CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit
10.1
This
Change in Control Severance
Agreement (this “Agreement”) made this ___ day of _______, 2008, by and between
_________________ (“Executive”) and Hibbett Sports, Inc. (the
“Company”).
WHEREAS,
the Compensation Committee of
the Board of Directors of the Company (the “Board”) has determined that it is in
the best interest of the Company to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility of a
Change in Control of the Company.
NOW,
THEREFORE, in consideration of the
mutual promises and agreements contained herein, the receipt and sufficiency
of
which are hereby acknowledged, the parties agree as follows:
1. Change
in Control Payments. If Executive’s employment with the Company
is terminated by the Company without Cause or by the Executive for Good Reason
within: (i) two years following a Change in Control; or (ii) within a six-month
period prior to a Change in Control if Executive’s termination or resignation is
also directly related to or occurs in connection with a Change in Control,
the
Company shall pay Executive, within thirty (30) days of Executive’s termination
date or the Change in Control date, whichever is later, severance in the amount
equal to one and one-half (1.5) times the sum of Executive’s Covered Salary and
Executive’s Covered Bonus.
To
the extent that Executive has been
granted options, stock awards or other equity compensation under the Company’s
equity compensation plan, Executive’s interest in such awards shall be fully
exercisable, vested and nonforfeitable as of the Change in Control date, to
the
extent not already exercisable or vested as of such date.
2. Definitions.
(a) “Cause,”
for purposes of this Agreement, means felony conviction or plea to same, fraud
or dishonesty, willful misconduct or failure to perform duties, intentional
acts
resulting in material injury to the Company or acts of moral
turpitude.
(b) “Change
in Control,” for purposes of this Agreement, occurs if:
(i) The
individuals who, as of the date of this Agreement, constitute the Board of
Directors of the Company (the “Incumbent Board”), cease for any reason to
constitute at least a majority of the Board; or
(ii) The
acquisition by any individual, entity or group (as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934), of beneficial ownership of 50% 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 voting securities of the Company that may be cast for the
election of the Company’s
directors
(the “Outstanding Company Voting Securities”) other than a result of an issuance
of securities initiated by the Company, or open market purchases approved by
the
Board, as long as the majority of the Board approving the purchases is a
majority at the time the purchases are made; provided, however, that for
purposes of this Section 2(b)(ii), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company or (iii) any acquisition by any Executive
benefit plan (or related trust) sponsored or maintained by the Company;
or
(iii) The
merger or consolidation or sale or other disposition of all or substantially
all
of the assets of the Company (a “Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case
may be, of the corporation resulting from such Business Combination (including,
without limitation a corporation which as a result of such transaction owns
the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case
may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any Executive benefit plan (or related trust) of the Company
or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution
of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) The
dissolution or liquidation of the Company.
(c) “Covered
Bonus,” for purposes of this Agreement, shall mean the average of the actual
cash bonuses paid to the Executive for the five years prior to the year of
the
Executive’s employment termination from the Company (but in no event greater
than the target bonus for the year in which the termination or resignation
of
employment occurs). Covered Bonus will be calculated over a shorter
period if the Executive has been employed for a shorter period.
(d) “Covered
Salary,” for purposes of this Agreement, shall mean the highest annual rate of
base salary paid to the Executive by the Company prior to the termination of
Executive’s employment or resignation from the Company.
(e) “Good
Reason,” for purposes of this Agreement, means the occurrence of any of the
following, without the prior written consent of the Executive: (i) a
change in the
location
of the Executive’s principal place of employment to a location more than 50
miles from the Executive’s initial work site with the Company, (ii) reduction in
Executive’s annual base salary or bonus opportunity, (iii) material, adverse
change in the Executive’s duties or responsibilities, other than in connection
with the termination of Executive’s employment for Cause; provided, however,
that the Executive shall not be deemed to have Good Reason pursuant to this
provision unless the Executive gives the Company written notice that the
specified conduct or event has occurred and making specific reference to this
Section 2(e) and the Company fails to cure such conduct or event within thirty
(30) days of receipt of such notice.
3. Limitation
on Change in Control Payments. Anything in Section 1 above to the
contrary notwithstanding, if, with respect to Executive, the payments that
Executive has a right to receive under this Agreement plus any other payments
from the Company including but not limited to the acceleration of the
exercisability and/or vesting of any awards of Common Stock options to purchase
Common Stock, together with any other payments which such Participant has the
right to receive from the Company or any other affiliated entity, would
constitute an “excess parachute payment” (as defined in Section 280G of the
Code), then the payments under this Agreement shall be reduced to (but not
below
zero) to the largest amount that will result in no portion of such payments
being subject to the excise tax imposed by Section 4999 of the
Code. The determination of any reduction pursuant to this Section
must be made by the Company in good faith, before any payments are due and
payable to Executive.
4. Nonqualified
Deferred Compensation Omnibus Provision. The payments and
benefits under this Agreement are intended to satisfy the exclusion from Section
409A of the Code for payments made upon an involuntary separation from
service. However, to the extent that any payment or benefit which is
provided pursuant to or in connection with this Agreement which is considered
to
be nonqualified deferred compensation subject to Section 409A of the Code,
it
shall be paid and provided in a manner, and at such time and in such form,
as
complies with the applicable requirements of Section 409A of the Code to avoid
the unfavorable tax consequences provided therein for
non-compliance. In connection with effecting such compliance with
Section 409A of the Code, the following shall apply:
(a) Notwithstanding
any other provision of this Agreement, the Company is authorized to amend this
Agreement, to delay the payment of any monies and/or provision of any benefits
in such manner as may be determined by it to be necessary or appropriate to
comply, or to evidence or further evidence required compliance, with Section
409A of the Code (including any transition or grandfather rules
thereunder).
(b) Neither
the Executive nor the Company shall take any action to accelerate or delay
the
payment of any monies and/or provision of any benefits in any manner which
would
not be in compliance with Section 409A of the Code (including any transition
or
grandfather rules thereunder). Notwithstanding the
foregoing:
(i) Payment
may be delayed for a reasonable period in the event the payment is not
administratively practical due to events beyond the recipient’s control such as
where the recipient is not competent to receive the payment, there is a dispute
as to amount due or
the
proper recipient of such payment, additional time is needed to calculate the
amount payable, or the payment would jeopardize the solvency of the
Company.
(ii) Payments
shall be delayed in the following circumstances: (1) where the
Company reasonably anticipates that the payment will violate the terms of a
loan
agreement to which the Company is a party and that the violation would cause
material harm to the Company; or (2) where the Company reasonably
anticipates that the payment will violate Federal securities laws or other
applicable laws; provided that any payment delayed by operation of this clause
(B) will be made at the earliest date at which the Company reasonably
anticipates that the payment will not be limited or cause the violations
described.
(iii) If
the Executive is a specified Executive of a publicly traded corporation as
required by Section 409A(a)(2)(B)(i) of the Code, and any payment or provision
of any benefit hereunder is subject to Section 409A any payment or provision
of
benefits in connection with a separation from service payment event (as
determined for purposes of Section 409A of the Code), as opposed to another
payment event permitted under Section 409A, or an amount payable that is not
subject to Section 409A shall not be made until six months after the Executive’s
separation from service (the “409A Deferral Period”).
5. Restrictive
Covenants.
(a) Non-Solicitation. During
the Executive’s employment with the Company and for a period of twelve (12)
months after the Termination Date, Executive will not for his own benefit or
for
the benefit of any person or entity other than the Company, (i) solicit, or
assist any person or entity to solicit, any officer, director, or employee
of
the Company to leave his employment, (ii) hire or cause to be hired
any person who is then, or who was during the one (1) year prior to the
Termination Date, an officer, director, or employee of the Company, or (iii)
engage any person who is then, or who was during the one (1) year prior to
the
Termination Date, an officer, director, employee or independent contractor
of
the Company.
(b) Non-interference. During
the Executive’s employment with the Company and for a period of twelve (12)
months after the Termination Date, Executive will not solicit, or assist any
person or entity to solicit, any person or entity who, during the twelve (12)
month period prior to the Termination Date, paid or engaged the Company for
products or services, for the purpose of providing services or selling products
where those services or products compete with the services or products offered
by the Company as of the Termination Date.
(c) Blue-Penciling. If
the final judgment of a court of competent jurisdiction declares that any term
or provision of this Section 5 is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable that
comes closest to expressing the intention of the invalid or unenforceable term
or provision, and this Agreement shall be enforceable as so modified after
the
expiration of the time within which the judgment may be appealed.
6. Confidential
Information.
(a) Non-Disclosure. During
his employment with the Company, and at all times thereafter, Executive agrees
not to disclose, communicate or divulge to any third party or use, or permit
others to use, any confidential information of the Company. For the
purposes of this Agreement, “confidential information” shall mean all
information disclosed to Executive, or known to Executive as a consequence
of or
through this employment, where such information is not generally known by the
public or was regarded or treated as proprietary by the Company
(including, without limitation, private or sensitive information concerning
any
of the Company’s employees and executives, business systems and procedures,
suppliers, methods, systems, designs and know-how, names of referral sources,
client records, client lists, pricing lists, business or strategic plans,
marketing methods or plans or any other non-public information which, if used,
divulged, published or disclosed by Executive, would be reasonably likely to
provide a competitive advantage to a competitor).
(b) Proprietary
Rights. All rights, including without limitation any writing,
discoveries, inventions, innovations, and computer programs and related
documentation and all intellectual property rights therein, including without
limitation copyright (collectively “Intellectual Property”) created, designed or
constructed by Executive during his employment with the Company, that are
related in any way to Executive’s work with the Company or to any of the
services provided by the Company, shall be the sole and exclusive property
of
the Company. Executive agrees to deliver and assign to the Company
all such Intellectual Property and all rights which Executive may have therein
and Executive agrees to execute all documents, including without limitation
patent applications, and make all arrangements necessary to further document
such ownership and/or assignment and to take whatever other steps may be needed
to give the Company the full benefit thereof. Executive further
agrees that if the Company is unable after reasonable effort to secure the
signature of Executive on any such documents, the Chairman of the Board of
Directors of the Company shall be entitled to execute any such papers as the
agent and attorney-in-fact of Executive and Executive hereby irrevocably
designates and appoints each such officer of the Company as Executive’s agent
and attorney-in-fact to execute any such papers on Executive’s behalf and to
take any and all actions required or authorized by the Company pursuant to
this
Section 6(b). Without limitation to the foregoing, Executive
specifically agrees that all copyrightable materials generated during the term
of Executive’s employment with the Company, including but not limited to,
computer programs and related documentation, that are related in any way to
Executive’s work with the Company or to any of the services provided by the
Company, shall be considered works made for hire under the copyright laws of
the
United States and shall upon creation be owned exclusively by the
Company. To the extent that any such materials, under applicable law,
may not be considered works made for hire, Executive hereby assigns to the
Company the ownership of all copyrights in such materials, without the necessity
of any further consideration, and the Company shall be entitled to register
and
hold in their own name all copyrights in respect of such materials.
7. Notices. All
notices, consents, and other communications to, upon, and between the respective
parties hereto shall be in writing and shall be deemed to have been given,
delivered, or made when sent or mailed by registered or certified mail, postage
prepaid, and return receipt requested and addressed to the Company at its
principal office in Birmingham,
Alabama
and to the Executive at his residence as shown upon the employment records
of
the Company.
8. Modification. No
provision of this Agreement, including any provision of this Section, may be
modified, deleted or amended in any manner except by an agreement in writing
executed by the parties hereto.
9. Benefit. All
of the terms of this Agreement shall be binding upon, inure to the benefit
of
and be enforceable by the Company and its successors and assigns and by the
Executive and his personal representatives.
10. Severability. In
the event that any part of this Agreement shall be held to be unenforceable
or
invalid, the remaining parts shall nevertheless continue to be valid and
enforceable as though the unenforceable or invalid portions were not a part
hereof.
11. Entire
Agreement. This Agreement contains the entire understanding of
Executive and Company concerning the subjects it covers and it supersedes all
prior understandings and representations concerning the subjects it
covers.
12. Choice
of Law. This Agreement shall be governed by the laws of the state
of Alabama, without regard to its conflict of laws principles.
13. Headings. The
headings provided herein are for convenience only and shall not affect the
interpretation of this Agreement.
14. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
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Hibbett
Sports, Inc.
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Executive
|
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By:
__________________________________
|
________________________________
|
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Its:
__________________________________
|
|
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Dated:
________________________________
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Dated:
___________________________
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