SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of December,
1997 among Xxxx Sports Corp., a Delaware corporation (the "Company"), Xxxx
Sports, Inc., a California corporation and a wholly-owned subsidiary of the
Company (the "Subsidiary"), and Xxxxxxx Xxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive currently serves as the U.S. Group
President of Xxxx Sports, Inc. and his services and knowledge are valuable to
the Company and the Subsidiary in connection with the management of the
operating facilities, divisions and departments of the U.S. Group Divisions of
Xxxx Sports, Inc.; and
WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure
the Executive's continued services and to ensure the Executive's continued
dedication and objectivity in the event of any threat or occurrence of, or
negotiation or other action that could lead to, or create the possibility of, a
Change in Control (as defined in Section 1) of the Company, without concern as
to whether the Executive might be hindered or distracted by personal
uncertainties and risks created by any such possible Change in Control, and to
encourage the Executive's full attention and dedication to the Company, the
Board has authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company, the
Subsidiary and the Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by the Executive of
those duties and responsibilities of the Executive which do not differ in any
material respect from the duties and responsibilities of the Executive during
the 90-day period immediately prior to a Change in Control (other than as a
result of incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on the Executive's part, which is committed in bad faith
or without reasonable belief that such breach is in the best interests of the
Company and which is not remedied in a reasonable period of time after receipt
of written notice from the Company specifying such breach or (2) the commission
by the Executive of a felony involving moral turpitude.
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 20% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of a conversion
or exchange privilege in respect of outstanding convertible or exchangeable
securities), (B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or consolidation,
each of the conditions described in clauses (i), (ii) and (iii) of subsection
(3) of this Section (1)(c) shall be satisfied; and provided further that, for
purposes of clause (B), if any Person (other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of 20%
or more of the Outstanding Company Common Stock or 20% or more of the
Outstanding Company Voting Securities by reason of an acquisition by the Company
and such Person shall, after such acquisition by the Company, become the
beneficial owner of any additional shares of the Outstanding Company Common
Stock or any additional Outstanding Voting Securities and such beneficial
ownership is publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least
66-2/3% of such Board; provided, however, that any individual who becomes a
director of the Company subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by the vote
of at least 66-2/3% of the directors then comprising the Incumbent Board shall
be deemed to have been a member of the Incumbent Board; and provided further,
that no individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall be deemed to have been a member of the
Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case, immediately
after such reorganization, merger or consolidation, (i) more than 60% of the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 60% of the combined voting
power of the then outstanding securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals or entities who were
the beneficial owners, respectively, of the
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Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (other than the Company, any employee benefit
plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or any
corporation controlled by the Company) and any Person which beneficially owned,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 20% or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 20% or more of the then outstanding shares of common
stock of such corporation or 20% or more of the combined voting power of the
then outstanding securities of such corporation entitled to vote generally in
the election of directors and (iii) at least 66-2/3% of the members of the board
of directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a plan
of complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, immediately after such sale or other
disposition, (A) more than 60% of the then outstanding shares of common stock
thereof and more than 60% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or any
corporation controlled by the Company) and any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or indirectly, 20%
or more of the Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock thereof
or 20% or more of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors and (C) at least
66-2/3% of the members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
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(e) "Date of Termination" means (1) the effective date on
which the Executive's employment by the Company or the Subsidiary terminates as
specified in a prior written notice by the Company or the Executive, as the case
may be, to the other, delivered pursuant to Section 11 or (2) if the Executive's
employment by the Company and the Subsidiary terminates by reason of death, the
date of death of the Executive.
(f) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(g) "Good Reason" means, without the Executive's express
written consent, the occurrence of any of the following events after a Change in
Control:
(1) any of (i) the assignment to the Executive of any duties
inconsistent in any material respect with the Executive's position(s), duties,
responsibilities or status with the Company or the Subsidiary immediately prior
to such Change in Control, (ii) a change in the Executive's reporting
responsibilities, titles or offices with the Company or the Subsidiary as in
effect immediately prior to such Change in Control, (iii) any removal or
involuntary termination of the Executive from the Company or the Subsidiary
otherwise than as expressly permitted by this Agreement or any failure to
re-elect the Executive to any position with the Company or the Subsidiary held
by the Executive immediately prior to such Change in Control or (iv) any breach
by the Company or the Subsidiary of any employment agreement among the Company
and/or the Subsidiary and the Executive then in effect;
(2) a reduction by the Company or the Subsidiary in the
Executive's rate of annual base salary as in effect immediately prior to such
Change in Control or as the same may be increased from time to time thereafter;
(3) any requirement of the Company or the Subsidiary that the
Executive be based anywhere other than at the facility where the Executive is
located at the time of the Change in Control;
(4) the failure of the Company or the Subsidiary to (i)
continue in effect any employee benefit plan or compensation plan in which the
Executive is participating immediately prior to such Change in Control, unless
the Executive is permitted to participate in other plans providing the Executive
with substantially comparable benefits, or the taking of any action by the
Company or the Subsidiary which would adversely affect the Executive's
participation in or materially reduce the Executive's benefits under any such
plan, (ii) provide the Executive and the Executive's dependents welfare benefits
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) in accordance with the most favorable
plans, practices, programs and policies of the Company and its affiliated
companies in effect for the Executive immediately prior to such Change in
Control or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies, (iii) provide fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the
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Executive immediately prior to such Change in Control or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies, (iv) provide
the Executive with paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive immediately prior to such Change in Control or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies, or (v) reimburse the Executive promptly for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive immediately prior to such Change in Control, or if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
For purposes of this Agreement, any good faith determination
of Good Reason made by the Executive shall be conclusive; provided, however,
that an isolated, insubstantial and inadvertent action taken in good faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive shall not constitute Good Reason.
(h) "Nonqualifying Termination" means a termination of the
Executive's employment (1) by the Company or the Subsidiary for Cause, (2) by
the Executive for any reason other than a Good Reason, (3) as a result of the
Executive's death or (4) by the Company and the Subsidiary due to the
Executive's absence from his duties with the Company and the Subsidiary on a
full-time basis for at least 180 consecutive days as a result of the Executive's
incapacity due to physical or mental illness.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1) the
Executive's death and (2) two years following such Change in Control.
2. Obligations of the Executive. The Executive agrees that in
the event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company or the Subsidiary without Good
Reason (a) until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until 90 days following such Change in Control. For
purposes of the foregoing subsection (a), Good Reason shall be determined as if
a Change in Control had occurred when such attempted Change in Control became
known to the Board.
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3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of the
Executive shall terminate, other than by reason of a Nonqualifying Termination,
then the Company shall pay to the Executive (or the Executive's beneficiary or
estate), as compensation for services rendered to the Company and the
Subsidiary:
(1) within 30 days following the Date of Termination, a
lump-sum cash amount equal to the sum of:
(i) the Executive's full annual base salary from the Company
and its affiliated companies through the Date of Termination, to the extent not
theretofore paid,
(ii) the Executive's annual bonus in an amount at least equal
to the average annualized (for any fiscal year consisting of less than 12 full
months) bonus paid or payable, including by reason of any deferral, to the
Executive by the Company and its affiliated companies in respect of the three
fiscal years of the Company immediately preceding the fiscal year in which the
Change in Control occurs, multiplied by a fraction, the numerator of which is
the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is 365 or 366, as
applicable, and
(iii) any compensation previously deferred by the Executive
(together with any interest and earnings thereon) and any accrued vacation pay,
in each case to the extent not theretofore paid; plus
(2) within 30 days following the Date of Termination, a
lump-sum cash amount in an amount equal to the Executive's highest annual base
salary from the Company and its affiliated companies in effect during the
12-month period prior to the Date of Termination; provided, however, that any
amount paid pursuant to this Section 3(a)(2) shall be paid in lieu of any other
amount of severance relating to salary or bonus continuation to be received by
the Executive upon termination of employment of the Executive under any
severance plan, policy or arrangement of the Company.
(b) (1) For a period of one year commencing on the Date of
Termination, the Company shall continue to keep in full force and effect all
medical, dental, accident, disability and life insurance plans with respect to
the Executive and his dependents with the same level of coverage, upon the same
terms and otherwise to the same extent as such plans shall have been in effect
immediately prior to the Date of Termination. Notwithstanding the foregoing
sentence, if any of the medical, dental, accident, disability or life insurance
plans then in effect generally with respect to other peer executives of the
Company and its affiliated companies would be more favorable to the Executive,
such plan coverage shall be substituted for the analogous plan coverage provided
to the Executive immediately prior to the Date of Termination, and the Company
or the Subsidiary, as the case may be, and the Executive shall share the costs
of such
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plan coverage in the same proportion as such costs were shared immediately prior
to the Date of Termination. The obligation of the Company and the Subsidiary to
continue coverage of the Executive and the Executive's dependents under such
plans shall cease at such time as the Executive and the Executive's dependents
obtain comparable coverage under another plan, including a plan maintained by a
new employer. Execution of this Agreement by the Executive shall not be
considered a waiver of any rights or entitlements the Executive and the
Executive's dependents may have under applicable law to continuation of coverage
under the group medical plan maintained by the Company or its affiliated
companies.
(2) The Company shall reimburse the Executive for Executive's
expenditures for obtaining outplacement services, provided that the Company
shall have no obligation to reimburse the Executive in an amount which exceeds
10% of the Executive's highest annual base salary from the Company and its
affiliated companies in effect during the 12-month period prior to the Date of
Termination.
(c) If during the Termination Period the employment of the
Executive shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive within 30 days following the Date of
Termination, a lump-sum cash amount equal to the sum of (1) the Executive's full
annual base salary from the Company and its affiliated companies through the
Date of Termination, to the extent not theretofore paid and (2) any compensation
previously deferred by the Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Certain Reductions in Payments.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or its affiliated companies to or for the benefit of
the Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard to
any adjustment required under this Section 4) (in the aggregate, the "Total
Payments") would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), and if it is determined that (A) the amount remaining,
after the Total Payments are reduced by an amount equal to all applicable
federal and state taxes (computed at the highest applicable marginal rate),
including the Excise Tax, is less than (B) the amount remaining, after taking
into account all applicable federal and state taxes (computed at the highest
applicable marginal rate), after payment or distribution to or for the benefit
of the Executive of the maximum amount that may be paid or distributed to or for
the benefit of the Executive without resulting in the imposition of the Excise
Tax, then the payments due hereunder shall be reduced so that the Total Payments
are One Dollar ($1) less than such maximum amount.
(b) All determinations required to be made under this Section
4, including whether and when a reduction in the amount payable hereunder
pursuant to Section 4(a) is required and the amount of any such reduction and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's public accounting firm (the "Accounting
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Firm") which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company or the Executive. In the event that the Accounting Firm is serving
as accountant or auditor for the individual, entity or group effecting the
Change in Control, the Executive shall appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion that failure to
report the Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company, the
Subsidiary and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the reduction in the amount
payable hereunder pursuant to Section 4(a) will not have been made consistent
with the calculations required to be made hereunder. In that event the Executive
thereafter shall promptly pay to the Company the amount of the required
reduction.
5. Withholding Taxes. The Company may withhold, or in the
event of payments made by the Subsidiary, the Subsidiary may withhold, from all
payments due to the Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company or the
Subsidiary, as the case may be, is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of the Executive's employment
with the Company or the Subsidiary or involving the failure or refusal of the
Company or the Subsidiary to perform fully in accordance with the terms hereof,
the Company shall reimburse the Executive on a current basis, for all legal fees
and expenses, if any, incurred by the Executive in connection with such contest
or dispute, together with interest at a rate equal to the Prime Rate as
published in the "Money Rates" section of The Wall Street Journal, but in no
event higher than the maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the Executive's statement
for such fees and expenses through the date of payment thereof; provided,
however, that in the event the resolution of any such contest or dispute
includes a finding denying, in total, the Executive's claims in such contest or
dispute, the Executive shall be required to reimburse the Company, over a period
of 12 months from the date of such resolution, for all sums advanced to the
Executive pursuant to this Section 6.
7. Operative Event. Notwithstanding any provision herein to
the contrary, no amounts shall be payable hereunder unless and until there is a
Change in Control at a time when the Executive is employed by the Company and
the Subsidiary.
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8. Termination of Agreement.
(a) This Agreement shall be effective on the date hereof and
shall continue until terminated by the Company as provided in paragraph (b) of
this Section 8; provided, however, that this Agreement shall terminate in any
event upon the first to occur of (i) the Executive's death and (ii) termination
of the Executive's employment with the Company prior to a Change in Control.
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to approve the
termination of this Agreement, which termination shall not become effective
until the date fixed by the Board for such termination, which date shall be at
least 180 days after notice thereof is given by the Company to the Executive in
accordance with Section 11; provided, however, that no such action shall be
taken by the Board during any period of time when the Board has knowledge that
any person has taken steps reasonably calculated to effect a Change in Control
until, in the opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and provided further, that in no event
shall this Agreement be terminated in the event of a Change in Control.
9. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle the Executive to continued employment with the Company or its
subsidiaries, and if the Executive's employment with the Company shall terminate
prior to a Change in Control, then the Executive shall have no further rights
under this Agreement; provided, however, that any termination of the Executive's
employment following a Change in Control shall be subject to all of the
provisions of this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of this Section
10, it will cause any successor or transferee unconditionally to assume, by
written instrument delivered to the Executive (or his beneficiary or estate),
all of the obligations of the Company hereunder. Failure of the Company to
obtain such assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this Agreement and
shall entitle the Executive to compensation and other benefits from the Company
in the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For purposes of
implementing
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the foregoing, the date on which any such merger, consolidation or transfer
becomes effective shall be deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amounts would be payable to the Executive
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to such person or persons appointed in writing by the Executive to
receive such amounts or, if no person is so appointed, to the Executive's
estate.
11. Notice.
(a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five days after deposit in the
United States mail, certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to his residence as reflected on the books
and records of the Company and if to the Company, to Xxxx Sports Corp., 0000 Xxx
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, attention President, with copies to
the Secretary and the Chairman of the Compensation Committee of the Board of
Directors of Xxxx Sports Corp., or (2) to such other address as a party may have
furnished to the others in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.
(b) A written notice of the Executive's Date of Termination by
the Company or the Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) specify the termination
date (which date shall be not less than 15 days after the giving of such
notice). The failure by the Executive or the Company to set forth in such notice
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
12. Full Settlement; Resolution of Disputes.
(a) The Company's obligation to make any payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, such amounts shall not be reduced
whether or not the Executive obtains other employment.
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(b) If there shall be any dispute between the Company and the
Executive in the event of any termination of the Executive's employment, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason was not made in
good faith, or that the Company is not otherwise obligated to pay any amount or
provide any benefit to the Executive and his dependents or other beneficiaries,
as the case may be, under paragraphs (a) and (b) of Section 3, the Company shall
pay all amounts, and provide all benefits, to the Executive and his dependents
or other beneficiaries, as the case may be, that the Company would be required
to pay or provide pursuant to paragraphs (a) and (b) of Section 3 as though such
termination were by the Company without Cause or by the Executive with Good
Reason; provided, however, that the Company shall not be required to pay any
disputed amounts pursuant to this paragraph except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts to which
the Executive is ultimately adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any corporation or
other entity in which the Company has a direct or indirect ownership interest of
50% or more of the total combined voting power of the then outstanding
securities of such corporation or other entity entitled to vote generally in the
election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of California without
regard to the principle of conflicts of laws. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which other provisions
shall remain in full force and effect.
15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
16. Joint and Several Obligation. Each duty and obligation of
the Company hereunder shall be the joint and several duty and obligation of the
Company and the Subsidiary.
17. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by the Executive, by a duly authorized officer of the Company and by
a duly authorized officer of the Subsidiary. No waiver by a party hereto at any
time of any breach by another party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. Failure by the Executive, the Company or the
Subsidiary to insist upon strict compliance with any provision of this Agreement
or to assert any right the Executive, the Company or the Subsidiary may have
hereunder, including, without limitation, the right of the Executive to
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terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement. The rights
of, and benefits payable to, the Executive, his estate or his beneficiaries
pursuant to this Agreement are in addition to any rights of, or benefits payable
to, the Executive, his estate or his beneficiaries under any other employee
benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the Company and the Subsidiary have each
caused this Agreement to be executed by a duly authorized officer of the Company
or the Subsidiary, as the case may be, and the Executive has executed this
Agreement as of the day and year first above written.
XXXX SPORTS CORP.
By:___________________________
Xxxxx X. Xxx
Chairman of the Board and
Chief Executive Officer
XXXX SPORTS, INC.
By:___________________________
Xxxxx X. Xxx
Chairman of the Board and
Chief Executive Officer
EXECUTIVE:
------------------------------
Xxxxxxx Xxxxx
