EXHIBIT 99.1
CONFIDENTIAL SEVERANCE AGREEMENT AND GENERAL RELEASE
This Confidential Severance Agreement and General Release (this
"Agreement") is hereby entered into by and among Xxxxxxx X. Xxxxxxx XX, an
individual ("Executive"), Outdoor Channel Holdings, Inc., an Alaska corporation
("Holdings"), The Outdoor Channel, Inc., a Nevada corporation, ("Channel"),
LDMA-AU, Inc., a Nevada corporation ("Lost Dutchman's") and Gold Prospectors'
Association of America, Inc., a California corporation ("GPAA"). GPAA, Holdings,
Channel, and Lost Dutchman's are referred to herein collectively as the
"Companies".
RECITALS
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A. Executive has been employed by Holdings pursuant to an Employment
Agreement by and between Holdings and Executive dated as of April 14, 1999
attached hereto as Exhibit A (the "Employment Agreement"). Executive served as
(i) Chief Financial Officer, Chief Operating Officer and General Counsel and a
director of Holdings, (ii) General Counsel and a director of Channel, (iii) a
director of GPAA, and (iv) a director of Lost Dutchman's.
B. On the Resignation Date (as defined below), Executive voluntarily,
unconditionally and irrevocably resigned from all of his positions as an
officer, director and employee that Executive held with any of the Companies and
any other subsidiary or related entity of any of the Companies.
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby, acknowledge, the
parties hereto mutually agree as follows:
1. Agreement Date. Except as otherwise provided herein, this Agreement
shall be dated the date it has been executed by both of the parties, and if the
parties hereto execute this Agreement on different dates, the latter of such
dates.
2. Confirmation of Resignation. Subject to the next sentence, Executive
hereby reaffirms his voluntary, unconditional and irrevocable resignation as an
employee, officer, and director (including as a member of any committees of the
Boards of Directors) of the Companies and any other subsidiary or related entity
of any of the Companies, effective as of 5:00 p.m. on November 11, 2003 (the
"Resignation Date"). By 5:00 p.m. on December 16, 2003, Executive will fax or
e-mail to Holdings' Chief Executive Officer confirming the foregoing
resignations. The Companies accept such resignations, effective on the
Resignation Date. By this Agreement, Executive withdraws and waives any and all
protests to meetings held or actions taken by the Boards of Directors of Channel
and Holdings up to and including the Agreement Date that relate to the subject
matter hereof and hereby gives his consent to such actions.
3. Property of the Companies; Property of Executive. Executive will by
December 19, 2003 return to the respective Companies all files, records, credit
cards, keys, equipment, and any other property of such Companies or documents
maintained by him for the Companies' use or benefit; provided, however, that
Executive will be permitted to keep, and will be sold for the sum of $1.00, the
Sony office computer utilized in his office and the Sony notebook computer (in
both cases, without any data pertaining to the Companies).
4. Benefits to Executive. In reliance on such voluntary resignation and
the representations, warranties, agreements and releases in this Agreement, the
Companies will provide Executive with the following pay and benefits:
(a) Holdings has paid Executive all wages earned through November 19,
2003. Executive hereby acknowledges such receipt. Executive's earned but unused
vacation (20 days, totaling $11,250, less applicable withholdings), has also
been paid to him, and Executive acknowledges receipt thereof as full payment of
the Companies' obligations related to vacation pay.
(b) Holdings shall pay Executive the sum of $8,212, less applicable
withholdings, by December 19, 2003. Thereafter, Holdings shall pay Executive
$16,000 per month, in arrears, less legally required deductions, commencing
December 31, 2003 and ending on April 30, 2004. Such monthly amount shall be
direct deposited or mailed to Executive on the last day of each month. If
Holdings does not direct deposit or mail such amount to Executive within 10 days
after the last day of the month, Holdings shall pay to Executive a late fee
equal to 1% of such monthly amount unless Holdings' delayed payment is excused
by Executive's material breach of a term of the Agreement or the Exhibits
hereto. In addition, if Executive exercises his rights under COBRA in a timely
manner, Holdings will pay the premium for such insurance continuation for
Executive and his family through April 30, 2004.
(c) In the event Executive elects to waive and release any claims that
he may have for violations of the Age Discrimination in Employment Act, as
amended, pursuant to Exhibit B attached hereto (the "Age Release"), Holdings
shall pay Executive $16,000 per month, in arrears, less legally required
deductions, commencing May 31, 2004 and ending on October 31, 2004. In the event
Executive elects to waive and release any claims Executive may have for
violations of the Age Discrimination Employment Act pursuant to the Age Release,
then Holdings will pay the COBRA premium for Executive and his family (assuming
Executive exercises his rights under COBRA in a timely manner) commencing May 1,
2004 and ending on May 31, 2005. In the event Executive does not execute the Age
Release or revokes the Age Release prior to its effectiveness, Executive will
not receive the payments and benefits outlined in this subparagraph (c).
(d) Pursuant to the Employment Agreement, Executive and Holdings agreed
to defer a portion of Executive's earnings and Executive and the Companies agree
and acknowledge that the deferred amount totaled $317,750 ("Deferred Amount").
By signing this Agreement, Executive and the Companies confirm and agree that as
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of January 1, 2000, Executive constructively received 134,375 shares of common
stock of Holdings ("Holdings Deferred Shares") for part of the Deferred Amount,
and 125,726 shares of common stock of Channel ("Channel Deferred Shares") for
the remainder of the Deferred Amount, even though the certificates for the
Holdings Deferred Shares and the Channel Deferred Shares were not physically
issued to Executive at that time. Holdings shall issue the Holdings Deferred
Shares within ten (10) business days following the Agreement Date. Holdings
shall report Executive's income for the Holdings Deferred Shares on a corrected
2000 Form W-2, and file an amended Form 1120 tax return for 2000 to report
Executive's income for the Holdings Deferred Shares. Executive shall file an
amended Form 1040 tax return for 2000 to report the income for the Holdings
Deferred Shares that is reported on the corrected Form W-2. Executive and the
Companies agree that Executive's income for the Holdings Deferred Shares for
2000 is $436,719, which is based upon the closing price of the Holdings common
stock on the first trading day of 2000, and this sum shall be reported as
Executive's income for the Holdings Deferred Shares on the corrected Form W-2,
and the amended Form 1120 and 1040 tax returns.
(e) The Channel Deferred Shares shall be issued within ten (10)
business days following the Agreement Date and a portion of such shares shall be
retained by Holdings pursuant to a Stock Pledge Agreement as provided for in
Section 10 below and a share certificate representing the remainder of such
shares shall be promptly delivered to Executive. Holdings shall report
Executive's income for the Channel Deferred Shares on a corrected 2000 Form W-2,
and file an amended Form 1120 tax return for 2000 to report Executive's income
for the Channel Deferred Shares. Executive shall file an amended Form 1040 tax
return for 2000 to report the income for the Channel Deferred Shares that is
reported on the corrected Form W-2. Executive and the Companies agree that
Executive's income for the Channel Deferred Shares for 2000 is $251,452, which
is based upon the estimated fair market value of such shares as of January 2000,
and this sum shall be reported as Executive's income for the Channel Deferred
Shares on the corrected Form W-2, and the amended Form 1120 and 1040 tax
returns.
(f) The Administrator of the Holdings Stock Option Plan ("Holdings
Option Plan") will permit Executive to exercise Executive's options to purchase
up to 60,000 shares of Holdings common stock granted to Executive pursuant to
the Holdings Stock Option Agreement signed by Executive on February 16, 2000,
attached as Exhibit C (the "Holdings Option Agreement"), pursuant to the terms
of the Holdings Option Agreement and to pay the exercise price pursuant to
Sections 5.3(a), 5.3(b) or 5.3(c) of the Holdings Option Plan (and in the case
of Section 5.3(c) of such option plan only so long as the surrender of shares of
common stock does not result in the recognition of a charge to operations by the
Channel or Holdings as determined in accordance with generally accepted
accounting principles). In addition, Holdings will register on Form S-8 the
stock issuable to Executive upon the exercise of such options within ten (10)
business days of this Agreement and Executive agrees not to exercise Executive's
options granted pursuant to the Holdings Option Agreement prior thereto.
Executive understands and agrees that he must comply with all provisions of the
Holdings Stock Option Agreement to exercise his options, including provisions
relating to payment of taxes upon exercise.
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(g) The Administrator of the Channel Stock Option Plan ("Channel Option
Plan") will permit Executive to exercise his options to purchase up to 200,000
shares of Channel common stock granted to Executive pursuant to the Channel
Stock Option Agreement effective as of December 10, 1997, attached as Exhibit D
(the "Channel Option Agreement"), pursuant to the terms of the Channel Option
Agreement and to pay the exercise price pursuant to Sections 5.3(a), 5.3(b) or
5.3(c) of the Channel Option Plan (and in the case of Section 5.3(c) of such
option plan only so long as the surrender of shares of common stock does not
result in the recognition of a charge to operations by the Channel or Holdings
as determined in accordance with generally accepted accounting principles).
Executive understands and agrees that he must comply with all provisions of the
Channel Option Agreement to exercise his options, including provisions relating
to the payment of taxes upon exercise, and that such options may, if a
contemplated transaction is completed, be converted into options to acquire
Holdings common stock at the then applicable exchange rate (with appropriate
changes to the exercise price).
(h) Holdings and Executive will execute the Registration Rights
Agreement attached to this Agreement as Exhibit E and incorporated herein (the
"Registration Rights Agreement").
(i) Holdings will pay Executive $1,500 per month, less legally required
deductions, for a period of 36 months commencing on December 1, 2004 and ending
on October 31, 2007.
(j) Holdings will pay Executive $100,000, less legally required
withholdings, on or before January 31, 2004.
(k) Xxxxx Xxxxxx shall provide Executive with a letter of reference, a
copy of which is attached hereto as Exhibit F. If anyone inquires of any
now-current officer or director of Holdings or Channel about Executive's
employment and/or services as a director of the Companies, such persons shall
refer the inquiry to Xxxxx Xxxxxx, and if he no longer holds the offices he
currently holds with the Companies, to his successor, who shall advise the
inquiring party that there is a letter of reference for Executive and who will
on request forward a copy of Exhibit F to the inquiring party. Xxxxx Xxxxxx or
his successor will not state anything about Executive in response to such an
inquiry that contradicts Exhibit F, provided, however, that nothing in this
paragraph or Exhibit F shall require Xxxxxx, his successor, or any officer or
director of the Companies to speak untruthfully in any legal proceeding or in
dealing with any governmental agency.
5. Continuation of Benefits After the Resignation Date. Except as
expressly provided in this Agreement, the Holdings Option Agreement (and by
virtue thereof, the Holdings Option Plan) and the Channel Option Agreement (and
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by virtue thereof, the Channel Option Plan), or in the plan documents governing
the Companies' employee benefit plans, as of the Resignation Date, Executive
will no longer be eligible for, receive, accrue, or participate in any other
benefits or benefit plans provided by any of the Companies and any of their
parents, direct or indirect subsidiaries, divisions or related entities
(collectively referred to herein as the "Companies and their Related Entities"),
including, without limitation, medical, dental and life insurance benefits, and
401(k) retirement plans. As of the Resignation Date, Executive was fully vested
with regard to the contributions of Holdings made pursuant to Executive's 401(k)
account in Holdings 401(k) retirement plan.
6. COBRA Benefits. Nothing in this Agreement is intended to alter the
terms of COBRA in any way and those terms shall remain applicable in all
respects.
7. Acknowledgement of Total Compensation. Executive acknowledges and
agrees that the cash, options, shares and other consideration described in this
Agreement satisfy any and all monies, other compensation or benefits that
Executive earned or that is owed to him as a result of his employment by the
Companies, under the Employment Agreement or otherwise.
8. Agreements Between Executive, the Companies and Their Affiliates.
(a) Executive represents, warrants and agrees that, (i) this Agreement,
(ii) the Channel Pledge Agreement (as defined below), (iii) the Channel Option
Agreement, (iv) the Holdings Option Agreement; (v) the Registration Rights
Agreement and (vi) the Age Release, if executed and not revoked, are the only
current agreements between the Companies and Executive, and that any other
agreements purportedly between the Companies and Executive are void and of no
force or effect. Without limiting in any way the acknowledgement contained in
Section 7 above, Executive expressly acknowledges and agrees that Executive has
no rights whatsoever under the Employment Agreement, the Acknowledgement
Agreement dated April 14, 1999 attached hereto as Exhibit G (the
"Acknowledgement Agreement") or the memorandum dated March 10, 1998 between
Executive and Holdings (the "1998 Memorandum").
(b) Except for the Holdings Deferred Shares and Channel Deferred
Shares, Executive represents, warrants and agrees that (i) the Channel Option
Agreement and the (ii) Holdings Option Agreement are the only options, warrants
or other rights which Executive has to acquire any securities of any of the
Companies. Executive acknowledges that Executive does not own any outstanding
securities of either GPAA or Lost Dutchman's.
(c) Executive represents and warrants that Executive is not indebted to
the Companies and their Related Entities for any loan or other monies borrowed
by Executive.
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9. Holdings Deferred Shares. Executive acknowledges that the Holdings
Deferred Shares will not be registered under the Securities Act or qualified
under the California Corporate Securities Law of 1968, as amended, and such
shares shall contain a restrictive legend to such effect.
10. Channel Deferred Shares. Executive acknowledges that the Channel
Deferred Shares will not be registered under the Securities Act or qualified
under the California Corporate Securities Law of 1968, as amended, and such
shares shall contain a restrictive legend to such effect. Concurrently with the
execution of this Agreement Executive agrees to execute the Channel Stock Pledge
Agreement attached hereto as Exhibit H (the "Channel Pledge Agreement") as
non-exclusive security for the faithful performance of Executive's covenants,
representations, warranties, agreements and obligations as set forth therein.
Executive agrees that certificates evidencing 30,500 Channel Deferred Shares
(the "Pledged Channel Shares') together with stock assignments duly endorsed and
separate from certificate (with a date and number of shares left blank) shall be
retained by Holdings pursuant to the Channel Pledge Agreement. Executive
irrevocably authorizes Holdings to hold the Pledged Channel Shares pursuant to
the Channel Pledge Agreement and constitutes and appoints the Chief Executive
Officer of Holdings as Executive's attorney-in-fact and agent and execute all
documents necessary and proper as provided for under the Channel Pledge
Agreement.
11. Status of Employment Agreement. Except as otherwise provided
herein, the parties agree that the Employment Agreement was terminated as of the
Resignation Date.
12. Release by Executive and Release by the Companies.
(a) Subject to Section 13(c) below, Executive does hereby, for himself
and his heirs, successors and assigns, release, acquit and forever discharge the
Companies and their Related Entities, and their respective officers, agents,
attorneys, directors, managers, employees, representatives, affiliates, related
entities, successors, and assigns (collectively, the "Company Released
Parties"), of and from any and all claims, actions, charges, complaints, causes
of action, rights, demands, debts, damages, or accountings of whatever nature,
known or unknown, which he or his heirs may have against such persons or
entities based on any actions or events which occurred prior to and including
the Agreement Date, including but not limited to those related to, or arising
from, Executive's employment with the Companies, the Employment Agreement, the
Acknowledgement Agreement, the 1998 Memorandum, termination of Executive's
employment, the Holdings Deferred Shares, the Channel Deferred Shares, or any
other equity or option to purchase equity of any Company Released Party, other
than claims arising from this Agreement (including Holdings' 401(k) plan), the
Registration Rights Agreement, the Holdings Option Agreement, the Channel Option
Agreement, and the Channel Pledge Agreement.
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(b) Subject to Section 13(d) below, the Companies do hereby, for
themselves and their respective related entities, successors, and assigns,
release, acquit, and forever discharge Executive and his heirs, successors, and
assigns (collectively, the "Executive Released Parties"), of and from claims,
actions, charges, complaints, causes of action, rights, demands, debts, damages,
or accountings of whatever nature, known or unknown, which they may have against
the Executive Released Parties based on any actions or events which occurred
prior to and including the Agreement Date, including but not limited to those
related to, or arising from, Executive's employment with the Companies, the
Employment Agreement, the Acknowledgement Agreement, the 1998 Memorandum, the
Holdings Deferred Shares, the Channel Deferred Shares, or any other equity or
option to purchase equity of any Executive Released Party, other than claims
arising from this Agreement, the Registration Rights Agreement, the Holdings
Option Agreement, the Channel Option Agreement, and the Channel Pledge
Agreement.
13. Waiver of Civil Code Section 1542.
(a) It is further understood and agreed that as a condition of this
Agreement, all rights under Section 1542 of the Civil Code of the State of
California are expressly waived by Executive and the Companies, except as
expressly excepted in Sections 12(a), 12(b), 13(c), and 13(d) of this Agreement.
Such Section reads as follows:
"A General Release does not extend to claims which a creditor does not
know or suspect to exist in his favor at the time of executing the Release,
which if known by him must have materially affected his settlement with the
debtor."
(b) Executive and the Companies expressly waive and release any rights
and benefits which either has or may have under any similar law or rule of any
other jurisdiction pertaining to the matters released herein.
(c) Notwithstanding Sections 12(a), 13(a) and 13(b) above, nothing in
this Agreement shall be deemed to be a waiver or release by Executive of
Executive's rights under California Labor Code Section 2802 regarding any acts
by Executive prior to November 11, 2003 or of Executive's right to indemnity as
provided in the Companies' bylaws or as otherwise provided in paragraph 16 of
this Agreement.
(d) Notwithstanding Sections 12(b), 13(a) and 13(b) above, nothing in
this Agreement shall be deemed a waiver or release by the Companies of any claim
against Executive based on any act or omission by Executive not presently known
to any officer or director of the Companies which constitutes a breach of
fiduciary duty or other unlawful act by Executive. If such claim is ever
brought, however, it shall not relieve the Companies of their obligations under
this Agreement or the exhibits hereto.
(e) No party hereto has any right to rescind, change, modify and/or
offset its obligations under this Agreement and the Exhibits hereto, including,
without limitation, the computation or the amounts of the Deferred Amount, the
Holdings Deferred Shares, and the Channel Deferred Shares and Executive's
options to purchase shares under the Holdings Option Agreement and the Channel
Option Agreement, except as otherwise provided in such Exhibits if such
provision exists.
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14. No Inducement of Legal Proceedings. Executive and the Companies
further agree that under no circumstances will either induce, encourage, solicit
or assist any other person or entity to file or pursue any proceeding of any
kind against the opposing Released Parties regarding any act or omission that
occurred prior to the effective date of this Agreement; provided, however, that
Executive shall not be precluded from discussing with Executive's father any
claims he may have against the Companies, provided, however, Executive will not
represent or assist his father in any such legal action or otherwise arrange for
such legal representation. However, if Executive's father brings such legal
action, nothing herein shall prevent the Companies from introducing any evidence
related to Executive while employed by or a Director of Holdings and/or Channel.
15. Cooperation Clause.
(a) To facilitate the orderly conduct of the Companies business, at no
cost to Executive, Executive shall cooperate with any requests by the Companies
for information or assistance related to the time of his employment.
(b) Executive shall execute and deliver to the Companies any ancillary
agreements or other documents requested by the Companies that are reasonably
necessary or desirable to give effect to the provisions of this Agreement.
(c) Executive, at no cost to himself, agrees to cooperate with the
Companies and their Related Entities and their counsel (i) in any investigations
(including internal investigations) and audits of the Companies or any of their
Related Entities' management's current and past conduct and business and
accounting practices and (ii) in the Companies' defense of, or other
participation in, any administrative, judicial, or other proceeding arising from
any charge, complaint or other action which has been or may be filed relating to
the period during which Executive was engaged in employment with the Companies
and/or their Related Entities. Prior to January 1, 2005, Executive will not
communicate, directly or indirectly, with any shareholder, person or entity any
words, comments, or opinions which are materially detrimental to the Companies
(regardless of whether the actual effect of such communication is detrimental or
not) concerning the management or governance of the Companies and/or their
Related Entities, the operations of the Companies and/or their Related Entities,
the decisions by the boards of directors of the Companies or other positions
taken by the Companies and/or their Related Entities, or the financial status of
the Companies and/or their Related Entities; provided, however, Executive may
communicate privately to the Chief Executive Officer and the directors of the
Companies regarding such matters; and provided, further, that nothing herein
requires Executive to speak untruthfully in any legal proceeding or in dealing
with any governmental agency. Executive shall direct inquiries from third
parties on these issues to the Chief Executive Officer of Holdings.
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(d) Executive will not seek or accept employment by the Companies or
their Related Entities at any time and if he does so, his application need not
be considered.
(e) Executive will promptly return any files, customer lists, financial
information (excluding publicly filed or disseminated information) and other
property of the Companies and their Related Entities that are in Executive's
possession or control that have not been returned to the Companies as of the
Effective Date, without making copies thereof.
(f) Executive will not use or disclose any confidential financial,
personnel, or client information, trade secrets, or other confidential
information that he learned while employed by the Companies.
(g) Prior to January 1, 2005, Executive will not solicit or participate
in or assist in any way in the solicitation of any employee of the Companies to
cease employment with the Companies or to begin an employment or consulting
relationship with any other employer.
(h) Executive will not solicit or participate in or assist in any way
in the solicitation of the customers of the Companies to cease or decrease doing
business with the Companies or to do business with any competitor of the
Companies, unless Executive can establish by a preponderance of the evidence
that he did not use or disclose any proprietary information or trade secret
information of the Companies in identifying such customer or making such
solicitation.
16. Indemnification and Insurance.
(a) Subject to Section 16(b) hereof, with regard to Executive's actions
as a member of the Board of Directors of the Companies, the Companies agree to
defend and indemnify Executive in accordance with the indemnification provisions
contained in their bylaws. To the extent the Companies maintain directors and
officers insurance that provides coverage for Xxxxx Xxxxxx and/or Xxx Xxxxxx,
the Companies agree that such insurance and any continuations thereof for Xxxxx
Xxxxxx and/or Xxx Xxxxxx shall also include same coverage for Executive for the
periods during which Executive was a member of the Board of Directors of the
Companies.
(b) If Executive is a party or is threatened to be made a party to any
claim, action or proceeding by reason of any action taken by Executive while
Executive was a director of Channel prior to the Resignation Date, Channel
agrees to indemnify and hold harmless Executive to the same extent as provided
in the Bylaws of Holdings as such Bylaws exist on the date of this Agreement,
except as may be otherwise prohibited by California, Nevada or other applicable
law. Notwithstanding the foregoing, Executive shall not be entitled to
indemnification for acts or omissions or transactions from which a director may
not be relieved of liability as set forth in Section 204(a)(10) of the
California Corporations Code or as set forth in Article IX of the Amended and
Restated Articles of Incorporation of Channel.
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(c) Prior to requesting any reimbursement or advance for matters
covered by Sections 16(a) or (b) above, Executive agrees to submit bills to the
Companies' insurer for payment as requested by the Companies and the Companies
shall not be obligated to make any payment with respect to any costs or expenses
for which payment is actually made under a valid and collectible insurance
policy. Executive agrees to give the Companies such assistance, information and
cooperation as they may reasonably request in connection with any matter covered
by this Section 16.
17. Approval by the Board of Directors. The Board of Directors of
Holdings has approved (or ratified) this Agreement and its terms and provisions,
including, without limitation, the issuance of the Holdings Deferred Shares and
the shares of common stock issuable upon the exercise of the Holdings Option
Agreement.
18. Breach of Release. Executive and the Companies agree that if they
hereafter commence, join in, or in any manner seek relief through any suit
arising out of, based upon, or relating to any of the claims released by them as
provided in paragraphs 12 and 13 herein above, or in any manner assert against
any of the parties they have released any of the claims they have released
hereunder, they shall pay to such parties, in addition to any other damages
caused to them, reasonable attorneys' fees incurred in defending or otherwise
responding to said suit or claim.
19. Office Furniture and Personal Property of Executive.
(a) Prior to the date of this Agreement, Holdings has returned to
Executive the personal office furniture of Executive (consisting of a desk,
chair, microwave, copy machine, television and other miscellaneous items). Prior
to the date of this Agreement, Holdings has also paid on behalf of Executive the
costs and expenses for returning such personal office furniture. On or before
December 19, 2003, Holdings shall return to Executive all his personal files and
records that were maintained by Executive.
(b) With regard to any legal work which Executive performed for the
Companies and/or any related entities prior to Executive's employment with the
Companies, Executive may request copies of or access to any files he maintained
related thereto, and the Companies will either, at Executive's option, provide
access to such files or copies to Executive at Executive's expense.
(c) Executive acknowledges that the Companies do not owe Executive any
rent or any other amounts for the use of Executive's personal property while
such property was at the executive offices of Holdings.
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(d) Certain items of personal property used in Executive's Newport
Beach and Temecula offices (consisting of telephones, a table, books, and other
miscellaneous items) are of nominal value and are considered Executive's
personal property.
20. Reimbursement of Expenses. Upon the submission of proper invoices
and receipts in accordance with the normal procedures of Holdings and the
Channel, which submission shall be within thirty (30) days of the date of
Agreement, Executive shall be entitled to receive reimbursement for reasonable
out-of-pocket business expenses properly incurred by Executive which have not
been previously reimbursed by the Companies for Executive's services to the
Companies in connection with his trips to Arkansas and New Mexico; provided,
however, that each such expense must be of a nature qualifying it as a proper
business expenditure of the Companies and Executive furnishes to the Companies
adequate records, receipts and other documentary evidence reasonably required by
the Companies for the submission of such expenses and such expenses otherwise
comply with the general policies of the Companies with respect to expense
reimbursement; provided, however, in no event shall such expenses exceed $3,000.
21. Securities Matters.
(a) Executive represents and warrants that (i) Executive is aware and
knowledgeable of the financial condition, plans and business prospects of the
Companies and (ii) by reason of Executive's business and financial experience,
Executive is capable of evaluating the merits and risks of an investment in
shares of the common stock of Holdings and in Channel and is capable of
protecting Executive's own interests in connection with such investment.
Executive acknowledges that (i) Executive is responsible for Executive's
required filings with the Securities and Exchange Commission in connection with
any acquisition of common stock of Holdings and any subsequent sale or
disposition of such shares, and (ii) Executive may acquire shares of common
stock of Holdings and/or Channel which have not been registered under the
Securities Act or qualified under the California Corporate Securities Law of
1968, as amended (and such shares will contain a legend to such effect), and
that any disposition of such shares is subject to restrictions imposed by
federal and state law.
(b) Subject to the next sentence, Executive agrees that Executive will
not (i) participate in any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the Securities and Exchange Commission) to vote, or seek
to influence any person with respect to the voting of any voting securities of
the Companies, (ii) try to influence the management, boards of directors,
actions or the policies of the Companies, or (iii) publicly oppose decisions or
recommendations by the Board of Directors of the Companies. Executive's
covenants contained in the previous sentence shall terminate upon the earlier of
(i) two (2) years from the Resignation Date or (ii) such time as the aggregate
beneficial ownership (as determined in accordance with Section 13 of the
Securities Exchange Act of 1934 and the rules thereunder) of Xxxxxx Xxxxxx,
Xxxxx Xxxxxx, the Estate of Xxxxx Xxxxxx, Musk Ox Investments L.P., Musk Ox
Properties L.P. and their related parties and affiliates, including, but not
limited to trusts and foundations established by any of the foregoing, on a
collective basis, becomes less than forty percent (40%) of the outstanding
voting securities of the Company.
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(c) Executive agrees and acknowledges that the holding periods for the
Holdings Deferred Shares and the Channel Deferred Shares shall commence as
determined under Rule 144 under the Securities Act and the SEC interpretations
and no action letters thereunder. In connection with any requested transfer of,
or any requested removal of any restrictive legend placed on, unregistered
securities, Executive shall provide to the Companies an unqualified written
opinion (citing appropriate authorities and precedents) of a reputable law firm
with experience in securities matters who shall be, and whose legal opinion
shall be, reasonably satisfactory to Holdings and its legal counsel that the
transfer or removal of any legend is in compliance with the Securities Act, and
if applicable, California securities laws and may be lawfully accomplished
without registration or qualification of such securities or the retention of
such legend, as applicable. Upon receipt of such satisfactory written opinion,
Holdings agrees to take appropriate steps to transfer or reissue such securities
without a Securities Act restrictive legend, as applicable.
(d) Until November 10, 2005, to the extent institutional investors
approach the chief executive of Holdings with their interest in acquiring in
private sales large blocks of Holdings common stock (i.e., more than $500,000
worth of stock at the time of such approach), and to the extent Holdings
approves of such potential investor purchasing such shares, Holdings agrees that
it will advise such institutional investors of Executive's interest in selling
shares so long as Executive has communicated to Chief Executive a definite
current interest in selling such amount of stock.
22. Arbitration.
(a) Any dispute regarding the validity or terms of this Agreement or
any aspects of Executive's employment or its termination and any other disputes
between the parties hereto shall be resolved by binding arbitration before a
single arbitrator selected by mutual agreement of the parties. If no such
agreement can be promptly reached after written demand for arbitration has been
served on the other party, an arbitrator shall be selected and the arbitration
conducted in accordance with the rules of Judicate West in Orange County,
California which are applicable to employment-related disputes, as the exclusive
remedy for any such dispute, and in lieu of any court action, which is hereby
waived. The only exception is a claim by either party for injunctive relief
pending arbitration, or other provisional relief pursuant to California Code of
Civil Procedure ss. 1281.8. The arbitrator shall not have the power or authority
to require either party to take or refrain from taking any action other than as
expressly provided for in this Agreement.
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(b) The parties shall have the right of discovery in the arbitration,
subject to the limitations set forth in Rule 26 of the Federal Rules of Civil
Procedure, except that there shall be no right to propound interrogatories or
requests for admissions. The arbitration shall otherwise be subject to the
provisions of California Code of Civil Procedure Section 1280, et seq., to the
extent those provisions are not in conflict with the other terms of this
Agreement. The arbitrator shall follow the laws of the State of California and
the United States in rendering an award, and the award shall be in the form of a
reasoned decision setting forth the factual and legal reasons for the award. The
arbitrator shall have no authority to fail to follow the laws of the State of
California and the United States except as expressly modified in this Agreement
and the Exhibits hereto.
23. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.
24. Attorneys' Fees. In any action, litigation, arbitration or
proceeding between the parties arising out of or in relation to this Agreement,
each party shall bear its own costs and expenses, including reasonable
attorneys' fees.
25. Non-Admission of Liability. The parties understand and agree that
neither the payment of any sum of money nor the execution of this Agreement by
the parties will constitute or be construed as an admission of any liability
whatsoever by any party.
26. Tax Matters. The Companies may, if required in their reasonable
judgment, withhold from any amounts payable to Executive (excluding the Channel
Deferred Shares and the Holdings Deferred Shares) all Federal, state, city and
other taxes as required by applicable law and may file with appropriate
governmental authorities all information returns or other reports with respect
to any amounts payable under this Agreement, as may, in their reasonable
judgment, be required by law. Executive agrees that any federal, state,
municipal or other taxes that may be owed or payable as a result of the sums
paid to Executive pursuant to this Agreement and/or any of the shares which
Executive is entitled to receive or otherwise acquire pursuant to this Agreement
and the exhibits referred to herein or therein are Executive's sole and
exclusive responsibility. Executive agrees to indemnify, defend and hold the
Companies harmless from and against any and all liability or claim for any tax,
contribution or penalty or interest thereon incurred or demanded as a result of
the payments or transfers contemplated by this Agreement; provided, however,
that in no event will Executive be required to reimburse the Companies with
respect to any income tax liability to the extent that Executive has actually
paid the tax that gave rise to the assertion of the withholding tax liability
against the Companies, as provided in Section 3402(d) of the Code; provided,
further that the provisions of this Section 26 shall not require Executive to
indemnify the Companies with respect to any interest and penalties related to
the Companies' failure to withhold or report taxes in a timely manner, or with
respect to the Companies' income tax liabilities that are not related to
Executive's failure to pay income tax due on the payments or transfers to
Executive that are referenced in this Agreement. In order to secure Executive's
promise to promptly pay all agreed tax liabilities related to the receipt of the
Holdings Deferred Shares and the Channel Deferred Shares, Executive shall
execute the Channel Pledge Agreement as provided for in Section 10 above.
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27. Severability. If any one or more of the provisions contained herein
(or parts thereof), or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity
and enforceability of any such provision in every other respect and of the
remaining provisions hereof will not be in any way impaired or affected, it
being intended that all of the rights and privileges shall be enforceable to the
fullest extent permitted by law. The parties hereto covenant and agree that they
shall not initiate, directly or indirectly, any proceeding or action to declare
and determine any provision contained herein invalid, illegal or unenforceable
in any respect for any reason.
28. Entire Agreement. Except as expressly provided herein, this
Agreement and the Exhibits attached hereto contain all of the terms, promises,
representations, and understandings made between the parties as of the Agreement
Date and supersede any previous representations, understandings, or agreements,
except for any agreement by Executive regarding confidentiality and/or
protection of information, property, or trade secrets of the Companies, which
agreement(s) shall continue in full force and effect.
29. Waiver. No waiver by any party hereto at any time of any breach of,
or compliance with, any condition or provision of this Agreement to be performed
by any other party hereto may be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or subsequent time.
30. Amendment. This Agreement may be modified or amended only if such
modification or amendment is agreed to in writing and signed by duly authorized
representatives of the parties hereto, which writing expressly states the intent
of the parties to modify this Agreement.
31. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original as against any
party that has signed it, but all of which together will constitute one and the
same instrument.
32. Assignment. This Agreement inures to the benefit of and is binding
upon Executive and the Companies and their respective heirs, successors and
permitted assigns. Executive's rights under this Agreement are not assignable
except by transfer at death pursuant to the applicable laws of descent and
distribution, or to an inter vivos trust under the terms of which Executive is
the grantor and beneficiary.
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33. Miscellaneous Provisions.
(a) The parties represent that they have read this Agreement and fully
understand all of its terms; that they have conferred with their attorneys and
have been represented and advised by legal counsel of their choice regarding the
negotiations and finalization of this Agreement; that they have executed this
Agreement without coercion or duress of any kind; and that they understand any
rights that they have or may have and sign this Agreement with full knowledge of
any such rights.
(b) The language in all parts of this Agreement must be in all cases
construed simply according to its fair meaning and not strictly for or against
any party. Whenever the context requires, all words used in the singular must be
construed to have been used in the plural, and vice versa, and each gender must
include any other gender. The captions of the Sections of this Agreement are for
convenience only and must not affect the construction or interpretation of any
of the provision herein.
(c) Each provision of this Agreement and the Exhibits hereto to be
performed by a party hereto is both a covenant and condition, and is a
consideration for the other party's performance hereunder. All rights, remedies,
undertakings, obligations, options, covenants, conditions and agreements
contained in this Agreement are cumulative and no one of them is exclusive of
any other. Time is of the essence in the performance of this Agreement.
(d) Each party acknowledges that no representation, statement or
promise made by any other party, or by the agent or attorney of any other party,
has been relied on by him or it in entering into this Agreement, except for the
representations, statements and promises expressly stated in this Agreement and
the Exhibits attached hereto.
(e) Each party understands that the facts and law with respect to which
this Agreement is entered into may be materially different from those the
parties now believe to be true. Each party accepts and assumes this risk and
agrees that this Agreement and the releases in it shall remain in full force and
effect, and legally binding, notwithstanding the discovery or existence of any
additional or different facts or law, or of any claims with respect to those
facts or law except as expressly provided otherwise above. Each of the parties
hereto represents and warrants to the other that they have conducted such
investigation of the facts and law relating to the subject matter of this
Agreement and the other agreements referenced herein as they deem necessary and
appropriate; provided, however, that this subparagraph (e) does not in any way
apply to, impair, or affect Section 13(d).
(f) Unless expressly set forth otherwise, all references herein to a
"day" are deemed to be a reference to a calendar day. All references to
"business day" mean any day of the year other than a Saturday, Sunday or a
public or bank holiday in Temecula, California. Unless expressly stated
otherwise, cross-references herein refer to provisions within this Agreement and
are not references to the overall transaction or to any other document.
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(g) Each party to this Agreement will cooperate fully in the execution
of any and all other documents and in the completion of any additional actions
that may be necessary or appropriate to give full force and effect to the terms
and intent of this Agreement.
(h) If there is any conflict between the language of this Agreement and
any Exhibit hereto, the language of this Agreement shall prevail.
(i) Neither this Agreement nor any Exhibit hereto is effective until
all are signed by each party hereto and thereto (counterpart signatures are
effective for this purpose). Facsimile copies of signatures to this Agreement
and to all Exhibits hereto
[continued on next page]
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shall be effective and each party hereto agrees to exchange and deliver original
signatures to this Agreement and to all Exhibits hereto by no later than 10:00
a.m. California time on December 19, 2003.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates indicated below.
"Executive" /S/ XXXXXXX X. XXXXXXX XX
------------------------------
XXXXXXX X. XXXXXXX XX
Dated: December 16, 2003
"Companies" OUTDOOR HOLDINGS, INC.
By: /S/ XXXXX XXXXXX
--------------------------
Name: Xxxxx Xxxxxx
Title: President/CEO
Dated: December 16, 2003
THE OUTDOOR CHANNEL, INC.
By: /S/ XXXXX XXXXXX
--------------------------
Name: Xxxxx Xxxxxx
Title: Co-President/CEO
Dated: December 16, 2003
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LDMA-AU, INC.
By: /S/ XXXXX XXXXXX
--------------------------
Name: Xxxxx Xxxxxx
Title: President
Dated: December 16, 2003
GOLD PROSPECTORS' ASSOCIATION
OF AMERICA, INC.
By: /S/ XXXXX XXXXXX
--------------------------
Name: Xxxxx Xxxxxx
Title: President
Dated: December 16, 2003
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