exv10w27



 



Exhibit
10.27


EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made the 5 day of Dec, 2005
(the “Effective Date”), by and between HASTINGS ENTERTAINMENT, INC., a Texas corporation
(“Company”) and Michael Rigby (“Executive”).



WITNESSETH:




     WHEREAS, Company and its affiliates are engaged in the retail sale of books, music,
videos, periodicals, and software and the rental of videos; and



     WHEREAS, Executive has expertise, experience and capability in the business of Company;



     WHEREAS,
Executive has agreed to serve Company as its SVP Merchandising;
and



     WHEREAS, Company desires to enter into this Agreement to provide severance and other benefits
for Executive and obtain Executive’s agreements regarding confidentiality and post-employment
restrictive covenants for Company; and



     WHEREAS, Executive is willing to provide such agreements to Company.



     NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which consideration is
mutually acknowledged by the parties, it is hereby agreed as follows:



     1. Duties
and Responsibilities. The duties and responsibilities of Executive are and
shall
continue to be of an executive nature as shall be required by Company in the conduct of its
business.
Executive’s powers and authority shall include all those presently delegated to him or such
other duties
and responsibilities as from time to time may be assigned to him. Executive recognizes, that
during his
employment hereunder, he owes an undivided duty of loyalty to Company, and agrees to devote
substantially all of his business time, skills, efforts, and attention to the performance of
said duties and
responsibilities and to use his best efforts to promote and develop the business of Company.



     2. Employment
Term. Executive’s employment shall continue until terminated by either
party in accordance with Sections 4, 5, 6, or 7 herein. Except as may otherwise be expressly
provided
herein, regardless of the basis of any termination, Executive’s obligations under Sections 10,
11, 12, and
13 hereof shall continue. Anything to the contrary notwithstanding, two (2) years from and
after the
Effective Date either Company or Executive may terminate this Agreement upon thirty (30) days
written
notice to the other. In such event, the terms and provisions of this Agreement shall no longer
be effective
as to either party.



     3. Compensation and Benefits.



     (a) Base
Salary. For services rendered by Employee under this Agreement, Company shall
compensate Employee in the annual amount of $170,000 (“Base Salary”) payable in equal semi monthly
installments during the term of this Agreement. This base salary will be reviewed on an annual
basis commencing August 2006 and may be adjusted upwards or downwards.



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     (b) Bonus. For each fiscal year during the term of this Agreement, Employee shall be
eligible
for a bonus payable based on the Company’s Corporate Officer Incentive Plan (“COIP”) at a 75%
base
salary bonus level.



     (c) Withholding. All compensation shall be paid net of such withholdings as Employee
requests
or as are required by applicable law, rule or regulation. Company shall periodically review
Employee’s
Base Salary in an effort to assure Employee continued reasonable compensation for Employee’s
services.



     (d) Stock Options. Ten Thousand (10,000) shares granted pursuant to Company’s stock
option
program guidelines.



     (e) Business Expenses. Employee is authorized to incur reasonable and necessary
expenses for
promoting the business of Company, including expenses for entertainment, travel and similar
items in
accordance with Company policy. Company will reimburse Employee for all such expenses upon
the
presentation by Employee, from time to time, of an itemized account of such expenditure in
conformance
with Company policy.



     (f) Housing and Relocation Expenses. Company will provide its standard relocation and
moving
expenses from your current residence in Parkland, Florida. Company will assist Employee with
duplicate
housing costs for a period equal to the lesser of twelve months or until Employee’s residence
located in
Parkland, Florida is sold. During such period Company will reimburse Employee for the lesser
of your
actual monthly principal, interest, taxes and insurance payments for the lesser of such costs
in either
Amarillo, Texas or Parkland, Florida. In addition, Company will reimburse your realtor
sales
commission not to exceed 6% in connection with the sale of your home in parkland, Florida. You
agree
to attempt to obtain a fee arrangement with a realtor providing for a 3-5% sales commission,
if possible.



     (g) Benefits. Subject to meeting eligibility provisions, if any, Employee shall be
entitled to such
benefits as the Board of Directors of Company may from time to time establish generally for
employees
of the Company. Such benefits shall be generally consistent with the benefits provided by
comparable
firms within Company’s industry and shall include, without limitation, vacation pay, sick pay
benefits
and major medical coverage. The Company will also provide Employee with three (3) weeks of
paid
vacation per year and will pay for Employee’s attendance at reasonable trade organization
meetings and
seminars.



     4. Termination by Company; Special Compensation.



     (a) At any time, Company may terminate Executive’s employment for any reason. If
Executive’s termination is other than pursuant to Section 5, Executive shall, subject to the
other
provisions of this Section 4, be entitled to the following Special Compensation (as that term
is defined in
this Section 4) in lieu of any benefits available under any and all Company separation plans
or policies.




	 	(b)	 	For purposes of this Agreement, “Special Compensation” shall entitle Executive:
	 
	 		 	(i) to continue to receive for a period of eighteen (18) months from the date of
termination (the “Severance Period”) monthly compensation at the rate equal to the
monthly amount of his base annual salary in effect at the date of termination of
employment;
	 
	 		 	(ii) to receive a bonus, based on actual performance results, up to the 100% Performance




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	 	 	 	Percentage under the COIP throughout the Severance Period provided that the
amount, if any, payable under such plan for the award period including the last day
of the Severance Period shall be pro rated based upon the number of months of the
Severance Period that fall within the award period and the total number of months
in such award period;
	 
	 		 	(iii) to continue to receive throughout the Severance Period any executive medical,
dental, life, and qualified or nonqualified retirement benefits which the Executive
was receiving or was entitled to receive at the time of termination, except that
long term disability and short term disability benefits cease on the last day
worked;





     (c) Company shall pay or cause to be paid the amounts payable under paragraph (b)(i) above
in equal installments, monthly in arrears, and the amount payable under paragraph (b)(ii) in
accordance
with the terms of such plan. All payments pursuant to this Section shall be subject to
applicable federal
and state income and other withholding taxes.



     (d) In addition to the Special Compensation described above, Executive shall also be entitled
to any vacation pay for vacation accrued by Executive in the calendar year of termination but
not taken
at the time of termination.



     (e) In the event Executive becomes employed full time during the Severance Period,
Executive’s entitlement to continuation of the benefits described in paragraph (b)(iii) shall
immediately
cease, however, Executive shall retain any rights to continue medical insurance coverage under
the
COBRA continuation provisions of the group medical insurance plan by paying the applicable
premium.



     (f) The payments and benefits provided for in this Section shall be in addition to all other
sums then payable and owing to Executive hereunder and, except as expressly provided herein,
shall
not be subject to reduction for any amounts received by Executive for employment or services
provided after termination of employment hereunder, and shall be in full settlement and
satisfaction
of all of Executive’s claims and demands.



     (g) In all events, Executive’s right to receive Special Compensation and/or other benefits
pursuant to this Section shall cease immediately in the event Executive is reemployed by
Company or an
affiliate or Executive breaches any provision of Sections 10, 11, 12 or 13 hereof. In all
cases, Company’s
rights under Section 14 shall continue.



     (h) In the event that the Special Compensation is determined to be an “excess parachute
payment” under section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) or any
successor provision, subject to the excise tax imposed by section 4999 of the Code or any successor
provision (the “Excise Tax”), Company agrees to pay to Executive an additional sum (the “Gross Up”)
in an amount such that the net amount retained by Executive, after receiving both the Special
Compensation and the Gross Up and after paying: (i) any Excise Tax on the Payment and the Gross Up,
and (ii) any Federal, state and local income taxes on the Gross Up, is equal to the amount of the
Special Compensation.



     For purposes of determining the Gross Up, Executive shall be deemed to pay state and local
income taxes at the highest marginal rate of taxation in his filing status for the calendar year in
which the Special Compensation is to be made based upon Executive’s domicile on the date of the
payment. The determination of whether such Excise Tax is payable and the amount of such Excise Tax
shall be based upon the opinion of tax counsel selected by Company subject to the approval of
Executive. If such opinion




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is not finally accepted by the Internal Revenue Service, then appropriate adjustments shall be
calculated (with Gross Up, if applicable) by such tax counsel based upon the final amount of
Excise Tax so determined. The final amount shall be paid, if applicable, within thirty (30) days
after such calculations are completed.




     5. Voluntary Resignation by Executive; Termination for Cause; Total Disability; Death.
Upon termination of Executive’s employment by either Voluntary Resignation, or Termination for
Cause (as those terms are defined in this Section 5), Executive shall have no right to
compensation, severance pay or other benefits described herein but Executive’s obligations under
Sections 10, 11, 12 and 13 hereof shall continue. Upon termination for total disability, Executives
obligations under Sections 10, 11, 12, and 13 hereof shall continue.




	(a)	 	Voluntary Resignation by Executive. At any time, Executive has the right, by written
notice
to Company, to terminate his services hereunder (“Voluntary Resignation”), effective as of
sixty (60)
days after such notice.
	 
	(b)	 	Termination for Cause by Company. At any time, Company has the right to terminate
Executive’s employment for cause. Termination upon the occurrence of any of the following
shall be
deemed termination for cause (“Termination for Cause”):






(i) fails to follow any material requirement, instruction, order or mandate of
any superior officer or the board of directors of Company;




(ii) commits any dishonest act towards Company, its officers, employees or Board of
Directors;




(iii) engages in any activity involving fraud, dishonesty, moral turpitude or
dereliction of duty; or




(iv) materially violates Company’s policies or procedures.



     Termination for failure to meet any material requirements, instruction, orders or mandates,
or materially violating Company’s policies or procedures, unless willful, continuing and
substantial, shall not be deemed a Termination for Cause. For Termination for Cause, written
notice of the termination of Executive’s employment by Company shall be served upon Executive and
shall be effective as of the date of such service. Such notice given by Company shall specify the
act or acts of Executive underlying such termination.



     (c) Total Disability. Upon the total disability of Executive, as disability is defined in the
disability policies and plans applicable to Executive, Executive shall have no right to
compensation or
severance pay described herein but shall be entitled to long term disability and other such
benefits
afforded under Company’s applicable policies and plans.



     (d) Death. Upon the death of Executive, Executive’s estate shall have no right to receive
compensation or other severance pay described herein, but shall be entitled to receive any
benefits
afforded under Company’s applicable policies and plans.



     6. Resignation Following Constructive Discharge. If at any time, except in
connection with a termination pursuant to Sections 4, 5, or 7, Executive is Constructively
Discharged (as that term is



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defined in this Section 6) then Executive shall have the right, by written notice to
Company within sixty (60) days of such Constructive Discharge, to terminate his services
hereunder, effective as of thirty (30) days after such notice. Executive shall in such event be
entitled to the compensation and benefits as if such employment were terminated pursuant to
Section 4 of this Agreement.




     For purposes of this Agreement, Executive shall be “Constructively Discharged” upon the
occurrence of any one of the following events:



     (a) Executive is removed from his position with Company other than as a result of Executive’s
appointment to a position of equal or superior scope and responsibility; or



     (b) Executive’s total compensation is reduced by more than 20% (other than across-the-board
reductions similarly affecting all executive officers of Company).



     7. Effect of Change in Control.



     (a) Upon a Change in Control, Executive will be entitled to a payment (the “Change of Control
Gross-Up”) for all unexercised incentive stock options, and shares owned immediately prior to the
Change of Control that were acquired as a result of incentive stock options exercised within 12
months prior to the Change in Control and non-qualified options exercised within 18 months prior
to the Change in Control. Payments will be determined separately for each option, and type of
option, granted.



     The Change of Control Gross-Up shall be determined in accordance with the following formula:




	 	(i)	 	For all unexercised incentive stock options





G =
[((P = E) x N) x (1-L)]  ̧ (1-M)




	 	 	 	 	 
	 

	 	Where
	 	G = Change of Control Gross-Up Payment
	 
	 	 	 	 
	 

	 	 	 	P = The price per share paid in the tender offer or merger agreement
that results in the Change in Control. If no such tender offer or
merger agreement occurs in connection with a Change in Control, then
the price per share shall be determined by a majority of
disinterested incumbent members of the Board of Directors of
Company’s in office immediately prior to the Change in Control.
	 
	 	 	 	 
	 

	 	 	 	E = The exercise price per share of the incentive stock option.
	 
	 	 	 	 
	 

	 	 	 	N = The number of unexercised shares of such incentive stock option.
	 
	 	 	 	 
	 

	 	 	 	L = The long term capital gains tax rate (expressed as a decimal) in
effect for the calendar year in which the Change of Control Gross-Up
is to be made.
	 
	 	 	 	 
	 

	 	 	 	M = The highest marginal rate (expressed as a decimal) of taxation in
the Executive’s filing status for the calendar year in which the
Change of Control Gross-Up is to be made.






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     (ii) For all Incentive Stock Options exercised within the 12-month period prior to the
Change in Control and owned by Executive immediately prior to the Change in Control.



	 	 	 	 	 
	 

	 	 	 	G = [((P - F) x Q) x
(l-L)]  ̧ (l-M)
	 
	 	 	 	 
	 

	 	Where
	 	G = Change of Control Gross-Up Payment
	 
	 	 	 	 
	 

	 	 	 	P = The price per share paid in the tender offer or merger agreement that
results in the Change in Control. If no such tender offer or merger
agreement occurs in connection with a Change in Control, then the price
per share shall be determined by a majority of disinterested incumbent
members of the Board of Directors of Company’s in office immediately prior
to the Change in Control.
	 
	 	 	 	 
	 

	 	 	 	F = The exercise price of such option.
	 
	 	 	 	 
	 

	 	 	 	Q = The number of shares exercised in such Incentive Stock Option.
	 
	 	 	 	 
	 

	 	 	 	L = The long term capital gains tax rate (expressed as a decimal) in
effect for the calendar year in which the Change of Control Gross-Up is to
be made.
	 
	 	 	 	 
	 

	 	 	 	M = The highest marginal rate (expressed as a decimal) of taxation in the
Executive’s filing status for the calendar year in which the Change of
Control Gross-Up is to be made.






                  (iii) For all non-qualified stock options exercised within the 18-month period prior to the
Change in Control and owned by Executive immediately prior to the Change in Control.



	 	 	 	 	 
	 

	 	 	 	G = [((P-V) x Q) x (l-L)]
 ̧ (l-M)
	 
	 	 	 	 
	 

	 	Where
	 	G = Change of Control Gross-Up Payment
	 
	 	 	 	 
	 

	 	 	 	P = The price per share paid in the tender offer or merger agreement that
results in the Change in Control. If no such tender offer or merger
agreement occurs in connection with a Change in Control, then the price
per share shall be determined by a majority of disinterested incumbent
members of the Board of Directors of Company in office immediately prior
to the Change in Control.
	 
	 	 	 	 
	 

	 	 	 	V = The fair market value of the stock at time of exercise of the
non-qualified option (determined as of the closing price of the stock on
the date such option is exercised).
	 
	 	 	 	 
	 

	 	 	 	Q = The number of shares exercised in such Incentive Stock Option.
	 
	 	 	 	 
	 

	 	 	 	L = The long term capital gains tax rate (expressed as a decimal) in effect
for the calendar year in which the Change of Control Gross-Up is to be
made.







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M = The highest marginal rate (expressed as a decimal) of
taxation in the
Executive’s Filing status for the calendar year in which the Change of
Control Gross-Up is to be made.



     The
Change in Control Gross-Up for unexercised incentive stock options shall be paid upon surrender and
cancellation of the incentive stock options. The Change in Control Gross-Up for incentive stock options exercised
in the 12-month period prior to the Change in Control and for non-qualified stock options exercised in the
18-month period prior to the Change in Control shall be paid upon the
Change in Control.



     (b) “Change in Control” shall mean an event which shall be deemed to have occurred if: (i)
a merger or consolidation of the Company with or into another corporation occurs in which the Company shall not be
the surviving corporation (for purposes of this definition, the Company shall not be deemed the surviving
corporation in any such transaction if, as the result thereof, it becomes a wholly-
owned subsidiary of another corporation); (ii) a dissolution of the Company occurs; (iii) a transfer of all or
substantially all of the assets or shares of stock of the Company in one transaction or a series of related
transactions to one or more other persons or entities occurs; (iv) if any “person” or “group” as those terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than Excluded Persons, becomes the “beneficial owner” (as defined in Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company’s then outstanding securities; or (v) during any period of two
consecutive years commencing on or after January 1, 2000,
individuals who at the beginning of the period
constituted the Board cease for any reason to constitute at least a majority, unless the election of each
director who was not a director at the beginning of the period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors then in office who were directors at the beginning of
the period. The term “Excluded Persons” means each of John H. Marmaduke, the John H. Marmaduke
Family Limited Partnership, the Stephen S. Marmaduke Family Limited Partnership, and the Estate of
Sam Marmaduke, Deceased, and any person, entity, or group under the control of any of them, or a
trustee or other fiduciary holding securities under an employee benefit plan of the Company.



     A Change of Control shall include any other transactions or series of related transactions
occurring which have substantially the same effect as the transactions specified in any of the preceding
clauses of this Section 7.



     (c) Except as otherwise specifically provided, amounts paid under this Section 7 shall be
paid, if applicable, within thirty (30) days after such calculations are completed.



     8. Dispute Resolution. All disputes arising under this Agreement, other than those disputes
relating to Executive’s alleged violations of Sections 10 through 13 herein, shall be submitted to
arbitration by the American Arbitration Association of Dallas, Texas. Costs of arbitration shall be borne
equally by the parties. The decision of the arbitrators shall be final and there shall be no appeal from any
award rendered. Any award rendered may be entered as a judgment in any court of competent jurisdiction.
In any judicial enforcement proceeding, the losing party shall reimburse the prevailing party for its
reasonable costs and attorneys’ fees for enforcing its rights under this Agreement, in addition to any
damages or other relief granted. This Section 8 does not apply to any action by Company to enforce
Sections 10 through 13 of this Agreement and does not in any way restrict Company’s rights under
Section 14 herein.



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     9. Enforcement. All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid or reimbursed by Company
if Executive is successful pursuant to a legal judgment, arbitration
or settlement.



     10. Confidential Information. Executive acknowledges that during the course of his
employment he has learned or will learn or develop Confidential Information (as that term is defined in
this Section 10). Executive further acknowledges that unauthorized disclosure or use of such
Confidential Information, other than in discharge of Executive’s duties, will cause Company irreparable harm.



     For purposes of this Section, Confidential Information means trade secrets (such as technical and
non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing,
process) and other proprietary information concerning the business of Company, or its affiliates, including
but not limited to: pricing and financial information; computer programs; unpatented inventions,
discoveries or improvements; marketing, manufacturing, or organizational research and development;
business plans; sales forecasts; personnel information, including the identity of other employees of
Company, their responsibilities, competence, abilities, and compensation; current and prospective
suppliers’ lists and information on suppliers; information concerning planned or pending acquisitions or
divestitures; and information concerning purchases or leasing of major equipment or property, which
information: (a) has not been made generally available to the public; and (b) is useful or of value to the
current or anticipated business, or research or development activities of Company, or (c) has been
identified to Executive as confidential by Company, either orally or in writing.



     Except in the course of his employment and in the pursuit of the business of Company or any of
its subsidiaries or affiliates, Executive shall not, during the course of his employment, or for a period of
eighteen (18) months following termination of his employment for any reason, directly or indirectly,
disclose, publish, communicate or use on his behalf or another’s behalf, any proprietary information or
data of Company or any of its subsidiaries or affiliates.



     Executive acknowledges that Company operates and competes nationally, and that Company
will be harmed by unauthorized disclosure or use of Confidential Information regardless of where such
disclosure or use occurs, and that therefore this confidentiality agreement is not limited to any single state
or other jurisdiction.


     11. Non-Competition.



     (a) Scope. During the effectiveness of this Agreement (the “Term”), Employee shall devote
substantially of his business, time, attention and energies to the business and interests of Company, and
shall not be engaged (whether or not during normal business hours) in any other business or professional
activity (whether or not such activity is pursued for gain, profit or other pecuniary advantage) without
first obtaining the written consent of the Board of Directors of Company. During the Term of and for a
period of two years after the expiration or termination of this Agreement, for any reason or for no reason
at all, Employee shall not directly or indirectly:



          (i) Own, have any interest in or be, serve or act as an individual proprietor, partner,
agent, stock holder, officer, employee, consultant, director, joint
venturer, investor, lender, or in any
other capacity whatsoever (other than as the holder of not more than one percent (1%) of the total
outstanding stock of a publicly held company) of or with, or assist in any way, any corporation,
partnership, firm or business enterprise at least 20% of whose sales (in dollar volume) are books, music




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or video sales or rentals (whether such book, music or video (including
games) is new or pre-owned) (individually or in the aggregate with all
affiliates thereof) and which does business anywhere in the
United States.




          (ii) Solicit or induce, or attempt to induce, any employee or independent
contracter of Company or any other person who shall be in the service of
Company to terminate his or her employment with or otherwise cease his or her
relationship with Company; or




          (iii) Solicit divert or take away, or attempt to solicit, divert or take
away, the business or patronage of any of the clients, customers (whether any
such customer has done business once or more than once), suppliers or accounts,
or prospective clients, customers or accounts, or suppliers to Company.




     12. Inducement of Other Employees. For an eighteen (18) month period following
termination of employment, Executive will not directly or indirectly solicit,
induce or encourage any employee or agent of Company to terminate his
relationship with Company.



     13. Return
of Company’s Property. All notes, reports, sketches, plans,
published memoranda or other documents created, developed, generated or held by
Executive during employment concerning or related to Company’s business, and
whether containing or relating to Confidential Information or not, are the
property of Company and will be promptly delivered to Company upon termination
of Executive’s employment for any reason whatsoever. During the course of
employment, Executive shall not remove any of the above property containing
Confidential Information, or reproductions or copies thereof, or any apparatus
from Company’s premises without authorization.



     14. Remedies. Executive acknowledges that the restraints and agreements herein
provided are fair and reasonable, that enforcement of the provisions of
Sections 10, 11, 12 and 13 will not cause him undue hardship and that said
provisions are reasonably necessary and commensurate with the need to protect
Company and its legitimate and proprietary business interests and property from
irreparable harm.



     Executive acknowledges that failure to comply with the terms of this Agreement
will cause irreparable damage to Company. Therefore, Executive agrees that, in
addition to any other remedies at law or in equity available to Company for
Executive’s breach or threatened breach of this Agreement, Company is entitled
to specifie performance or injunctive relief, without bond, against Executive
to prevent such damage or breach, and the existence of any claim or cause of
action Executive may have against Company will not constitute a defense
thereto. Executive further agrees to pay reasonable attorney fees and costs of
litigation incurred by Company in any proceeding relating to the enforcement
of the Agreement or to any alleged breach thereof in which Company shall
prevail in whole or in part.



     In the event of a breach or a violation by Executive of any of the covenants
and provisions of this Agreement, the running of the Non-Compete Period (but
not of Executive’s obligation thereunder), shall be tolled during the period
of the continuance of any actual breach or violation.



     15. Entire
Understanding. This Agreement constitutes the entire
understanding between the parties relating to Executive’s employment hereunder
and while this Agreement is in effect supersedes all prior written and oral
understandings and agreements with respect to such matters.



     16.  No Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance,



9









 




charge pledge, or hypothecation, or to execution, attachment, levy, or similar process or
assignment operation of law, and any attempt, voluntary or involuntary, to affect any such action
shall be null, void, and of no effect.




     17.  Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties
hereto, Executive’s executors, administrators, legal representatives, heirs, successors, and assigns
and the successors and assigns of Company. Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise,
to all or substantially all the
business or assets of Company, expressly and unconditionally to assume and agree to perform
Company’s obligations under this Agreement, in the same manner and to the same extent that Company
would be required to perform if no such succession or assignment had taken place.



     18. Partial Invalidity. The various provisions of this Agreement are intended to be severable
and to constitute independent and distinct binding obligations. Should any provision of this
Agreement be determined to be void and unenforceable, in whole or in part, it shall not be deemed to
affect or impair the validity of any other provision or part thereof, and such provision or part
thereof shall be deemed modified to the extent required to permit enforcement. Without limiting the
generality of the foregoing, if the scope of any provision contained in this Agreement is too broad
to permit enforcement to its full extent, but may be made enforceable by limitations thereon, such
provision shall be enforced to the maximum extent permitted by law, and Executive hereby agrees that
such scope may be judicially modified accordingly.



     19. Strict Construction. The language used in this Agreement will be deemed to be the language
chosen by Company and Executive to express their mutual intent and no rule of strict construction
shall be applied against any person.



     20. Waiver. The waiver of any party hereto of a breach of any provision of this Agreement by any
other party shall not operate or be construed as a waiver of any subsequent breach.



     21. Notices. Any notice or other communication required or permitted to be given hereunder shall
be determined to have been duly given to any party (a) upon delivery to the address of such party
specified below if delivered personally or by courier; (b) upon dispatch if transmitted by telecopy
or other means of facsimile, provided a copy thereof is also sent by
regular mail or courier; or
(c) within forty-eight (48) hours after deposit thereof in the U.S. mail, postage prepaid, for
delivery as certified mail, return receipt requested, addressed, in any case to the party at the
following address(es) or telecopy numbers:



	 	 	 	 	 	 	 
	 

	 	If to Executive:
	 	 	 	If to Company:
	 
	 	 	 	 	 	 
	 

	 	Michael Rigby
	 	 	 	Hastings Entertainment, Inc.
	 

	 	C/o Hastings Entertainment, Inc.
	 	 	 	P.O. Box 35350
	 

	 	P.O. Box 35350
	 	 	 	Amarillo, TX 79120
	 

	 	Amarillo, TX 79120
	 	 	 	Facsimile: (806) 351-2299
	 

	 	Facsimile: (806) 351-2299
	 	 	 	Attention: Corporate Secretary





or to such other address(es) or telecopy number(s) as any party may designate by written notice in
the aforesaid manner.




     22. Governing Law. This Agreement shall be governed by, and interpreted, construed and



10









 




enforced in accordance with, the laws of the State of Texas.




     23. Gender. Wherever from the context it appears appropriate, each term stated in
either the singular of plural shall include the singular and the plural, and the
pronouns stated in either the masculine, the feminine or the neuter gender shall
include the masculine, feminine or neuter.



     24. Headings. The headings of the Sections of this Agreement are for reference
purposes only and do not define or limit, and shall not be used to interpret or
construe the contents of this Agreement.



     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of
the date above set forth.



	 	 	 	 	 	 	 
	 	 	HASTINGS ENTERTAINMENT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Marmaduke	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John H. Marmaduke, President	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Michael Rigby	 	 
	 	 	 	 	 
	 	 	Michael Rigby	 	 







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