charges |
||||
Liabilities: |
||||
Accounts payable |
||||
Current portion of operating lease liabilities |
||||
Accrued liabilities |
||||
Operating lease liabilities |
||||
Other liabilities |
||||
Net assets acquired, excluding goodwill |
$ |
|||
Goodwill |
$ |
|||
(1) |
The Company has an obligation to pay, in cash, an aggregate amount equal to any “Transaction Tax Benefits,” with respect to any taxable year of the Company after the Closing Date ending on or before December 31, 2028, including the current taxable year. Transaction Tax Benefits is generally defined as any reduction in the Company’s liabilities for U.S. federal and state income taxes due to the use of net operating losses generated prior to the Closing Date. The contingent consideration could range from $ Transaction Tax Benefits are achieved) to a cap, as defined in the Merger Agreement of approximately $ |
Amount |
Useful Life(Yrs) |
|||||||
Favorable/unfavorable lease contracts, net |
$ | |||||||
Tradenames |
Indefinite |
|||||||
Total acquisition-related intangible assets |
$ |
|||||||
Thirteen Weeks Ended |
Twenty-six Weeks Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
July 31, 2022 |
August 1, 2021 |
|||||||||||||
Revenues |
$ | $ | $ | $ | ||||||||||||
Net i ncome |
$ | $ | $ | $ | ||||||||||||
Balance at January 31, 2021 |
$ | |||
Currency adjustment |
||||
Balance at January 30, 2022 |
||||
Currency adjustment |
||||
Acquisition of Main Event |
||||
Balance at July 31, 2022 |
$ | |||
July 31, 2022 |
January 30, 2022 |
|||||||||||||||||||||||
Gross Amount |
Accumulated Amortization |
Net Amount |
Gross Amount |
Accumulated Amortization |
Net Amount |
|||||||||||||||||||
Favorable/unfavorable lease contracts, net |
$ |
$ |
( |
) |
$ |
$ |
— |
$ |
— |
$ |
— |
|||||||||||||
Tradenames (indefinite lived) |
$ |
N/A |
N/A |
$ |
N/A |
N/A |
||||||||||||||||||
Remainder of 2022 |
$ |
|||
2023 |
$ |
|||
2024 |
$ |
|||
2025 |
$ |
|||
2026 |
$ |
July 31, 2022 |
January 30, 2022 |
|||||||
Deferred amusement revenue |
$ | $ | ||||||
Current portion of operating lease liabilities, net (1) |
||||||||
Compensation and benefits |
||||||||
Deferred gift card revenue |
||||||||
Property taxes |
||||||||
Current portion of deferred occupancy costs |
||||||||
Accrued interest |
||||||||
Sales and use taxes |
||||||||
Customer deposits |
||||||||
Utilities |
||||||||
Current portion of long-term insurance |
||||||||
Variable rent liabilities |
||||||||
Other |
||||||||
| $ | $ | |||||||
| ( 1 ) |
The balance of leasehold incentive receivables of $ |
Thirteen Weeks Ended |
Twenty-Six Weeks Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
July 31, 2022 |
August 1, 2021 |
|||||||||||||
Operating lease cost |
$ |
$ |
$ |
$ |
||||||||||||
Variable lease cost |
||||||||||||||||
Short-term lease cost |
||||||||||||||||
Amortization of favorable/unfavorable lease contracts, net |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||
Remainder of 2022 |
$ |
|||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total future operating lease liability |
$ |
|||
Less: interest |
( |
) | ||
Present value of operating lease liabilities |
$ |
|||
July 31, 2022 |
January 30, 2022 |
|||||||
Senior secured notes |
$ | $ | ||||||
Term loan |
— | |||||||
Total debt outstanding |
||||||||
Current portion |
( |
) | — |
|||||
Original issue discount on term loan |
( |
) | — |
|||||
Debt issuance costs |
( |
) | ( |
) | ||||
Long-term debt |
$ | $ | ||||||
Thirteen Weeks Ended |
Twenty-six Weeks Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
July 31, 2022 |
August 1, 2021 |
|||||||||||||
| 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 30, 2022 |
$ | $ | ||||||||||||||
| Granted |
— | — | ||||||||||||||
| Exercised |
( |
) | ( |
) | ||||||||||||
| Forfeited |
( |
) | — | — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Outstanding at July 31, 2022 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Exercisable at July 31, 2022 |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Wtd. Avg. |
||||||||
Shares |
Fair Value |
|||||||
| Outstanding at January 30, 2022 |
$ | |||||||
| Granted |
||||||||
| Performance adjusted units |
||||||||
| Vested |
( |
) | ||||||
| Forfeited |
( |
) | ||||||
| |
|
|
|
|||||
| Outstanding at July 31, 2022 |
$ | |||||||
| |
|
|
|
|||||
| • | Revenues totaled $468,359 in the second quarter of 2022 compared with $344,599 in the second quarter of 2019. A total of 148 and 130 Dave & Buster’s stores were open and operating without restrictions at the end of the second quarter of 2022 and 2019, respectively. The newly acquired Main Event stores contributed revenues of $51,405 from the acquisition on June 29, 2022, through the end of the second quarter. Revenues totaled $377,638 in the second quarter of 2021, which ended with 142 Dave & Buster’s stores open and operating in limited capacity. |
| • | Overall Dave & Buster’s comparable store sales increased 9.6% compared with the same period in 2019 and increased 5.7% compared with the same period in 2021, which ended with 113 comparable Dave & Buster’s stores open and operating in limited capacity. |
| • | Net income totaled $29,088, or $0.59 per diluted share, compared with net income of $32,356, or $0.90 per diluted share in the same period of 2019. Net income in the second quarter of fiscal 2022 was impacted by incremental acquisition and integration costs related to the Main Event Acquisition. In the same period of 2021, we recorded net income of $52,770. |
| • | Adjusted EBITDA totaled $119,550, or 25.5% of revenues, compared with Adjusted EBITDA of $85,982 or 25.0% of revenues in the second quarter of 2019. Adjusted EBITDA was $119,152 or 31.6% of revenues in the second quarter of 2021. |
| • | Ended the quarter with $100,386 in cash and $491,395 of liquidity available under the Company’s revolving credit facility. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Food and beverage revenues |
$ | 156,995 | 33.5 | % | $ | 123,006 | 32.6 | % | ||||||||
| Amusement and other revenues |
311,364 | 66.5 | 254,632 | 67.4 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total revenues |
468,359 | 100.0 | 377,638 | 100.0 | ||||||||||||
| Cost of food and beverage (as a percentage of food and beverage revenues) |
46,461 | 29.6 | 33,127 | 26.9 | ||||||||||||
| Cost of amusement and other (as a percentage of amusement and other revenues) |
29,075 | 9.3 | 24,584 | 9.7 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total cost of products |
75,536 | 16.1 | 57,711 | 15.3 | ||||||||||||
| Operating payroll and benefits |
113,674 | 24.3 | 80,623 | 21.3 | ||||||||||||
| Other store operating expenses |
142,440 | 30.4 | 105,116 | 27.9 | ||||||||||||
| General and administrative expenses |
37,710 | 8.1 | 18,470 | 4.9 | ||||||||||||
| Depreciation and amortization expense |
38,614 | 8.2 | 34,875 | 9.2 | ||||||||||||
| Pre-opening costs |
3,913 | 0.8 | 1,676 | 0.4 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating costs |
411,887 | 87.9 | 298,471 | 79.0 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income |
56,472 | 12.1 | 79,167 | 21.0 | ||||||||||||
| Interest expense, net |
17,118 | 3.7 | 13,728 | 3.7 | ||||||||||||
| Loss on debt refinancing |
1,479 | 0.3 | 0 | 0 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income before provision for income taxes |
37,875 | 8.1 | 65,439 | 17.3 | ||||||||||||
| Provision for income taxes |
8,787 | 1.9 | 12,669 | 3.3 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 29,088 | 6.2 | % | $ | 52,770 | 14.0 | % | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Change in comparable store sales (1) |
5.7 | % | 690.8 | % | ||||||||||||
| Comparable stores at end of period (1) |
113 | 114 | ||||||||||||||
| Company-owned stores at end of period (1) |
200 | 142 | ||||||||||||||
| (1) | Our comparable store count as of the end of the second quarter of fiscal 2022 excludes a store in Cary, North Carolina, which was closed and relocated during the fourth quarter of fiscal 2021. Company-owned stores as of July 31, 2022, include 52 Main Event stores, which were acquired on June 29, 2022. These stores are not considered comparable stores. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Net income |
$ | 29,088 | 6.2 | % | $ | 52,770 | 14.0 | % | ||||||||
| Interest expense, net |
17,118 | 13,728 | ||||||||||||||
| Loss on debt refinancing |
1,479 | — | ||||||||||||||
| Provision for income taxes |
8,787 | 12,669 | ||||||||||||||
| Depreciation and amortization expense |
38,614 | 34,875 | ||||||||||||||
| |
|
|
|
|||||||||||||
| EBITDA |
95,086 | 20.3 | % | 114,042 | 30.2 | % | ||||||||||
| Loss on asset disposal |
154 | 112 | ||||||||||||||
| Impairment of long-lived assets |
1,841 | — | ||||||||||||||
| Share-based compensation |
4,698 | 3,187 | ||||||||||||||
| Pre-opening costs |
3,913 | 1,676 | ||||||||||||||
| Other costs (1) |
13,858 | 135 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Adjusted EBITDA |
$ | 119,550 | 25.5 | % | $ | 119,152 | 31.6 | % | ||||||||
| |
|
|
|
|||||||||||||
| (1) | Primarily represents $7,700 in costs related to the acquisition of Main Event. Refer to Note 2 of the Unaudited Consolidated Financial Statements for more information. |
Thirteen Weeks |
Thirteen Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Operating income |
$ | 56,472 | 12.1 | % | $ | 79,167 | 21.0 | % | ||||||||
| General and administrative expenses |
37,710 | 18,470 | ||||||||||||||
| Depreciation and amortization expense |
38,614 | 34,875 | ||||||||||||||
| Pre-opening costs |
3,913 | 1,676 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Store Operating Income Before Depreciation and Amortization |
$ | 136,709 | 29.2 | % | $ | 134,188 | 35.5 | % | ||||||||
| |
|
|
|
|||||||||||||
Thirteen Weeks |
Thirteen Weeks |
|||||||
Ended |
Ended |
|||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| New store and operating initiatives |
$ | 37,016 | $ | 12,611 | ||||
| Games |
17,826 | 9,443 | ||||||
| Maintenance capital |
7,262 | 6,402 | ||||||
| |
|
|
|
|||||
| Total capital additions |
$ | 62,104 | $ | 28,456 | ||||
| |
|
|
|
|||||
| Payments from landlords |
$ | 7,215 | $ | 2,085 | ||||
Thirteen Weeks Ended |
||||||||||||
July 31, 2022 |
August 1, 2021 |
Change |
||||||||||
| Total revenues |
$ | 468,359 | $ | 377,638 | $ | 90,721 | ||||||
| Total store operating weeks |
2,171 | 1,817 | 354 | |||||||||
| Comparable store revenues |
$ | 333,967 | $ | 316,006 | $ | 17,961 | ||||||
| Comparable store operating weeks |
1,469 | 1,445 | 24 | |||||||||
| Noncomparable store revenues—Dave & Buster’s |
$ | 84,723 | 69,164 | $ | 15,559 | |||||||
| Noncomparable store operating weeks—Dave & Buster’s |
442 | 372 | 70 | |||||||||
| Noncomparable store revenues—Main Event |
51,405 | — | 51,405 | |||||||||
| Noncomparable store operating weeks—Main Event |
260 | — | 260 | |||||||||
| Other revenues and deferrals—Dave & Buster’s |
$ | (1,736 | ) | $ | (7,532 | ) | $ | 5,796 | ||||
Thirteen Weeks Ended |
||||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| Food sales |
23.4 | % | 22.4 | % | ||||
| Beverage sales |
10.1 | % | 10.2 | % | ||||
| Amusement sales |
65.8 | % | 67.2 | % | ||||
| Other |
0.7 | % | 0.2 | % | ||||
Twenty-Six Weeks |
Twenty-Six Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Food and beverage revenues |
$ | 308,907 | 33.6 | % | $ | 208,764 | 32.5 | % | ||||||||
| Amusement and other revenues |
610,553 | 66.4 | 434,214 | 67.5 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total revenues |
919,460 | 100.0 | 642,978 | 100.0 | ||||||||||||
| Cost of food and beverage (as a percentage of food and beverage revenues) |
89,716 | 29.0 | 56,284 | 27.0 | ||||||||||||
| Cost of amusement and other (as a percentage of amusement and other revenues) |
55,841 | 9.1 | 41,198 | 9.5 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total cost of products |
145,557 | 15.8 | 97,482 | 15.2 | ||||||||||||
| Operating payroll and benefits |
207,035 | 22.5 | 130,902 | 20.4 | ||||||||||||
| Other store operating expenses |
266,865 | 29.0 | 189,561 | 29.4 | ||||||||||||
| General and administrative expenses |
66,007 | 7.2 | 35,561 | 5.5 | ||||||||||||
| Depreciation and amortization expense |
71,902 | 7.8 | 69,974 | 10.9 | ||||||||||||
| Pre-opening costs |
6,910 | 0.8 | 3,335 | 0.5 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total operating costs |
764,276 | 83.1 | 526,815 | 81.9 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Operating income |
155,184 | 16.9 | 116,163 | 18.1 | ||||||||||||
| Interest expense, net |
28,509 | 3.1 | 28,548 | 4.5 | ||||||||||||
| Loss on debt refinancing |
1,479 | 0.2 | — | — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Income before provision for income taxes |
125,196 | 13.6 | 87,615 | 13.6 | ||||||||||||
| Provision for income taxes |
29,124 | 3.2 | 15,210 | 2.3 | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 96,072 | 10.4 | % | $ | 72,405 | 11.3 | % | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Change in comparable store sales (1) |
32.2 | % | 199.1 | % | ||||||||||||
| Comparable stores at end of period (1) |
113 | 114 | ||||||||||||||
| Company-owned stores at end of period (1) |
200 | 142 | ||||||||||||||
| (1) | Our comparable store count as of the end of the second quarter of fiscal 2022 excludes a store in Cary, North Carolina, which was closed and relocated during the fourth quarter of fiscal 2021. Company-owned stores as of July 31, 2022, includes 52 Main Event stores, which were acquired on June 29, 2022. These stores are not considered comparable stores. |
Twenty-Six Weeks |
Twenty-Six Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Net income |
$ | 96,072 | 10.4 | % | $ | 72,405 | 11.3 | % | ||||||||
| Interest expense, net |
28,509 | 28,548 | ||||||||||||||
| Loss on debt refinancing |
1,479 | |||||||||||||||
| Provision for income taxes |
29,124 | 15,210 | ||||||||||||||
| Depreciation and amortization expense |
71,902 | 69,974 | ||||||||||||||
| |
|
|
|
|||||||||||||
| EBITDA |
227,086 | 24.7 | % | 186,137 | 28.9 | % | ||||||||||
| Loss on asset disposal |
370 | 257 | ||||||||||||||
| Impairment of long-lived assets |
1,841 | — | ||||||||||||||
| Share-based compensation |
8,253 | 6,158 | ||||||||||||||
| Pre-opening costs |
6,910 | 3,335 | ||||||||||||||
| Other costs (1) |
18,337 | (30 | ) | |||||||||||||
| |
|
|
|
|||||||||||||
| Adjusted EBITDA |
$ | 262,797 | 28.6 | % | $ | 195,857 | 30.5 | % | ||||||||
| |
|
|
|
|||||||||||||
| (1) | Primarily represents $12,200 in costs related to the acquisition of Main Event. Refer to Note 2 of the Unaudited Consolidated Financial Statements for more information. |
Twenty-Six Weeks |
Twenty-Six Weeks |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
July 31, 2022 |
August 1, 2021 |
|||||||||||||||
| Operating income |
$ | 155,184 | 16.9 | % | $ | 116,163 | 18.1 | % | ||||||||
| General and administrative expenses |
66,007 | 35,561 | ||||||||||||||
| Depreciation and amortization expense |
71,902 | 69,974 | ||||||||||||||
| Pre-opening costs |
6,910 | 3,335 | ||||||||||||||
| |
|
|
|
|||||||||||||
| Store Operating Income Before Depreciation and Amortization |
$ | 300,003 | 32.6 | % | $ | 225,033 | 35.0 | % | ||||||||
| |
|
|
|
|||||||||||||
Twenty-Six Weeks |
Twenty-Six Weeks |
|||||||
Ended |
Ended |
|||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| New store and operating initiatives |
$ | 72,147 | $ | 19,756 | ||||
| Games |
19,338 | 12,614 | ||||||
| Maintenance capital |
13,573 | 8,290 | ||||||
| |
|
|
|
|||||
| Total capital additions |
$ | 105,058 | $ | 40,660 | ||||
| |
|
|
|
|||||
| Payments from landlords |
$ | 7,928 | $ | 2,085 | ||||
Twenty-Six Weeks Ended |
||||||||||||
July 31, 2022 |
August 1, 2021 |
Change |
||||||||||
| Total revenues |
$ | 919,460 | $ | 642,978 | $ | 276,482 | ||||||
| Total store operating weeks |
4,047 | 3,450 | 597 | |||||||||
| Comparable store revenues |
$ | 702,444 | $ | 531,412 | $ | 171,032 | ||||||
| Comparable store operating weeks |
2,938 | 2,735 | 203 | |||||||||
| Noncomparable store revenues—Dave & Buster’s |
$ | 173,873 | 127,662 | $ | 46,211 | |||||||
| Noncomparable store operating weeks—Dave & Buster’s |
849 | 715 | 134 | |||||||||
| Noncomparable store revenues—Main Event |
$ | 51,405 | — | $ | 51,405 | |||||||
| Noncomparable store operating weeks—Main Event |
260 | — | 260 | |||||||||
| Other revenues and deferrals—Dave & Buster’s |
$ | (8,262 | ) | $ | (16,096 | ) | $ | 7,834 | ||||
Twenty-Six Weeks Ended |
||||||||
July 31, 2022 |
August 1, 2021 |
|||||||
| Food sales |
22.9 | % | 22.3 | % | ||||
| Beverage sales |
10.7 | % | 10.2 | % | ||||
| Amusement sales |
65.8 | % | 67.3 | % | ||||
| Other |
0.6 | % | 0.2 | % | ||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
| • | incorrect assumptions regarding the future results of acquired operations or assets or expected cost reductions or other synergies expected to be realized from acquiring operations or assets; |
| • | failure to integrate the operations or management of any acquired operations or assets successfully and timely; |
| • | potential loss of key employees and customers of the acquired companies; |
| • | potential lack of experience operating in a geographic market or product line of the acquired business; |
| • | an increase in our expenses, particularly overhead expenses, and working capital requirements; |
| • | the possible inability to achieve the intended objectives of the business combination; and |
| • | the diversion of management’s attention from existing operations or other priorities. |
| • | incur or guarantee additional indebtedness or issue certain disqualified or preferred stock; |
| • | pay dividends or make other distributions on, or redeem or purchase any equity interests or make other restricted payments; |
| • | make certain acquisitions or investments; |
| • | create or incur liens; |
| • | transfer or sell assets; |
| • | incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries; |
| • | alter the business that we conduct; |
| • | enter into transactions with affiliates; and |
| • | consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all our assets. |
Item 2. |
Unregistered Sales of Equity Securities |
| Period (1) |
Total Number of Shares Repurchased |
Average Price Paid per Share |
Total Number of Shares Repurchased as Part of Publicly Announced Plan (2) |
Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Plan (3) |
||||||||||||
| May 2 – May 29, 2022 |
— | $ | — | — | $ | 100,000 | ||||||||||
| May 30 – July 3, 2022 |
— | $ | — | — | $ | 100,000 | ||||||||||
| July 4 – July 31, 2022 |
764,988 | $ | 32.70 | 764,988 | $ | 74,985 | ||||||||||
| (1) | Monthly information is presented by reference to our fiscal periods during the thirteen weeks ended July 31, 2022. |
| (2) | Our Board of Directors approved a share repurchase program, under which the Company may repurchase shares on the open market, through privately negotiated transactions, and through trading plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The share repurchase program may be modified, suspended or discontinued at any time. |
| (3) | Based on total share repurchase authorization in effect on July 31, 2022. |
Item 6. |
Exhibits |
| * | Filed herein |
| DAVE & BUSTER’S ENTERTAINMENT, INC., a Delaware corporation | ||||||
| Date: September 7, 2022 | By: | /s/ Christopher Morris | ||||
| Christopher Morris | ||||||
| Chief Executive Officer | ||||||
| Date: September 7, 2022 | By: | /s/ Michael A. Quartieri | ||||
| Michael A. Quartieri | ||||||
| Chief Financial Officer | ||||||
Exhibit 10.1
Dave & Buster’s Entertainment, Inc.
2014 Omnibus Incentive Plan
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
(EMPLOYEE FORM)
THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this “Award Agreement”) is made effective as of June 29, 2022 (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and Christopher Morris (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 (the “Plan”); and
WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the option 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 the Option. The Company hereby grants to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of 98,706 Shares as of the Date of Grant. The Option is intended to be a Nonqualified Stock Option.
2. Option Price. The purchase price of the Shares subject to the Option is $33.77 per Share (the “Option Price”).
3. Option Term. The term of the Option shall be ten (10) years, commencing on the Date of Grant (the “Option Term”). The Option shall automatically terminate upon the expiration of the Option Term, or at such earlier time specified herein or in the Plan.
4. Vesting of the Option. Subject to the Participant’s continued Service with the Company through the applicable vesting date, Section 5 of this Award Agreement and the terms of the Plan, the Option shall vest in equal installments on each of the first five (5) anniversaries of the Date of Grant, such that one-fifth (1/5th) of the Option vests on each such anniversary (each, a “Vesting Date”).
5. Termination of Service.
(a) Termination of Service for Cause. Upon a termination of the Participant’s Service by the Company for Cause the Option, including any vested portion, shall
D&B Employee – Christopher Morris
2022 Nonqualified Stock Option Award Agreement No 1
Page 1 of 10
immediately terminate and be forfeited without consideration. For purposes of this Award Agreement, “Cause” means (i) “Cause” 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 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.
(b) Termination of Service due to death or Disability. Upon a termination of the Participant’s Service by reason of death or Disability, any unvested portion of the Option shall immediately become vested, and any vested portion shall remain exercisable until the earlier of (i) one (1) year following such termination of Service and (ii) the expiration of the Option Term. For purposes of this Award Agreement, “Disability” means (A) “Disability” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (B) 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.
(c) Termination of Service due to Retirement. Upon a termination of the Participant’s Service by reason of Retirement, subject to the terms of the Plan, any unvested portion of the Option shall continue to vest on each remaining Vesting Date, and any vested portion shall remain exercisable until the expiration of the Option Term. For purposes of this Award Agreement, “Retirement” means (i) “Retirement” 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 Retirement: termination of the Participant’s Service, other than for Cause, after attaining (A) age sixty (60) and completing ten (10) years of continued service (i.e., without any termination of Service) with the Company or its Affiliates or (B) age sixty-five (65).
(d) Termination without Cause or for Good Reason related to 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 a termination by reason of death or Disability), in either case before the final Vesting Date (a “Specified Termination”), and (ii) the Specified Termination occurs on or within ninety (90) days before or twelve (12) months following the occurrence of a Change of Control of the Company, any unvested portion of the Option shall immediately vest, and any vested portion shall remain exercisable until the expiration of the Option Term; provided, that the foregoing shall not apply in the event that all Options issued and outstanding under the Plan are terminated in
D&B Employee – Christopher Morris
2022 Nonqualified Stock Option Award Agreement No 1
Page 2 of 10
connection with such Change of Control. 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.
(e) Termination without Cause or for Good Reason. Upon a termination of the Participant’s Service by the Company without Cause or due to the Participant’s resignation for Good Reason (excluding a termination by reason of death or Disability) other than as provided in Section 5(d): (i) any portion of the Option that is vested as of the date of such termination of employment shall remain exercisable until the earlier of (A) ninety (90) days following such termination of Service and (B) the expiration of the Option Term; provided, that if a Change of Control should occur on or before the earlier of (A) and (B), then any portion of the Option that is vested as of the date of such termination of employment shall remain exercisable until the expiration of the Option Term; and (ii) any portion of the Option that is unvested as of such termination of employment shall remain outstanding but unexercisable until the earliest of (A) the date that is ninety (90) days following such termination of Service, at which time the unvested portion shall terminate and be forfeited, (B) the expiration of the Option Term, at which time the unvested portion shall terminate and be forfeited, and (C) the consummation of a Change of Control of the Company, at which time the unvested portion shall remain eligible for continued vesting in accordance with the terms of this Award notwithstanding such termination of employment (and to the extent the unvested portion would have vested pursuant to Section 4 hereof prior to the Change of Control if the Participant’s Service had not terminated, the unvested portion shall be deemed to have vested in accordance with and to the extent applicable to that vesting schedule).
(f) Other Terminations of Service. Upon a termination of the Participant’s Service for any reason, other than pursuant to Sections 5(a), 5(b), 5(c), 5(d) and 5(e) above, any unvested portion of the Option shall immediately terminate and be forfeited without consideration, and any vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days following such termination of Service and (ii) the expiration of the Option Term.
6. Exercise Procedures.
(a) Notice of Exercise. To the extent exercisable, the Participant or the Participant’s representative may exercise any vested portion of the Option or any part thereof prior to the expiration of the Option Term or as otherwise set forth in Section 5 hereof by giving written notice to the Company in the form attached hereto as Exhibit A or any other form acceptable to the Committee or the Committee’s designated administrative representative (the “Notice of Exercise”). The Notice of Exercise shall be signed by the person exercising such Option or shall evidence the intent of the person exercising such Option if delivered in electronic format or with
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an electronic signature. In the event that such Option is being exercised by the Participant’s representative, the Notice of Exercise shall be accompanied by proof (satisfactory to the Company) of such representative’s right to exercise such Option.
(b) Method of Exercise. The Participant or the Participant’s representative shall deliver to the Company, at the time the Notice of Exercise is given, payment (i) in cash or its equivalent (e.g., by cashier’s check), (ii) in Shares (whether or not previously owned by the Participant) having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee, (iii) partly in cash and partly in Shares (as described in clause (ii) above), (iv) if there is a public market for the Shares at such time, subject to such administrative requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased or (v) to the extent permitted by the Committee, another form of payment permissible under Section 6.5 of the Plan for the full amount of the aggregate Option Price for the exercised Option.
(c) Issuance of Shares. Provided the Company receives a properly completed and executed Notice of Exercise and payment for the full amount of the aggregate Option Price and the Participant has made arrangements for appropriate withholding, the Company shall promptly cause the Shares underlying the exercised Option to be issued in the name of the Person exercising the applicable Option.
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 herein 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 “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
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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 exercise, termination or settlement of the Option and termination or satisfaction of the Award Agreement.
8. No Right to Continued Service. The granting of the Option 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.
9. 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.
10. Transferability. Unless otherwise provided by the Committee, the Option 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 Option 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. During the Participant’s lifetime, the Option is exercisable only by the Participant (or, if the Participant is disabled, the Participant’s representative).
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11. 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 Option, 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. Option 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 Option 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.
18. No Guarantees Regarding Tax Treatment. The Participant shall be responsible for all taxes with respect to the Option. The Committee and the Company make no guarantees regarding the tax treatment of the Option.
19. Amendment. The Committee may amend or alter this Award Agreement and the Option granted hereunder at any time, subject to the terms of the Plan.
20. 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.
21. 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.
22. 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 Nonqualified Stock Option Award Agreement as of the date first set forth above.
| PARTICIPANT |
|
|
| Christopher Morris |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Robert W. Edmund | ||
| General Counsel, Secretary and SVP of HR | ||
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EXHIBIT A
Notice of Exercise
Dave & Buster’s Entertainment, Inc.
1221 S. Belt Line Road #500
Coppell, Texas 75019
Attn: General Counsel Date of Exercise:
Ladies & Gentlemen:
1. Exercise of Option. This constitutes notice to Dave & Buster’s Entertainment, Inc. (the “Company”) that pursuant to my Nonqualified Stock Option Award Agreement (the “Award Agreement”) under the Company’s 2014 Omnibus Incentive Plan (the “Plan”) I elect to purchase the number of Shares of Company common stock set forth below and for the price set forth below. By signing and delivering this notice to the Company, I hereby acknowledge that I am the holder of the stock option (the “Option”) exercised by this notice and have full power and authority to exercise the same. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Award Agreement or the Plan, as applicable.
| Date of Grant: | ||||||
| Number of Shares as to which the Option is exercised (“Optioned Shares”): | ||||||
| Shares to be issued in name of: | ||||||
| Total exercise price: | $ |
| ||||
| Cash payment or other method of payment permitted under Section 6(b) of the Award Agreement delivered herewith: | $ |
| ||||
| Method: |
| |||||
2. Form of Payment. The Option may be exercised by delivery to the Company of payment (i) in cash or its equivalent (e.g., by cashier’s check), (ii) in Shares (whether or not previously owned by the Person exercising the Option pursuant to this notice) having a Fair Market Value equal to the aggregate Option Price for the Shares being
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purchased and satisfying such other requirements as may be imposed by the Committee, (iii) partly in cash and partly in Shares (as described in clause (ii) above), (iv) if there is a public market for the Shares at such time, subject to such administrative requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased or (v) to the extent permitted by the Committee, another form of payment permissible under Section 6.5 of the Plan for the full amount of the aggregate Option Price for the exercised Option.
3. Delivery of Payment. With this notice, I hereby deliver to the Company the full exercise price of the Optioned Shares and any and all withholding taxes due in connection with the exercise of my Option or have otherwise satisfied such requirements.
4. Rights as Stockholder. While the Company will endeavor to process this notice in a timely manner, I acknowledge that until the issuance of the shares underlying the Optioned Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to such shares, notwithstanding the exercise of my option(s). No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance of the optioned stock.
5. Interpretation. Any dispute regarding the interpretation of this notice shall be submitted promptly by me or by the Company to the Committee. The resolution of such a dispute by the Committee shall be final and binding on all parties.
6. Governing Law; Severability. This notice is governed by the internal substantive laws but not the choice of law rules, of Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this notice will continue in full force and effect without said provision.
7. Entire Agreement. The Plan and the Award Agreement under which the Optioned Shares were granted are incorporated herein by reference, and together with this notice constitute the entire agreement of the parties with respect to the subject matter hereof.
| Very truly yours, |
|
|
|
|
| (social security number) |
D&B Employee – Christopher Morris
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Exhibit 10.2
Dave & Buster’s Entertainment, Inc.
2014 Omnibus Incentive Plan
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
(EMPLOYEE FORM)
THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this “Award Agreement”) is made effective as of June 29, 2022 (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and Christopher Morris (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 (the “Plan”); and
WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the option 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 the Option. The Company hereby grants to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of 29,612 Shares as of the Date of Grant. The Option is intended to be a Nonqualified Stock Option.
2. Option Price. The purchase price of the Shares subject to the Option is $33.77 per Share (the “Option Price”).
3. Option Term. The term of the Option shall be ten (10) years, commencing on the Date of Grant (the “Option Term”). The Option shall automatically terminate upon the expiration of the Option Term, or at such earlier time specified herein or in the Plan.
4. Vesting of the Option. Subject to the Participant’s continued Service with the Company through the applicable vesting date, the condition set forth in Subsection 4(a) below, Section 5 of this Award Agreement and the terms of the Plan, the Option shall vest in equal installments on each of the first five (5) anniversaries of the Date of Grant, such that one-fifth (1/5th) of the Option vests on each such anniversary (each, a “Vesting Date”).
(a) Purchase Condition. Participant must purchase at least $1,000,000 in Company Shares on the open market during the open trading window for Company insiders starting on the second business day following the Company’s release of earnings for the second fiscal quarter for fiscal 2022 and continuing until the close of business on October 14, 2022. If
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Participant is blacked out from trading during said trading window, then Participant shall make such purchase in the next available trading window in which he is not blacked out. If Participant fails to comply with this condition, the Option shall immediately terminate and be forfeited without consideration.
5. Termination of Service.
(a) Termination of Service for Cause. Upon a termination of the Participant’s Service by the Company for Cause the Option, including any vested portion, shall immediately terminate and be forfeited without consideration. For purposes of this Award Agreement, “Cause” means (i) “Cause” 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 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.
(b) Termination of Service due to death or Disability. Upon a termination of the Participant’s Service by reason of death or Disability, any unvested portion of the Option shall immediately become vested, and any vested portion shall remain exercisable until the earlier of (i) one (1) year following such termination of Service and (ii) the expiration of the Option Term. For purposes of this Award Agreement, “Disability” means (A) “Disability” as defined in any employment agreement between the Participant and the Company or any of its Affiliates, or (B) 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.
(c) Termination of Service due to Retirement. Upon a termination of the Participant’s Service by reason of Retirement, subject to the terms of the Plan, any unvested portion of the Option shall continue to vest on each remaining Vesting Date, and any vested portion shall remain exercisable until the expiration of the Option Term. For purposes of this Award Agreement, “Retirement” means (i) “Retirement” 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 Retirement: termination of the Participant’s Service, other than for Cause, after attaining (A) age sixty (60) and completing ten (10) years of continued service (i.e., without any termination of Service) with the Company or its Affiliates or (B) age sixty-five (65).
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(d) Termination without Cause or for Good Reason related to 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 a termination by reason of death or Disability), in either case before the final Vesting Date (a “Specified Termination”), and (ii) the Specified Termination occurs on or within ninety (90) days before or twelve (12) months following the occurrence of a Change of Control of the Company, any unvested portion of the Option shall immediately vest, and any vested portion shall remain exercisable until the expiration of the Option Term; provided, that the foregoing shall not apply in the event that all Options issued and outstanding under the Plan are terminated in connection with such Change of Control. 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.
(e) Termination without Cause or for Good Reason. Upon a termination of the Participant’s Service by the Company without Cause or due to the Participant’s resignation for Good Reason (excluding a termination by reason of death or Disability) other than as provided in Section 5(d): (i) any portion of the Option that is vested as of the date of such termination of employment shall remain exercisable until the earlier of (A) ninety (90) days following such termination of Service and (B) the expiration of the Option Term; provided, that if a Change of Control should occur on or before the earlier of (A) and (B), then any portion of the Option that is vested as of the date of such termination of employment shall remain exercisable until the expiration of the Option Term; and (ii) any portion of the Option that is unvested as of such termination of employment shall remain outstanding but unexercisable until the earliest of (A) the date that is ninety (90) days following such termination of Service, at which time the unvested portion shall terminate and be forfeited, (B) the expiration of the Option Term, at which time the unvested portion shall terminate and be forfeited, and (C) the consummation of a Change of Control of the Company, at which time the unvested portion shall remain eligible for continued vesting in accordance with the terms of this Award notwithstanding such termination of employment (and to the extent the unvested portion would have vested pursuant to Section 4 hereof prior to the Change of Control if the Participant’s Service had not terminated, the unvested portion shall be deemed to have vested in accordance with and to the extent applicable to that vesting schedule).
(f) Other Terminations of Service. Upon a termination of the Participant’s Service for any reason, other than pursuant to Sections 5(a), 5(b), 5(c), 5(d) and 5(e) above, any unvested portion of the Option shall immediately terminate and be forfeited without consideration, and any vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days following such termination of Service and (ii) the expiration of the Option Term.
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6. Exercise Procedures.
(a) Notice of Exercise. To the extent exercisable, the Participant or the Participant’s representative may exercise any vested portion of the Option or any part thereof prior to the expiration of the Option Term or as otherwise set forth in Section 5 hereof by giving written notice to the Company in the form attached hereto as Exhibit A or any other form acceptable to the Committee or the Committee’s designated administrative representative (the “Notice of Exercise”). The Notice of Exercise shall be signed by the person exercising such Option or shall evidence the intent of the person exercising such Option if delivered in electronic format or with an electronic signature. In the event that such Option is being exercised by the Participant’s representative, the Notice of Exercise shall be accompanied by proof (satisfactory to the Company) of such representative’s right to exercise such Option.
(b) Method of Exercise. The Participant or the Participant’s representative shall deliver to the Company, at the time the Notice of Exercise is given, payment (i) in cash or its equivalent (e.g., by cashier’s check), (ii) in Shares (whether or not previously owned by the Participant) having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee, (iii) partly in cash and partly in Shares (as described in clause (ii) above), (iv) if there is a public market for the Shares at such time, subject to such administrative requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased or (v) to the extent permitted by the Committee, another form of payment permissible under Section 6.5 of the Plan for the full amount of the aggregate Option Price for the exercised Option.
(c) Issuance of Shares. Provided the Company receives a properly completed and executed Notice of Exercise and payment for the full amount of the aggregate Option Price and the Participant has made arrangements for appropriate withholding, the Company shall promptly cause the Shares underlying the exercised Option to be issued in the name of the Person exercising the applicable Option.
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 herein 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
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level (including, without limitation, General Managers, Assistant General Managers, store departmental managers, and all higher-ranking managers) (for purposes of this Section 7, 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 7 shall survive exercise, termination or settlement of the Option and termination or satisfaction of the Award Agreement.
8. No Right to Continued Service. The granting of the Option 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.
9. 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.
10. Transferability. Unless otherwise provided by the Committee, the Option 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
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shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option 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. During the Participant’s lifetime, the Option is exercisable only by the Participant (or, if the Participant is disabled, the Participant’s representative).
11. 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 Option, 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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
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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.
17. Option 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 Option 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.
18. No Guarantees Regarding Tax Treatment. The Participant shall be responsible for all taxes with respect to the Option. The Committee and the Company make no guarantees regarding the tax treatment of the Option.
19. Amendment. The Committee may amend or alter this Award Agreement and the Option granted hereunder at any time, subject to the terms of the Plan.
20. 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.
21. 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.
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22. 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 Nonqualified Stock Option Award Agreement as of the date first set forth above.
| PARTICIPANT |
|
|
| Christopher Morris |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Robert W. Edmund | ||
| General Counsel, Secretary and SVP of HR | ||
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EXHIBIT A
Notice of Exercise
Dave & Buster’s Entertainment, Inc.
1221 S. Belt Line Road #500
Coppell, Texas 75019
Attn: General Counsel Date of Exercise:
Ladies & Gentlemen:
1. Exercise of Option. This constitutes notice to Dave & Buster’s Entertainment, Inc. (the “Company”) that pursuant to my Nonqualified Stock Option Award Agreement (the “Award Agreement”) under the Company’s 2014 Omnibus Incentive Plan (the “Plan”) I elect to purchase the number of Shares of Company common stock set forth below and for the price set forth below. By signing and delivering this notice to the Company, I hereby acknowledge that I am the holder of the stock option (the “Option”) exercised by this notice and have full power and authority to exercise the same. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Award Agreement or the Plan, as applicable.
| Date of Grant: | ||||||
| Number of Shares as to which the Option is exercised (“Optioned Shares”): | ||||||
| Shares to be issued in name of: | ||||||
| Total exercise price: | $ |
| ||||
| Cash payment or other method of payment permitted under Section 6(b) of the Award Agreement delivered herewith: | $ |
| ||||
| Method: |
| |||||
2. Form of Payment. The Option may be exercised by delivery to the Company of payment (i) in cash or its equivalent (e.g., by cashier’s check), (ii) in Shares (whether or not previously owned by the Person exercising the Option pursuant to this notice) having a Fair Market Value equal to the aggregate Option Price for the Shares being
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purchased and satisfying such other requirements as may be imposed by the Committee, (iii) partly in cash and partly in Shares (as described in clause (ii) above), (iv) if there is a public market for the Shares at such time, subject to such administrative requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased or (v) to the extent permitted by the Committee, another form of payment permissible under Section 6.5 of the Plan for the full amount of the aggregate Option Price for the exercised Option.
3. Delivery of Payment. With this notice, I hereby deliver to the Company the full exercise price of the Optioned Shares and any and all withholding taxes due in connection with the exercise of my Option or have otherwise satisfied such requirements.
4. Rights as Stockholder. While the Company will endeavor to process this notice in a timely manner, I acknowledge that until the issuance of the shares underlying the Optioned Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to such shares, notwithstanding the exercise of my option(s). No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance of the optioned stock.
5. Interpretation. Any dispute regarding the interpretation of this notice shall be submitted promptly by me or by the Company to the Committee. The resolution of such a dispute by the Committee shall be final and binding on all parties.
6. Governing Law; Severability. This notice is governed by the internal substantive laws but not the choice of law rules, of Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this notice will continue in full force and effect without said provision.
7. Entire Agreement. The Plan and the Award Agreement under which the Optioned Shares were granted are incorporated herein by reference, and together with this notice constitute the entire agreement of the parties with respect to the subject matter hereof.
| Very truly yours, |
|
|
|
|
| (social security number) |
D&B Employee – Christopher Morris
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Exhibit 10.3
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 June 29, 2022 (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and Christopher Morris (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, 157,931 RSUs may be earned under this Award (the “Target Achievable RSUs”) based on the volume-weighted average closing price of a share of the Company’s common stock for the consecutive 60-trading day period ending on the fifth anniversary of the Date of Grant (the “Average Share Price”, and the last day of such 60-trading day period, the “Closing Date”). For purposes of this Award Agreement, “Performance Period” means the period commencing on the Date of Grant and ending on 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 Company shall determine the number RSUs, if any, that shall be deemed earned and eligible for vesting and settlement (such RSUs, “Earned RSUs”)
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in accordance with subsections (b) and (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.
(b) Service Vesting. The Earned RSUs shall vest on the Closing Date, subject to the Participant’s continued employment with the Company through such date and subject to earlier vesting of all or a portion of the Earned RSUs in accordance with Subsection 2(c) below (as applicable, each such date is referred to herein as a “Vesting Date”).
(c) Performance Calculation. The RSUs shall be deemed earned as set forth in the table below based on the Average Share Price. If on the Closing Date, the Average Share Price fails to achieve the target level specified in the table below, then all RSUs shall be deemed unearned, forfeited, and canceled immediately without consideration. 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 | |
| Greater than or equal to $67.54 |
100% | |
| Less than $67.54 |
0% |
(i) Notwithstanding the foregoing, if at any time between the Date of Grant and the Closing Date, the volume-weighted average closing price of a share of the Company’s common stock for any consecutive 60-trading day period (the final day of such 60-trading day period, the “Interim Closing Date”) is greater than or equal to $67.54, then vesting shall occur in three installments as follows:
(1) Twenty-five percent (25%) of the RSUs will vest on the earlier of (x) the first anniversary of the Interim Closing Date or (y) the Closing Date; and
(2) Twenty-five percent (25%) of the RSUs will vest on the earlier of (x) second anniversary of the Interim Closing Date or (y) the Closing Date; and
(3) The remaining fifty percent (50%) of the RSUs (the “Remaining RSUs”) will vest on the Closing Date.
(ii) Further notwithstanding the foregoing, if at any time between the one-year anniversary of the Interim Closing Date and the Closing Date, the volume-weighted average closing price of a share of the Company’s common stock for any consecutive 60-trading day period (the final day of such 60-trading day period, the “Subsequent Closing Date”) is greater than or equal to $67.54, then vesting of the Remaining RSUs shall occur as follows (it being understood the vesting of the RSUs in Subsections 2(c)(ii)(1) and (2) shall be unaffected):
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(1) Fifty percent (50%) of the Remaining RSUs will vest on the earlier of (x) the first anniversary of the Subsequent Closing Date or (y) the Closing Date; and
(2) Fifty percent (50%) of the Remaining RSUs will vest on the earlier of (x) second anniversary of the Subsequent Closing Date or (y) the Closing Date.
(d) Change of Control. In the event of a Change in Control, notwithstanding Section 2(c), the following shall apply:
(i) Upon the occurrence of a Change in Control of the Company, if the Share Price is greater than or equal to $67.54 on the effective date of the Change in Control (the “CIC Date”), then all RSUs not already deemed to be Earned RSUs shall be converted to Earned RSUs, except that notwithstanding Sections 2(b) and 2(c), vesting of all then outstanding Earned RSUs shall occur as follows:
(1) Fifty percent (50%) of the then outstanding Earned RSUs will vest on the earlier of (x) the CIC Date or (y) the Closing Date; and
(2) Twenty-five percent (25%) of the then outstanding Earned RSUs will vest on the earlier of (x) first anniversary of the CIC Date or (y) the Closing Date; and
(3) Twenty-five percent (25%) of the then outstanding Earned RSUs will vest on the earlier of (x) second anniversary of the CIC Date or (y) the Closing Date.
(ii) If the Share Price is less than $67.54 on the CIC Date, then all RSUs not deemed to be Earned RSUs shall immediately terminate and be forfeited without consideration.
3. Settlement; Payment.
(a) Share Settlement. Pursuant to the terms of the Plan and this Award Agreement, including, without limitation, Section 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 applicable Vesting Date, and in all events no later than the sixtieth (60th) day following such 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.
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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.
4. 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:
(i) at any time prior to the Closing Date, 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 Closing Date and prior to the final 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 Earned 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 of Service Due to Retirement. Upon a termination of the Participant’s Service by reason of Retirement that occurs:
(i) at any time prior to the Vesting Date, 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 from the Date of Grant through and including the date of termination of Service, and the denominator of which is 1,825, except that notwithstanding Section 2(b), 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 3 above; and
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(ii) after the Vesting Date and prior to the final Settlement Date, then the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs that would have vested on the Vesting Date coincident with or next following such termination of Service, 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, “Retirement” means (i) “Retirement” 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 Retirement: termination of the Participant’s Service, other than for Cause, after attaining (A) age sixty (60) and completing ten (10) years of continued Service (i.e., without any termination of Service) with the Company or its Affiliates or (B) age sixty-five (65).
(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 twenty-four (24) 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,
(1) 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; and
(2) Any then-outstanding Earned RSUs shall be settled in accordance with Section 3 above, except that notwithstanding Section 2(b), such Earned 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; and
(ii) If the Change in Control occurs after the expiration of the Performance Period and prior to the final 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 Earned 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;
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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 Vesting Date, 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 from the Date of Grant through and including the date of termination of Service, and the denominator of which is 1,825, except that notwithstanding Section 2(b), such RSUs shall be fully vested and settled on the Settlement Date next following the end of the full Performance Period, subject to the applicable limitations set forth in Section 3 above; and
(ii) after the Vesting Date and prior to the final Settlement Date, then the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs that would have vested on the Vesting Date coincident with or next following such termination of Service, except that notwithstanding Section 2(b), such Earned RSUs shall be fully vested and settled within sixty (60) days following such termination of Service, subject to the applicable limitations set forth in 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 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.
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(g) Other Terminations of Service. Upon a termination of the Participant’s Service prior to the final Settlement Date for any reason other than pursuant to Sections 4(a), 4(b), 4(c) and 4(d) 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(d), 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 “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
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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.
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.
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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.
(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.
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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 |
|
|
| Christopher Morris |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Robert W. Edmund | ||
| General Counsel, Secretary & SVP of HR | ||
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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 June 29, 2022 (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and Christopher Morris (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, 98,706 RSUs may be earned under this Award (the “Target Achievable RSUs”) based on the volume-weighted average closing price of a share of the Company’s common stock for the consecutive 60-trading day period ending on the fifth anniversary of the Date of Grant (the “Average Share Price”, and the last day of such 60-trading day period, the “Closing Date”). For purposes of this Award Agreement, “Performance Period” means the period commencing on the Date of Grant and ending on 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 Company shall determine the number RSUs, if any, that shall be deemed earned and eligible for vesting and settlement (such RSUs, “Earned RSUs”)
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in accordance with subsections (b) and (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.
(b) Service Vesting. The Earned RSUs shall vest on the Closing Date subject to the Participant’s continued employment with the Company through such date and subject to earlier vesting of all or a portion of the Earned RSUs in accordance with Subsection 2(c) below (as applicable, each such date is referred to herein as a “Vesting Date”).
(c) Performance Calculation. The RSUs shall be deemed earned as set forth in the table below based on the Average Share Price. If on the Closing Date, the Average Share Price fails to achieve the target level specified in the table below, then all RSUs shall be deemed unearned, forfeited, and canceled immediately without consideration. 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 | |
| Greater than or equal to $101.31 |
100% | |
| Less than $101.31 |
0% |
(i) Notwithstanding the foregoing, if at any time between the Date of Grant and the Closing Date, the volume-weighted average closing price of a share of the Company’s common stock for any consecutive 60-trading day period (the final day of such 60-trading day period, the “Interim Closing Date”) is greater than or equal to $101.31, then vesting shall occur in three installments as follows:
(1) Twenty-five percent (25%) of the RSUs will vest on the earlier of (x) the first anniversary of the Interim Closing Date or (y) the Closing Date; and
(2) Twenty-five percent (25%) of the RSUs will vest on the earlier of (x) second anniversary of the Interim Closing Date or (y) the Closing Date; and
(3) The remaining fifty percent (50%) of the RSUs (the “Remaining RSUs”) will vest on the Closing Date.
(ii) Further notwithstanding the foregoing, if at any time between the one-year anniversary of the Interim Closing Date and the Closing Date, the volume-weighted average closing price of a share of the Company’s common stock for any consecutive 60-trading day period (the final day of such 60-trading day period, the “Subsequent Closing Date”) is greater than or equal to $101.31, then vesting of the Remaining RSUs shall occur as follows (it being understood the vesting of the RSUs in Subsections 2(c)(ii)(1) and (2) shall be unaffected):
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(1) Fifty percent (50%) of the Remaining RSUs will vest on the earlier of (x) the first anniversary of the Subsequent Closing Date or (y) the Closing Date; and
(2) Fifty percent (50%) of the Remaining RSUs will vest on the earlier of (x) second anniversary of the Subsequent Closing Date or (y) the Closing Date.
(d) Change of Control. In the event of a Change in Control, notwithstanding Section 2(c), the following shall apply:
(i) Upon the occurrence of a Change in Control of the Company, if the Share Price is greater than or equal to $101.31 on the effective date of the Change in Control (the “CIC Date”), then all RSUs not already deemed to be Earned RSUs shall be converted to Earned RSUs, except that notwithstanding Sections 2(b) and 2(c), vesting of all then outstanding Earned RSUs shall occur as follows:
(1) Fifty percent (50%) of the then outstanding Earned RSUs will vest on the earlier of (x) the CIC Date or (y) the Closing Date; and
(2) Twenty-five percent (25%) of the then outstanding Earned RSUs will vest on the earlier of (x) first anniversary of the CIC Date or (y) the Closing Date; and
(3) Twenty-five percent (25%) of the then outstanding Earned RSUs will vest on the earlier of (x) second anniversary of the CIC Date or (y) the Closing Date.
(ii) If the Share Price is less than $101.31 on the CIC Date, then all RSUs not deemed to be Earned RSUs shall immediately terminate and be forfeited without consideration.
3. Settlement; Payment.
(a) Share Settlement. Pursuant to the terms of the Plan and this Award Agreement, including, without limitation, Section 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 applicable Vesting Date, and in all events no later than the sixtieth (60th) day following such 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.
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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.
4. 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:
(i) at any time prior to the Closing Date, 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 Closing Date and prior to the final 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 Earned 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 of Service Due to Retirement. Upon a termination of the Participant’s Service by reason of Retirement that occurs:
(i) at any time prior to the Vesting Date, 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 from the Date of Grant through and including the date of termination of Service, and the denominator of which is 1,825, except that notwithstanding Section 2(b), 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 3 above; and
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(ii) after the Vesting Date and prior to the final Settlement Date, then the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs that would have vested on the Vesting Date coincident with or next following such termination of Service, 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, “Retirement” means (i) “Retirement” 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 Retirement: termination of the Participant’s Service, other than for Cause, after attaining (A) age sixty (60) and completing ten (10) years of continued Service (i.e., without any termination of Service) with the Company or its Affiliates or (B) age sixty-five (65).
(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 twenty-four (24) 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,
(1) 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; and
(2) Any then-outstanding Earned RSUs shall be settled in accordance with Section 3 above, except that notwithstanding Section 2(b), such Earned 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; and
(ii) If the Change in Control occurs after the expiration of the Performance Period and prior to the final 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 Earned 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;
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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 Vesting Date, 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 from the Date of Grant through and including the date of termination of Service, and the denominator of which is 1,825, except that notwithstanding Section 2(b), such RSUs shall be fully vested and settled on the Settlement Date next following the end of the full Performance Period, subject to the applicable limitations set forth in Section 3 above; and
(ii) after the Vesting Date and prior to the final Settlement Date, then the Award shall be settled in accordance with Section 3 above, in respect of the number of then-outstanding Earned RSUs that would have vested on the Vesting Date coincident with or next following such termination of Service, except that notwithstanding Section 2(b), such Earned RSUs shall be fully vested and settled within sixty (60) days following such termination of Service, subject to the applicable limitations set forth in 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 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.
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(g) Other Terminations of Service. Upon a termination of the Participant’s Service prior to the final Settlement Date for any reason other than pursuant to Sections 4(a), 4(b), 4(c) and 4(d) 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(d), 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 “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
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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.
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.
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2022 Restricted Stock Unit Award Agreement – Performance Based No 2
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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.
(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.
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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]
D&B Team Member – Christopher Morris
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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 |
|
|
| Christopher Morris |
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Robert W. Edmund | ||
| General Counsel, Secretary & SVP of HR | ||
D&B Team Member – Christopher Morris
2022 Restricted Stock Unit Award Agreement – Performance Based No 2
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Exhibit 10.5
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 June 29, 2022 (the “Date of Grant”), between Dave & Buster’s Entertainment, Inc., a Delaware corporation (the “Company”) and Christopher Morris (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 14,806 RSUs. The RSU Award will vest in five (5) installments as follows: 2,962 RSUs on the first anniversary of the Date of Grant, 2,961 RSUs on the second anniversary of the Date of Grant, 2,961 RSUs on third anniversary of the Date of Grant, 2,961 RSUs on fourth anniversary of the Date of Grant, and 2,961 RSUs on fifth anniversary of the Date of Grant. 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 applicable date of vesting, and in all events no later than sixty (60) days following the applicable date of vesting, 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 final 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 within sixty (60) days 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 of Service Due to Retirement. Upon a termination of the Participant’s Service by reason of Retirement that occurs at any time prior to the final Settlement Date, then the Award shall continue to vest and be settled in accordance with Section 2 above, subject to the applicable limitations set forth in Section 2 above.
For purposes of this Award Agreement, “Retirement” means (i) “Retirement” 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 Retirement: termination of the Participant’s Service, other than for Cause, after attaining (A) age sixty (60) and completing ten (10) years of continued Service (i.e., without any termination of Service) with the Company or its Affiliates or (B) age sixty-five (65).
(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 final 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 final 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
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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(c).
(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 final 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 1,825, 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 final 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 final Settlement Date for termination without Cause pursuant to Section 3(d), 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.
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This Section 6 shall survive termination or settlement of the Award and termination or satisfaction of the Award Agreement.
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.
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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.
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.
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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.
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.
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: |
| |
| Christopher Morris | ||
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||
| By: |
| |
| Robert W. Edmund | ||
| General Counsel, Secretary & SVP of HR | ||
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2022 Restricted Stock Unit Award Agreement – Time Based
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Exhibit 31.1
CERTIFICATION
I, Christopher Morris, 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 second 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: September 7, 2022 | /s/ Christopher Morris | |
| Christopher Morris | ||
| Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Michael A. Quartieri, 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 second 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: September 7, 2022 | /s/ Michael A. Quartieri | |
| Michael A. Quartieri | ||
| 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 July 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher Morris, 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: September 7, 2022 | /s/ Christopher Morris | |||||
| Christopher Morris | ||||||
| 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 July 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. Quartieri, 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: September 7, 2022
| /s/ Michael A. Quartieri |
| Michael A. Quartieri |
| Chief Financial Officer |