AGREEMENT
Exhibit 10.2
AGREEMENT
AGREEMENT made and entered into by and between Xxxxxx-Xxxx Sports, Inc. (the
“Company”) and Xxxxxxx X. Xxxxx (the “Executive”), effective as of the Closing
Date, as defined in the Stock Purchase Agreement dated as of February 1, 2006, by and between
Xxxxxxx Xxxx Holdings, Inc.(renamed Xxxxxx-Xxxx Sports, Inc.) and Xxx. X. Xxxxxx, Inc. (the
“Stock Purchase Agreement”), which occurred on March 16, 2006, and which is hereafter
referred to as the “Effective Date.”
For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Executive agree as follows:
1. Employment. Subject to the terms and conditions set forth in this Agreement, the
Company hereby offers, and the Executive hereby accepts, employment.
2. Term. Subject to earlier termination as hereafter provided, the Executive’s
employment hereunder shall be for a term of three years, commencing as of the Effective Date, and
shall automatically renew thereafter for successive terms of one year each. The term of this
Agreement, as from time to time renewed, is hereafter referred to as “the term of this
Agreement” or “the term hereof.”
3. Capacity and Performance.
(a) Commencing on April 13, 2006, and continuing thereafter during the term hereof, the
Executive shall serve the Company as its Chief Executive Officer (“CEO”). In addition, and
without further compensation, the Executive shall serve as a director and/or officer of one or more
of the Company’s Sports Affiliates (as defined in Section 14 hereof), if so elected or appointed
from time to time. The Executive shall report to the the Board of Directors of the Company (the
“Board”) or a committee thereof.
(b) The Company shall take all actions reasonably necessary to elect and re-elect the
Executive to the Board during the term hereof. At the request of the Board, upon termination of his
employment with the Company for any reason, the Executive shall resign as a member of the Board and
as an officer of the Company and shall resign from any other positions and offices he may have with
the Company or any of its Affiliates.
(c) During the term hereof, the Executive shall be employed by the Company on a full-time
basis. As CEO, he shall have the duties and responsibilities of that position and such other
duties and responsibilities, reasonably consistent with that position, with respect to the business
operations of the Company and its Sports Affiliates, as may be assigned by the Board or a committee
thereof from time to time.
(d) Subject to business travel as necessary or desirable for the performance of the
Executive’s duties and responsibilities hereunder, the Executive’s primary worksite during
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the term hereof shall be at the location of the former offices of Easton Sports, Inc.
(“ESI”) in Van Nuys, California as of the Closing Date (the “ESI Location”) or such
other site as the Company may select from time to time, provided such site is no more than
thirty-five (35) miles from the ESI Location unless the Executive has expressly consented in
writing thereto.
(e) During the term hereof, the Executive shall devote his full business time and best
efforts, business judgment, skill and knowledge exclusively to the advancement of the business and
interests of the Company and its Sports Affiliates and to the discharge of his duties and
responsibilities hereunder. During the term of this Agreement, the Executive may engage in passive
management of his personal investments and in such community and charitable activities as do not
individually or in the aggregate give rise to a conflict of interest or otherwise interfere with
his performance of his duties and responsibilities hereunder. It is agreed that the Executive may
remain a member of the board of directors of Volcom, Inc. and a member of its audit committee
during his employment with the Company, provided that such activities do not detract from his
performance hereunder or result in a conflict of interest. The Executive shall not engage in any
other business activity except with the express prior written approval of the Board, it also being
agreed that if the Board subsequently determines that any previously approved activity does detract
from the Executive’s performance or give rise to a conflict of interest, the Executive shall cease
such activity promptly following notice from the Company.
4. Compensation and Benefits. As compensation for all services performed by the
Executive under and during the term hereof and subject to performance of the Executive’s duties and
of the obligations of the Executive to the Company and its Affiliates, pursuant to this Agreement
or otherwise:
(a) Base Salary. Initially during the term hereof, the Company shall pay the
Executive a base salary at the rate of Seven Hundred and Fifty Thousand Dollars ($750,000) per
annum, payable in accordance with the payroll practices of the Company for its executives and
subject to annual review by the compensation committee of the Board and to increase, but not
decrease, in the discretion of such committee or the Board. The Executive’s base salary, as from
time to time increased, is hereafter referred to as the “Base Salary.”
(b) Bonus Compensation. For each fiscal year completed during the term hereof, the
Executive shall have the opportunity to earn an annual bonus (“Annual Bonus”) under the
Company’s executive incentive plan for the combined businesses of the Company and the Sports
Affiliates in accordance with the terms thereof. The Executive’s target bonus under the executive
incentive plan shall be eighty percent (80%) of the Base Salary for achievement of the consolidated
annual business plan for the Company and the Sports Affiliates (the “Business Plan”), with
a potential for the Annual Bonus to exceed target if achievement exceeds the Business Plan, all as
approved by the compensation committee of the Board after consultation with Executive. For 2006
only, the Executive’s Annual Bonus shall not be less than that for which the Executive would have
earned under the approved ESI plan applicable to him and in effect immediately prior to the Closing
Date based on an annual salary of $600,000, which plan is attached as Exhibit B hereto. In
any fiscal year during the term hereof in which a new Sports Affiliate is acquired, the Executive’s
Annual Bonus for that fiscal year shall be not less that the Annual Bonus he would have received
for that fiscal year under the terms of the then-existing
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bonus plan had the acquisition not occurred. Except as otherwise provided in Section 5
hereof, the Executive must be employed on the last day of a fiscal year in order to be eligible to
earn an Annual Bonus for that fiscal year.
(c ) Equity Participation. Executive shall be entitled to an award of Class B Common
Units of Easton Xxxx Sports, LLC (the “Units”) under the Easton Xxxx Sports, LLC 2006
Equity Incentive Plan as amended from time to time (the “Plan”) that is fifteen percent
(15%) of the aggregate number of Units that may be awarded to employees under the Plan, as
determined on the date of grant of the Executive’s award, which is expected to be on the Closing
Date. Such award shall be subject to the terms of the agreement captioned “Easton Xxxx Sports, LLC
Class B Common Unit Certificate” (the “Unit Certificate”), which the Executive must execute
in order to receive the award, to the terms of the Plan, and to the terms of the Xxxxxx-Xxxx
Sports, LLC Second and Restated Limited Liability Company Agreement as amended from time to time
(the “LLC Agreement”).
(d) Employee Benefit Plans. During the term hereof, the Executive shall be entitled
to participate in all “Employee Benefit Plans,” as that term is defined in Section 3(3) of
ERISA, including both health and welfare and retirement plans, from time to time in effect for
executives of the Company generally, except to the extent any of the Employee Benefit Plans is
duplicative of a benefit otherwise provided to the Executive under this Agreement (e.g., a
severance pay plan). The Executive’s participation shall be subject to the terms of the applicable
Employee Benefit Plan documents and generally applicable Company policies.
(e) Executive Perquisites. During the term hereof, the Company shall provide the
Executive (i) a non-accountable expense allowance for automobile and expenses in the amount of
Twelve Hundred Dollars ($1200) per month, (ii) other Executive Perquisites comparable to those in
effect for the Executive immediately prior to the Closing Date and (iii) any and all other
Executive Perquisites provided to one or more other executives, as in effect from time to time
during the term hereof, except to the extent that any such Executive Perquisite is duplicative of
one otherwise provided to the Executive hereunder. For purpose of this Agreement, “Executive
Perquisites” means any and all fringe benefit plans, programs and arrangements of any type or
description, exclusive only of Employee Benefit Plans (which are subject to Section 4(d) hereof),
cash compensation (i.e., salary, bonuses and other incentive compensation and payments in
connection with termination, to the extent not already excluded as an Employee Benefit Plan) and
equity participation (which is subject to Section 4(c) hereof).
(f) Vacations. During the term hereof, the Executive shall be entitled to four (4)
weeks of vacation per year, to be taken at such times and intervals as shall be determined by the
Executive, subject to the reasonable business needs of the Company and with the approval of the
Board or a committee thereof. Vacation shall be governed by the policies of the Company, as in
effect from time to time.
(g) Business Expenses. The Company shall pay or reimburse the Executive for all
reasonable, customary and necessary business expenses incurred or paid by the Executive in the
performance of his duties and responsibilities hereunder, subject to any maximum annual
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limit and other restrictions on such expenses set by the Board and to such reasonable
substantiation and documentation as may be specified by the Company from time to time.
(h) Reimbursement of Legal Fees. The Company will reimburse the Executive’s legal
fees and expenses incurred in the negotiation of the terms and conditions of his employment with
the Company under this Agreement and the preceding term sheet, to a maximum total reimbursement of
Eighteen Thousand Dollars ($18,000).
(i) Directors & Officers Insurance Coverage. The Company, at its sole cost and
expense, shall obtain and maintain in effect directors and officers (“D&O”) liability insurance
under which the Executive is a named insured. The Company will maintain such insurance throughout
the term hereof and for at least four (4) years thereafter.
5. Termination of Employment and Severance Benefits. Notwithstanding the provisions
of Section 2 hereof, the Executive’s employment hereunder shall terminate during the term hereof
under the following circumstances:
(a) Death. In the event of the Executive’s death during the term hereof, the
Executive’s employment hereunder shall immediately and automatically terminate. In such event, the
Company shall pay promptly to the beneficiary designated by the Executive in writing on the form
attached to this Agreement as Exhibit C or, if none has been so designated, to his estate,
(i) Base Salary earned but not paid through the date of termination of the Executive’s employment
with the Company (hereafter, the “Date of Termination”), (ii) pay at the rate of the Base
Salary for any vacation earned but not used through the Date of Termination, (iii) any Annual Bonus
earned but unpaid for the fiscal year preceding that in which the Date of Termination occurs and
(iv) any business expenses incurred by the Executive but un-reimbursed on the Date of Termination,
provided that such expenses and required substantiation and documentation are submitted prior to or
within sixty (60) days after the Date of Termination and that such expenses are reimbursable under
Company policy (all of the foregoing, “Final Compensation”). In addition to Final
Compensation: (A) The Company shall pay to the beneficiary designated by the Executive in writing
or, if none, his estate, an Annual Bonus for the fiscal year in which the Date of Termination
occurs, determined by multiplying the Annual Bonus the Executive would have received had he
continued employment through the last day of the fiscal year by a fraction, the numerator of which
is the number of days he was employed during the fiscal year, through the Date of Termination, and
the denominator of which is 365 (a “Final Pro-Rated Bonus”). Such Final Pro-Rated Bonus
will be payable at the time annual bonuses are paid to Company executives generally under its
executive incentive plan. (B) The Company will pay the full premium cost of health and dental plan
coverage for each of Executive’s qualified beneficiaries until the first to occur of the conclusion
of eighteen (18) months from the Date of Termination or the date the qualified beneficiary ceases
to be eligible for coverage continuation under COBRA, other than as a result of a statutory
amendment reducing the COBRA period below eighteen (18) months, or the date the qualified
beneficiary becomes eligible for reasonably comparable coverage under the health or dental plan of
his/her employer or that of his/her parent or spouse (the “Section 5(a) Benefit Termination
Date”). The Executive’s qualified beneficiaries shall exercise their rights under COBRA and
the Company’s obligations hereunder shall be satisfied by their coverage under the Company’s group
health and dental plans so long as the health and
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dental plans available to Executive’s qualified beneficiaries through the Company provide a
choice with terms at least reasonably comparable to the terms of the plans in which Executive was
participating on the Date of Termination. If that ceases to be the case or if the rights of
Executive’s qualified beneficiaries under COBRA cease as a result of a decrease in the statutory
period below eighteen (18) months, the Company will reimburse Executive’s qualified beneficiaries
for the remainder of the period, through the Section 5(a) Death Benefit Termination Date of each,
the premium cost of health and dental plan coverage that is at least reasonably comparable to the
terms of the plans in which the Executive and his qualified beneficiaries were participating on the
Date of Termination. The rights of Executive’s qualified beneficiaries under COBRA shall run
concurrently with any coverage provided hereunder. (C) The executor or administrator of the
Executive’s estate, as applicable, may put the Executive’s vested Units to Easton Xxxx Sports, LLC
(the “LLC”) at “Fair Market Value” (as defined in the Unit Certificate), provided
he/she does so within one hundred and twenty (120) days following the Date of Termination. Payment
by the LLC may be by cash or promissory note in accordance with those provisions governing the
purchase and sale of management Units contained in the LLC Agreement (or any successor corporate
governance document). Any equity in the LLC held by the Executive on the Date of Termination shall
otherwise be governed by the terms of the Unit Certificate, the Plan and the LLC Agreement, as
applicable.
(b) Disability.
(i) The Company may terminate the Executive’s employment hereunder, upon notice to the
Executive, in the event that the Executive becomes disabled during his employment through
any illness, injury, accident or condition of either a physical or psychological nature and,
as a result, is unable to perform, in any material respect, his duties and responsibilities
hereunder, notwithstanding the provision of any reasonable accommodation (exclusive of the
leave of absence provided hereunder), for one hundred and eighty (180) days during any
period of three hundred and sixty-five (365) consecutive calendar days. In the event of
such termination, and provided that the Executive satisfies in full all of the conditions
set forth in Section 5(h) hereof, then, in addition to Final Compensation, the Company shall
provide the Executive the following: (A) The Company will pay the Executive a Final
Pro-Rated Bonus for the fiscal year in which the Date of Termination occurs, payable at the
time annual bonuses are paid to Company executives generally under its executive incentive
plan or, if later, on the tenth (10th) business day following the later of the
effective date of the Release of Claims, as defined in Section 5(h) below, or the date the
Release of Claims is received by the Chair of the Board on behalf of the Company. (B) The
Company will pay the full premium cost of health and dental plan coverage for Executive and
his qualified beneficiaries until the first to occur of the conclusion of eighteen (18)
months or the date the Executive and his qualified beneficiaries cease to be eligible for
coverage continuation under COBRA, other than as a result of a statutory amendment reducing
the COBRA period below eighteen (18) months or, with respect to the coverage of each of the
Executive and his qualified beneficiaries, the date each becomes eligible for reasonably
comparable coverage under the health and dental plans of another employer of the Executive
or any of his qualified beneficiaries or their parent or spouse (the “Section 5(b)
Benefit Termination Date”). The Executive and his qualified beneficiaries shall
exercise their
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rights under COBRA and the Company’s obligations hereunder shall be satisfied by their
coverage under the Company’s group health and dental plans so long as the health and dental
plans available to Executive and his qualified beneficiaries through the Company provide a
choice with terms at least reasonably comparable to the terms of the plans in which
Executive was participating on the Date of Termination. If that ceases to be the case or if
the rights of Executive and his qualified beneficiaries under COBRA cease as a result of a
decrease in the statutory period below eighteen (18) months, the Company will reimburse
Executive for the remainder of the period, through the Section 5(b) Benefit Termination Date
of the Executive and each of his qualified beneficiaries, the premium cost of health and
dental plan coverage that is at least reasonably comparable to the terms of the plans in
which the Executive and his qualified beneficiaries were participating on the Date of
Termination. The rights of Executive and his qualified beneficiaries under COBRA shall run
concurrently with any coverage provided hereunder. (C) The Executive may put his vested
Units to the LLC at Fair Market Value (as defined in the Unit Certificate), provided he
does so within one hundred and twenty (120) days following the Date of Termination. Payment
by the LLC may be by cash or promissory note in accordance with those provisions governing
the purchase and sale of management Units contained in the LLC Agreement (or any successor
corporate governance document). Any equity in the LLC held by the Executive on the Date of
Termination shall otherwise be governed by the terms of the Unit Certificate, the Plan and
the LLC Agreement, as applicable. (D) In the event that the Company had not provided the
Executive the opportunity to participate in a long-term disability insurance plan, the
Company shall continue to pay the Executive the Base Salary from the Date of Termination
until the expiration of six months thereafter or, if earlier, until the date the Executive
recovers sufficiently from his illness or injury to resume work on a substantially full-time
basis (the “Recovery Date”), with payments commencing at the next regular Company payday for
executives which is at least five business days following the later of the effective date of
the Release of Claims or the date the Release of Claims signed by the Executive is received
by the Chair of the Board, but with the first payment retroactive to the day immediately
following the Date of Termination or, in the event that any long-term disability insurance
plan in which the Executive is a participant as a result of his employment with the Company
fails to provide the Executive income replacement benefits equal to the Base Salary (or
income replacement benefits not subject to federal income tax which are equal to the Base
Salary net of federal income tax), the Company will pay the Executive the difference between
the Base Salary and income replacement benefits received (after giving effect to any tax
savings of the Executive if such benefits are not subject to federal or state income tax)
until the earlier of the expiration of six months following the Date of Termination or the
Recovery Date.
(ii) The Board may designate another employee to act in the Executive’s place during
any period of the Executive’s disability. Notwithstanding any such designation, the
Executive shall continue to receive compensation and benefits in accordance with Sections
4(a) through 4(e) of this Agreement and the terms and conditions of any plans, policies,
agreements and other documents to which reference is made therein (collectively, the
“Plan Documents”) while his disability continues until the Executive becomes
eligible for disability income benefits under any disability plan in
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which he is a participant as a result of his employment with the Company or until he
recovers sufficiently to resume his duties and responsibilities hereunder (provided he does
so within the aforesaid one hundred and eighty (180) days or such longer period as the Board
in its discretion may provide) or until the termination of his employment, whichever shall
first occur. If, while his employment hereunder continues, the Executive is receiving
disability income benefits under any such disability plan, the Executive shall be entitled
to receive the Base Salary reduced by the amount of such disability income benefits (after
giving effect to any tax savings of the Executive if such benefits are not subject to
federal or state income tax) and shall continue to be eligible for payments and benefits in
accordance with Sections 4(b) through 4(e) of this Agreement and the terms and conditions of
the Plan Documents, until the earlier to occur of his recovery or the termination of his
employment under this Agreement.
(iii) If any question shall arise as to whether during any period the Executive is
disabled through any illness, injury, accident or condition of either a physical or
psychological nature so as to be unable to perform in any material respect his duties and
responsibilities hereunder, the Executive may, and at the request of the Company shall,
submit to a medical examination by a physician selected by the Company to whom the Executive
or his duly appointed guardian, if any, has no reasonable objection to determine whether the
Executive is so disabled and such determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the Executive shall fail to
submit to such medical examination, the Company’s determination of the issue shall be
binding on the Executive.
(c) By the Company for Cause. The Company may terminate the Executive’s employment
hereunder for Cause at any time upon notice to the Executive setting forth in reasonable detail the
nature of such Cause. For purposes of this Agreement, “Cause” shall be limited to: (i) Executive’s
indictment, charge or conviction of, or plea of nolo contendere to, (A) a felony or any crime
involving fraud or material dishonesty or (B) any felony or crime involving moral turpitude that
might be reasonably expected to, or does, adversely effect the Company or any of its Affiliates;
(ii) Executive’s gross negligence or willful misconduct with regard to the Company or any of its
Affiliates, including but not limited to its Sports Affiliates, which has a material adverse impact
on Company or its Affiliates, whether economic or to reputation or otherwise; (iii) Executive’s
refusal or willful failure to substantially perform his duties or to follow a lawful written
directive of the Board or its designee within the scope of the Executive’s duties hereunder which
in either case remains uncured or continues after twenty (20) days’ written notice from the Board
which references the potential for a “for Cause” termination and specifies in reasonable detail the
nature of the refusal or willful failure which must be cured; (iv) Executive’s theft, fraud or any
material act of dishonesty related to the Company or any of its Affiliates; (v) any representations
or warranties of the Executive under this Agreement that there is no legal impediment to
employment, no disclosure of third party confidential information and no breach of any existing
employment agreement prove false in a material respect; provided that Executive has been provided
with written notification of any of the foregoing and has been given five (5) days to present any
mitigating, corrective or clarifying information to the Board; (vi) the Executive’s breach of a
fiduciary duty owed to the Company or any of its Affiliates, including but not limited to any
breach or violation of those provisions of this Agreement setting forth the
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Executive’s obligations with respect to confidentiality, non-competition and non-solicitation;
(vii) the Executive’s breach of any other material provision of this Agreement unless corrected by
the Executive within twenty (20) days of the Company’s written notification to the Executive of
such breach or (viii) any restatement of the Company’s audited financial statements shall occur or
the Company’s auditors shall require an adjustment to current year financials then being audited,
which would result in a greater than 10% decrease to the Company’s EBITDA for any fiscal year and
would also require a waiver or amendment of the Company’s credit agreement with its senior lenders;
provided, however, that no such reinstatement or adjustment shall be Cause hereunder to the extent
that it pertains or results from the business of the Company and its pre-Closing Affiliates
conducted prior to the Closing Date; and further provided that no such reinstatement or adjustment
shall be Cause hereunder unless the necessity for such restatement or adjustment originated from
the Executive’s acts or omissions and the Executive knew or reasonably should have known that said
acts or omissions could result in, or otherwise necessitate, such a restatement or adjustment. In
the event of such termination, the Company shall have no obligation to the Executive under this
Agreement other than provision of Final Compensation. Any equity in the LLC held by the Executive
on the Date of Termination hereunder shall be governed by the terms of the Unit Certificate, the
Plan and the LLC Agreement, as applicable.
(d) By the Company other than for Cause. The Company may terminate the Executive’s
employment hereunder other than for Cause at any time upon notice to the Executive. In the event
of such termination, and provided that the Executive satisfies in full all of the conditions set
forth in Section 5(h) hereof, then, in addition to Final Compensation, the Executive, as
compensation for his satisfying of those conditions, shall be entitled to the following: (i) The
Company shall pay the Executive a Final Pro-Rated Bonus for the fiscal year in which the Date of
Termination occurs, payable at the time annual bonuses are paid to Company executives generally
under its executive incentive plan or, if later, on the tenth (10th) business day
following the later of the effective date of the Release of Claims or the date the Release of
Claims, signed by the Executive, is received by the Chair of the Board on behalf of the Company.
(ii) The Company shall pay the Executive compensation for the longer of (A) that portion of the
then-current term of this Agreement that remains after the Date of Termination (if termination
occurs during the initial three-year term hereof) or (B) the period of twenty-four months following
the Date of Termination, at the rate of one-twelfth of the Base Salary per month, commencing on the
next regular Company payday for its executives that is at least five (5) business days following
the later of the effective date of the Release of Claims or the date the Release of Claims, signed
by the Executive, is received by the Chair of the Board, but with the first payment being
retroactive to the day immediately following the Date of Termination. (iii) The Company will pay
the full premium cost of health and dental plan coverage for Executive and his qualified
beneficiaries until the first to occur of the conclusion of the period of compensation defined in
clause (ii) immediately above or the date Executive becomes eligible for participation in health
and dental plans of another employer which are reasonably comparable to those being provided at
that time to Executive and his qualified beneficiaries by the Company (the “Section 5(d)
Benefit Termination Date”). The Executive and his qualified beneficiaries shall exercise their
rights under COBRA and the Company’s obligations hereunder shall be satisfied by their coverage
under the Company’s group health and dental plans so long as the
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health and dental plans available to Executive and his qualified beneficiaries through the
Company provide a choice with terms at least reasonably comparable to the terms of the plans in
which Executive was participating at the time his employment with the Company terminated. If that
ceases to be the case, or if the rights of the Executive and his qualified beneficiaries under
COBRA expire, prior to the Section 5(d) Benefit Termination Date, the Company will reimburse
Executive until the Section 5(d) Benefit Termination Date the reasonable premium cost of health and
dental coverage that is at least reasonably comparable to the terms of the plans in which the
Executive and his qualified beneficiaries were participating at the time his employment with the
Company terminated. The rights of Executive and his qualified beneficiaries under COBRA shall run
concurrently with any coverage provided at Company expense hereunder. (iv) In the event that
performance has been within 5% of the Business Plan each fiscal year prior to the fiscal year in
which termination other than for Cause occurs and performance in the fiscal year in which
termination occurs is on track to achieve the Business Plan at the time employment terminates, all
of the Executive’s time-vested Units that would have vested that year, had Executive’s employment
continued through the end of the year, shall become vested. (v) The Executive may put his vested
Units to the LLC at seventy-five percent (75%) of Fair Market Value (as defined in the Unit
Certificate), provided he does so within 120 days following the date of termination. Payment by
the LLC may be by cash or promissory note in accordance with those provisions governing the
purchase and sale of management Units contained in the LLC Agreement (or any successor corporate
governance document). Any Units in the LLC held by the Executive on the Date of Termination
otherwise shall be governed by the terms of the Unit Certificate, the Plan and the LLC Agreement,
as applicable.
(e) By the Executive for Good Reason. The Executive may terminate his employment
hereunder for Good Reason upon notice to the Company setting forth in reasonable detail the nature
of such Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without the
Executive’s consent, the occurrence of any one or more of the following events: (i) the material
breach of this Agreement by the Company which is not cured, if curable, within twenty (20) days
after written notice to the Company specifying in reasonable detail the nature of such breach; (ii)
a material diminution of any of the Executive’s significant duties or the assignment to the
Executive of material duties inconsistent with his position or the material impairment of the
Executive’s ability to function in his position, in each case only after the Company shall have had
an opportunity and failed to cure (any cure to be effected within twenty (20) days after written
notice to the Company by the Executive specifying in reasonable detail the nature of such Good
Reason); (iii) any reduction in or failure to pay the Base Salary or any failure to pay any Annual
Bonus to which the Executive is entitled hereunder or any failure to provide benefits in accordance
with this Agreement or any material failure to provide perquisites in accordance with this
Agreement, in each case only after the Company has been given an opportunity, and has failed, to
cure any such event within twenty (20) days following the Executive’s written notice to the Company
specifying in reasonable detail the nature of the reduction or failure; (iv) any relocation of the
Executive’s primary worksite to a site that is more than thirty-five (35) miles from the site of
the former offices of ESI in Van Nuys California as of the Closing Date or (v) subjection of the
Executive to a working environment sufficiently hostile or otherwise adverse as to satisfy the
general legal standard for a constructive discharge, provided that the Executive provides the
Company written notice specifying in reasonable detail
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the circumstances rendering the working environment hostile or otherwise adverse and the
Company fails within twenty (20) days of that notice to take remedial action to mitigate those
circumstances. In the event of termination in accordance with this Section 5(e), and provided that
the Executive satisfies in full all of the conditions set forth in Section 5(h) hereof, then, in
addition to Final Compensation, the Company shall provide the Executive the same pay and benefits
he would have received under clauses (i), (ii) and (iii) of Section 5(d) had his employment been
terminated by the Company other than for Cause and the Executive may put his vested Units to the
LLC at Fair Market Value (as defined in the Unit Certificate), provided he does so within one
hundred and twenty (120) days following the Date of Termination, with payment by the LLC being made
by cash or promissory note in accordance with those provisions governing the purchase and sale of
management Units contained in the LLC Agreement (or any successor corporate governance document).
Any equity in the LLC held by the Executive on the Date of Termination shall otherwise be governed
by the terms of the Unit Certificate, the Plan and the LLC Agreement, as applicable.
(f) By the Executive Other than for Good Reason. The Executive may terminate his
employment hereunder at any time upon sixty (60) days’ notice to the Company. In the event of
termination of the Executive pursuant to this Section 5(f), the Board may elect to waive the period
of notice, or any portion thereof, and, if the Board so elects, the Company will pay the Executive
his Base Salary for the initial sixty (60) days of the notice period (or for any remaining portion
of thereof). The Company’s only other obligation to the Executive hereunder shall be for Final
Compensation, if any. Any equity in the LLC held by the Executive on the Date of Termination
hereunder shall be governed by the terms of the Unit Certificate, the Plan and the LLC Agreement,
as applicable.
(g) Termination Following a Change of Control
(i) In the event that there occurs a Change of Control, as defined in clause (g)(ii)
immediately below, and during the period commencing on the day following the occurrence of a Change
of Control and ending twenty-four (24) months thereafter the Company terminates the Executive’s
employment hereunder other than for Cause in accordance with Section 5(d) or the Executive
terminates his employment hereunder for Good Reason in accordance with Section 5(e) hereof and
provided that the Executive satisfies in full all of the conditions set forth in Section 5(h)
hereof, then, in addition to Final Compensation, the Executive, in lieu of any severance pay or
other benefits set forth above in Section 5(d) or Section 5(e) hereof, will be eligible for (A) a
single lump sum payment equal to 24 months of Base Salary, without offset for other earnings, (B) a
Final Pro-Rated Bonus for the fiscal year in which the Date of Termination occurs, payable at the
time bonuses are paid generally, and (C) health and dental plan premium payments (or, as
applicable, reimbursements) on the same terms and conditions applicable in the event of a
termination other than for Cause or for Good Reason prior to a Change of Control. Notwithstanding
anything to the contrary herein, however, no payments or reimbursements shall be due hereunder
until five (5) business days following the later of the effective date of the Release of Claims or
the date the Release of Claims, signed by the Executive, is received by the Chair of the Board.
-10-
(ii) For purposes of this Agreement, “Change of Control” shall mean the occurrence, after the
Closing Date, of (a) any change in the ownership of the capital equity of Easton Xxxx Sports, LLC,
if, immediately after giving effect thereto, (A) the Investors (as defined below) and their
Affiliates will hold, directly or indirectly, less than 50% of the number of Common Units held by
the Investors and their Affiliates as of the Closing Date or (ii) any Person (as defined below)
other than the Investors and their Affiliates will hold, directly or indirectly, greater than 50%
of the number of outstanding Common Units of Easton Xxxx Sports, LLC; or (b) any sale or other
disposition of all or substantially all of the assets of Easton Xxxx Sports, LLC (including,
without limitation, by way of a merger or consolidation or through the sale of all or substantially
all of the stock or membership interests of its subsidiaries or sale of all or substantially all of
the assets of Easton Xxxx Sports, LLC and its direct and indirect subsidiaries, taken as a whole)
to another Person (the “Change of Control Transferee”) if, immediately after giving effect thereto,
any Person (or group of Persons acting in concert) other than the Investors and their Affiliates
will have the power to elect a majority of the members of the board of managers or board of
directors (or other similar governing body) of the Change of Control Transferee. For purposes of
this Section 5(g): A “Person” shall have the meaning ascribed to that term in section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 and “Investors” shall mean all
Unit-holders of Easton Xxxx Sports, LLC as of the date of this Agreement, including without
limitation Fenway Partners, Inc., American Capital Strategies Ltd., Antares Capital Corporation,
Xxxx Sports Holdings, LLC, Xxxx Sports 2001, LLC, Xxxx Sports 2001 Coinvestors, LLC and Xxxx
Sports 2001 Investments, LLC.
(h) Conditions. The Executive’s eligibility to receive and retain any
“Post-Employment Benefits” (meaning any and all compensation and benefits, of any kind,
provided under this Agreement in connection with or following termination of employment, exclusive
of Final Compensation) is subject to full satisfaction of all of the following as well as the
covenant of confidentiality set forth in Section 7 below and the assignment of rights to
Intellectual Property (as hereafter defined), but with the express understanding and agreement of
the parties that the Executive is free to elect not to comply with clause (i) below and is free not
to forbear from competition or solicitation as set forth in clauses (ii), (iii) and (iv)
immediately below, but that his right to any Post-Employment Benefits under this Agreement is
expressly conditioned on compliance with said clause (i) and the forbearance required under all of
said clauses (ii), (iii) and (iv), as well as his full satisfaction of the covenant of
confidentiality and assignment of rights to Intellectual Property. The conditions to receipt of
Post Employment Benefits are as follows:
(i) The Executive’s execution and return, to the Chair of the Board, of a timely and
effective release of claims in the form attached hereto and marked Exhibit A (“Release
of Claims”). The Release of Claims creates legally binding obligations and the Company
therefore advises the Executive to consult an attorney before signing it.
(ii) Forbearance by the Executive for twenty-four (24) months following termination of
the Executive’s employment with the Company from competition with the Company or any of its
Sports Affiliates anywhere in the world where the Company or any of those Sports Affiliates
is doing business, whether as owner, partner, investor, consultant, agent, employee,
co-venturer or otherwise. Specifically, but without limiting
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the foregoing, the Executive shall not engage in any activity that is competitive, or
is in preparation to engage in competition, with the business of the Company or any of its
Sports Affiliates as conducted or under consideration at any time during the Executive’s
employment and further the Executive shall not, in any capacity, whether as an employee,
independent contractor or otherwise, whether with or without compensation, work for, or
provide services to, any person or entity engaged in, or in preparation to engage in, any
business that is competitive with the business of the Company or any of its Sports
Affiliates, as conducted or in planning during his employment. The foregoing, however, shall
not be breached solely by the Executive’s passive ownership of less than 3% of the equity
securities of any publicly traded company.
(iii) Forbearance by the Executive for twenty-four (24) months following termination
of his employment from any direct or indirect solicitation or encouragement of any of the
Customers of the Company or any of its Sports Affiliates to terminate or diminish their
relationship with the Company or any of its Sports Affiliates and from any direct or
indirect solicitation or encouragement of any of the Customers or Prospective Customers of
the Company or any of its Sports Affiliates to conduct with himself or any other Person (as
defined in Section 14 hereof) any business or activity which such Customer or Prospective
Customer conducts or could conduct with the Company or any of its Sports Affiliates. For
purposes of this Section 5(h), a Customer is a person or entity which was such at any time
during the twelve (12) months prior to the Date of Termination and a Potential Customer is a
person or entity contacted by the Company or any of its Sports Affiliates to become such at
any time within twelve (12) months prior to the Date of Termination other than by general
advertisement, provided, in each case, that the Executive had contact with such Customer or
Potential Customer through his employment or other associations with the Company or had
access to Confidential Information that would assist in his solicitation of such Customer or
Potential Customer in competition with the Company or any of its Sports Affiliates.
(iv) Forbearance by the Executive for twenty-four (24) months following termination of
his employment with the Company from directly or indirectly hiring or otherwise engaging the
services of any employee, independent contractor or other agent providing services to the
Company or any of its Sports Affiliates and from soliciting any such employee, independent
contractor or agent to terminate or diminish his/her/its relationship with the Company or
any of its Sports Affiliates. For purposes of this Section 5(h), an employee, independent
contractor or agent means any Person who was performing services for the Company or any of
its Sports Affiliates in such capacity at any time during the twelve (12) months immediately
preceding the Date of Termination.
(i) No Right of Offset. Except as otherwise expressly provided in Section 5(d)(iii)
hereof and applicable to termination in accordance with Section 5(d), Section 5(e) or Section 5(g),
the Company shall not be entitled to offset against any Post-Employment Benefits to which the
Executive is entitled in accordance with the terms of this Agreement any earnings of the Executive
from any other employment after his employment with the Company terminates;
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nor shall the Executive be obligated to seek new employment following termination of his
employment hereunder in order to reduce any obligation of the Company hereunder.
(j) Timing of Payments. In the event that, at the time the Executive’s employment
with the Company terminates, the Company is publicly traded (as defined in Section 409A of the
Internal Revenue Code) or the limitation on payments or provision of benefits imposed by Section
409A(a)(2)(B) otherwise would be applicable, any amounts payable under this Section 5 that would
otherwise be considered deferred compensation subject to the additional twenty percent (20%) tax
imposed by Section 409A if paid within six (6) months following the Date of Termination shall be
paid at the later of the time otherwise provided in Section 5 or the time that will prevent such
amounts from being considered deferred compensation.
6. Effect of Termination. The provisions of this Section 6 shall apply to any
termination of the Executive’s employment under this Agreement, whether pursuant to Section 5 or
otherwise.
(a) Provision by the Company of Final Compensation and Post Employment Benefits, if any, to
which the Executive is entitled under the applicable termination provision of Section 5 shall
constitute the entire obligation of the Company to the Executive hereunder following termination of
his employment by the Company. The Executive shall promptly give the Company notice of all facts
necessary for the Company to determine the amount and duration of its obligations in connection
with any termination pursuant to Section 5 hereof (e.g., of Company contributions to the premium
cost of health and dental plan coverage for the Executive and his qualified beneficiaries under
Section 5).
(b) Except for health and dental plan participation continued in accordance with the federal
law generally known as COBRA, the Executive’s participation in Employee Benefit Plans shall
terminate pursuant to the terms of the applicable Plan Documents based on the Date of Termination
without regard to any continuation of Base Salary or other payment to the Executive following the
Date of Termination.
(c) Provisions of this Agreement shall survive any termination if so provided herein or if
necessary or desirable to accomplish the purposes of other surviving provisions, including without
limitation the conditions to receipt of Post Employments Benefits set forth in Section 5(h) and the
obligations of the Executive under Sections 7 and 8 hereof. The Executive recognizes that, except
as expressly provided in Section 5(d), Section 5(e) or Section 5(f) (with respect to Base Salary
for any notice period waived) or Section 5(g), no compensation is earned after termination of
employment.
7. Confidential Information.
(a) The Executive acknowledges that the Company and its Affiliates continually develop
Confidential Information (as defined in Section 14 hereof); that the Executive may develop
Confidential Information for the Company or its Affiliates; and that the Executive may learn of
Confidential Information during the course of employment. The
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Executive will comply with the policies and procedures of the Company and its Affiliates for
protecting Confidential Information and shall not disclose to any Person or use, other than as
required by applicable law or for the proper performance of his duties and responsibilities to the
Company and its Affiliates, any Confidential Information obtained by the Executive incident to his
employment or other association with the Company or any of its Affiliates. The Executive
understands that this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.
(b) All documents, records, tapes and other media of every kind and description relating to
the business, present or otherwise, of the Company or any of its Affiliates and any copies, in
whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the
sole and exclusive property of the Company and its Affiliates. The Executive shall safeguard all
Documents and shall surrender to the Company at the time his employment terminates, or at such
earlier time or times as the Board or its designee may specify, all Documents and all other
property of the Company and its Affiliates then in the Executive’s possession or control.
8. Assignment of Rights to Intellectual Property. The Executive shall promptly and
fully disclose all Intellectual Property (as defined in Section 14 hereof) to the Company. The
Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the
Company) the Executive’s full right, title and interest in and to all Intellectual Property. The
Executive agrees to execute any and all applications for domestic and foreign patents, copyrights
or other proprietary rights and to do such other acts (including without limitation the execution
and delivery of instruments of further assurance or confirmation) requested by the Company to
assign the Intellectual Property to the Company and to permit the Company to enforce any patents,
copyrights or other proprietary rights to the Intellectual Property. The Executive will not charge
the Company for time spent in complying with these obligations. All copyrightable works that the
Executive creates during the course of his employment by the Company and which pertains to the
business of the Company or any of its Affiliates or is suggested by any work performed by the
Executive for the Company or any of its Affiliates or makes use of Confidential Information shall
be considered “work made for hire” and, upon creation, shall be owned exclusively by the Company or
its applicable Affiliate.
9. Restricted Activities. The Executive agrees that certain restrictions on his
activities during his employment are necessary to protect the goodwill, Confidential Information
and other legitimate interests of the Company and its Affiliates:
(a) While the Executive is employed by the Company, the Executive shall not, directly or
indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or
otherwise, compete with the Company or any of its Affiliates anywhere in the world. Specifically,
but without limiting the foregoing, the Executive agrees not to engage in any manner in any
activity that is directly or indirectly competitive or potentially competitive with the business of
the Company or any of its Affiliates as conducted or under consideration at any time during the
Executive’s employment or to provide services in any capacity to a Person which is a competitor of
the Company or any of its Affiliates.
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(b) The Executive agrees that, while he is employed by the Company, and excluding any
activities undertaken on behalf of the Company or any of its Affiliates in the course of his
duties, he will not hire or attempt to hire any employee of the Company or any of its Affiliates;
assist in such hiring by any Person; encourage any such employee to terminate his or her
relationship with the Company or any of its Affiliates; or solicit or encourage any customer of the
Company or any of its Affiliates to terminate or diminish its relationship with them; or solicit or
encourage any customer or potential customer or the Company or any of its Affiliates to conduct
with any Person any business or activity which such customer or potential customer conducts or
could conduct with the Company or any of its Affiliates.
(c) The Executive agrees that during his employment by the Company he shall not publish any
work that disparages the Company or any of its Affiliates, their management or their business or
the Products.
10. Enforcement of Covenants. The Executive acknowledges that he has carefully read
and considered all the terms and conditions of this Agreement, including the restraints imposed
upon him pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that those restraints are
necessary for the reasonable and proper protection of the Company and its Affiliates and that each
and every one of the restraints is reasonable in respect to subject matter, length of time and
geographic area. The Executive further acknowledges that, were he to breach any of the covenants
contained in Sections 7, 8 or 9 hereof, the damage to the Company and its Affiliates would be
irreparable. The Executive therefore agrees that the Company, in addition to any other remedies
available to it, shall be entitled to preliminary and permanent injunctive relief against any
breach or threatened breach by the Executive of any of said covenants, without having to post bond.
The parties further agree that, in the event that any provision of Section 7, 8 or 9 hereof shall
be determined by any court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range of activities,
such provision shall be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.
12. Conflicting Agreements. The Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder will not breach or be
in conflict with any other agreement to which the Executive is a party or is bound and that the
Executive is not now subject to any covenants against competition or similar covenants or any court
order or other legal obligation that would affect the performance of his obligations hereunder.
The Executive will not disclose to or use on behalf of the Company any proprietary information of a
third party without such party’s consent.
13. Indemnification. The Company shall indemnify the Executive to the fullest extent
permitted by applicable law. Executive’s right to indemnification shall include the right to be
paid by the Company the expenses incurred in defending any covered proceeding in advance of its
final disposition, provided that Executive shall repay any advanced amounts if it shall be
ultimately determined that the Executive is not entitled to be indemnified for such expenses under
this Agreement or otherwise. The Executive agrees promptly to notify the Company of any actual or
threatened claim arising out of or as a result of his employment or offices with the Company or any
of its Affiliates.
-15-
14. Definitions. Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in this Section and as provided elsewhere herein.
For purposes of this Agreement, the following definitions apply:
(a) “Affiliates” means all persons and entities directly or indirectly controlling, controlled
by or under common control with the entity specified, where control may be by management authority
or equity interest.
(b) “Sports Affiliates” means those Affiliates of the Company, whether existing on the
Effective Date or established or acquired thereafter, engaged in any of the businesses acquired
from or through Xxxxxxx Sports Group, Xxxx Sports Corporation or Xxx. X. Xxxxxx, Inc. and any other
businesses reasonably related thereto.
(c) “Confidential Information” shall mean any and all information of the Company and its
Affiliates that is not generally known by those with whom the Company or any of its Affiliates
competes or does business, or with whom the Company or any of its Affiliates plans to compete or do
business, including without limitation (i) information related to the Products, technical data,
methods, processes, know-how and inventions of the Company and its Affiliates, (ii) the
development, research, testing, marketing and financial activities and strategic plans of the
Company and its Affiliates, (iii) the manner in which they operate, (iv) their costs and sources of
supply, (v) the identity and special needs of the customers and prospective customers of the
Company and its Affiliates and (vi) the persons and entities with whom the Company and its
Affiliates have business relationships and the nature and substance of those relationships.
Confidential Information also includes any information that the Company or any of its Affiliates
may receive or has received from customers, subcontractors, suppliers or others, with any
understanding, express or implied, that the information would not be disclosed. Confidential
Information does not include information that enters the public domain, other than through a breach
by the Executive or another Person of an obligation of confidentiality to the Company or one of its
Affiliates.
(d) “Intellectual Property” means any invention, formula, process, discovery, development,
design, innovation or improvement (whether or not patentable or registrable under copyright
statutes) made, conceived, or first actually reduced to practice by the Executive solely or jointly
with others, during his employment by the Company; provided, however, that, as used in this
Agreement, the term “Intellectual Property” shall not apply to any invention that the Executive
develops on his own time, without using the equipment, supplies, facilities or trade secret
information of the Company or any of the Sports Affiliates to which the Executive has access as a
result of his employment, unless such invention relates at the time of conception or reduction to
practice of the invention (i) to the business of the Company or such Sports Affiliate, (ii) to the
actual or demonstrably anticipated research or development of the Company or of any Sports
Affiliates to which the Executive has access as a result of his employment or (iii) results from
any work performed by the Executive for the Company.
(e) “Person” means an individual, a corporation, a limited liability company, an association,
a partnership, an estate, a trust and any other entity or organization, other than the Company or
any of its Affiliates.
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(f) “Products” means all products planned, researched, developed, tested, manufactured, sold,
licensed, leased or otherwise distributed or put into use by the Company or any of its Affiliates,
together with all services provided or planned by the Company or any of its Affiliates, during the
Executive’s employment.
15. Withholding. All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under applicable law.
16. Assignment. Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the other; provided, however, that the Company may assign its rights and obligations
under this Agreement without the consent of the Executive in the event the Company shall hereafter
effect a corporate reorganization, consolidate with, or merge into, any Person or transfer all or
substantially all of its properties or assets to any Person. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their respective successors,
executors, administrators, heirs and permitted assigns.
17. Severability. If any portion or provision of this Agreement shall to any extent
be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of
this Agreement, or the application of such portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
18. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party to require the performance of
any term or obligation of this Agreement, or the waiver by either party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
19. Notices. Any and all notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be effective when delivered in person,
consigned to a reputable national courier or deposited in the United States mail, postage prepaid,
registered or certified, and addressed to the Executive at his last known address on the books of
the Company or, in the case of the Company, to it c/o Xxxx X. Xxxxxxxx, Fenway Partners, Inc.,
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, with a copy to Xxxx Xxxxxxxx,
Fenway Partners, Inc., 000 X. 00xx Xx., 00xx Xxxxx, Xxx Xxxx, XX 00000 or to such other address as
either party may specify by notice to the other actually received.
20. Entire Agreement. This Agreement contains the entire agreement of the parties,
and supersedes all prior agreements whether written or oral, with respect to the Executive’s
employment and all related matters, including without limitation the term sheet between the parties
that preceded this Agreement.
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21. Amendment. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by an expressly authorized representative of the Board.
22. Waiver of Certain Rights. The Executive expressly and irrevocably waives any and
all rights that he has had in the past, now has, might now have, or hereafter acquire, under the
agreement captioned “Change of Control Agreement” between Executive and Easton Sports, Inc.
effective October 1, 2004 (“Easton Sports Agreement”) or otherwise as a result of the signing of
the Stock Purchase Agreement or the consummation of the transaction contemplated by the Stock
Purchase Agreement or any event related thereto being a “Change of Control” as that term is defined
in the Easton Sports Agreement or otherwise, as applicable, and, without limiting the generality of
the foregoing, agrees specifically that he will be entitled to no termination pay or other benefits
of any kind as a result thereof.
23. Headings. The headings and captions in this Agreement are for convenience only
and in no way define or describe the scope or content of any provision of this Agreement.
24. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which together shall constitute one and the same instrument.
25. Governing Law. This is a California contract and shall be construed and enforced
under and be governed in all respects by the laws of the State of California, without regard to the
conflict of laws principles thereof, and, for the avoidance of doubt, shall include both the
statutory and common law of California, except to the extent preempted by federal law.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly authorized
representative, and by the Executive, as of the date first above written.
| THE EXECUTIVE: | THE COMPANY: XXXXXX-XXXX SPORTS, INC. |
|||
/s/ Xxxxxxx Xxxxx
|
By: | /s/ Xxxx Xxxxxxxx | ||
Xxxxxxx X. Xxxxx |
||||
| Title: | Vice President | |||
Easton Xxxx Sports, LLC shall be a party to this Agreement, but solely for the purposes of
Section 4(c) hereof.
Section 4(c) hereof.
| EASTON XXXX SPORTS, LLC | ||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Vice President | |||
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EXHIBIT A
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION OF the benefits to be provided me in connection with the termination
of my employment, as set forth in the agreement between me and Xxxxxx-Xxxx Sports, Inc. (the
“Company”) dated as of March 16, 2006 (the “Agreement”), which are conditioned,
inter alia, on my signing this Release of Claims and to which I am not otherwise entitled, and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
I, on my own behalf and on behalf of my heirs, executors, administrators, beneficiaries,
representatives and assigns, and all others connected with me, hereby release and forever discharge
the Company and its Affiliates (as that term is defined in the Agreement) and all of their
respective past, present and future officers, directors, trustees, shareholders, employees, agents,
general and limited partners, members, managers, joint venturers, representatives, successors and
assigns, and all others connected with any of them (all of the foregoing, collectively, the
“Released”), both individually and in their official capacities, from any and all causes of
action, rights and claims of any type or description, known or unknown, which I have had in the
past, now have, or might now have, through the date of my signing of this Release of Claims,
including without limitation any causes of action, rights or claims in any way resulting from,
arising out of or connected with my employment by the Company or any of its Affiliates or the
termination of that employment or pursuant to any federal, state or local law, regulation or other
requirement, including without limitation Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act and the fair employment
practices laws of the state or states in which I have been employed by the Company or any of its
Affiliates, each as amended from time to time, (all of the foregoing, in the aggregate,
“Claims”)
In signing this Release of Claims, I expressly waive and relinquish all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California, and do so understanding and
acknowledging the significance of such specific waiver of Section 1542, which Section states as
follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.
Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full
and complete release and discharge of the Released, I expressly acknowledge that this Release of
Claims is intended to include in its effect, without limitation, all Claims which I do not know or
suspect to exist in my favor at the time of execution hereof, and that this Release of Claims
contemplates the extinguishment of all such Claims.
Excluded from the scope of this Release of Claims is (i) any claim arising under the terms of the
Agreement after the effective date of this Release of Claim and (ii) any right of indemnification
-20-
or contribution that I have pursuant to the Articles of Incorporation or By-Laws of the Company or
any of its Sports Affiliates (as defined in the Agreement).
In signing this Release of Claims, I acknowledge my understanding that I may not sign it prior to
the termination of my employment, but that I may consider the terms of this Release of Claims for
up to twenty-one (21) days (or such longer period as the Company may specify) from the date my
employment with the Company terminates. I also acknowledge that I am advised by the Company and
its Affiliates to seek the advice of an attorney prior to signing this Release of Claims; that I
have had sufficient time to consider this Release of Claims and to consult with an attorney, if I
wished to do so, or to consult with any other person of my choosing before signing; and that I am
signing this Release of Claims voluntarily and with a full understanding of its terms.
I further acknowledge that, in signing this Release of Claims, I have not relied on any promises or
representations, express or implied, that are not set forth expressly in the Agreement. I
understand that I may revoke this Release of Claims at any time within seven (7) days of the date
of my signing by written notice to the Company c/o Xxxx X. Xxxxxxxx, Fenway Partners, Inc., 00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, with a copy to Xxxx Xxxxxxxx, Fenway
Partners, Inc., 000 X. 00xx Xx., 00xx Xxxxx, Xxx Xxxx, XX 00000, or to such other address as the
Company party may specify and that this Release of Claims will take effect only upon the expiration
of such seven-day revocation period and only if I have not timely revoked it.
Intending to be legally bound, I have signed this Release of Claims as of the date written below.
Signature: |
||
| Xxxxxxx X. Xxxxx | ||
Date Signed: |
||
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EXHIBIT B
[Attach Memorandum to Bonus Plan Participants
from Xxxxx Xxxx dated December 29, 2005
Subject: Easton Sports, Inc. (ESI)—FY2006 Bonus Plan]
from Xxxxx Xxxx dated December 29, 2005
Subject: Easton Sports, Inc. (ESI)—FY2006 Bonus Plan]
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EXHIBIT C
Designation of Beneficiary
Reference is made to the employment agreement between the undersigned and Xxxxxx-Xxxx Sports,
Inc. dated as of March 16, 2006 (the “Employment Agreement”). All capitalized terms not
defined on this form shall have the meaning ascribed to them in the Employment Agreement.
I hereby designate the following person as my beneficiary to receive any Final Compensation
and any Final Pro-Rated Bonus under Section 5(a) of the Employment Agreement in the event of my
death during the term of the Employment Agreement:
Name of Beneficiary:
Social Security Number:
Date of Birth:
Relationship:
Current Address:
I understand that it is my obligation to inform the Company in writing of any change of address for
my designated beneficiary. I also understand that I may change my designated beneficiary at any
time by submission of a new form fully completed, signed by me and dated. The form with the latest
date shall govern in the event of my death.
Signature: |
||
| Xxxxxxx X. Xxxxx | ||
Date: |
||
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