1
Exhibit 10.7
To: Xxxxx X. Xxxx
From: The Board of Directors, Gart Bros. Sporting Goods
Company
Re: Severance Letter Agreement
As an inducement to your employment, the following Severance Letter of Agreement
is proposed. All references to "Employer" shall mean Gart Bros. Sporting Goods
Company ("Gart") and all references to "Employee" shall mean Xxxxx X. Xxxx.
JOB DUTIES. Employer employs the Employee as Senior Vice President - Finance,
Chief Financial Officer. During employment, the Employee shall faithfully work
for the Employer, and promptly do and perform any and all duties pertaining to
the Employer's business as well as the duties expected of the Employee within
the bounds of the above job description. Employee shall not, without prior
written consent of Employer, either directly or indirectly, engage in any other
occupation, profession or business.
COMPENSATION AND BENEFITS. The Employee shall be initially entitled to receive
the following compensation and benefits: Base Salary at the current annual
level, and such Health Insurance, Life Insurance, and Long Term Disability at
the current levels of cost and as are generally available to Gart's senior
officers.
AT-WILL EMPLOYMENT. This agreement does not constitute an employment contract
for a specific term. The Employer and Employee acknowledge that they both have
the sole subjective discretion to terminate employment at will at any time.
Nothing contained in this agreement shall be construed to create any condition
which must be satisfied before employment may be terminated.
SEVERANCE PAYMENT. Until five years from the date of this agreement, in the
event the Employer elects to terminate this agreement, except as designated
below, the Employer shall continue the Employee's base salary, less deductions
as required by law, and current health insurance benefits until the earlier of:
A. The date the Employee secures alternate full time
employment; or
B. Fifty-Two (52) weeks from the date that the Employer
terminates the employment.
The Company shall be entitled to offset any earnings that Employee receives
during this period for employment that is not full time. The employee shall be
obligated to use his best efforts to obtain alternate full time employment.
2
Any and all amounts payable hereunder are conditioned upon receipt of a signed
release agreement, in a form acceptable to Gart, that releases the Employer from
any and all claims relating to or arising from the Employee's employment or
termination. The Employee also agrees not to seek unemployment compensation.
The Employee shall not be entitled to any severance payment or benefits in the
event that either the Employee voluntarily terminates employment or the Employer
terminates employment for the following reasons:
A. the Employee's gross negligence or willful failure to
perform the Employee's duties; or
B. the Employee engages in fraudulent, dishonest or any other act
that materially violates the policies of the Company now or
hereinafter in effect or materially interferes with the
Employee's ability to perform said duties; or
C. the Employee reveals or uses for Employee's own benefit any
Confidential Information without the consent of the Employer
in violation of this agreement or any separate agreements
going forward; or
D. the Employee is convicted of a felonious act; or
E. the Employee engages in any misconduct that damages the
Company.
COVENANT NOT TO COMPETE AND CONFIDENTIALITY. The Employee expressly covenants
and agrees that while employed and during the one (1) year immediately following
the date of termination, the Employee will not directly or indirectly manage,
control, participate in or be associated with any other business engaged or
contemplating the business of retail sporting goods within existing trade areas
or announced trade areas the Employer is contemplating. The Employee also
covenants and agrees to execute a separate and mutually agreed upon
Confidentiality Statement at the time of termination, and agrees to be bound to
its terms from that day forward.
EMPLOYER PROPERTY RETURN. At the termination of employment, the Employee will
promptly deliver to the Employer all documentation and notes in written form and
all computer data made or compiled by the Employee. Employee also agrees to
surrender all property and tangible assets of the Employer.
ARBITRATION. Any dispute or disagreement arising out of this Agreement, except
injunctive relief, shall be resolved by arbitration under the rules of the
American Arbitration Association and an Arbitrator agreed to by both parties.
The arbitrator's decisions shall be final and binding upon the parties and
judgment may be entered in any court.
3
SEPARABILITY. The invalidity or unenforceability of any part of this Agreement,
in general or as applied to a particular occurrence or circumstance, shall not
affect the validity and enforceability of any other of this Agreement.
APPLICABLE LAW. This Agreement shall be construed and
interpreted according to the laws of Colorado.
SUCCESSORS AND ASSIGNS. The rights and duties of the Employer and Employee under
this agreement shall not be assignable by either party except that this
Agreement and all the rights under it may be assigned by Employer to any
corporation or other business entity that succeeds to all or substantially all
of the business of Employer through merger, consolidation, corporate
reorganization, or by acquisition of substantially all of the assets of Employer
and which assumes Employer's obligation hereunder.
NOTICE. Any notice required pursuant to this Agreement shall be in writing, and
sent by registered or certified mail to Employer's principal office and
Employee's last-known address.
WAIVER. The failure of either party to this Agreement to insist upon the
performance of any of the terms and conditions of this Agreement, shall not
constitute a waiver, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred.
SECTION HEADINGS. The titles to the sections of this Agreement are solely for
the convenience of the parties and shall not be used to explain, modify,
simplify, or aid in the interpretation of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this
___ day of May, 1995.
EMPLOYER: EMPLOYEE:
Gart Bros. Sporting Goods Company
--------------------------------- -----------------------------------
Print Name: Xxxx X. Xxxxxx Print Name: Xxxxx X. Xxxx
Title: President/CEO Address:
---------------------------
-----------------------------------
