AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made
and entered into this 16 day of March, 1999, by and between JUMBOSPORTS INC., a
Florida corporation (hereinafter called "Employer"), and XXXXXXX X. XXXXXXXX
(hereinafter called "Employee").
WHEREAS, Employer and Employee are parties to that certain Employment
Agreement dated December 23, 1998 (the "Prior Employment Agreement");
WHEREAS, on December 27, 1998, Employer filed its Voluntary Petition for
Relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy
Code");
WHEREAS, pursuant to that certain Order Granting Debtor's Motion for
Authority to Pay Officers' Salaries and Directors' Fees and to Honor Existing
Compensation Agreements and Policies, entered by Judge C. Xxxxxxx Xxxxxxxx, III,
on February 23, 1999 (the "Compensation Order"), the Prior Employment Agreement
was approved, subject to certain required modifications; and
WHEREAS, the parties hereto desire to amend and completely restate the
Prior Employment Agreement to comply with the provisions of the Compensation
Order.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby amend and restate the Prior Employment Agreement to read in
its entirety as set forth below:
WITNESSETH:
1. Employment. Employer hereby agrees to continue to employ Employee, and
Employee hereby agrees to continue his employment with Employer, upon the terms
and conditions hereinafter set forth.
2. Effect of Compensation Order. Employer and Employee intend that this
Agreement shall comply in all respects with the provisions of the Compensation
Order, and the Compensation Order is incorporated herein by this reference. In
the event of any inconsistency between the provisions of this Agreement and the
provisions of the Compensation Order, the provisions of the Compensation Order
shall control.
3. Effect on Prior Agreements. Employer and Employee hereby acknowledge and
agree that this Agreement supersedes any prior or contemporaneous agreement,
representation or understanding, oral or written, between Employer and Employee
regarding the terms and conditions of Employee's employment with Employer,
including, without limitation, the Prior Employment Agreement.
4. Term. The term of this Agreement shall commence effective as of February
23, 1999 (the "Effective Date"), and shall, subject to prior termination
pursuant to paragraph 8 of this Agreement, terminate on the latest of (a) the
effective date of a plan of reorganization with respect to the Employer, (b) the
dismissal of the Chapter 11 proceeding with respect to the Employer or (c)
December 31, 1999.
5. Duties. The Employee is engaged as Executive Vice President and Chief
Financial Officer of the Employer. The Employee shall have such duties,
responsibilities and accommodations as the Employer's Board of Directors shall
designate to that position.
6. Extent of Service. Employee shall exclusively devote his entire working
time, energy and attention to his duties hereunder, provided that the Employee
may (i) make passive investments in entities which are not publicly traded and
which are not competitive with, or suppliers of goods or services to, Employer,
(ii) own up to 2% of the outstanding equity securities of any entity which is
publicly traded on a national securities exchange or on the NASDAQ Stock Market,
and (iii) with the approval of the Board of Directors, serve on boards of
corporations that do not compete with the Company or serve on boards for or
engage in activities of a community, civic or public interest nature.
7. Compensation and Benefits. During the term of this Agreement, Employer
shall pay to Employee the following compensation, which shall be payable, less
any withholding and other payroll taxes required by law, in accordance with
Employer's normal payroll policies applicable to all of Employer's employees:
(a) Base Salary. An annual base salary in the amount of Two Hundred Forty
Thousand Dollars ($240,000) (the "Annual Base Salary").
(b) Stay or Retention Bonus. Employee is entitled to a retention bonus in
accordance with the provisions of Schedule A attached to this Agreement and
incorporated herein by this reference ("Schedule A"); provided, however, that
for purposes of determining whether Employee is entitled to such retention
bonus, the termination of Employee's employment by Employee following a
Constructive Termination Event (as defined herein) shall be deemed to be an
"involuntarily" termination.
(c) Success Bonus. Employee is entitled to a success bonus in accordance
with the provisions of Schedule A; provided, however, that, for purposes of
determining whether Employee is entitled to such success bonus, Employee's
employment hereunder shall be deemed to continue following the termination of
such employment (i) by Employer without Cause (as defined herein), (ii) by
Employee following a Constructive Termination Event (as defined herein), or
(iii) as a result of the death or Permanent Disability (as defined herein) of
Employee.
(d) Other Benefit Programs. During the term of this Agreement, Employee
shall be entitled to continue to participate in Employer's executive benefit
programs available for senior executive officers as it may exist from time to
time, including, without limitation, any temporary housing assistance program in
which Employee participates as of the Effective Date.
8. Termination.
(a) Termination by Employer. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement is not to be considered an agreement
for a fixed term or as a guarantee of continuing employment. Accordingly,
Employee's employment may be terminated by Employer with or without cause upon
immediate written notice to Employee at any time during the term of this
Agreement. Additionally, Employee's employment shall automatically terminate
upon his death or upon a determination that he is permanently disabled.
(b) Termination by Employee. Notwithstanding anything to the contrary
contained in this Agreement, Employee may resign as an officer and, if
applicable, director and terminate his employment with Employer at any time upon
30 days' prior written notice to Employer.
(c) Effect of Termination. Upon the termination of Employee's employment
with Employer for any reason, Employee shall remain entitled to (i) the
bi-weekly portion of his Annual Base Salary then due through the date of such
termination and (ii) all benefits which are accrued, vested and earned up to the
termination date under the terms of any existing benefit plan of Employer such
as the vested balance of the employee's account under any retirement or deferred
compensation plan and any benefits which are legally required to be provided
after termination, such as COBRA benefits ("Legally Earned or Required
Benefits"). Except as provided in the preceding sentence, and except for any
severance benefit to which Employee may be entitled pursuant to paragraph 9 of
this Agreement, Employee shall be entitled to no other benefits or salary from
Employer following the termination of Employee's employment hereunder.
(d) Agreements by Employee. Upon termination of Employee's employment with
Employer for any reason, Employee shall (i) immediately return any and all
property and records belonging to Employer which are in Employee's possession
and shall vacate Employer's offices in a prompt and professional manner and (ii)
resign immediately as an officer and, if applicable, director of Employer and
any subsidiary of Employer unless Employer indicates in writing to Employee its
desire that Employee retain any such position.
(e) Transition Services. Upon a termination of employment, whether by
Employee or by Employer, with or without cause, Employee shall cooperate with
Employer in order to insure an orderly and businesslike transfer of Employee's
duties to other personnel designated by the Employer. Additionally, Employee
shall make himself available for a period of ninety (90) days after such
termination, at reasonable times and upon reasonable notice, to consult with
Employer and assist Employer with respect to any matters for which Employer
requests such assistance; provided that Employer shall reimburse Employee for
any reasonable out-of-pocket expense incurred by Employee at Employer's request
in connection with such consultation or assistance, and Employer shall schedule
such consultation at times which will not interfere with any subsequent
employment which Employee has obtained and such consultation shall not require
more than an average of two days per month without Employee's consent. A breach
of the foregoing provisions by Employee shall be deemed to be a material breach
of this Agreement.
9. Severance Benefits. Employee shall be entitled to severance payments in
accordance with the provisions of Schedule A. In addition, if Employee is
entitled to receive a severance benefit pursuant to Schedule A, then Employee
shall continue to be entitled to his then current benefits pursuant to paragraph
7(d) of this Agreement until the earlier of (x) the date on which Employee
becomes entitled to receive comparable benefits from another employer or (y) the
date that is one (1) year after the termination of Employee's employment.
10. Excise Taxes. In the event that any payment to be received by Employee
hereunder would be subject to an excise tax pursuant to Section 4999 of the
Code, whether in whole or in part, as a result of being an "excess parachute
payment" within the meaning of such term in Section 280G(b) of the Code, the
amount payable under this Agreement shall be reduced to the largest amount so
that no portion of such payment is subject to excise tax pursuant to Section
4999 of the Code. If the amount necessary to eliminate such excise tax exceeds
the amount otherwise payable under this Agreement, no payment shall be made
under this paragraph and no further adjustment shall be made.
11. Nondisclosure of Confidential Information and Trade Secrets. Employee
shall not disclose, either directly or indirectly, any Confidential Information
or Trade Secrets to any other person or otherwise use such Confidential
Information or Trade Secrets for any purpose except in connection with his
employment with the Employer. For purposes of the foregoing, the term "Trade
Secret" has the meaning ascribed thereto in Section 688.002(4), Florida
Statutes, or any revision or successor thereto, and the term "Confidential
Information" means any technical or nontechnical data, formula, pattern,
compilation, program, devise, method, technique, drawing, process, know-how,
financial data, financial plan, marketing plan, expansion plan, cost analysis,
list of suppliers, customers or their employees, or other proprietary
information which is secret and confidential and is not readily and legally
available to the public from sources other than Employer.
12. Injunctive Relief. In the event of a breach or violation or threatened
breach or violation by Employee of the provisions of any of the restrictive
covenants set forth in paragraph 11 of this Agreement, Employer shall be
entitled to an injunction restraining Employee from directly or indirectly
engaging in such behavior. Nothing herein shall be construed as prohibiting
Employer from pursuing any other remedies available to it by law or by this
Agreement for breach, violation or threatened breach or violation of any
provision of this Agreement, including, by way of illustration and not by way of
limitation, the recovery of damages from Employee or any other person, firm,
corporation or entity. The provisions of paragraphs 11 and 12 of this Agreement
shall survive the termination of this Agreement for any reason. Should Employer
bring an action against Employee to enforce any restrictive covenants set forth
in this Agreement, the period of restriction applicable to such covenant shall
be deemed to begin running on the date of entry of an order granting Employer
preliminary injunctive relief and shall continue uninterrupted for the original
intended period.
13. Definitions. For purposes of this Agreement, the following terms shall
have the meanings assigned in this paragraph 13:
(a) The term "Cause" shall mean (i) Employee's commission of any act or
acts of fraud or willful misappropriation that result in material expense or
harm to Employer; (ii) Employee's default in any material respect in the
performance of his obligations, services or duties hereunder (other than a
default caused by a medically determinable physical or mental impairment of
Employee), which shall include, without limitation, Employee's disregarding
written instructions from the Board of Directors of Employer concerning the
conduct of his duties hereunder, if Employee has failed to substantially cure
such default within thirty (30) days following the delivery by Employer of
written notice to Employee specifying in reasonable detail the nature of all
claimed defaults and the manner in which Employee may cure such defaults; or
(iii) Employee's conviction of a felony in any state or federal court within the
United States.
(b) The term "Constructive Termination Event" shall mean (x) any action by
Employer which is directed at Employee specifically, or which is aimed at a
group of employees which includes Employee, and not at all employees generally,
and which has the effect of diminishing Employee's compensation, employment
responsibilities, authority, or accommodations; or (y) a request by any holder
of Employer's outstanding indebtedness that Employee terminate his employment
with Employer.
(c) The term "Permanent Disability" means Employee's inability to perform
with reasonable accommodation the essential duties of Employee's position, as
existing on the date of this Agreement, as the result of any medically
determinable physical or mental impairment which has lasted, or can reasonably
be expected to last, for a period of 120 consecutive days or any 180 days in any
twelve-month period. The determination of whether Employee is subject to a
Permanent Disability shall be made by a licensed medical doctor selected by the
Compensation Committee of the Board of Directors of Employer, and the decision
of such doctor shall be binding on the parties hereto.
14. General Provisions.
(a) Governing Law; Venue. The laws of the State of Florida, excluding its
choice of law provisions if such laws would result in the application of laws
other than the laws of the State of Florida, shall govern any disputes between
the parties, the validity of this Agreement, the construction of its terms, and
the interpretation of the rights and duties of the parties hereunder. The forum
selected for any proceeding or suit related to a dispute between the parties or
this Agreement shall be in a federal or state court of competent jurisdiction
located in Hillsborough County, Florida. The parties hereto each consent to
those courts' personal jurisdiction over them, and waive any defense, whether
asserted by motion or pleading, that Hillsborough County, Florida is an improper
or inconvenient venue.
(b) Further Action. Each party hereto agrees to perform all further acts
and execute, acknowledge, and deliver any documents which may be reasonably
necessary, appropriate, or desirable to carry out the provisions of this
Agreement.
(c) No Waiver. No party shall be deemed to have waived any of its rights or
remedies hereunder unless such waiver is specific and in writing. No delay or
omission by any party in exercising any of its rights or remedies hereunder
shall constitute a waiver thereof, or shall constitute any further waiver
thereafter. All rights and remedies of a party are cumulative and concurrent and
the exercise of one right or remedy shall not be deemed a waiver or release of
any other right or remedy.
(d) Binding Effect; Counterparts. The covenants and agreements contained in
this Agreement shall be binding on, and shall inure to the benefit of the
successors and permitted assignees of the parties. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement.
(e) Complete Agreement; Modification. This Agreement contains the final,
complete, and exclusive expression of the understanding between the parties with
respect to the transactions contemplated by this Agreement, and supersedes any
prior or contemporaneous agreement or representation, oral or written, by any of
them. This Agreement may be modified or amended only by an agreement in writing
signed by or on behalf of both parties hereto.
(f) Notices. All notices, demands and other communications required or
permitted hereunder shall be in writing, and shall be deemed given on the third
(3d) day after it is deposited in a United States postal letter box for mailing
by first class mail, postage prepaid, certified mail, return receipt requested
(regardless of whether the return receipt is subsequently received), and
addressed by the sender as follows, or to such other address as the parties may
designate to the others in writing:
To Employer: JumboSports Inc.
0000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
To Employee: Xxxxxxx X. Xxxxxxxx
00000 Xxxxx Xxxx Xxxxx
Xxxx, Xxxxxxx 00000
(g) Descriptive Headings. The titles and captions preceding the text of the
articles and sections of this Agreement are inserted solely for convenient
reference and neither constitute a part of this Agreement nor affect its
meaning, interpretation, or effect.
(h) Severability. If any paragraph, or other provision of this Agreement,
or the application thereof, is held to be invalid, illegal, or unenforceable in
any respect or for any reason, the remainder of this Agreement, and the
application of the paragraph or other provision to a person or circumstance with
respect to which it is valid, legal, and enforceable, shall not be affected
thereby.
(i) Gender; Number. Throughout this Agreement, except where the context
requires otherwise, the masculine gender shall be deemed to include the feminine
and neuter and the singular number shall be deemed to include the plural, and
vice-versa.
(j) Computation of Time. Whenever the last day for the exercise of any
privilege or the discharge of any duty under this Agreement shall fall upon
Saturday, Sunday or any public or legal holiday, whether federal or of the State
of Florida, the party having such privilege or duty shall have until 5:00 p.m.
on the next succeeding regular business day to exercise such privilege or to
discharge such duty.
(k) Continuance of Agreement. The rights, responsibilities and duties of
the parties hereto and the covenants and agreements herein contained shall
survive the execution hereof, shall continue to bind the parties hereto, and
shall continue in full force and effect until each and every obligation of the
parties pursuant to this Agreement shall have been fully performed.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the day and year first written above.
EMPLOYEE:
By: /s/ XXXXXXX X. XXXXXXXX
Title: CFO
COMPENSATION PACKAGE FOR
XXX XXXXXXXX
1. Base Compensation.
Continuation of basic compensation and benefits while employed by the
Debtor.
2. Stay or Retention Bonus.
(a) Amount: Six months of base salary
(b) Date of payment: Already paid
(c) Conditions to make stay bonus non-refundable: Xx. Xxxxxxxx will stay
until the earlier of:
(i) December 31, 1999;
(ii) The effective date of a plan of reorganization;
(iii) The date that his employment is involuntarily terminated; or (iv) The
"bitter end," which would include a Chapter 7 conversion, the cessation of
retail business operations (such as by liquidation, stay relief and foreclosure
by Foothill, sale of the business, etc.), or dismissal of the Chapter 11 case.
3. Success Bonus.
(a) Amount: Six Months of base compensation
(b) Date of Payment: the effective date of a plan or reorganization
(c) Conditions precedent to payment:
(i) Continued employment as of the effective date of the plan;
(ii) The plan is a non-liquidating plan; and
(iii) The plan has been supported by majority vote of both Committees.
4. Severance Pay (other than in the case of a Foothill Event of Default and
subsequent acceleration).
(a) Amount: From nine to twelve months of base compensation
(b) Date of Payment:
(i) Nine months payable in a lump sum on the date of termination of
employment
(ii) Up to an additional three months of base compensation payable monthly
in months seven to twelve at the rate of 50% for each such month that Xx.
Xxxxxxxx has not accepted permanent employment (not including consulting
assignments and board directorships)
(c) The only condition to the payment of these amounts is that the employee
not voluntarily leave the Company prior to the time permitted under paragraph 2
above and (as to the three months deferred payment) that the employee has not
entered into a permanent employment agreement (not including consulting
agreements and board representations).
5. Severance Pay (following termination of employment after a Foothill Event of
Default and subsequent acceleration).
(a) This provision is applicable in lieu of the severance compensation set
forth in P. 4 above if, and only if:
(i) Foothill declares an Event of Default that is not subsequently waived
by Foothill or judicially determined to have not occurred or to be unenforceable
by Foothill;
(ii) Foothill accelerates its DIP loan after such Event of Default and does
not thereafter reinstate the DIP loan; and
(iii) Xx. Xxxxxxxx'x employment is thereafter terminated.
(b) Amount: Six months of base compensation
(c) Date of Payment: Termination of employment
6. Death or Disability.
The Stay Bonus will not be refundable if the employee dies or is disabled.
