EMPLOYMENT AGREEMENT
Exhibit
99.3
SPORT
CHALET, INC., a Delaware corporation ("Employer"), and Xxxxxx Xxxxxxxx
("Executive"), in consideration of the mutual promises made herein, do, as of
December 31, 2008, agree as follows:
G. Executive
is employed as the Executive Vice President – Chief Merchandising
Officer;
H. Employer
is willing to employ Executive, and Executive desires to be so employed, on the
terms and conditions set forth in this Agreement; and
I. This
Agreement shall replace all prior agreements regarding the employment of
Executive by the Employer.
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ARTICLE
XIII
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TERM
OF EMPLOYMENT
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Specified
Term. Employer hereby employs Executive, and Executive hereby accepts
employment with Employer, for an initial term beginning on January 1, 2009 and
ending at the close of business on December 31, 2009. Executive's
employment hereunder shall automatically renew for succeeding twelve-month
periods, unless notice of termination is given by either party at least 30 days
prior to the end of the initial term or any renewal term. Executive's
employment may also terminate earlier as otherwise provided in this
Agreement.
"Employment
Term." The phrase "Employment Term" shall mean the entire period of
Executive's employment by Employer hereunder, whether for the periods provided
above, or whether terminated earlier as hereinafter provided or extended by
mutual agreement between Employer and Executive.
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ARTICLE
XIV.
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DUTIES
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General
Duties. Executive shall serve as the Executive Vice President – Chief
Merchandising Officer of Employer. In this capacity, Executive shall,
to the best of his ability, perform all services, acts or things (i) necessary
or advisable to manage and conduct the business of Employer as it relates to
merchandising, planning, marketing and advertising, and in-store merchandise
presentation, (ii) as are provided in Employer's Certificate of Incorporation
and Bylaws, (iii) as may be assigned by Employer's President, Chief Executive
Officer or Board of Directors or (iv) as may be specified in the job description
or performance objectives adopted from time to time by Employer's Board of
Directors, President and Chief Executive Officer. Executive shall
perform such duties subject at all times to the policies of Employer and its
Board of Directors and the direction of Employer's President and Chief Executive
Officer. Executive shall report to Employer's President and Chief
Executive Officer.
1
Conduct
of Executive. Executive shall at all times during the Employment Term
conduct himself in a manner consistent with his position with Employer and shall
not knowingly perform any act which he knew or should have known was contrary to
the best interests of Employer.
Devotion
to Employer's Business.
Executive
shall devote the full working portion of his entire productive time, ability and
attention to the business of Employer during the Employment Term.
During
the Employment Term, Executive shall not engage in any other business duties or
pursuits whatsoever, or directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior consent of Employer's
Board of Directors, President and Chief Executive Officer; provided, however,
that the expenditure of reasonable amounts of time for educational, charitable
or professional activities shall not be deemed a breach of this Agreement if
those activities do not materially interfere with the services required under
this Agreement and shall not require the prior written consent of Employer as
set forth above.
This
Section 2.3 shall not be interpreted to prohibit Executive from making passive
personal investments or conducting private business affairs if those activities
do not materially interfere with the services required under this
Agreement. Notwithstanding the foregoing, Executive shall not, to the
best of his knowledge, directly or indirectly, acquire, hold or retain any
interest in any competitor, vendor or supplier of Employer.
Competitive
Activities. Except as otherwise expressly provided in this Agreement,
during the Employment Term, Executive shall not, directly or indirectly, either
as an executive, employer, consultant, agent, principal, partner, stockholder,
corporate officer or director, or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner whatsoever with the business of Employer.
Trade
Secrets.
Executive
shall not, without the prior written consent of Employer in each instance,
disclose or use in any way, either during his employment by Employer or
thereafter, except as required in the course of such employment, any
confidential business or technical information or trade secret of Employer
acquired in the course of such employment, whether or not patentable,
copyrightable or otherwise protected by law, and whether or not conceived of or
prepared by him that derives economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value
from its disclosure or use (collectively, the "Trade Secrets"). Trade
Secrets include without limitation, any confidential information concerning
customer lists, products, procedures, operations, investments, financing, costs,
employees, purchasing, accounting, marketing, merchandising, sales, salaries,
pricing, profits and plans for future development, the identity, requirements,
preferences, practices and methods of doing business of specific parties with
whom Employer transacts business, and all other information which is related to
any product, service or business of Employer, other than information which is
generally known in the industry in which Employer transacts business or is
acquired from public sources or was known to Executive prior to his employment
by Employer; all of which Trade Secrets are the exclusive and valuable property
of Employer.
2
All
files, accounts, records, documents, books, forms, notes, reports, memoranda,
studies, compilations of information, correspondence and all copies, abstracts
and summaries of the foregoing, and all other physical items related to
Employer, other than a merely personal item (such as personal office belongings
or personal contacts information), whether of a public nature or not, and
whether prepared by Executive or not, are and shall remain the exclusive
property of Employer and shall not be removed from the premises of Employer
except as required in the course of Executive's employment, without the prior
written consent of Employer in each instance, and the same shall be promptly
returned to Employer by Executive on the expiration or termination of his
employment or at any time prior thereto upon the request of
Employer.
Executive
hereby acknowledges and agrees that it would be difficult to fully compensate
Employer for damages resulting from the breach or threatened breach of Sections
2.4 or 2.5 and, accordingly, that Employer shall be entitled to temporary and
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, to enforce such provisions without the
necessity of proving actual damages and without the necessity of posting any
bond or other undertaking in connection therewith. This provision
with respect to injunctive relief shall not, however, diminish Employer's right
to claim and recover damages.
The
provisions of Section 2.5 shall survive the termination of this
Agreement.
Solicitation
of Employees. Executive agrees that while employed by Employer, and
as a result of the Executive's position with the Employer, the Executive will
acquire specialized knowledge regarding the Employer's
employees. Therefore, Executive agrees that for a period of one (1)
year after Executive's termination of employment from Employer, Executive will
not, directly or indirectly, solicit any person who is engaged as a regular,
temporary, introductory, full time or part time employee, agent, or independent
contractor by the Employer to terminate his or her employment or engagement with
the Employer for any reason.
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ARTICLE
XV.
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COMPENSATION
AND BENEFITS.
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Compensation. As
compensation for the services to be performed hereunder, Executive shall receive
a salary in the amount of Two Hundred Eighty-Five Thousand Dollars ($285,000)
per annum, payable in arrears on a bi-weekly basis. Effective July 1,
2009, Executive's salary shall increase to Two Hundred Ninety-Five Thousand
Dollars ($295,000) per annum, payable in arrears on a bi-weekly
basis. Executive shall receive such other increases in salary, if
any, as may be determined by the Board of Directors in its sole
discretion. The annual salary excluding bonuses, profit sharing,
stock options and all other forms of compensation is referred to as the "Base
Salary."
Tax
Withholding. Employer shall have the right to deduct or withhold from
any amounts due to Executive hereunder (including, without limitation, the
Severance Amount which may be payable pursuant to Sections 4.1(b) and 4.1(e))
any and all federal, state or local taxes, withholdings and deductions now
applicable or that may be enacted and become applicable in the future,
including, but not limited to, federal income and Social Security
taxes.
3
Bonus. Executive
shall be eligible to participate in such executive bonus programs as Employer
may establish from time to time. Under the "Senior Management Bonus
Plan" currently in effect, Executive's maximum target annual bonus shall be
forty percent (40%) of his base salary for the applicable fiscal year
payable pursuant to Section 3.1. This Bonus Plan and any target bonus
are subject to change in the discretion of the Employer, but Executive shall be
eligible to participate in any such bonus programs as long as Employer offers
such plans to its Executive Vice Presidents. Except as specified in
Sections 4.1(a), 4.1(b) or 4.1(e), Executive must be employed as of the time of
payment (typically June) to be eligible for any bonus, and there are no pro rata
payments of the Bonus Plan if Executive is not employed as of the time of
payment Provided that Executive is still employed in June 2009, Executive is
guaranteed a minimum bonus of Twenty-Eight Thousand Five Hundred Dollars
($28,500) for the fiscal year ending March 2009. Provided Executive
is still employed in June 2010, Executive is guaranteed a minimum bonus of
Twenty-Nine Thousand Five Hundred Dollars ($29,500) for the fiscal year ending
March 2010..
Stock
Options. Executive has been granted Non-Qualified Stock Options
("NQSOs") to purchase Employer's common stock on the terms set forth on Exhibit
A and in accordance with Employer's 2004 Incentive Award Plan as amended and a
Key Executive Stock Option Incentive Award Agreement which is incorporated
herein by this reference.
Annual
Vacation. Executive shall be entitled to vacation or personal leave
in accordance with Employer's policies for executive vacations, with prior
approval of the Chief Executive Officer, in an annual amount not less than three
weeks. The vacation is subject to the Employer's rules on accrual of
vacation.
Automobile
Allowance. Employer shall pay to Executive an automobile allowance in
the annual amount of Eleven Thousand Five Hundred Fifty Dollars ($11,550)
payable at least monthly.
Medical
Coverage. Employer shall include Executive and his immediate family
in such health care plans as may be provided to Executive Vice Presidents of
Employer generally and under the same terms and conditions.
Life
Insurance. Employer shall provide to Executive such life insurance,
if any, as is currently provided to Executive Vice Presidents of Employer
generally and under the same terms and conditions.
Long Term
Disability Plan. Employer shall include Executive in such long term
disability plans as may be provided to Executive Vice Presidents of Employer and
under the same terms and conditions.
Qualified
Plans. Executive shall be entitled to participate in Employer's
qualified plans in accordance with the terms and conditions of the plan
documents.
Reimbursement
of Business Expenses. Employer shall promptly reimburse Executive for
all reasonable and necessary business expenses incurred by Executive in
connection with the business of Employer subject to compliance by Executive with
Employer's Standard Operating Procedures with respect to the amount,
documentation and verification of such expenses as the same may be amended from
time to time.
4
Signing
Bonus. Subject to employment on the specified dates, Executive
shall receive the following signing bonus, payable as
follows: (1) Twenty Thousand Dollars ($20,000) payable on April 1,
2008; (2) Twenty Thousand Dollars ($20,000) payable on April 1, 2009; Ten
Thousand Dollars ($10,000) payable on April 1, 2010.
Notwithstanding
any provision in the Agreement to the contrary, the reimbursement of eligible
expenses or in-kind benefits provided pursuant to this Agreement, including, but
not limited to, this Section, shall be subject to the following
conditions:
the
eligible expenses must be incurred or in-kind benefits provided during the
Employment Term;
the
expenses eligible for reimbursement or in-kind benefits in one taxable year
shall not affect the expenses eligible for reimbursement or in-kind benefits in
any other taxable year;
the
reimbursement of eligible expenses shall be made promptly, subject to the
Employer's applicable policies, but in no event later than the end of the year
after the year in which such expense was incurred; and
the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
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ARTICLE
XVI.
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TERMINATION
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4.1 Termination. In
addition to an expiration of this Agreement pursuant to Section 1.1, the
Employment Term and Executive's employment shall cease under the following
circumstances:
Death or
Disability. The Employment Term shall terminate automatically upon
the death of Executive. The Employment Term and employment shall also
terminate upon the "Disability" of Executive provided Employer shall have given
Executive written notice of such termination not less than thirty (30) days
prior to the date of termination. "Disability" shall mean a physical
or mental disability of Executive which has continued, or is reasonably likely
to continue, for a period of at least four (4) consecutive months and that has
prevented, or would prevent Executive from performing his essential functions of
his position (even with a reasonable accommodation that is not an undue
hardship) under this Agreement during such period. Such disability
shall be determined by Executive's regular physician or two physicians selected
by the Board of Directors. Upon termination because of death or
disability, Executive shall not be entitled to any additional Base Salary,
bonus, or other compensation or benefits after the date of such termination
except as provided in the next sentence. If Executive is terminated
because of death or disability on or after January 1, but before the payment of
the annual bonus for the fiscal year ending in March of that calendar year,
Executive shall receive a pro rata annual bonus based on the number of months
the Executive was employed in that fiscal year; provided, however, that no such
bonus shall be paid if no other Executive Vice President receives the annual
bonus for that fiscal year. That amount of the bonus for the
Executive shall be based on Executive's maximum target annual
bonus. The payment of the annual bonus, if any, shall be made at the
same time as the other executives of Employer receive their bonus payments, but
in no event later than July 15 of the year of the termination.
5
Termination
by Employer Without Cause or Termination of Employment By
Non-Renewal. Employer shall be entitled to terminate Executive's
employment without "Cause" at any time during Executive's
employment. Written notice of the termination without Cause shall be
delivered to Executive and shall specify the date of termination. At
the time of the termination, Executive shall receive payment of the Base Salary
through the date of the termination and any accrued vacation. Except
as provided in this Section 4.1(b), Executive shall not be entitled to any Base
Salary, bonus, or other compensation or benefits after the date of such
termination. If Employer terminates the employment relationship and
this Agreement without Cause, or if Employer decides not to renew this Agreement
and thereby terminates Executive's employment, Executive shall receive the
following after execution of the standard form of Severance Agreement and
Release: i) a Lump Sum Payment equal to six months Base Salary, and ii) if
Executive is terminated on or after January 1, but before the payment of the
annual bonus for the fiscal year ending in March of that calendar year,
Executive shall receive a pro rata annual bonus based on the number of months
the Executive was employed in that fiscal year; provided, however, that no such
bonus shall be paid if no other Executive Vice President receives the annual
bonus for that fiscal year. That amount of the bonus for the
Executive shall be based on Executive's maximum target annual
bonus. The Lump Sum Payment shall be paid to Executive within 60 days
of the date of the termination. The payment of the annual bonus, if
any, shall be made at the same time as the other executives of Employer receive
their bonus payments, but in no event later than July 15 of the year of the
termination. Additionally, in the event Executive elects to continue
his medical and dental coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") and remains eligible for coverage under
COBRA, Employer will pay directly to the insurance carriers the full cost of
Executive's monthly COBRA premium for medical and dental coverage for the first
eighteen months of such coverage in accordance with the COBRA regulations. The
aggregate amount paid under the preceding sentences is referred to herein as the
"Severance Amount." Payment of the Severance Amount shall be in lieu of all
other claims, damages or liabilities Executive might otherwise assert against
Employer, including, without limitation, those for breach of this Agreement or
for discrimination. The Severance Amount shall be paid as severance
and only upon execution, without revocation, by Executive of Employer's standard
form of Severance Agreement and Release within 30 days following such
termination. If Executive fails to execute the release within 30 days
and/or revokes such release, then Executive shall not receive any Severance
Amount. The Severance Agreement and Release will require Executive to
release all claims against Employer and its Executives in order to receive the
Severance Amount. The amount of the Severance Amount is subject to an
increase pursuant to the provisions of Section 5 Change in Control.
Termination
by Employer With Cause. Employer shall be entitled to terminate
Executive's employment under this Agreement for Cause, in which case Executive
shall not be entitled to any additional Base Salary, bonus, or other
compensation or benefits after the date of such termination. "Cause"
means (i) the commission of any material criminal act or any act of fraud or
material dishonesty with respect to Employer; (ii) misconduct; (iii) material
breach of the provisions of this Agreement, (iv) insubordination or refusal to
perform required duties, or (v) an order of a court, administrative board or
judge, or regulatory authority which precludes Executive from performing his
duties. Written notice of the termination with Cause shall be
delivered to Executive and shall specify the date of termination and that the
termination is for "Cause".
6
Termination
by Executive For Any Reason. Executive shall be entitled to terminate
his employment under this Agreement at any time upon thirty (30) days prior
written notice to Employer, in which case Executive shall not be entitled to any
additional Base Salary, bonus, or other compensation or benefits after the date
of such termination.
Termination
by Executive for Good Reason. Executive may terminate his employment
for "Good Reason" within four (4) months of the initial existence of "Good
Reason", by sending written notice of termination to Employer stating that the
termination is for "Good Reason" and specifying the basis for the Good
Reason. In the event the Executive fails to terminate his employment
within such period, but Executive terminates after such period, then the
termination shall be deemed without Good Reason. "Good Reason" shall
mean any of the following events:
(i) An
involuntary material diminution in the Executive's authority or
duties;
(ii) An
involuntary material diminution in Executive's Base Salary; or
(iii) A
material breach of Section 3 of this Agreement.
In order
for the termination to be one for "Good Reason", Executive must first give the
Employer written notice which shall identify with reasonable specificity the
grounds for Good Reason within 60 days of the initial existence of Good Reason,
upon the notice of which the Employer shall have 30 days to cure the alleged
grounds for Good Reason contained in the notice. In the event
Executive fails to notify the Employer of the existence of Good Reason within
such 60 days or the Employer cures the alleged grounds for Good Reason in that
30 day cure period, but Executive's employment under this Agreement in fact
terminates at the initiation of Executive, such termination shall be deemed a
termination by Executive without Good Reason. Upon a termination by
Executive, at the time of termination, Executive shall receive payment of the
Base Salary through the date of termination and any accrued
vacation. If Executive terminates his employment with the Employer
for Good Reason in accordance with this Section 4.1(e), then Executive shall not
be entitled to any additional Base Salary, bonus, or other compensation or
benefits except the following: upon execution by Executive of
Employer's standard form of Severance Agreement and Release, Executive shall
receive the following: (i) a Lump Sum Payment equal to six months Base Salary,
payable within 60 days following the termination of employment; and (ii) if
Executive is terminated on or after January 1, but before the payment of the
annual bonus for the fiscal year ending in March of that calendar year,
Executive shall receive a pro rata annual bonus based on the number of months
the Executive was employed in that fiscal year; provided, however, that no such
bonus shall be paid if no other Executive Vice President receives the annual
bonus for that fiscal year. That amount of the bonus for the
Executive shall be based on Executive's maximum target annual
bonus. The Lump Sum Payment shall be paid to Executive within 60 days
of the date of the termination. The payment of the annual bonus, if
any, shall be made at the same time as the other executives of Employer receive
their bonus payments, but in no event later than July 15 of the year of the
termination. The amount paid under the preceding sentence is referred to as the
"Severance Amount". Executive shall not be entitled to any other
compensation or benefits after the date of termination. Payment of
the Severance Amount shall be in lieu of all other claims, damages or
liabilities Executive might otherwise assert against Employer, including,
without limitation, those for breach of contract or for
discrimination. The Severance Amount shall be paid only upon
execution, without revocation, by Executive of Employer's standard form of
Severance Agreement and Release within 30 days following such
termination. If Executive fails to execute the release within 30 days
and/or revokes such release, then Executive shall not receive any Severance
Amount. The Severance Agreement and Release will require Executive to
release all claims against Employer and its executives in order to receive the
Severance Amount. The amount of the Severance Amount is subject to an increase
pursuant to the provisions of Section 5 Change in Control.
7
Duties
Upon Termination. In the event that Executive's employment by
Employer under this Agreement is terminated, neither Employer nor Executive
shall have any remaining duties or obligations hereunder, except that (i)
Employer shall promptly pay to Executive, or his estate, all reimbursable
expenses incurred by Executive hereunder as of such date, and such compensation
as is due pursuant to Sections 3.1 and 3.5, prorated through the date of
termination, (ii) Employer shall provide to Executive such Severance Amount as
may be due pursuant to Sections 4.1(b) or 4.1(e) or Section 5, and (iii)
Executive shall continue to be bound by Section 2.5; and (iv) Executive shall be
bound by Section 2.6 for one year after the termination.
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ARTICLE
XVII.
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CHANGE
IN CONTROL.
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If, (A)
"In Anticipation Of," as defined below, or within 12 months after a "Change in
Control" of the Employer (or any successor), as defined below, the Employer
involuntarily terminates Executive's employment without Cause, or (B) within 12
months after a Change in Control, Executive terminates his employment for Good
Reason, then subject to the satisfaction of the conditions in Section 4.1(b) or
4.1(e) respectively, the Severance Amount payable under Section 4.1(b) or
Section 4.1(e) shall be equal to one times the annual Base Salary (hereinafter
the "Change in Control Payment"). The Change in Control Payment shall
be paid within 60 days following the termination of employment.
Definitions. The
following terms shall have the following meanings for purposes of this Section
5.
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(i)
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"In
Anticipation Of": The involuntary termination by the Employer
of Executive’s employment shall be deemed to have been "In Anticipation
Of" a Change in Control if such termination (A) was at the request of an
unrelated third party who has taken steps reasonably calculated to effect
a Change in Control, or (B) otherwise arose in connection with a Change in
Control.
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8
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(ii)
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"Change
in Control": A "Change in Control" means, and shall be deemed
to have taken place, if (1) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Employer's stockholders,
of each new Board member was approved by a vote of at least three-fourths
(3/4) of the Board members then still in office who were Board members at
the beginning of such period; (2) any reorganization, consolidation,
merger or similar transaction involving the Employer in which
the Employer is not the continuing or surviving corporation or pursuant to
which the Employer’s securities would be converted into cash, securities
or other property (other than a merger of the Employer in which the
holders of the Employer’s voting securities immediately prior to the
merger have more than 50% of the combined voting power of the securities
of the corporation or other entity resulting from or surviving such
merger, calculated on a fully-diluted basis in accordance with generally
accepted accounting principles after giving effect to such merger,
immediately after such merger); (3) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Employer; or (4) the current
Chief Executive Officer Xxxxx Xxxxx ceases to be the Chief Executive
Officer.
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Severance
Amount Shall Not Constitute Excess Parachute Payments. It is the intention of
the parties that any payment of the Severance Amount shall not constitute
"excess parachute payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), and any regulations
thereunder. If the independent accountants acting as auditors for
Employer (or another accounting firm designated by them) determine that any
payment of the Severance Amount may constitute "excess parachute payments," the
payments may be reduced to the maximum amount which may be paid without the
payments being "excess parachute payments." The determination shall
take into account (i) whether the payments are "parachute payments" under
Section 280G(b)(3) and, if so, (ii) the amount of payments under this Agreement
that constitutes reasonable compensation under Section 280G.
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ARTICLE
XVIII.
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GENERAL
PROVISIONS
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Notices. Any
notices to he given hereunder by either party to the other shall be in writing
and may he transmitted by personal delivery or by mail, registered or certified,
postage prepaid with return receipt requested. Mailed notices shall
be addressed to the parties at the addresses appearing on the signature pages
hereof, but each party may change that address by written notice in accordance
with this section. Notices delivered personally shall be deemed
communicated as of the date of actual receipt; mailed notices shall be deemed
communicated as of the third day following the date of mailing.
9
Arbitration. Any
dispute or controversy arising from or related to this Agreement, or from any
other aspect of Executive's employment or the termination thereof, or any other
dispute between Executive and Employers, shall be submitted to arbitration in
Los Angeles County, California, in accordance with the employment arbitration
rules of the American Arbitration Association ("AAA") by a single impartial
arbitrator. Any such dispute or controversy shall be submitted to AAA
within the time period provided by the applicable statute of
limitations. The parties hereto consent to the jurisdiction of the
arbitrator selected in accordance with the AAA's rules and
procedures. See the AAA's website "xxx.xxx.xxx" for such rules and
procedures. The arbitration procedure provided before in this section
shall be the exclusive avenue of redress for any disputes relating to or arising
from this Agreement. The arbitrator is required to apply the terms of
this Agreement to any dispute or controversy and has no authority to ignore or
modify such terms. The arbitrator is obligated to apply the
substantive law for both liability and remedies applicable to the claim and is
not permitted to apply "broad principles of justice or equity under Code of
Civil Procedure Sections 1280 et. seq. The arbitrator has the
authority to award monetary and other damages, or no damages, only in accordance
with applicable substantive law, and is not permitted to apply "broad principles
of justice or equity" in awarding a remedy. In other words, the
arbitrator shall apply the law as it would be applied in court. The
arbitrator shall not have the power to commit errors of law or legal reasoning,
and the award may be vacated or corrected on appeal to a court of competent
jurisdiction for any such error. The arbitrator shall also have discretion to
award the prevailing party reasonable costs and attorneys' fees incurred in
bringing or defending an action under this provision, in accordance with
applicable law. This Agreement to arbitrate arises out of this
individually negotiated contract and not pursuant to an employer promulgated
plan. The parties therefore intend that the allocation of the costs
of the arbitration and the arbitrator shall be made in accordance with the AAA's
rules for individually negotiated contracts. Any award issued as a
result of arbitration pursuant to this Agreement shall be final and binding
between the parties thereto, and shall be enforceable by any court having
jurisdiction over the party against whom enforcement is sought.
Attorneys'
Fees and Costs. If any legal or arbitration action based in contract
law is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs, and
necessary disbursements in addition to any other relief to which that party may
be entitled. This provision shall be construed as applicable to the
entire contract.
SEC
Compliance. Executive acknowledges that concurrently herewith he has
been provided with a copy of and will abide by the Employer's Statement of
Company Policy Re: Securities Trades by Company Personnel as the same may be
amended from time to time by Employer, which Statement is incorporated herein by
this reference.
Remedy
For Certain Breaches. If Employer breaches Sections 2.1, 3.1, or 3.3
through 3.12, and Executive does not give notice of termination for Good Reason,
the Executive is limited to a maximum of six months period for damages for any
such breach.
Entire
Agreement. This Agreement, together with its exhibits, and the
arbitration agreement supersede any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of Executive
by Employer and contain all of the covenants and agreements between the parties
with respect to that employment in any manner whatsoever. Each party
to this Agreement acknowledges that no representation, inducements, promises, or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement, statement, or promise not contained in this agreement shall be valid
or binding on either party.
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Modifications. Any
modification of this Agreement will be effective only if it is in writing and
signed by the party to be charged and approved by the Board of Directors of
Employer.
Effect of
Waiver. The failure of either party to insist on strict compliance
with any of the terms, covenants, or conditions of this Agreement by the other
party shall not be deemed a waiver of that term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
Partial
Invalidity. If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Governing
Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California except that, with respect to matters of
corporate governance, the laws of the State of Delaware shall
govern.
Sums Due
Deceased Executive. If Executive dies prior to the expiration of the
Employment Term, any sums that may be due him from Employer under this agreement
as of the date of death shall be paid to Executive's executors, administrators,
heirs, personal representatives, successors, and assigns.
Insurance. Executive
shall be covered by any policy of directors' and officers' liability insurance
maintained by Employer. Such insurance shall be maintained by
Employer to cover any acts that occurred during the term of this Agreement, even
if the claim is made after this Agreement has expired or been
terminated.
Consultation. Executive
acknowledges that he has had sufficient time to consult with the advisor of his
choice.
Construction. This
Agreement was reviewed by each party hereto and is the product of informed
negotiations between the parties hereto. If any part of this
Agreement is deemed to be unclear or ambiguous, it shall be construed as if it
were drafted jointly by the parties. Each party hereto acknowledges
that no party was in a superior bargaining position regarding the substantive
terms of this Agreement.
Section
409A of the Code. This Agreement is intended to comply with the
requirements of Section 409A of the Code. Notwithstanding anything in
this Agreement to the contrary, if Executive is determined by the Employer to be
a "specified employee" (as defined in Section 409A(a)(2)(B) of the Code and
determined pursuant to related Treasury Regulations or other guidance
promulgated thereunder) and if required under Section 409A, the Severance
Payment shall be paid on the earlier of (i) the first business day of the
seventh month following the Executive's separation from service, or (ii) ten
days after the Employer receives notification of the Executive's
death. Any such delayed payment shall be made without
interest.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
date and year first set forth above.
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|
EMPLOYER
|
SPORT CHALET, INC. | |
| By: | /s/ Xxxxx Xxxxx | |
|
XXXXX
XXXXX
CHAIRMAN
and CEO
|
||
|
EXECUTIVE
|
||
|
|
/s/ Xxxxxx Xxxxxxxx | |
| Xxxxxx Xxxxxxxx | ||
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