AMENDED AND RESTATED MANAGEMENT CHANGE OF CONTROL SEVERANCE AGREEMENT
Exhibit
10.3
AMENDED
AND RESTATED
This
Amended and Restated Management Change of Control Severance Agreement (this
"Agreement") is dated this 9th
day of
May, 2006 (the "Effective Date"), by and among Cabela's Incorporated, a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive").
W
I T N E
S S E T H :
WHEREAS,
the Executive is presently an officer of the Company and party to that certain
Management Change of Control Severance Agreement with the Company dated June
16,
2004 (the “Original Agreement”);
WHEREAS,
effective June 1, 2006, the Executive will assume the additional position
of
Chief Executive Officer of the Company’s wholly-owned bank subsidiary, World’s
Foremost Bank (“WFB”);
WHEREAS,
the Company desires to ensure the Executive's continued active participation
in
the business of the Company and WFB;
WHEREAS,
in order to induce the Executive to remain in the employ of the Company and
WFB
and in consideration of the Executive's agreeing to remain in the employ
of the
Company and WFB, the parties desire to specify the severance benefits which
shall be due the Executive in the event that his employment with the Company
or
WFB is terminated under specified circumstances; and
WHEREAS,
the Company and the Executive intend for this Agreement to amend and restate
the
Original Agreement in its entirety.
NOW
THEREFORE, in consideration of the mutual agreements contained in this
Agreement, and upon the other terms and conditions provided in this Agreement,
the parties to this Agreement agree as follows:
1. Definitions.
The
following words and terms shall have the meanings set forth below for the
purposes of this Agreement:
(a) Annual
Compensation.
The
Executive's "Annual Compensation" for purposes of this Agreement shall be
deemed
to mean the sum of (i) the base salary paid to the Executive by the Company
or
any subsidiary thereof during the calendar year in which the Date of Termination
occurs (determined on an annualized basis) and (ii) the average of the incentive
compensation award (i.e. including the portion paid to the Employee in cash
and
any portion deferred under the Company’s existing Deferred Compensation Plan or
any future deferred compensation plan(s) adopted by the Company) granted
to the
Executive by the Company under the Cabela’s Incorporated Restated Bonus Plan (or
any future cash bonus plan(s) adopted by the Company) in each of the two
calendar years preceding the calendar year in which the Date of Termination
occurs (determined on an annualized basis).
(b) Board.
“Board”
shall mean the Board of Directors of the Company.
(c) Cause.
Termination of the Executive's employment for "Cause" shall mean termination
because (i) the Executive is charged with a felony, (ii) in the reasonable
determination of the Company, the Executive has committed an act of fraud,
embezzlement or theft relating to the Company or WFB, (iii) in the reasonable
determination of the Company, the Executive has committed gross negligence
in
the course of his employment with the Company or WFB that is materially
detrimental to the business of the Company or WFB, (iv) the Executive fails
to
fulfill his duties as an employee of the Company or WFB, including inattention
to or neglect of his duties and shall not have remedied such failure within
thirty (30) days after receiving written notice from the Company or WFB
specifying the details thereof, or (v) of a third occurrence of the same
action
or inaction which caused the Company or WFB to previously give the Executive
notice under Section 1(c)(iv). For purposes of this Agreement, an act or
omission on the part of the Executive shall be deemed “gross negligence” only if
it was done by the Executive in bad faith, not merely an error in judgment,
and
without reasonable belief that the act or omission was in the best interests
of
the Company and WFB. In the event the Executive disputes the existence of
Cause
in connection with a termination of employment, no termination for Cause
shall
be effective in the absence of an affirmative vote of seventy-five percent
(75%)
of the members of the entire Board (disregarding any director who must
abstain).
(d) Change
in Control.
"Change
in Control" shall mean the occurrence of any of the following
events:
(i) any
transaction that would result and does result in the reorganization, merger
or
consolidation of the Company, with one or more other Persons, other than
a
transaction following which:
(A) at
least
fifty-one percent (51%) of the equity ownership interests of the entity
resulting from such transaction are Beneficially Owned by Persons who,
immediately prior to such transaction, Beneficially Owned at least fifty-one
percent (51%) of the outstanding equity ownership interests in the Company.
For
purposes of this Section 1(d), the term “Beneficially Owned” or "Beneficial
Ownership" shall have the meaning ascribed to it under Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and,
for purposes of this Section 1(d) and Section 1(n), the terms “Person” or
“Persons” shall have the meaning ascribed to them under Sections 13(d) and 14(d)
of the Exchange Act; and
(B) at
least
fifty-one percent (51%) of the securities entitled to vote generally in the
election of directors of the entity resulting from such transaction are
Beneficially Owned by Persons who, immediately prior to such transaction,
Beneficially Owned at least fifty-one percent (51%) of the securities entitled
to vote generally in the election of directors of the Company;
(ii) the
consummation of the sale or other disposition of all or substantially all
of the
assets of the Company, except for any such transaction which does not result
in
a Change in Control under Section 1(d)(v);
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(iii) an
acquisition (other than directly from the Company) of any voting securities
of
the Company (the "Voting Securities") by any Person, immediately after which
such Person has Beneficial Ownership of more than fifty percent (50%) of
the
combined voting power of the Company's then outstanding Voting
Securities;
(iv) a
complete liquidation or dissolution of the Company;
(v) the
occurrence of any event if, immediately following such event, members of
the
Board who belong to any of the following groups do not aggregate at least
a
majority of the Board:
(A) individuals
who were members of the Board on the Effective Date of this Agreement;
or
(B) individuals
who first became members of the Board after the Effective Date of this Agreement
but prior to such event either:
(1) upon
election
to serve as a member of the Board by the affirmative vote of three-quarters
of
the members of the Board, or of a nominating committee thereof, in office
at the
time of such first election; or
(2) upon
election by the stockholders of the Company to serve as a member of the Board,
but only if nominated for election by the affirmative vote of three-quarters
of
the members of the Board, or of a nominating committee thereof, in office
at the
time of such first nomination; provided that such individual's election or
nomination did not result from an actual or threatened election contest or
other
actual or threatened solicitation of proxies or consents other than by or
on
behalf of the Board;
provided,
however, in no event shall a "Change in Control" be deemed to have occurred
as a
result of any acquisition of securities or assets of the Company or a subsidiary
of the Company, by the Company, any subsidiary of the Company or by any employee
benefit plan maintained by the Company.
(e) COBRA. "COBRA"
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
(f)
Code. "Code"
shall mean the Internal Revenue Code of 1986, as amended.
(g) Date
of
Termination.
"Date
of Termination" shall mean (i) if the Executive's employment is terminated
for
Cause, the date on which the Notice of Termination is given, and (ii) if
the
Executive's employment is terminated for any other reason, the date specified
in
the Notice of Termination.
(h) Disability.
Termination by the Company or WFB of the Executive's employment based on
"Disability" shall mean termination because of any physical or mental impairment
which qualifies the Executive for disability benefits under the applicable
long-term disability plan maintained by the Company or any subsidiary or,
if no
such plan applies, which would qualify the Executive for disability benefits
under the Federal Social Security System, in each case whether or not the
Executive has applied for such benefits.
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(i) Equity
Plans.
“Equity
Plans” shall mean all stock option, restricted stock and other equity plans of
the Company, including the 2004 Stock Plan, the 2004 Employee Stock Purchase
Plan and the 1997 Stock Option Plan.
(j) Good
Reason.
Termination by the Executive of the Executive's employment for "Good Reason"
shall mean termination by the Executive following a Change in Control or
WFB
Change in Control based on:
(i) Without
the Executive's express written consent, (A) the assignment by the Company
or
WFB to the Executive of duties which are materially inconsistent with the
Executive's primary positions, duties, powers, responsibilities and status
with
the Company or WFB immediately prior to a Change in Control or WFB Change
in
Control, (B) a material change in the Executive's reporting responsibilities,
titles or offices as an employee and as in effect immediately prior to such
a
Change in Control or WFB Change in Control, or (C) removal of the Executive
from, or failure to re-elect the Executive to, such material responsibilities,
titles or offices, except in connection with the termination of the Executive's
employment for Cause, Disability or Retirement, as a result of the Executive's
death or by the Executive other than for Good Reason;
(ii) Without
the Executive's express written consent, a material reduction by the Company
or
WFB in the Executive's base salary as in effect immediately prior to the
date of
the Change in Control or WFB Change in Control;
(iii) Without
the Executive’s express written consent, a material reduction in the benefits
potentially available to the Executive under the Company’s or any subsidiary’s
incentive compensation plans as in effect immediately prior to the date of
the
Change in Control or WFB Change in Control;
(iv) Without
the Executive's express written consent, the failure by the Company or any
Company subsidiary to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under the Company's
or
any subsidiary’s employee benefit, life insurance, medical, health and accident,
or disability plans, programs or arrangements but specifically excluding
all
Equity Plans in
which
the Executive was participating, the taking of any action by the Company
or any
subsidiary which would directly or indirectly materially reduce any of such
benefits or deprive the Executive of any other material fringe benefits enjoyed
by the Executive or the failure by the Company or any subsidiary to provide
the
Executive with the number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company or any subsidiary
in
accordance with the Company's or any subsidiary’s normal vacation policy in
place immediately prior to the Change of Control or WFB Change in Control;
provided, however, that routine changes to such pans, programs, arrangements,
fringe benefits or vacation policies that apply to similarly situated employees
or to employees in general shall not constitute “Good Reason” for purposes of
this Agreement;
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(v) Without
the Executive’s express written consent, a change in the Executive's principal
place of employment by a distance in excess of one hundred (100) miles from
its
location immediately prior to the Change in Control or WFB Change in
Control;
(vi) Any
purported termination of the Executive's employment for Disability or Retirement
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 1(l); or
(vii) The
failure by the Company to obtain the assumption of and agreement to perform
this
Agreement by any successor as contemplated in Section 11.
(k) IRS.
IRS
shall mean the Internal Revenue Service.
(l)
Notice
of
Termination.
Any
purported termination of the Executive's employment by the Company or WFB
for
any reason, including for Cause, Disability or Retirement, or by the Executive
for any reason, including for Good Reason, shall be communicated by written
"Notice of Termination" to the other party to this Agreement. For purposes
of
this Agreement, a "Notice of Termination" shall mean a dated notice which
(i)
indicates the specific termination provision in this Agreement relied upon,
(ii)
sets 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, (iii) specifies a Date of Termination, which shall be not less
than
thirty (30) nor more than ninety (90) days after such Notice of Termination
is
given, except in the case of the Company's or WFB’s termination of the
Executive's employment for Cause, which shall be effective immediately; and
(iv)
is given in the manner specified in Section 12.
(m) Retirement.
"Retirement" shall mean any termination of the Executive’s employment with the
Company or WFB, either voluntarily or involuntarily, by the Executive or
the
Company or WFB after the Executive reaches age sixty-five (65).
(n) WFB
Change in Control.
"WFB
Change in Control" shall mean the occurrence of any of the following
events:
(i) any
transaction that would result and does result in the sale or transfer to
one or
more other Persons of more than 51% of WFB’s credit card portfolio (excluding
any transfers in connection with securitization transactions in the ordinary
course of WFB’s business);
(ii) any
transaction that would result and does result in the reorganization, merger
or
consolidation of WFB, with one or more other Persons, other than a transaction
following which:
(A) at
least
fifty-one percent (51%) of the equity ownership interests of the entity
resulting from such transaction are owned by the Company; and
(B) at
least
fifty-one percent (51%) of the securities entitled to vote generally in the
election of directors of the entity resulting from such transaction are owned
by
the Company;
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(iii) the
consummation of the sale or other disposition of all or substantially all
of the
assets of WFB, except where following the sale or other disposition:
(A) at
least
fifty-one percent (51%) of the equity ownership interests of the entity
receiving all or substantially all of the assets of WFB are owned by the
Company; and
(B) at
least
fifty-one percent (51%) of the securities entitled to vote generally in the
election of directors of the entity receiving all or substantially all of
the
assets of WFB are owned by the Company; or
(iv) a
complete
liquidation or dissolution of WFB;
provided,
however, in no event shall a "WFB Change in Control" be deemed to have occurred
as a result of any acquisition of securities or assets of WFB or a subsidiary
of
WFB by the Company, any subsidiary of the Company or by any employee benefit
plan maintained by the Company.
2. Benefits
Upon Termination.
If the
Executive's employment by the Company or WFB is terminated within twenty-four
(24) months after a Change in Control or WFB Change in Control by (i) the
Company or WFB for any reason other than Cause, Disability, Retirement or
the
Executive's death or (ii) the Executive for Good Reason, then:
(a) The
Company
shall pay to the Executive in a lump sum as of the Date of Termination (unless
the Company and the Executive mutually agree upon an alternative form of
payment) a cash severance amount equal to two (2) times the Executive's Annual
Compensation;
(b) The
Company
shall maintain and provide for, at no cost to the Executive, the continued
participation of the Executive and the Executive’s dependants, if applicable, in
group life insurance, health and accident insurance and disability insurance
programs, but specifically excluding (i) all Equity Plans and (ii) incentive
compensation awards included in Annual Compensation, that are offered by
the
Company in which the Executive or the Executive’s dependants participated
immediately prior to the Date of Termination (collectively, the "Benefits").
Such continuation shall be for (A) the period of time that the Executive
is
eligible for continuation coverage under COBRA for all of the Benefits covered
by COBRA and (B) a period of 2 years after the Date of Termination for all
other
Benefits; provided that in the event that the Executive's participation in
any
plan, program or arrangement as provided in this Section 2(b) is barred by
the
underlying service provider or insurance carrier used by the Company to provide
such benefits, or during such period any such plan, program or arrangement
is
discontinued or the benefits thereunder are materially reduced, the Company
shall arrange to either provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of Termination or
a cash
amount equal to the amount paid by the Company for such benefits in the
applicable preceding period, adjusted for any federal or state income taxes
the
Executive has to pay on the cash amount;
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(c) All
unvested
stock options, restricted stock or other equity interests of the Company
issued
to the Executive under the Equity Plans shall fully vest on the Date of
Termination to the extent such options, restricted stock or other equity
interests do not otherwise vest upon the Change of Control;
(d) All
unvested amounts of the Executive under the Company's existing Deferred
Compensation Plan or any future deferred compensation plan(s) adopted by
the
Company shall fully vest and be paid on the Date of Termination;
and
(e) Section
7(b) (Development of Intellectual Property) of this Agreement and similar
provisions (including non-competition and non-solicitation provisions but
excluding confidentiality provisions) in other agreements between the Executive
and the Company shall be terminated and of no further force and effect as
of the
Date of Termination, but Section 7(a) (Nondisclosure of Confidential
Information) of this Agreement and similar confidentiality provisions in
other
agreements between the Executive and the Company shall remain in full force
and
effect after the Date of Termination.
3. Gross-Up
Payment.
Anything in this Agreement to the contrary notwithstanding, in the event
it
shall be determined that any payment or distribution by or on behalf of the
Company to or for the benefit of the Executive as a result of a change in
control (within the meaning of Section 280G of the Code) (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments required
under this Section 3 (a "Payment")) would be subject to the excise tax imposed
by Section 4999 of the Code, or any interest or penalties are incurred by
the
Executive with respect to such excise tax (such excise tax, together with
any
such interest and penalties, are hereinafter collectively referred to as
the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect
to such taxes), including any income taxes (and any interest and penalties
imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to
the
Excise Tax imposed upon the Payments.
(a) Tax
Opinion.
Subject
to the provisions of Section 3(b), all determinations required to be made
under
this Section 3, including whether and when a Gross-Up Payment is required
and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a big 4 accounting firm
selected by the Company (the "Tax Firm"); provided, however, that the Tax
Firm
shall not determine that no Excise Tax is payable by the Executive unless
it
delivers to the Executive a written opinion (the "Tax Opinion") that failure
to
pay the Excise Tax and to report the Excise Tax and the payments potentially
subject thereto on or with the Executive's applicable federal income tax
return
will not result in the imposition of an accuracy-related or other penalty
on the
Executive. All fees and expenses of the Tax Firm shall be paid by the Company.
Within fifteen (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
Executive or the Company, the Tax Firm shall make all determinations required
under this Section 3, shall provide to the Company and the Executive a written
report setting forth such determinations, together with detailed supporting
calculations,
7
and,
if
the Tax Firm determines that no Excise Tax is payable, shall deliver the
Tax
Opinion to the Executive. Any Gross-Up Payment, as determined pursuant to
this
Section 3, shall be paid by the Company to the Executive within fifteen (15)
days of the receipt of the Tax Firm's determination. Subject to the remainder
of
this Section 3, any determination by the Tax Firm shall be binding upon the
Company and the Executive. As a result of uncertainty in the application
of
Sections 280G and 4999 of the Code at the time of the initial determination
by
the Tax Firm under this Section 3, it is possible that Gross-Up Payments
which
will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made under this Section 3.
In
the event that it is ultimately determined in accordance with the procedures
set
forth in Section 3(b) that the Executive is required to make a payment of
any
Excise Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly
paid
by the Company to or for the benefit of the Executive. In determining the
reasonableness of Tax Firm's determinations under this Section 3, and the
effect
thereof, the Executive shall be provided a reasonable opportunity to review
such
determinations with the Tax Firm and the Executive's tax counsel.
(b) Notice
of IRS Claim.
The
Executive shall notify the Company in writing of any claims by the IRS that,
if
successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than
thirty
(30) calendar days after the Executive actually receives notice in writing
of
such claim and shall apprise the Company of the nature of such claim and
the
date on which such claim is requested to be paid; provided, however, that
the
failure of the Executive to notify the Company of such claim (or to provide
any
required information with respect thereto) shall not affect any rights granted
to the Executive under this Section 3 except to the extent that the Company
is
materially prejudiced in the defense of such claim as a direct result of
such
failure. The Executive shall not pay such claim prior to the expiration of
the
thirty (30) day period following the date on which he gives such notice to
the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive
in
writing prior to the expiration of such period that it desires to contest
such
claim, the Executive shall do all of the following:
(i)
provide
the Company with any information reasonably requested by the Company relating
to
such claim;
(ii)
take
such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including accepting legal representation
with respect to such claim by an attorney selected by the Company and reasonably
acceptable to the Executive;
(iii) cooperate
with the Company in good faith in order effectively to contest such claim;
and
(iv) if
the
Company elects not to assume and control the defense of such claim, permit
the
Company to participate in any proceedings relating to such claim;
8
provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with
such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties
with
respect thereto) imposed as a result of such representation and payment of
costs
and expenses. Without limiting the foregoing provisions of this Section 3,
the
Company shall have the right, at its sole option, to assume the defense of
and
control all proceedings in connection with such contest, in which case it
may
pursue or forego any and all administrative appeals, proceedings, hearings
and
conferences with the taxing authority in respect of such claim and may either
direct the Executive to pay the tax claimed and xxx for a refund or contest
the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court
of
initial jurisdiction and in one or more appellate courts, as the Company
shall
determine; provided, however, that if the Company directs the Executive to
pay
such claim and xxx for a refund, the Company shall advance the amount of
such
payment to the Executive, on an interest-free basis and shall indemnify and
hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income
tax
(including interest or penalties with respect thereto) imposed with respect
to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to
which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's right to assume the defense of and control
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable under this Section 3 and the Executive shall be entitled
to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(c) Right
to Tax Refund.
If,
after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 3, the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company's complying with
the
requirements of Section 3(b)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon net of any taxes
paid by the Executive). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 3(b), a determination is made
that
the Executive is not entitled to a refund with respect to such claim and
the
Company does not notify the Executive in writing of its intent to contest
such
denial of refund prior to the expiration of thirty (30) calendar days after
such
determination, then such advance shall, to the extent of such denial, be
forgiven and shall not be required to be repaid and the amount of the forgiven
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
4. Mitigation;
Exclusivity of Benefits.
(a) The
Executive shall not be required to mitigate the amount of any benefits under
this Agreement by seeking other employment or otherwise. The amount of severance
to be provided pursuant to Section 2 shall not be reduced by any compensation
earned by the Executive as a result of employment by another employer after
the
Date of Termination or otherwise.
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(b) The
specific arrangements referred to in this Agreement are not intended to exclude
any other benefits which may be available to the Executive upon a termination
of
employment with the Company or WFB pursuant to employee benefit plans of
the
Company or otherwise.
5. Withholding.
All
payments required to be made by the Company under this Agreement to the
Executive shall be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Company may reasonably determine
should be withheld pursuant to any applicable law or regulation.
6. Nature
of Employment and Obligations.
(a) Nothing
contained in this Agreement shall be deemed to create other than a terminable
at
will employment relationship between the Company and the Executive or WFB
and
the Executive, and the Company or WFB may terminate the Executive's employment
at any time, subject to providing any payments specified in this Agreement
in
accordance with the terms of this Agreement.
(b) Nothing
contained in this Agreement shall create or require the Company to create
a
trust of any kind to fund any benefits which may be payable under this
Agreement, and to the extent that the Executive acquires a right to receive
benefits from the Company under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of the Company.
7. Proprietary
Information.
The
parties agree to the protection of the Company’s proprietary information as
follows:
(a) Nondisclosure
of Confidential Information.
(i) Access.
The
Executive acknowledges that employment with Company necessarily involves
exposure to, familiarity with, and opportunity to learn highly sensitive,
confidential and proprietary information of the Company and its subsidiaries,
which may include information about products and services, markets, customers
and prospective customers, vendors and suppliers, miscellaneous business
relationships, investment products, pricing, billing and collection procedures,
proprietary software and other intellectual property, financial and accounting
data, personnel and compensation, data processing and communications, technical
data, marketing strategies, research and development of new or improved products
and services, and know-how regarding the business of the Company and its
products and services (collectively referred to herein as “Confidential
Information”).
(ii) Valuable
Asset.
The
Executive further acknowledges that the Confidential Information is a valuable,
special and unique asset of the Company, such that the unauthorized disclosure
or use by persons or entities outside the Company would cause irreparable
damage
to the business of the Company. Accordingly, the Executive agrees that during
and after the Executive’s employment with the Company, until the Confidential
Information becomes publicly known, the Executive shall not directly or
indirectly disclose to any person or entity, use for any purpose or permit
the
exploitation, copying or summarizing of, any Confidential Information of
the
Company, except as specifically required in the proper performance of his
duties
for the Company.
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(iii) Duties.
The
Executive agrees to take all appropriate action, whether by instruction,
agreement or otherwise, to ensure the protection, confidentiality and security
of the Confidential Information and to satisfy his obligations under this
Agreement. Prior to lecturing or publishing articles which reference the
Company
and its business, the Executive will provide to an officer of the Company
a copy
of the material to be presented for the Company to review and approve in
order
to ensure that no Confidential Information is disclosed.
(iv) Confidential
Relationship.
The
Company considers its Confidential Information to constitute “trade secrets”
which are protected from unauthorized disclosure under applicable law. However,
whether or not the Confidential Information constitutes trade secrets, the
Executive acknowledges and agrees that the Confidential Information is protected
from unauthorized disclosure or use due to his covenants under this Section
7
and his fiduciary duties as an executive of the Company.
(v) Return
of Documents.
The
Executive acknowledges and agrees that the Confidential Information is and
at
all times shall remain the sole and exclusive property of the Company. Upon
the
termination of his employment with the Company or upon request by the Company,
the Executive will promptly return to the Company in good condition all
documents, data and records of any kind, whether in hardcopy or electronic
form,
which contain any Confidential Information or which were prepared based on
Confidential Information, including any and all copies thereof, as well as
all
materials furnished to or acquired by the Executive during the course of
the
Executive’s employment with the Company.
(b) Development
of Intellectual Property.
(i) Definition
of Intellectual Property.
As used
in this Agreement, the term “Intellectual Property” shall include any
inventions, technological innovations, discoveries, designs, formulas, know-how,
processes, patents, trademarks, service marks, copyrights, computer software,
ideas, creations, writings and other works of authorship, books, lectures,
illustrations, photographs, scientific and mathematical models, improvements
to
all such property, and all recorded material defining, describing or
illustrating all such property, whether in hardcopy or electronic
form.
(ii) The
Company’s Rights in Intellectual Property.
The
Executive agrees that all right, title and interest of every kind and nature,
whether now known or unknown, in and to any Intellectual Property invented,
created, written, developed, conceived or produced by the Executive during
the
term of the Executive’s employment with the Company (i) whether using the
Company’s equipment, supplies, facilities or Confidential Information, (ii)
whether alone or jointly with others, and (iii) whether or not during normal
working hours, that are within the scope of the Company’s actual or anticipated
business operations or that relate to any of the Company’s actual or anticipated
products or services shall be the exclusive property of the Company and the
Executive hereby
11
assigns
to the Company all rights to such Intellectual Property without limitation
or
royalty. To the extent that any such Intellectual Property is copyrightable,
it
shall be deemed to be a “work for hire” within the meaning of the copyright
laws. Consideration for such assignment is hereby acknowledged. The Executive
will promptly and fully disclose to the Company any and all such Intellectual
Property. The Executive agrees that any patent application filed by him within
one year after termination of his employment is presumed to relate to an
invention developed during the term of the Executive’s employment with the
Company and thus is the exclusive property of the Company. As such, the
Executive agrees to disclose to the Company all such patent applications.
The
Executive hereby consents and agrees that the Executive shall have no right,
title, or interest of any kind or nature in or to any item of Intellectual
Property, or in or to any results or proceeds from any Intellectual
Property.
(iii) Additional
Actions.
The
Executive agrees to take all reasonably necessary actions to enable the Company
to obtain and perfect its rights in the Intellectual Property, including
assisting the Company in obtaining patents, copyrights, trademarks, service
marks and similar protections in the United States and all foreign countries.
The Executive further agrees to assist the Company in connection with any
demands, reissues, oppositions, litigation, controversy or other actions
involving any item of Intellectual Property. The Executive agrees to undertake
the foregoing obligations both during and after the Executive’s employment with
the Company, without charge, but at the Company’s expense with respect to the
Executive’s reasonable out-of-pocket costs. The Executive further agrees that
the Company may, in its sole discretion, keep such Intellectual Property
as
trade secrets, in which case the Executive will comply with the Confidential
Information provisions in Section 7(a) above.
(c) Enforcement.
For
purposes of this Section 7, the term "Company" shall include the Company
and all
of its subsidiaries. Each of the Company’s subsidiaries shall be an intended
third party beneficiary of this Agreement and shall have the right to enforce
the provisions of this Agreement against the Executive individually or
collectively with any one or more of the other subsidiaries.
(d) Equitable
Relief.
The
Executive acknowledges and agrees that, by reason of the sensitive nature
of the
Confidential Information and Intellectual Property of the Company referred
to in
this Agreement, in addition to recovery of damages and any other legal relief
to
which the Company may be entitled in the event of the Executive’s violation of
this Agreement, the Company shall also be entitled to equitable relief,
including such injunctive relief as may be necessary to protect the interests
of
the Company in such Confidential Information and Intellectual Property and
as
may be necessary to specifically enforce the Executive’s obligations under this
Agreement.
8. Severability.
The
Executive and the Company intend and agree that if a court of competent
jurisdiction determines that the scope of any provision of this Agreement
is too
broad to be enforced as written, the court should reform such provisions
to such
narrower scope as it determines to be enforceable. The Executive and the
Company
further agree that, if any provision of this Agreement is determined to be
unenforceable for any reason, such provision shall be deemed separate and
severable and the unenforceability of any such provision shall not invalidate
or
render unenforceable any of the remaining provisions of this
Agreement.
12
9. No
Attachment.
(a) Except
as
required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void and of no
effect.
(b) This
Agreement shall be binding upon, and inure to the benefit of, the Executive,
the
Company and their respective successors and permitted assigns.
10. Assignability.
The
Company may assign this Agreement and its rights and obligations under this
Agreement in whole, but not in part, to any corporation or other entity with
or
into which the Company may hereafter merge or consolidate or to which the
Company may transfer all or substantially all of its assets, if in any such
case
said corporation or other entity shall by operation of law or expressly in
writing assume all obligations of the Company under this Agreement as fully
as
if it had been originally made a party to this Agreement, but may not otherwise
assign this Agreement or its rights and obligations under this Agreement.
The
Executive may not assign or transfer this Agreement or any rights or obligations
under this Agreement.
11. Notice.
For the
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 certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth
below:
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To
the Company:
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||
|
Cabela's
Incorporated
|
||
|
Xxx
Xxxxxx Xxxxx
|
||
|
Xxxxxx,
XX 00000
|
||
|
Attention:
CEO
|
||
|
To
the Executive:
|
||
|
Xxxxxx
X. Xxxxxx
|
||
|
World's
Foremost Bank
|
||
|
0000
XX 0xx Xxxxxx
|
||
|
Xxxxxxx,
XX 00000
|
||
12. Amendment;
Waiver.
No
provisions of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer or officers of the Company as may be specifically
designated by the Board or a committee of the Board to sign on the Company’s
behalf. No waiver by any party to this Agreement at any time of any breach
by
any other 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.
13. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the United States where applicable and otherwise
by
the substantive laws of the State of Delaware.
13
14. Remedies
Cumulative.
No
remedy conferred upon a party by this Agreement is intended to be exclusive
of
any other remedy, and each and every remedy shall be cumulative and in addition
to any other remedy given under this Agreement or hereinafter existing at
law or
in equity.
15. Construction.
Any
reference to any federal, state, local or foreign law, constitution, code,
statute or ordinance shall be deemed to include all rules and regulations
promulgated thereunder (by any governmental authority or otherwise), and
any
successor law, unless the context otherwise requires. “Including” means
“including without limitation” and does not limit the preceding words or terms.
The words “or” or “nor” are inclusive and include “and”. The singular shall
include the plural and vice versa. Each word of gender shall include each
other
word of gender as the context may require. The parties have each participated
in
the negotiation and drafting of this Agreement. In the event an ambiguity
or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall
arise favoring or disfavoring any party by virtue of the authorship of any
of
the provisions of this Agreement.
16. Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
17. Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
18. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
19. Payment
of
Costs and Legal Fees.
All
reasonable costs and legal fees paid or incurred by the Executive pursuant
to
any dispute or question of interpretation relating to this Agreement shall
be
paid or reimbursed by the Company if the Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.
20. Entire
Agreement.
This
Agreement, including the recitals to this Agreement, embodies the entire
agreement between the Company and the Executive with respect to the matters
agreed to in this Agreement. All prior agreements between the Company and
the
Executive with respect to the matters agreed to in this Agreement, including
the
Original Agreement, are hereby superseded and shall have no force or effect,
except that this Agreement shall not affect or operate to reduce any benefit
or
compensation inuring to Executive of a kind elsewhere provided.
[The
Remainder of This Page Intentionally Left Blank.]
[Signature
Page Follows.]
14
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
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CABELA'S
INCORPORATED,
a
Delaware corporation
|
||
|
By:
|
/s/
Xxxxxx Xxxxxx
|
|
|
Xxxxxx
Xxxxxx, President and CEO
|
||
|
/s/
Xxxxxx X. Xxxxxx
|
||
|
Xxxxxx
X. Xxxxxx
|
||
