CONSULTING AND SEPARATION AGREEMENT
This CONSULTING AND SEPARATION AGREEMENT (this "Agreement"') is
made and entered into on August 13, 1998 to be effective as of July 28,
1998 (the "Effective Date"') by and between Sport Supply Group, Inc., a
Delaware corporation (the "Company") and Xxxxx X. Xxxxxxxxxx
("Xxxxxxxxxx").
WHEREAS, the Company and Xxxxxxxxxx entered into the following
agreements: (i) Employment Agreement dated as of February 28, 1991, as
amended by Amendment No. 1 to Employment Agreement and Severance
Agreement dated January 23, 1997 to be effective as of December 11, 1996
(the "Employment Agreement"); (ii) Severance Agreement dated as of
February 28, 1991, as amended by Amendment No. 1 to Employment Agreement
and Severance Agreement dated January 23, 1997 to be effective as of
December 11, 1996 (the "Severance Agreement"); and (iii) several Stock
Option Agreements, as amended, the terms of which are summarized on
Exhibit A attached hereto (the "Stock Option Agreements"); the
Employment Agreement, Severance Agreement and Stock Option Agreements
are collectively referred to herein as the "Xxxxxxxxxx Agreements").
WHEREAS, except as otherwise set forth herein, the Company and
Xxxxxxxxxx desire to terminate (i) their relationship as employer and
employee, respectively, and (ii) the Xxxxxxxxxx Agreements, and enter
into this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and
Xxxxxxxxxx agree as follows:
1. Resignation. Xxxxxxxxxx hereby resigns as an officer, director and
employee of the Company and Athletic Training Equipment Company, Inc., a
Delaware corporation and wholly-owned subsidiary of the Company
("ATEC"), effective upon the Effective Date.
2. Consulting Agreement. Xxxxxxxxxx hereby agrees to provide
consulting services to the Company pursuant to the following terms:
a. Extent of Services. Xxxxxxxxxx agrees to provide consulting
services up to 40 hours per month to the Company from August 1, 1998
through July 31, 2000 (the "Consulting Period") and shall report to the
Company's senior executive officers. During such time, Xxxxxxxxxx
agrees to promptly respond to all reasonable business-related requests
from the Company's senior executive officers, and perform such duties or
responsibilities as are reasonably requested by any of the Company's
senior executive officers, including without limitation, assisting the
Company in all of its current and future litigation proceedings.
Xxxxxxxxxx further acknowledges and agrees that he is not and will not
represent himself as an agent of the Company or its Affiliates (as
defined in Section 22 below) and shall have no authority to bind the
Company or its Affiliates in any manner without the prior written
authorization of a senior executive officer of the Company. Xxxxxxxxxx
further agrees to uphold his duty of loyalty to the Company, its
management, and its business and proprietary interests during the
Consulting Period. The temporary inability of Xxxxxxxxxx to render
services to the Company by reason of other employment, vacation, partial
or permanent disability or incapacity shall not constitute a failure by
Xxxxxxxxxx to perform his obligations hereunder and shall not be deemed
a breach or default by him hereunder, so long as Xxxxxxxxxx responds to
the Company's request and provides such consulting services within a
reasonable period of time thereafter.
b. Compensation. As compensation for the performance of
Xxxxxxxxxx'x services as a consultant hereunder on a monthly basis, the
Company shall pay Xxxxxxxxxx an amount equal to $25.00 per hour for each
hour of consulting services actually rendered by Xxxxxxxxxx in
accordance with the terms of this Agreement (the "Consulting
Compensation"). The Consulting Compensation will accrue and be payable
to Xxxxxxxxxx in arrears on a monthly basis in accordance with the
payroll practices of the Company in effect from time to time during the
Consulting Period, less such amounts required to be withheld or deducted
therefrom. In addition, the Company will reimburse Xxxxxxxxxx for his
reasonable travel and business expenses incurred in connection with
providing consulting services hereunder and in accordance with the
Company's policy on travel and entertainment, a copy of which has
previously been provided to Xxxxxxxxxx. All requests for payment and
reimbursement shall be in writing and supported by invoices, receipts or
similar documentation, and shall otherwise be in compliance with the
Company's policy regarding reimbursement.
3. Other Benefits. Subject to the terms and conditions of this
Agreement, the Company will provide Xxxxxxxxxx with the following
(`` Other Benefits''):
a. Cash Payments. The Company will pay Xxxxxxxxxx twenty-four
(24) equal monthly installments of $9,709.73 no later than the last day
of each calendar month, with the first payment being made on August 31,
1998 and the last payment being made on July 31, 2000; provided,
however, such payments shall cease upon the earlier of the termination
of this Agreement, Xxxxxxxxxx'x death or as provided in Section 5 below.
b. Automobile. Xxxxxxxxxx may use his Company car until the
earlier of the expiration date of the lease (December 18, 1998) or until
the Company requests Xxxxxxxxxx to return the car, at which time he
agrees to return such car and all property relating thereto (including
the keys) in clean and good working condition to the Manager of Human
Resources within 5 days of the Company's request.
4. Covenants and Agreements of Xxxxxxxxxx. Xxxxxxxxxx acknowledges
and agrees that the Other Benefits set forth in Section 3 hereof and the
other consideration he has accepted and received pursuant to this
Agreement are not otherwise due to him. In consideration for the
payments and other consideration reflected in Section 3 of this
Agreement, the receipt and sufficiency of which are hereby acknowledged,
Xxxxxxxxxx voluntarily and knowingly:
a. Nondisparagement of Company. Agrees that after the date
hereof, he will not say, publish or do anything that casts the Company
or any of its Affiliates, any of its products or the industry or
management of the Company or any of its Affiliates in an unfavorable
light, or disparage or injure the Company's or any of its Affiliate's
goodwill, business reputation or relationship with existing or potential
suppliers, vendors, customers, employees, contractors, investors or the
financial community in general, or the goodwill or business reputation
of the Company's or any of its Affiliate's employees, officers,
directors, consultants or contractors. Notwithstanding the foregoing,
nothing herein shall prohibit or hinder Xxxxxxxxxx from truthfully
testifying in a hearing, deposition or other legal proceeding in which
Xxxxxxxxxx could be criminally or civilly sanctioned for the failure to
respond truthfully.
b. Release. Hereby waives, releases and forever discharges and
covenants not to xxx the Company and/or its predecessors; successors;
partners; Affiliates, parents, or subsidiaries; assigns, employee
retirement, health and welfare benefit plans and the fiduciaries
thereof; officers; administrators; employees; former employees;
directors; trustees; shareholders; representatives; attorneys; and
agents, from all claims, liabilities, demands, actions, or causes of
action, in contract, tort or otherwise, including but not limited to all
wrongful discharge claims, all tort, intentional tort, personal injury,
negligence, gross negligence, defamation, and contract claims, any claim
for attorneys' fees, or any claim arising from any federal, state or
local civil rights and/or employment legislation (including but not
limited to Title VII of the Civil Rights Act of 1964, as amended by the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of
1967, the Texas Commission on Human Rights Act, the Texas Payday Act,
the Americans with Disabilities Act, and any claim for benefits,
including but not limited to those arising under the Employee Retirement
Income Security Act of 1974 ("ERISA"), known or hereafter discovered
by Xxxxxxxxxx, on account of or connected with or growing out of,
directly or indirectly, Xxxxxxxxxx'x employment and resignation thereof
or any act or omission by the Company or its agents occurring on or
before the Effective Date. By execution hereof, Xxxxxxxxxx represents,
covenants, and warrants that no claims released or waived herein have
been previously conveyed, assigned, or transferred in any manner,
whether in whole or in part, to any persons, entity, or other third
party. Xxxxxxxxxx expressly represents that he is competent and
authorized to release and/or waive any claim he may have against the
Company on any basis whatsoever.
c. Acknowledgment. Acknowledges that as of Effective Date: (i)
Xxxxxxxxxx'x employment by the Company is lawfully and voluntarily
terminated; (ii) Xxxxxxxxxx has received all due and owing pay for all
labor and services performed by him for the Company; (iii) he has
received or been compensated for all salary, vacation time, sick leave,
compensatory time, reimbursable expenses, car allowance, personal
injuries, bonuses, profit-sharing, retirement, health, welfare, pension,
all rights under all employee benefits to which he may have been
entitled as of the Effective Date; (iv) he will promptly reimburse the
Company for all personal expenses incurred by Xxxxxxxxxx, including,
without limitation, travel advances; and (v) there are no other
agreements, whether written or oral, between Xxxxxxxxxx and the Company,
other than the Xxxxxxxxxx Agreements.
d. Termination of Stock Option Agreements. Xxxxxxxxxx
acknowledges that he has been paid in full pursuant to the Severance
Agreement and Employment Agreement and that the Company owes him no
additional monies or other obligations under such agreements.
Xxxxxxxxxx acknowledges that, in consideration of the payments and other
consideration reflected in Section 3 of this Agreement, the Stock
Option Agreements are deemed cancelled and terminated as of the
Effective Date and are no longer in force or effect. Xxxxxxxxxx further
agrees to surrender the Stock Option Agreements to the Company.
e. Noncompetition; Confidentiality; Etc. Notwithstanding
anything to the contrary contained herein, the terms and provisions of
Sections 5 (Confidentiality), 6 (Noncompetition), 7 (Injunctive Relief),
8(b) and (g) (Termination), 11 (Severability), 12 (Waiver), 13
(Governing Law) and 15 (Attorneys Fees) of the Employment Agreement
shall survive termination of the Employment Agreement and the parties
hereto agree and confirm that such provisions are in full force and
effect as if the Employment Agreement had not been terminated.
f. Litigation Assistance. Agrees to assist the Company, at the
Company's request, with respect to all of the Company's litigation
proceedings and claims made against the Company and its Affiliates by
Xxxxxx X. Xxxxx and agrees to promptly respond to all business related
requests from the Company relating thereto. Xxxxxxxxxx understands and
agrees that any and all information pertaining to any of the Company's
litigation is confidential and proprietary, that he will not discuss any
issues relating to any litigation with any third party (other than
representatives of the Company) without the prior written consent of the
Company. Notwithstanding the foregoing, nothing herein shall prohibit
or hinder Xxxxxxxxxx from truthfully testifying in a hearing, deposition
or other legal proceeding in which Xxxxxxxxxx could be criminally or
civilly sanctioned for the failure to respond truthfully.
5. Conditions.
It is expressly understood that the obligations and
agreements of the Company pursuant to this Agreement are expressly
subject to the continuing performance by Xxxxxxxxxx of the obligations,
covenants and agreements assumed by him pursuant hereto. In this regard
and not by way of limitation, the obligations, covenants and agreements
of the Company pursuant to Sections 2 and 3 are expressly conditioned on
Xxxxxxxxxx continuing performance of the obligations and agreements
described in Sections 2, 3, 4, 6, 7, 8, 9 and 13 hereof. In the event
the Company's Board of Directors in good faith determines (after
providing Xxxxxxxxxx and counsel with notice and a reasonable
opportunity to appear before the Board of Directors), in its sole
discretion, that Xxxxxxxxxx has engaged in any activity that is
materially inimical, contrary, detrimental or harmful to the Company's
interests or otherwise breached any representation, agreement, covenant
or obligation contained herein (and such breach is not cured within ten
(10) days of Xxxxxxxxxx'x receipt of a written notice by the Company
alleging such breach in reasonable detail), the agreements, covenants
and obligations of the Company pursuant hereto shall terminate and be of
no further force or effect, without prejudice to any other right the
Company may have hereunder to performance of the agreements and
obligations assumed by Xxxxxxxxxx hereunder. Notwithstanding the
foregoing, the ten (10) day cure period described in the immediately
preceding sentence will not apply if the Company's Board of Directors
determines that Xxxxxxxxxx breached Sections 2, 4 and/or 13 of this
Agreement. In the event the Company fails to pay Xxxxxxxxxx any amounts
owing hereunder other than for a reason set forth in the third sentence
of this Section (and such failure is not cured within ten (10) days of
the Company's receipt of a written notice by Xxxxxxxxxx alleging such
failure), the Noncompetition provisions referenced in Paragraph 4(e)
hereof shall be terminated and of no further force or effect.
6. Return of Property. Xxxxxxxxxx further agrees to return to the
Company (Attention: Manager of Human Resources), simultaneously with the
execution of this Agreement, all computers, computer disks or other
magnetic storage data, facsimile machines, telephones, credit cards,
calling cards, keys, security codes, and other property of the Company
in Xxxxxxxxxx'x possession or control and all documents, records,
notebooks, mailing lists, business proposals, contracts, agreements and
other repositories containing information concerning the Company or its
business, whether copies or originals (including but not limited to all
correspondence, client and/or customer lists, vendor agreements, minutes
or agenda(s) for any meeting, hand-written notes, journals, computer
printouts or programs, office memoranda, other tangible items or
materials). Notwithstanding the foregoing, the parties agree Xxxxxxxxxx
has paid for the following items and may retain such items so long as
such items do not contain any of the Company's confidential information
and Xxxxxxxxxx signs the Airpass Agreement dated August 3, 1998:
Computer (Intel PII and accessories, Invoice No. 8700807-IN)
Computer Printer (HP Laserjet 6 LSE, Invoice No. 137432191)
Facsimile Machine (Sharp Plain Paper Fax, Catalog No. G20-UX1100)
American Airlines Airpass No. H007722
7. Revocation of this Agreement. Xxxxxxxxxx further acknowledges and
agrees that he has the right to discuss all aspects of this Agreement
with a private attorney, and that he has done so to the extent he
desires. Xxxxxxxxxx acknowledges and understands that he has twenty-one
(21) days to sign this Agreement after receipt of it in order to fully
consider all of its terms. Xxxxxxxxxx further acknowledges and
understands that this Agreement may be revoked by him in writing within
seven (7) days from the date he signs it, and that this Agreement shall
not become effective or enforceable until eight (8) days after
Xxxxxxxxxx has signed this Agreement.
8. Taxes. Xxxxxxxxxx further acknowledges and agrees that he shall be
solely responsible for the payment of all his federal, state and local
taxes, interest and penalties, if any, which are or may become due on
the amount paid to him under this Agreement, and agrees to defend,
indemnify and hold the Company harmless from any tax claims on that
amount.
9. Full and Final Settlement. This Agreement is contractual, not a
mere recital, and is a full and final settlement of any and all claims
each party hereto may have against the other and its affiliates on any
basis whatsoever, and shall be binding on the each party hereto and
their heirs, personal representative(s), estate, successors and assigns.
10. Entire Agreement. This Agreement and the provisions of the
Employment Agreement referenced in Section 4(e) hereof) constitute the
entire understanding Xxxxxxxxxx has with the Company and supersedes any
previous agreement, whether oral or written, between the Company and
Xxxxxxxxxx. No other promises or agreements regarding the matters
addressed herein shall be binding unless they are in writing and signed
by Xxxxxxxxxx and the Company.
11. No Continuing Waiver. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. Any waiver must be in writing and signed by the
party entitled to performance.
12. Attorneys' Fees. If any civil action, whether at law or in equity,
is necessary to enforce or interpret any of the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees,
court costs and other reasonable expenses of litigation, in addition to
any other relief to which such party may be entitled.
13. Confidentiality. Xxxxxxxxxx further agrees to keep the terms of
this Agreement wholly and completely confidential. Further, Xxxxxxxxxx
agrees not to disclose the amount, terms, substance, or contents of this
Agreement to any person or persons, excluding only his spouse, his
attorneys, his tax advisors and any government agency to which he is
required by law to reveal the terms of this Agreement. In addition,
Xxxxxxxxxx agrees not to use or disclose any Confidential Information as
defined in this paragraph. Xxxxxxxxxx further represents and warrants
that none of the Company's Confidential Information is in his possession
or control, including without limitation, on the computer or diskettes
in his possession or control. As used herein, "Confidential
Information" means all information concerning the Company or concerning
any subsidiary, division or affiliate (as defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended) of the Company that is not
in the public domain (including, without limitation, any information
regarding employees or former employees and their families, including
information pertaining to compensation or medical conditions).
14. Injunctive Relief. Each party acknowledges that a remedy at law
for any breach or attempted breach of this Agreement will be inadequate,
agrees that each party will be entitled to specific performance and
injunctive and other equitable relief in case of any breach or attempted
breach and agrees not to use as a defense that any party has an adequate
remedy at law. This Agreement shall be enforceable in a court of
equity, or other tribunal with jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for and
granted in connection herewith. Such remedy shall not be exclusive and
shall be in addition to any other remedies now or hereafter existing at
law or in equity, by statute or otherwise. No delay or omission in
exercising any right or remedy set forth in this Agreement shall operate
as a waiver thereof or of any other right or remedy and no single or
partial exercise thereof shall preclude any other or further exercise
thereof or the exercise of any other right or remedy.
15. No Admission of Liability. This Agreement does not constitute an
admission of liability of any kind by the Company or Xxxxxxxxxx.
16. Governing Law. This Agreement shall be interpreted by, governed
by, and enforced under the substantive laws (and not the choice of law
provisions) of the State of Texas, except where preempted by federal
law.
17. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if
mailed to the party to whom notice is to be given, properly addressed,
certified mail, return receipt requested, postage prepaid, as follows:
If to the Company:
Sport Supply Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000
Attention: President
If to Xxxxxxxxxx:
Xxxxx X. Xxxxxxxxxx
13631 Ashridge
Xxxxxx, Xxxxx 00000
with a copy to:
Xxxxx X. Xxxx
Wood, Exall & Bonnet, L.L.P.
0000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
18. Counterparts. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute but one and the same agreement.
19. Jurisdiction. The parties hereto hereby irrevocably submit to the
nonexclusive jurisdiction of the state and federal courts of the State
of Texas and agree and consent that service of process may be made upon
each party in any proceeding arising out of this Agreement by service of
process as provided by Texas law. All parties hereto hereby irrevocably
waive, to the fullest extent permitted by law, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in the
District Court of Dallas County, State of Texas, or in the United States
District Court for the Northern District of Texas, and hereby further
irrevocably waives any claims that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
The parties hereto further agree to designate an agent for service of
process in the City of Dallas in connection with any such suit, action
or proceeding if requested by the other party in contemplation of such a
suit, action or proceeding and deliver to the other party evidence
thereof. The parties hereto hereby irrevocable agree that any
proceeding against any party arising out of or in connection with this
Agreement shall be brought in the District Courts of Dallas County,
Texas, or in the United States District Court for the Northern District
of Texas.
20. Severability. The parties hereto expressly agree that it is not
the intention of any of them to violate any public policy, statutory or
common law rules, regulations, or decisions of any governmental or
regulatory body. If any provision of this Agreement is judicially or
administratively interpreted or construed as being in violation of any
public policy, statutory or common law rules, regulations or decisions
of any governmental or regulatory body, such sections, sentences, words,
clauses or combinations thereof shall be modified to the extent
necessary to make it enforceable and this Agreement shall remain binding
upon the parties hereto.
21. Descriptive Headings. The subject headings of the sections of this
Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
22. Affiliate. When used in this Agreement, the term "Affiliate" shall
mean (1) any corporation or organization of which such person is an
officer, director or partner or is directly or indirectly the beneficial
owner of 10% or more of any class of equity securities or financial
interest therein; or (2) any persons that directly or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the person specified. Any person who is an
Affiliate of any party hereto on the date hereof shall be deemed to be
the Affiliate of such party for purposes of this Agreement, regardless
of whether such person ceases to be an Affiliate of such party after the
date hereof. Any person who at any time after the date hereof becomes
an Affiliate of any party hereto shall be deemed to be the Affiliate of
such party for purposes of this Agreement, regardless of whether such
person was an Affiliate on the date hereof.
23. The Company agrees that after the date hereof, it will not say,
publish or do anything that casts Xxxxxxxxxx in an unfavorable light, or
disparages or injures Xxxxxxxxxx'x goodwill, business reputation or
relationship with investors or the financial community in general. In
addition, the Company hereby waives, releases and forever discharges and
covenants not to xxx Xxxxxxxxxx on account of Xxxxxxxxxx'x employment
with the Company with respect to acts occurring on or before the
Effective Date. By execution hereof, the Company represents, covenants,
and warrants that no claims released or waived herein have been
previously conveyed, assigned, or transferred in any manner, whether in
whole or in part, to any persons, entity, or other third party.
Notwithstanding the foregoing, nothing herein shall prohibit or hinder
the Company from truthfully testifying in a hearing, deposition or other
legal proceeding in which the Company could be criminally or civilly
sanctioned for the failure to respond truthfully.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on August 13, 1998.
SPORT SUPPLY GROUP, INC.
By: /s/ Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxxxxxx
President, Chief Operating Officer Xxxxx X. Xxxxxxxxxx
and Chief Financial Officer
EXHIBIT A
SUMMARY OF OPTIONS
DATE OF EXPIRE NUMBER EXERCISE
GRANT DATE OF OPTIONS PRICE
02/25/91 02/25/01 110,625* $7.60**
06/25/91 06/25/01 6,250* 4.80
02/07/92 02/07/02 18,750* 7.90**
12/28/92 12/28/02 14,375* 6.90
08/12/93 08/12/03 18,750* 10.20**
12/27/93 12/27/98 50,000* 14.10**
05/09/94 05/09/04 25,000 13.125*
*
01/03/95 01/02/05 21,200 10.63**
01/23/97 01/22/07 35,000 7.50
TOTAL 299,950
* Adjusted for March 10, 1994 5:4 Stock Split
Exercise Price reduced to $7.50 per share
