Exhibit 99.1
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
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This Amendment ("Amendment") modifies the Employment Agreement entered into as
of the 1st day of October, 2003 ("Agreement") between C. Xxxxx Xxxx residing at
[home address omitted] ("Employee"), and Xxxxxx'x Trading Company, Inc., an
Indiana corporation ("Company"). This Amendment is made and entered into as of
the 15th day of June, 2004 between the Employee and the Company.
1. AMENDMENT TO EMPLOYMENT AGREEMENT:
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(a) The Employee and the Company mutually agree that Section 5 of
the Agreement is hereby amended to add the following
subsection (e) at the end thereof, effective immediately:
"(e) Limitation on Parachute Payments: Notwithstanding anything
contained in this Agreement to the contrary, to the extent
that the Employee becomes entitled to any payment or
distribution of any type under this Section 5 ("Termination
Payments") and that payment or distribution would be subject
to the excise tax imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), either alone or
in conjunction with any other payment or distribution of any
type to or for the Employee by the Company or any of its
affiliates, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise (including, without limitation, any accelerated
vesting of stock options or restricted stock granted by the
Company pursuant to this Agreement or otherwise)
(collectively, the "Total Payments") then the Termination
Payments shall be reduced (but not below zero) so that the
maximum amount of the Total Payments (after reduction) shall
be one dollar ($1.00) less than the amount which would cause
any portion of the Total Payments to be subject to the excise
tax imposed by Section 4999 of the Code; provided that such
reduction to the Termination Payments shall be made only if
the total after-tax benefit to the Employee is greater after
giving effect to such reduction than if no such reduction had
been made. Unless the Employee shall have given prior written
notice to the Company to effectuate a reduction in the
Termination Payments if such a reduction is required, the
Company shall reduce or eliminate the Termination Payments by
first reducing or eliminating any cash severance benefits,
then by reducing or eliminating any accelerated vesting of
stock options, then by reducing or eliminating any accelerated
vesting of restricted stock, then by reducing or eliminating
any other remaining payments or distributions. The preceding
provisions of this subsection shall take precedence over the
provisions of any other plan, arrangement or agreement
governing the Employee's rights and entitlements to any
benefits or compensation.
As a result of the uncertainty in the application of Section
4999 of the Code at the time of the determination of whether a
reduction to the Termination Payments is required, it is
possible that Termination Payments to the Employee which will
not have been made by the Company (if a reduction to the
Termination Payments is made in accordance with the preceding
paragraph) should have been made ("Underpayment"). Any such
Underpayment shall be promptly paid by the Company to or for
the benefit of the Employee. In the event that a reduction to
the Termination Payments is required in accordance with the
preceding paragraph and all or a portion of the Total Payments
actually made to the Employee (after reduction of the
Termination Payments) shall be determined to result in the
imposition of any tax under Section 4999 of the Code, the
Employee shall promptly reimburse the Company for the amount
of the excess Termination Payments together with interest on
such amount (at the same rate as is applied to determine the
present value of payments under Section 280G or any successor
thereto), from the date the reimbursable payment was received
by the Employee to the date the same is repaid to the
Company."
(b) The Employee and the Company mutually agree that the Agreement
is hereby amended to add the following Section 19 at the end thereof, effective
immediately:
"19. STAY BONUS: If the event that the Company enters into an
agreement of merger with Dick's Sporting Goods, Inc. or one of its
affiliates on or before June 30, 2004, so long as Employee remains
employed by the Company through the date of consummation of the merger
described in any such agreement between the Company and Dick's Sporting
Goods, Inc. (the "Merger"), Employee shall become entitled to a payment
of $475,000 (less any required tax withholding) from the Company upon
the consummation of the Merger. The Company shall make this payment at
the closing of the Merger or within three days thereafter."
2. GOVERNING LAW: The provisions of this Amendment shall be construed
in accordance with, and governed by, the laws of the State of Indiana without
regard to principles of conflict of laws.
3. SUCCESSORS; NO ASSIGNMENT OF AGREEMENT: This Amendment shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs, successors and assigns.
4. CAPTIONS: The captions of this Amendment are for descriptive
purposes only and are not part of the provisions hereof and shall have no force
or effect.
IN WITNESS WHEREOF, the Company and Employee, intending to be legally bound,
have executed this Amendment on the day and year first above written.
EMPLOYEE: COMPANY:
XXXXXX'X TRADING COMPANY, INC.
By: /s/ C. XXXXX XXXX By: /s/ XXXXX X. XXXXXX
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C. Xxxxx Xxxx Xxxxx Xxxxxx
Chief Executive Officer
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