EXIBIT 10.1
RELOCATION AND RETENTION AGREEMENT
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This Relocation and Retention Agreement is entered into as of this 24th
day of July, 2006 by and between Escalade, Incorporated, an Indiana corporation
("Escalade") and Xxxxx X. Xxxxxxxx, an individual resident in Indiana
("Executive").
WHEREAS, Escalade desires that Executive's services as its Chief
Financial Officer be primarily rendered from Escalade's offices in Evansville,
Indiana; and
WHEREAS, Executive currently resides in the Wabash, Indiana area and
prior to the date hereof has been working primarily from Escalade's offices in
Wabash, Indiana; and
WHEREAS, both Escalade and Executive mutually desire that Executive
relocate to Evansville, Indiana as promptly as is practicable and recognize that
Executive will incur significant expenses in relocating his family and personal
residence to Evansville, Indiana;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, Escalade and Executive agree as follows:
1. Purchase and Sale of Existing Residence. Escalade and Executive
agree that Escalade will purchase Executive's existing residence located at 0000
Xxxx 000 Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000 ("Existing Residence") for a purchase
price equal to $375,000 ("Purchase Price"), such purchase to be on normal and
customary terms and conditions currently prevailing in the county in which the
Existing Residence is based for residential real estate transactions between
unrelated parties. Escalade and Executive agree that the Purchase Price has been
determined based upon a fair market appraisal of the Existing Residence prepared
by Xxxxxxx Real Estate Appraisals and dated as of June 6, 2006. The closing of
the purchase and sale of the Existing Residence ("Closing") shall occur no later
than August 15, 2006, subject to the satisfaction of standard closing
conditions.
2. Reimbursement of Loss. Escalade and Executive agree that
Executive's basis in the Existing Residence is $411,000, which basis exceeds the
Purchase Price by $36,000. Escalade hereby agrees to pay to Executive at the
Closing a cash bonus in the amount of $36,000 so that Executive will not incur a
financial loss on the sale of the Existing Residence as a result of his
relocation to Evansville, Indiana, plus a cash bonus in the amount of $5,000 to
cover Executive's closing costs, including but not limited to real estate sales
commissions, typically paid by a purchaser that are incurred by Executive in
connection with Executive's purchase of a new residence in the Evansville,
Indiana area (collectively, both such cash bonuses constitute the "Relocation
Bonus" in the aggregate amount of $41,000). Escalade and Executive agree that
some or all of the Relocation Bonus will constitute compensation to Executive
taxable as ordinary income. Accordingly, to prevent further out of pocket loss
to Executive in connection with the relocation, Escalade agrees that it will
make an additional cash bonus payment at Closing to Executive in the amount of
$29,000 to cover the estimated additional tax payment required of Executive
("Gross Up Bonus"). Escalade shall withhold income tax, social security tax and
other applicable taxes relating to the Relocation Bonus and Gross Up Bonus.
3. Real Estate Broker. Escalade acknowledges that Executive has
previously listed his Existing Residence for sale with Coldwell Banker ("Real
Estate Broker") and that Real Estate Broker has waived its rights to any
commission in connection with Executive's sale of the Existing Residence to
Escalade provided that Escalade engages Real Estate Broker in connection with
Escalade's contemplated resale of the Existing Residence. Escalade agrees that
it will engage Real Estate Broker on the same terms and conditions as currently
exist between Executive and Real Estate Broker.
4. Moving Expenses. Escalade agrees that it will pay the reasonable
moving expenses ("Moving Expenses") incurred by Executive in packing, loading,
transporting, unloading and unpacking the household furnishings and all personal
effects desired to be moved by Executive from his Existing Residence to his new
residence in Evansville, Indiana. Escalade and Executive agree that the moving
company shall invoice Escalade directly for its services and that Escalade shall
pay such invoice directly to the moving company.
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5. Maximum Escalade Relocation Payments. Escalade and Executive
agree that the anticipated maximum net out-of-pocket costs to Escalade in
connection with Executive's relocation to Evansville will not exceed $120,000,
which amount includes the Relocation Bonus, Gross Up Bonus, Moving Expenses, all
closing costs (including real estate sales commissions) incurred by Escalade in
connection with its purchase and sale of the Existing Residence, and any
shortfall between the amount Escalade receives upon its resale of the Existing
Residence and the Purchase Price (collectively, the "Relocation Payments"). In
the event that the Relocation Payments would exceed $120,000, Executive agrees
that Escalade shall reduce his annual bonus compensation for fiscal year 2006 by
the amount of such Relocation Payments in excess of $120,000. If the amount of
Executive's annual bonus compensation for fiscal year 2006 is not sufficient to
offset the amount of excess, then the excess shall be applied against future
years' bonus compensation until the excess has been paid in full.
6. Effect of Termination of Employment. In the event that, following
Executive's relocation, Executive's employment with Escalade would be terminated
with just cause by Escalade or by Executive without good reason (a
"Termination"), Executive agrees that he may be required to reimburse Escalade
for the Relocation Payments as follows. Executive shall reimburse Escalade for
100% of such Relocation Payments (less any amount previously repaid pursuant to
Section 5) if Termination occurs on or prior to the first anniversary of the
date of this Agreement; 66 2/3% if Termination occurs after the first
anniversary and on or prior to the second anniversary of the date of this
Agreement; and 33 1/3% if Termination occurs after the second anniversary and on
or prior to the third anniversary of the date of this Agreement.
For purposes of this Agreement, termination by Escalade "with just
cause" shall mean any termination by Escalade due to the commission by Executive
of fraud with respect to Escalade, the indictment of Executive for the
commission of a felony, or the intentional disregard by Executive of the express
instructions of Escalade's Board of Directors or Chief Executive Officer with
respect to a matter of policy, which disregard continues for not less than 15
days following Executive's receipt of written notice of such disregard; and
termination by Executive "without good reason" shall mean any termination by
Executive other than by reason of his death or disability, Escalade requiring
Executive to relocate anywhere in excess of 50 miles from Escalade's corporate
offices in Evansville, Indiana, or Escalade imposing job authorities or
responsibilities upon Executive which are materially inconsistent with his
experienced, knowledge, skill and background.
7. No Guarantee of Employment. Nothing herein shall be construed as
creating a contract or guarantee of employment for any specific duration of time
and Executive's employment shall continue to be on an at-will basis and may be
terminated by Escalade at any time with or without cause.
8. Successors; Binding Agreement. This Agreement shall be binding
upon Escalade and Executive, and their respective successors, heirs and assigns.
9. Severability. If any provision, construction, or application of
this Agreement is held to be unenforceable for any reason, the validity of all
remaining provisions, constructions, and applications shall not be affected, and
the rights and obligations of the parties shall be construed and enforced as if
the Agreement did not contain such unenforceable provision, construction, or
application; provided, however, that the resulting construction and enforcement
shall be generally consistent with the intended purposes of the entire
Agreement.
10. Assignment. Neither Escalade nor Executive may assign, transfer
or in any other way alienate the benefits and obligations provided and created
by this Agreement.
11. Governing Law. This Agreement and all actions taken hereunder
shall be governed as to validity, construction, interpretation and
administration by the laws of the State of Indiana and applicable federal law,
without regard to the choice of law provisions thereof.
12. Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
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IN WITNESS WHEREOF, this Relocation and Retention Agreement has been
executed by the parties hereto as of the day and year first above written.
ESCALADE, INCORPORATED
By: /s/ XXXXXX XXXXXXX
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Title: Chief Operating Officer
EXECUTIVE
/s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
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