Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the ____ day of
________, 1997, by and between THE SPORTSMAN'S GUIDE, INC., a Minnesota
corporation (the "COMPANY"), and _________________ ("EMPLOYEE"), under the
following circumstances:
A. Employee has been employed by the Company and has significant
experience in the operation and management of the Company's
business.
B. The Company desires to retain Employee's experience and expertise
for the continued success of the Company's business.
C. The parties desire to have their rights, obligations and duties
specified herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES; STANDARD OF SERVICE. The Company hereby
employs Employee as its ___________________________________________________
___________, with such duties and subject to such enhanced capacities and
titles as may be determined from time to time by the Board of Directors of
the Company (the "BOARD OF DIRECTORS"). Employee hereby accepts such
employment and agrees that while employed by the Company, he shall devote his
full attention and time during normal business hours to the business and
affairs of the Company and to use the Employee's best efforts to perform
faithfully and efficiently such responsibilities.
2. TERM.
(a) TERM. Subject to Section 3 hereunder, the term of this
Agreement shall begin as of the date hereof and shall continue until December
31, ____. Subject to the provisions of Section 3 hereunder, on January 1,
____ and on each January 1st thereafter, the term of this Agreement shall be
automatically extended for one (1) additional year unless, on or before the
October 31st immediately preceding such January 1st, either Employee or the
Company gives written notice to the other of the cessation of further
extensions, in which case no further automatic extensions shall occur.
(b) SURVIVAL OF CERTAIN PROVISIONS. Notwithstanding anything to the
contrary set forth in this Agreement, the provisions contained in this
Section 2(b), Section 3(d) and Sections 5, 6, 7 and 12 of this Agreement
shall survive the termination of this Agreement.
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3. EARLY TERMINATION/COMPENSATION UPON TERMINATION.
(a) DEATH, DISABILITY OR MUTUAL AGREEMENT. This Agreement shall
terminate prior to its stated termination date, and immediately upon the
happening of any of the following events:
(i) the death of Employee;
(ii) the mental or physical disability or incapacity of
Employee, which causes Employee to be unable to perform his duties
hereunder, which such disability or incapacity shall be deemed to have
occurred upon the earlier of (A) Employee becoming entitled to receive
"total disability benefits" (or their substantive equivalent form of
benefits) under the Company's disability plan(s) then in effect; (B) a
determination that Employee has become permanently disabled made by an
independent physician mutually agreed upon by the Company and Employee
in good faith or (C) Employee shall have been unable, unwilling, or
shall have failed to perform his duties hereunder for a period of one
hundred eighty (180) days during any twelve (12) consecutive months;
(iii) execution by the Company and Employee of a written
agreement of termination (which may specify a later effective date of
such termination); or
(iv) December 31 of any year in which Employee attains the age
of 65, at which time Employee shall retire unless otherwise agreed by
the Employee and the Company.
(b) BY THE COMPANY.
(i) The Company may terminate this Agreement upon the giving of
notice by the Company to Employee of termination for Cause. For this
purpose, "Cause" shall mean:
(A) the willful and continued failure by Employee to (I)
comply with the terms of this Agreement, (II) comply with policies of
the Board of Directors of the Company or (III) otherwise substantially
perform his duties with the Company (other than as a result of
disability of the type described in Section 3(a)(ii)); or
(B) the willful engaging by Employee in conduct which is
demonstrably and materially injurious to Company, monetarily or
otherwise; or
(C) (I) dishonesty which is materially injurious to the
Company, including, without limitation, the misappropriation of Company
trade
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secrets or customer mailing lists, (II) intoxication during
normal working hours, (III) actions involving moral turpitude, (IV)
addiction to or abuse of drugs (the effect of which is materially
injurious to the Company) or (V) conviction of a felony.
(ii) The Company may terminate this Agreement without cause upon
one hundred eighty (180) days' written notice to Employee provided Company
complies with the provisions of Section 3(d)(iv).
(c) BY EMPLOYEE. Employee may terminate this Agreement in accordance
with the following:
(i) immediately upon the giving of notice by Employee to the
Company of termination for Good Reason. For this purpose, "GOOD REASON"
shall mean any one or more of the following:
(A) an adverse change in Employee's status or position
as an executive officer of the Company including, without
limitation, any adverse change in Employee's status or position as
a result of a material diminution in Employee's duties,
responsibilities or authority as of the date of this Agreement (or
any status or position to which Employee may be promoted after the
date hereto or the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable judgment, are
inconsistent with Employee's status or position, or any removal of
Employee from or any failure to reappoint or reelect Employee to
such position as an officer of the Company (except in connection
with any termination of Employee's employment described in Sections
3(a) or (b));
(B) a reduction by the Company in Employee's Base Salary
(as hereinafter defined) as in effect immediately prior to the date
of this Agreement or as the same may be increased from time to time
or a change in the eligibility requirements or performance criteria
under any Plan (as hereinafter defined) under which Employee is
covered immediately prior to the date of this Agreement, which such
change is materially adverse to Employee;
(C) without replacement by a Plan providing benefits to
Employee equal to or greater than those discontinued, the failure
by the Company to continue in effect, within its maximum stated
term, any Plan in which Employee is participating or the taking of
any action by the Company that would materially and adversely
affect Employee's participation or materially reduce Employee's
benefits under any Plan;
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(D) the taking of any action by the Company that would
materially and adversely affect the physical conditions existing
immediately prior to the date of this Agreement in or under which
Employee performs his employment duties;
(E) the Company's announcement of plans to relocate or
undertaking of efforts to relocate its executive offices
(including, without limitation, the offices of Employee) to a
location outside of the Minneapolis/St. Xxxx metropolitan area;
(F) failure by the Company to obtain from any successor
in interest thereto assent to the terms of this Agreement.
Notwithstanding any provision in this Section 3(c) to the contrary, Good Reason
shall not include any reduction in bonus amounts paid or options or other
benefits granted to Employee based on the operating performance and/or financial
condition of the Company.
(ii) at any time upon one hundred eighty (180) days' prior
written notice by Employee to the Company.
(d) COMPENSATION UPON TERMINATION. Upon termination of Employee's
employment, Employee shall receive the following:
(i) DEATH OR DISABILITY. Upon any termination of Employee's
employment described in Sections 3(a)(i) or 3(a)(ii), the Employee
shall, within ten (10) days of such termination, receive the Base Salary
specified in Section 4 of this Agreement through the date of such
termination, and without further action by the Board of Directors or any
committee thereof, shall further receive, within ninety (90) days of
such termination, a lump sum payment equal to twelve (12) months of the
monthly Base Salary then being received by Employee; such benefits to be
at least partially funded through the Company's purchase of life and
disability insurance provided that the Company's failure to obtain
and/or maintain any such insurance shall not relieve the Company of any
obligation under this Section 3(d)(i). In addition, Employee shall be
paid a pro rata portion (based on the date of termination) of the bonus
that would have been payable to the Employee under the Company's bonus
plan in effect for such year, but for the termination of Employee's
employment. In making the determination as to the amount of bonus for
which Employee is eligible, the Company and members of its Board of
Directors and/or management charged with making such determination shall
calculate the amount of such bonus as if Employee had achieved all
subjective performance standards applicable to such determination but
otherwise based on the actual operating performance and financial
condition of the Company. Any such bonus payable under this Section
3(d)(i)
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shall be payable at the time of and in accordance with the terms and
conditions governing the payment of bonuses to other members of the
Company's senior management employees.
(ii) TERMINATION FOR RETIREMENT, FOR CAUSE OR VOLUNTARY
TERMINATION (OTHER THAN FOR GOOD REASON). Upon any termination of
employment described in Sections 3(a)(iv), 3(b) or 3(c)(ii), Employee
shall be entitled to receive the Base Salary, specified in Section 4 of
this Agreement through the date of such termination, and he shall not be
entitled to additional or further salary; provided that upon a
termination described in Section 3(a)(iv), all options to purchase
shares of the Company held by the Employee shall become vested and may
be exercised at any time until such options expire unless otherwise
cancelled pursuant to Section 3(e)(iii).
(iii) TERMINATION BY MUTUAL AGREEMENT. If Employee's employment
under this Agreement is terminated by the mutual agreement of Employee
and the Company, the Company shall provide Employee with the payments
and benefits specified in such Agreement.
(iv) TERMINATION FOR GOOD REASON OR WITHOUT CAUSE OR COMPANY
FAILURE TO RENEW AGREEMENT. Upon any termination of employment by
Employee for Good Reason as described in Section 3(c)(i) (other than
Good Reason arising after a Substantial Event), any termination of
employment by the Company pursuant to Section 3(b)(ii), or any failure
or refusal by the Company to permit the automatic renewal of this
Agreement in accordance with Section 2(a) hereof (other than a failure
to renew arising within twenty-four (24) months after a Substantial
Event), the Company, shall, without further action by the Board of
Directors or any committee thereof and within ten (10) days of such
termination, make a lump sum payment to Employee equal to twenty-four
(24) months of the monthly Base Salary then being received by Employee
and shall maintain in full force and effect, for a period of twenty-four
(24) months commencing on the date of such termination, all Plans
relating to medical, dental, accident and disability insurance then in
effect, at the same levels and coverages as senior management employees
were receiving immediately prior to Employee's termination. In
addition, Employee shall be paid a pro rata portion (based on the date
of termination) of the bonus that would have been payable to the
Employee under the Company's bonus plan in effect for such year, but for
the termination of Employee's employment. In making the determination
as to the amount of bonus for which Employee is eligible, the Company
and members of its Board of Directors and/or management charged with
making such determination shall calculate the amount of such bonus as if
Employee had achieved all subjective performance standards applicable to
such determination but otherwise based on the actual operating
performance and financial
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condition of the Company. Any such bonus payable under this Section
3(d)(iv) shall be payable at the time of and in accordance with the terms
and conditions governing the payment of bonuses to other members of the
Company's senior management employees.
(v) TERMINATION BY COMPANY FOLLOWING SUBSTANTIAL EVENT OR
TERMINATION BY EMPLOYEE FOR GOOD REASON FOLLOWING SUBSTANTIAL EVENT. In
the event that at any time within twenty-four (24) months after the
occurrence of a Substantial Event, the Company terminates Employee's
employment pursuant to Section 3(b)(ii), the Company fails to permit the
renewal of this Agreement by its terms or the Employee terminates
employment for Good Reason, the Employee shall receive the payments and
other compensation and benefits described in Section 5(c) hereof.
(e) In consideration of this Agreement and to induce the Company to
grant to Employee certain stock options,
(i) in the event that this Agreement is terminated pursuant to
Sections 3(b)(i)(C) or 3(c)(ii), all options (granted on or after July
1, 1997) to purchase shares of Common Stock of the Company then held by
Employee shall be cancelled and forfeited.
(ii) in the event that this Agreement is terminated pursuant to
Section 3(b)(i)(A) or 3(b)(i)(B), all options to purchase shares of
Common Stock of the Company then held by Employee which have vested as
of the date of such termination shall be and remain exercisable for a
period of thirty (30) days; at which time, if not exercised, such
options will expire. All other such options which have not vested as of
the date of such termination shall be immediately cancelled and
forfeited.
(iii) notwithstanding any other provision to the contrary
herein, in the event Employee breaches or otherwise violates the
covenants contained in Section 7(b), regardless of the reason for
termination, all options (granted on or after July 1, 1997) to purchase
shares of Common Stock of the Company then held by Employee shall be
cancelled and forfeited and all shares of Common Stock previously
acquired by Employee upon the exercise of such options granted by the
Company shall be sold to the Company at the exercise price of the option
(or if such shares are not then owned, Employee shall pay to the Company
an amount equal to any economic gain realized on the sale). All shares
of Common Stock issued upon exercise of any option held by Employee
shall be endorsed with a legend evidencing the restrictions described in
this Section 3(e)(iii).
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4. COMPENSATION, BENEFITS AND EXPENSES.
(a) BASE SALARY. For all services rendered under this Agreement
during the term of Employee's employment, the Company shall pay Employee a
minimum base salary at an annual rate that is not less than the annual rate
currently being paid Employee, or at such higher annual rate as may be from
time to time determined by action of the Company's Board of Directors or
committee thereof (the "BASE SALARY"). If the Base Salary is increased from
time to time during the term of this Agreement, the increased amount shall
then constitute the Base Salary for the remainder of the term and any
extensions thereof, subject to any subsequent increases. Except as otherwise
set forth herein, the Base Salary shall be payable in accordance with the
Company's customary payroll procedures.
(b) OTHER COMPENSATION AND BENEFITS. In accordance with their
terms, Employee shall be entitled to participate in any bonus or incentive
compensation agreements, plans, programs, policies or arrangements sponsored,
maintained or contributed to by the Company, to which the Company is a party
or under which employees of the Company are covered, including, without
limitation, any stock option, restricted stock or any other equity-based
compensation plan, annual or long-term incentive (bonus) plan and any
employee benefit plan such as a thrift, pension, profit sharing, deferred
compensation, medical, dental, disability, accident, life insurance,
automobile allowance, perquisite, fringe benefit, vacation, sick or parental
leave, severance or relocation plan or policy or any other agreement, plan,
program, policy or arrangement intended to benefit employees or executive
officers of the Company (collectively, "PLANS" and each a "PLAN").
(c) BUSINESS EXPENSES. During the term of Employee's employment
under this Agreement, the Company shall, in accordance with, and to the
extent of, its uniform policies in effect from time to time, bear all
ordinary and necessary business expenses incurred by Employee in performing
his duties hereunder including, without limitation, all travel, lodging, meal
and entertainment expenses while away from home on business in the service of
the Company, provided that Employee accounts for such expenses to the
Company, in the manner reasonably prescribed from time to time by the Company.
5. CERTAIN RIGHTS UPON A SUBSTANTIAL EVENT.
(a) SUBSTANTIAL EVENT DEFINED. For purposes of this Agreement, a
"Substantial Event" shall mean the following events:
(i) the Company sells, transfers, or otherwise disposes for
value all or substantially all of its assets;
(ii) the Company's shareholders authorize the Company to become
party to a merger, consolidation, sale, of
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assets or other reorganization as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or
event constitute less than a majority of the Board of Directors thereafter;
or
(iii) a tender offer is consummated for the acquisition of fifty
percent (50%) or more of the Company's issued and outstanding voting
capital stock.
(b) EVENTS OCCURRING UPON A SUBSTANTIAL EVENT. Immediately upon
the occurrence of a Substantial Event, without any action by the Board of
Directors or any committee thereof, all outstanding options granted as of
such date to Employee under the Company's 1996 Stock Option Plan or any
subsequent plan covering the grant of "incentive stock options" as defined
under Section 422 of the Code shall, to the extent not then exercisable,
become immediately exercisable in full and shall remain exercisable during
the remaining term thereof, whether or not Employee remains employed by the
Company.
(c) TERMINATION OF EMPLOYMENT OR FAILURE TO RENEW FOLLOWING
SUBSTANTIAL EVENT. If, (i) during any time within twenty-four (24) months
following a Substantial Event the Company shall (A) terminate Employee's
employment other than for Cause or the death, disability or retirement of
Employee or (B) fail or refuse to permit the renewal of the term of this
Agreement by its terms, or (ii) at any time within twenty-four (24) months
following a Substantial Event, Employee shall terminate this Agreement for
Good Reason, then, and without further action by the Board of Directors or
any committee thereof, the Company shall, within ten (10) days of such
termination, make a lump sum payment to Employee equal to thirty-six (36)
months of the monthly Base Salary then being received by Employee and shall
maintain in full force and effect, for a period of three (3) years commencing
on the date of such termination, all Plans relating to medical, dental,
accident and disability insurance then if effect, at the same levels and
coverages as Employee was receiving on the date immediately prior to the
Substantial Event. In addition, Employee shall be paid a pro rata portion
(based on the date of termination) of the bonus that would have been payable
to the Employee under the Company's bonus plan in effect for such year, but
for the termination of Employee's employment. In making the determination as
to the amount of bonus for which Employee is eligible, the Company, and
members of its Board of Directors and/or management charged with making such
determination shall calculate the amount of such bonus as if Employee had
achieved all subjective performance standards applicable to such
determination but otherwise based on the actual operating performance and
financial condition of the Company. Any such bonus payable under this
Section 5(c) shall be payable at the time of and in accordance with the terms
and conditions governing the payment of bonuses to other members of the
Company's senior management employees.
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6. TAXES.
(a) WITHHOLDING. All payments under this Agreement shall be
subject to reduction in the amount of any income, withholding, social
security, disability insurance, or similar taxes of payments which the
Company may be required or authorized to deduct by law or custom.
(b) EXCESS PARACHUTE PAYMENTS. Notwithstanding anything to the
contrary set forth in or construed under this Agreement, if any of the
payments or benefits provided for in this Agreement, together with any other
payments which Employee has the right to receive from the Company or any
corporation which is a member of an "affiliated group" (as defined in Section
1504(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to Section 1504(b) of the Code) of which the Company is a
member, constitute an "excess parachute payment" (as defined in Section
28OG(b) of the Code), the payments pursuant to this Agreement shall be
increased to the extent necessary to reimburse Employee (on a federal, state
and local income and employment after-tax basis) for the amount of the excise
tax, if any, imposed against Employee under Section 4999 of the Code, or any
applicable state and/or local counterpart thereto. The determination as to
whether any increase in the payments under this Agreement pursuant to this
Section 6(b) is necessary shall be made by Employee in good faith and such
determination shall be conclusive and binding upon the Company. The
increased payments required under this Section 6(b) shall be promptly paid to
Employee upon written demand therefor.
7. CONFIDENTIAL INFORMATION AND NONSOLICITATION.
(a) PROHIBITIONS AGAINST DISCLOSURE. Employee agrees that upon
termination of his employment with the Company for whatever reason, he will
deliver to the Company all copies of or information with respect to the
Company or its business which is not publicly known and which is in his
possession. Employee further agrees that, without the express written
consent of the Company, he will not, at any time during the term of this
Agreement or for a period of five (5) years thereafter, divulge, furnish,
disclose or make accessible to any person, firm, organization or corporation,
or use in any manner whatsoever to the detriment of the Company any such
information or materials with respect to the Company, or any aspect of its
business or operations, which are not already lawfully in the public domain.
(b) The Employee agrees that he shall not, without the express
prior written consent of the Company, at any time from the date of this
Agreement and for a period of one (1) year from the termination of Employee's
employment, for any reason, with the Company, directly or indirectly,
solicit, entice, call upon or approach any employees of the Company to enter
the employment of the Employee or any employer or business with which the
Employee is associated or in which the Employee has a financial interest.
Ownership by the Employee of less than five percent
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(5%) of the outstanding voting common stock, without any other action by or
on behalf of the Employee, of any publicly held corporation shall not
constitute a violation of this Section 7(b).
(c) SPECIFIC PERFORMANCE. Employee acknowledges that the
information received by him in the course of his employment with the Company
is of such character as to render the same unique and, therefore, agrees
disclosure thereof in violation of the covenants of Sections 7(a) or 7(b)
would be of irreparable damage to the Company. Accordingly, Employee agrees
and consents that in the event of any action or proceeding shall be
instituted by the Company to enforce any provision of this Agreement,
Employee waives the claim or defense in such action that there is an adequate
remedy at law available to the company, and Employee shall not urge in any
such action or proceeding the claim or defense that such remedy at law
exists. The parties agree that the Company's remedies for breach of this
Agreement expressly described herein shall be cumulative and the seeking or
obtainment of injunctive relief shall not preclude a claim or award for
damages or other relief as provided for herein or as otherwise may be
available to the Company.
8. NOTICES. All notices hereunder shall be in writing and shall be
deemed to have been given at the time when mailed in any general or branch
United States Post Office enclosed in a certified or registered postpaid
envelope addressed to the respective party at the address set forth below, or
at such changed address as either party may have fixed by notice; provided,
however, that any notice or change of address shall be effective only upon
receipt:
Address of Company: The Sportsman's Guide, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx Xx. Xxxx, XX 00000
with a copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxxxxxx, Xxxxxx & Xxxxx P.L.L.
00 Xxxxxxxxxx Xxxxx, X.X.
Xxxxx 0000
Xxxxxx, XX 00000
Address of Employee: [Employee's Name]
___________________
___________________
9. DIVISIBILITY. The provisions of this Agreement are divisible. If
any provision shall deemed invalid or unenforceable as to any periods of
time, territory or business activities, such provisions shall be deemed
limited to the extent necessary to render it valid and enforceable. If any
provision shall be deemed invalid or unenforceable to in other extent, the
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remaining provisions of this Agreement shall not be rendered unenforceable as
a result thereof.
10. WAIVER. Failure by either party to insist upon strict compliance
with any of the terms, conditions or conditions hereof shall not be deemed a
waiver of such term, covenant or condition nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.
11. CAPTIONS. The captions used in connection with this Agreement are
for reference purposes only and shall not be construed as a part of this
Agreement.
12. SUCCESSORS AND ASSIGNS.
(a) SUCCESSORS AND ASSIGNS OF THE COMPANY. This Agreement shall
be binding upon and inure to the benefit of any successor of the Company and
any such successor shall absolutely and unconditionally assume all of the
Company's obligations hereunder. Upon Employee's written request, the
Company shall seek to have any such successor, by agreement in form and
substance satisfactory to Employee, assent to the fulfillment by the Company
of its obligations hereunder.
(b) SUCCESSORS AND ASSIGNS OF EMPLOYEE. This Agreement and all
rights of Employee hereunder shall inure to the benefit of and be enforceable
by Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Employee should
die while any amounts would still be payable to Employee hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to Employee's devisee, legatee or other designee
or, if there be no such designee, to Employee's estate. Except as otherwise
expressly set forth in this Section 12(b), Employee may not assign this
Agreement, in whole or in part, without the prior written consent of the
Company.
13. COMPLETE AGREEMENT AND GOVERNING LAW. This Agreement supersedes
all prior agreements written or oral with respect to the subject matter
hereof. This Agreement is intended as a complete and exclusive statement of
the terms of the Agreement between the parties with respect to its subject
matter. This Agreement may be changed or terminated only in writing executed
by each party and shall be governed by the laws of the State of Minnesota.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE SPORTSMAN'S GUIDE, INC.
By:__________________________
Title:_______________________
EMPLOYEE:
_____________________________
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