EXHIBIT 10.27
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of April 1,
2001 by and between Sport Supply Group Inc., a Delaware corporation
("Employer") and Xxxxxxx Xxxxxxxx ("Employee").
RECITALS:
WHEREAS, Employer desires to retain the services of Employee, and
Employee desires to provide services to Employer in accordance with the
terms, conditions, and provisions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements of the
parties herein contained, the parties to this Agreement agree as follows:
1. Term. Subject to the terms and conditions set forth in this
Agreement, Employer hereby employs Employee, and Employee hereby accepts
such employment from Employer, for a three year period commencing on April
1, 2001 (the "Effective Date") and expiring on March 31, 2004 except as
otherwise provided herein.
2. Duties. Employee will be employed as the Vice President of Sales
and Marketing of Employer, and in such capacity will perform the normal
duties associated with such position and/or such other reasonable duties as
may be assigned from time to time by the President/CEO or Executive Vice
President/COO or Executive Vice President Sales and Marketing. During the
term of this Agreement, Employee shall devote his full time, attention, and
energies to the business of Employer in order to discharge his duties
faithfully, diligently, to the best of his abilities, and in a manner
consistent with any and all policies and guidelines as may be established by
Employer from time to time. Employee shall report to the Chairman of the
Board and to the Board of Directors of Employer.
3. Compensation.
(a) Subject to the terms and conditions of this Agreement and as
compensation for the performance of his services hereunder, Employer will
pay Employee a fixed salary at a minimum annual rate of $150,000 (such rate
is referred to herein as "Salary"). Employee's Salary will accrue and be
payable to Employee in accordance with the payroll practices of Employer in
effect from time to time during the term of this Agreement.
(b) Employer will pay Employee a $500 per month allowance for car
and car related expenses payable in accordance with the payroll practices of
Employer in effect from time to time during the term of this Agreement.
(c) Subject to the terms and provisions of this Agreement,
Employee shall be entitled to earn an annual cash bonus in an amount up to
thirty percent (30%) of his Salary ("Performance Bonus") based upon the
performance of Employer against specified performance criteria set forth in
a Business Plan as agreed to in writing by Employee and Employer's Chairman
of the Board of Directors, President/COO, Executive Vice Presidnet/CEO and
Executive Vice Presidnet Sales & Marketing; provided, however, the actual
results of operations as compared to the Business Plan shall be calculated
to exclude all revenues and expenses attributable to operations acquired by
Employer or its affiliates after the Effective Date unless provided for in
the Business Plan. The amount of the Performance Bonus, if any, shall be
determined by the Board of Directors or Compensation Committee in their sole
discretion. The parties shall use commercially reasonable efforts to agree
upon a Business Plan for the fiscal years ended September 30, 2002, 2003 and
2004, respectively.
Employer shall pay Employee any Performance Bonus earned with respect
to a fiscal year within 90 days of the end of such fiscal year.
(d) At its sole discretion, the Board of Directors of Employer
may give additional bonuses to Employee, but is not required to do so under
any circumstances. Employee is not entitled to participate in any bonus
plan (other than receiving his Performance Bonus, if any, as described
above) offered by Employer to its employees unless expressly provided for in
writing.
(e) Employer agrees to execute and deliver to Employee that
certain Stock Option Agreement, a copy of which is attached hereto as
Exhibit A (the "Option Agreement").
(f) All payments to Employee pursuant to this Agreement will be
subject to deduction and withholding authorized or required by applicable
law.
4. Confidentiality
(a) In exchange for and in consideration for the promises made by
Employee herein, including promises made by Employee regarding
noncompetition in Section 5 herein, Employer promises and agrees to provide
Employee with confidential, nonpublic information (in addition to any such
information previously obtained by Employee in the course of his employment)
consistent with the duties of an individual in Employee's position,
including but not limited to Employer's customer, supplier, and distributor
lists, trade secrets, plans, manufacturing techniques, sales, marketing and
expansion strategies, and technology and processes of Employer and/or its
affiliates, as they may exist from time to time, and information concerning
the products, services, production, development, technology and all
technical information, procurement and sales activities and procedures,
promotion and pricing techniques and credit and financial data concerning
customers of, and suppliers to, Employer and/or its affiliates (referred to
hereinafter as "Confidential Information"). Employee acknowledges that such
Confidential Information constitutes valuable, special and unique assets of
the Employer and that his access to and knowledge of the Confidential
Information is essential to the performance of his duties under this
Agreement. In consideration for Employer's promises herein, Employee agrees
that all Confidential Information previously provided or known to Employee
in the course of his employment with Employer and all such Confidential
Information made available and provided to Employee pursuant to the terms of
this Agreement will be considered Confidential Information owned by Employer
and Employee agrees that Employee will not (i) disclose any Confidential
Information to any person or entity other than in connection with his
employment for Employer in accordance with Employer's policy, or (ii) make
use of any Confidential Information for his own purposes or for the benefit
of any other person or entity, other than Employer. Employee further
represents and warrants that, on or prior to the date of this Agreement, he
has not (i) disclosed any Confidential Information to any person or entity
other than in connection with his employment for Employer in accordance with
Employer's policy or (ii) made use of any Confidential Information for his
own purposes or for the benefit of any other person or entity, other than
Employer. The term Confidential Information shall not include such portions
of the Confidential Information that (i) are or become generally available
to the public as a result of a disclosure by an authorized representative of
the Employer, or (ii) are or become available to the Employee on a
nonconfidential basis from a source (other than Employer or any of its
subsidiaries or representatives) that is not prohibited from disclosing such
Confidential Information to the Employee by a legal, contractual, fiduciary
or other obligation to Employer or any of its subsidiaries or
representatives.
(b) Employee acknowledges and agrees that all manuals, drawings,
blueprints, letters, notes, notebooks, reports, financial records
(including, without limitation, budgets, business plans and financial
statements), computers, computer equipment, computer disks, hard drives,
electronic storage devices, books, procedures, forms, documents, records or
paper, or copies thereof, pertaining to the operations or business of
Employer made or received by Employee or made known to him in any way in
connection with his employment and any other Confidential Information are
and will be the exclusive property of Employer. Employee agrees not to copy
or remove any of the above from the premises and custody of Employer, or
disclose the contents thereof to any other person or entity except in the
ordinary course of business consistent with Employer's policies. Employee
acknowledges that all such papers and records will at all times be subject
to the control of Employer, and Employee agrees to surrender the same upon
request of Employer, and will surrender such no later than any termination
of his employment with Employer, whether voluntary of involuntary.
5. Non-Compete Covenant. Employee acknowledges that the Confidential
Information specified above is valuable to the Employer and that, therefore,
its protection and maintenance constitutes a legitimate interest to be
protected by the Employer by the enforcement of this covenant not to
compete. Therefore, in consideration for the promises made by Employer
herein, including but not limited to the provision of Confidential
Information set forth in Section 4 herein, Employee covenants and agrees
that, (i) during the term of his employment by the Employer (or an
affiliate of Employer) and (ii) for a period commencing upon the termination
of Employee's employment by Employer (or an affiliate of Employer) and
ending upon the first anniversary thereof, Employee will not, directly or
indirectly, either as an individual or as an employer, employee, consultant,
partner, officer, director, shareholder, substantial investor, trustee,
agent, advisor, or consultant or in any other capacity whatsoever, of any
person or entity (other than the Employer):
(a) conduct or assist others in conducting any business in any
market area in the United States related to (i) the promotion, marketing,
distribution, manufacturing, sourcing, importing and/or sale of (A) sports
related equipment and/or supplies marketed to institutional customers
through direct mail catalogs, (B) baseball/softball pitching machines, or
(ii) any other business that generates more than 10% of Employer's revenues
at the time of termination (the "Employer's Business");
(b) recruit, hire, assist others in recruiting or hiring, discuss
employment with or refer to others for employment (collectively referred to
as "Recruiting Activity") any person who is, or within the 24 month period
immediately preceding the date of any such Recruiting Activity was, at any
time, an employee of the Employer or its affiliates; or
(c) (i) communicate to any competing entity or enterprise any
competitive non-public information concerning any past, present or
identified prospective client or customer of, or supplier to, Employer; or
(ii) call on, solicit or take away or attempt to call on, solicit or take
away any of the customers, suppliers, clients, licensors, licensees,
manufacturers, distributors, dealers or independent salespersons of the
Employer or any of its affiliates that are engaged in the Employer's
Business or that conduct business with Employer in the United States; or
induce, attempt to induce or assist any other person or entity in inducing
or attempting to induce, directly or indirectly, any such customer,
supplier, client, licensor, licensee, manufacturer, dealer, distributor or
independent salesperson to discontinue their relationship with the Employer
or its affiliates.
The existence of any claim or cause of action of Employee against
Employer, or any officer, director, or shareholder of Employer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by Employer of the covenants of Employee contained in this
Section 5.
If Employee violates any covenant contained in this Section 5 and
Employer brings legal action for injunctive or other relief, Employer shall
not, as a result of the time involved in obtaining the relief, be deprived
of the benefit of the full period of any such covenant. Accordingly, the
covenants of Employee contained in this Section 5 shall be deemed to have
durations as specified above, which periods shall commence upon the later of
(i) the termination of Employee's employment with Employer, and (ii) the
date of entry by a court of competent jurisdiction of a final, non-
appealable judgment enforcing the covenants of Employee in this Section 5.
During any period of time in which Employee is in breach of this covenant
not to compete, the parties agree that the time period of this covenant
shall be extended for an amount of time that Employee is in breach hereof.
Employee understands and agrees that the scope of this covenant
contained in this Section 5 is reasonable as to time, area, and persons and
is necessary to protect the proprietary and legitimate business interests of
the Employer, and but for such covenant the Employer would not have agreed
to enter into the transactions contemplated by this Agreement. Employee
agrees that this covenant is reasonable in light of the compensation and
other benefits Employee has accepted pursuant to this Agreement. It is
further agreed that such covenant will be regarded as divisible and will be
operative as to time, area, and persons to the extent that it may be so
operative. If any part of this Section is declared invalid, unenforceable,
or void as to time, area, or persons, the validity and enforceability of the
remainder will not be affected. Should a court of competent jurisdiction
determine this covenant unenforceable as written, the parties agree that the
court shall modify this covenant to the extent necessary to make it
enforceable. The alleged breach of any other provision of this Agreement
asserted by Employee shall not be a defense to claims arising from
Employer's enforcement of this covenant.
6. Proprietary Information. Employee hereby assigns to Employer
all of Employee's right, title and interest to, and shall promptly disclose
to Employer, all ideas, inventions, products, services, discoveries or
improvements (whether or not patentable) conceived or developed solely or
jointly by Employee during the term of this Agreement (a) that relate to the
Employer's Business or the actual or anticipated research or development of
Employer, (b) that result from any work performed by Employee for Employer,
or (c) for which equipment, supplies, facilities or Confidential Information
of Employer was used. Employee agrees to execute any further documents
and/or patents that Employer requests and will otherwise assist Employer (at
Employer's expense) in protecting Employer's rights to such ideas,
inventions, products, services, discoveries or improvements. Employee
hereby appoints Employer as his attorney-in-fact, with full power of
substitution, to execute and deliver such documents or patents on behalf of
Employee. This appointment is coupled with an interest in and to the ideas,
inventions, products, services, discoveries and improvements conceived or
developed by Employee and shall survive Employee's death or disability.
Employee hereby waives and quitclaims to Employer any and all claims of any
nature whatsoever that Employee may now or may hereafter have for
infringement of any patents or copyrights resulting from or relating to any
applications for any United States or foreign letters, patent or copyright
registrations assigned hereunder to Employer. Employee represents to
Employer that Employee has not conceived or reduced to practice any ideas,
inventions, products, services, discoveries or improvements at the time of
signing this Agreement.
7. Termination
(a) Employer's obligations under this Agreement shall be
terminated if Employee is discharged by Employer for cause. For the
purposes of this Agreement, a discharge for cause shall mean a discharge
resulting from a determination by the Chairman of the Board of Employer that
Employee: (i) has been convicted of a crime involving fraud, theft or
embezzlement; (ii) has failed and/or refused to follow the written policies,
practices, directives, or orders established by Employer's Board of
Directors and such failure or refusal is not cured within fifteen (15) days
of the date Employer sends a written notice to Employee requesting that
Employee cure such failure or refusal; (iii) has committed acts of gross
negligence to the detriment of Employer; (iv) has persistently failed or
refused to perform his duties hereunder and such failure or refusal is not
cured within fifteen (15) days of the date Employer sends a written notice
to Employee requesting that Employee cure such failure or refusal; (v) has
been insubordinate; or (vi) has breached any of the material terms or
provisions of this Agreement (including, but not limited to, a breach of
Section 4, 5 or 6 hereof). Notwithstanding anything to the contrary
contained herein, the 15-day cure period referenced in subsections (ii) and
(iv) of this Section shall not apply if Employee has been given the
opportunity to cure an alleged default under either of these subsections on
a prior occasion. Any termination for cause shall be appealable to the
Board of Directors of the Company.
(b) If Employee is absent from employment, or unable to render
services herein, by reason of physical or mental illness or disability for
more than three (3) months in the aggregate in any twelve (12) month period,
and the Employee is unable to perform his essential job functions with or
without reasonable accommodation, then Employee shall be considered
permanently disabled, and this Agreement may be immediately terminated by
Employer without any further obligation to Employee.
(c) If Employee dies, this Agreement shall immediately and
automatically terminate, without further obligation to Employee or
Employee's estate.
(d) In the event Employee resigns from the employ of Employer,
all of Employer's obligations under this Agreement shall be terminated.
(e) If Employee is terminated without cause prior to March 31,
2004 (and so long as Employee continues to abide by the Sections of this
Agreement that survive after such termination), then Employer will continue
to pay Employee his Salary through March 31, 2004 as if the Employee was not
terminated and after the end of the fiscal year during which such
termination occurs, the amount of the Performance Bonus payable to Employee
for such fiscal year, if any, pursuant to Section 3(c) of this Agreement
(such amount to be reduced proportionately for any period of less than 12
months in which the Employee was employed). Except as set forth in the
immediately preceding sentences, Employer will have no other obligations to
Employee if Employee is terminated without cause. However, in the event
Employee is terminated without cause in the last twelve (12) months of
employment, the provisions of Section 5 shall continue only so long as
Employer continues to pay Employee his Salary in accordance with Employer's
payroll practices in effect at such time.
(f) The provisions of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,
14, 17, 18 and 19 shall survive any termination or expiration of this
Agreement.
8. Injunctive Relief. Each party acknowledges that a remedy at law
for any breach or attempted breach of this Agreement will be inadequate,
agrees that each party will be entitled to specific performance and
injunctive and other equitable relief in case of any breach or attempted
breach and agrees not to use as a defense that any party has an adequate
remedy at law. This Agreement shall be enforceable in a court of equity, or
other tribunal with jurisdiction, by a decree of specific performance, and
appropriate injunctive relief may be applied for and granted in connection
herewith. Such remedy shall not be exclusive and shall be in addition to
any other remedies now or hereafter existing at law or in equity, by statute
or otherwise. No delay or omission in exercising any right or remedy set
forth in this Agreement shall operate as a waiver thereof or of any other
right or remedy and no single or partial exercise thereof shall preclude any
other or further exercise thereof or the exercise of any other right or
remedy.
9. Binding Nature. The rights and obligations of Employer under
this Agreement will inure to the benefit of and will be binding upon the
successors and assigns of Employer. Employer will require any successor to
all of the business and/or assets of Employer (by purchase, merger,
consolidation, or otherwise), to assume this agreement if Employer's
existence is terminated by such sale. Failure of Employer to obtain such
agreement will be deemed a termination without cause of Employee by Employer
and Employee will be paid pursuant to the terms of Section 7(e) of this
Agreement.
10. Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, in whole or in part, then both
parties will be relieved of all obligations arising under such provision,
but only to the extent it is illegal, unenforceable or void. The intent and
agreement of the parties to this Agreement is that this Agreement will be
deemed amended by modifying any such illegal, unenforceable or void
provision to the extent necessary to make it legal and enforceable while
preserving its intent, or if such is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives. Notwithstanding the foregoing, if the remainder of this
Agreement will not be affected by such declaration or finding and is capable
of substantial performance, then each provision not so affected will be
enforced to the extent permitted by law.
11. Waiver. No delay or omission by either party to this Agreement
to exercise any right or power under this Agreement will impair such right
or power or be construed as a waiver thereof. A waiver by either of the
parties to this Agreement of any of the covenants to be performed by the
other or any breach thereof will not be construed to be a waiver of any
succeeding breach thereof or of any other covenant contained in this
Agreement. All remedies provided for in this Agreement will be cumulative
and in addition to and not in lieu of any other remedies available to either
party at law, in equity, or otherwise.
12. Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Texas without giving effect to
any principle of conflict-of-laws that would require the application of the
law of any other jurisdiction.
13. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee: If to Employer:
Xxxxxxx Xxxxxxxx Sport Supply Group, Inc.
[ deleted for confidentiality ] 0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
14. Submission to Jurisdiction. All parties hereto hereby
irrevocably submit to the jurisdiction of the state and federal courts of
the State of Texas and agree and consent that service of process may be made
upon it in any proceeding arising out of this Agreement by service of
process as provided by Texas law. All parties hereto hereby irrevocably
waive, to the fullest extent permitted by law, any objection which it may
now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in the
District Court of Dallas County, State of Texas, or in the United States
District Court for the Northern District of Texas, and hereby further
irrevocably waive any claims that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
16. Assignment. The rights and obligations of Employer may, without
the consent of Employee, be assigned by Employer to any parent, subsidiary,
affiliate, or successor of Employer. Employee may not assign any of his
rights or obligations under this Agreement.
17. Entire Agreement. This Agreement and the Option Agreement
constitute the entire agreement between the parties to this Agreement with
respect to the subject matter of this Agreement and there are no
understandings or agreements relative to this Agreement (other than the
Option Agreement) which are not fully expressed in this Agreement. All
prior or contemporaneous agreements between the parties with respect to the
subject matter of this Agreement (other than the Option Agreement) being
expressly superseded by this Agreement. No change, waiver, or discharge of
this Agreement will be valid unless in writing and signed by the party
against which such change, waiver, or discharge is to be enforced.
18. Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to receive from the other its reasonable attorneys' fees,
costs, and necessary disbursements in addition to any other relief to which
such party may be entitled.
19. Representations, Warranties and Covenants. Employee understands
as part of the consideration for the offer of employment extended to
Employee by Employer and of his employment or continued employment by
Employer, that Employee has not brought and will not bring with him to
Employer or use in the performance of his responsibilities at Employer any
materials or documents of a former employer that are not generally
available to the public, unless Employee has obtained express written
authorization from the former employer for their possession and use.
Employee represents and warrants to Employer that the execution, delivery,
and performance of Employee of and under this Agreement does not and will
not with the passage of time or the giving of notice or both violate the
terms and conditions of any other written or oral agreement to which
Employee is a party or by which Employee is bound. Employee represents and
warrants that he is not a party to any employment, non-competition,
proprietary information or confidentiality agreement with any former
employer that remains or may remain in effect as of the date hereof.
Employee has not entered into, and Employee agrees not to enter into, any
oral or written agreement that is in any way inconsistent with the terms of
this Agreement. Employee also understands that, in his employment with
Employer, Employee is not to breach any obligation of confidentiality that
Employee has to former employers.
Employee further represents and warrants that he has never been:
(i) convicted or indicted in a criminal proceeding and is not a named
subject of a pending criminal proceeding (excluding minor traffic
violations); (ii) the subject of any investigation, order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court,
permanently or temporarily enjoining him from, or otherwise limiting,
Employee's engagement in any (A) activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
Federal or State securities laws or (B) type of business practice; or
(iii) found, whether formally or informally, by a court in a civil action or
by the Securities and Exchange Commission to have violated any Federal or
State securities laws.
IN WITNESS WHEREOF, the parties to this Agreement have executed and
delivered this Agreement on the date first above written.
EMPLOYER:
SPORT SUPPLY GROUP, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
