NON-COMPETITION, CONFIDENTIALITY AND SEVERANCE AGREEMENT
This Non-Competition, Confidentiality and Severance Agreement (this
"Agreement") is made as of February 15, 1998, by and between Sport
Supply Group, Inc., a Delaware corporation ("Employer"), and Xxxx Xxxxx
("Employee").
RECITALS:
WHEREAS, Employee has requested that Employer pay Employee a
specified severance amount if Employee is terminated without cause (as
described in Paragraph 1 below) by Employer;
WHEREAS, Employer has agreed to the severance arrangement described
herein so long as Employee agrees to abide by the terms and provisions
of this Agreement.
WHEREAS, but for Employee's promises and representations made
herein, Employer would not have agreed to the payment of severance as
set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements of
the parties herein contained, the parties to this Agreement agree as
follows:
1. Severance.
Employee acknowledges and agrees that Employee is an employee at
will and may be terminated by Employer at any time with or without cause
(as described below). Notwithstanding the foregoing, in consideration
for the promises made by Employee herein, including but not limited to
Employee's agreement regarding non-competition and nondisclosure of
Confidential Information below, Employer agrees as follows: If Employee
is terminated by Employer without cause, Employer agrees to pay Employee
his then current bi-weekly salary (i.e., happening every two weeks) for
a period of twenty-four (24) bi-weekly periods from the date of
termination (less all amounts required to be deducted or withheld
therefrom and all amounts owed or due by Employee to Employer). In
exchange for Employer's agreement to make such severance payments to
Employee and other promises made by Employer herein, Employee agrees
that upon the termination of his employment without cause he will sign
and deliver to Employer a Release in the form of Exhibit A attached
hereto. If Employee revokes the Release pursuant to Section 4 thereof
or otherwise, Employer shall not be obligated to pay any severance to
Employee.
Employee acknowledges that he shall not be entitled to the
severance payments referenced above (but he will continue to be
obligated by all the provisions that survive termination of this
Agreement, including without limitation Sections 2, 3 and 4) if Employee
(i) dies, (ii) resigns, (iii) is absent from employment or unable to
satisfactorily perform his essential job functions, by reason of
physical or mental illness or disability for more than thirty (30) days
in the aggregate in any twelve (12) month period, or (iv) is terminated
for cause. For the purposes of this Agreement, a discharge "for cause"
shall mean a discharge resulting from a determination by Employer that
Employee: (i) has committed a crime involving moral turpitude, including
fraud, theft or embezzlement; (ii) has failed and/or refused to follow
the policies, practices, directives, or orders established by Employer's
Board of Directors; (iii) has committed acts of gross negligence or misconduct
to the detriment of Employer; (iv) has been insubordinate and/or has
persistently failed to perform his duties hereunder; or (v) has breached
any of the terms or provisions of this Agreement (including, but not limited
to, a breach of Section 2, 3 or 4 hereof).
Except as set forth in this Section and/or required by federal or
state law, Employer will have no other obligations to Employee if
Employee is terminated with or without cause.
2. Confidentiality
(a) In exchange for and in consideration for the promises made by
Employee herein, including promises made by Employee regarding
noncompetition in Section 3 herein as well as Employee's agreement to
execute the attached Release in the event of Employee's discharge from
employment without cause, Employer promises and agrees to provide
Employee with confidential, nonpublic information (in addition to any
such information previously obtained by Employee in the course of his
employment) consistent with the duties of an individual in Employee's
position, including but not limited to Employer's customer, supplier,
and distributor lists, trade secrets, plans, manufacturing techniques,
sales, marketing and expansion strategies, and technology and processes
of Employer and/or its affiliates, as they may exist from time to time,
and information concerning the products, services, production,
development, technology and all technical information, procurement and
sales activities and procedures, promotion and pricing techniques and
credit and financial data concerning customers of, and suppliers to,
Employer and/or its Affiliates (referred to hereinafter as
"Confidential Information"). Employee acknowledges that such
Confidential Information constitutes valuable, special and unique assets
of the Employer and that his access to and knowledge of the
Confidential Information is essential to the performance of his duties
under this Agreement. In consideration for Employer's promises herein,
Employee agrees that all Confidential Information previously provided or
known to Employee in the course of his employment with Employer and all
such Confidential Information made available and provided to Employee
pursuant to the terms of this Agreement will be considered Confidential
Information owned by Employer and Employee agrees that Employee will not
(i) disclose any Confidential Information to any person or entity other
than in connection with his employment for Employer in accordance with
Employer's policy, or (ii) make use of any Confidential Information for
his own purposes or for the benefit of any other person or entity, other
than Employer. Employee further represents and warrants that, on or
prior to the date of this Agreement, he has not (i) disclosed any
Confidential Information to any person or entity other than in
connection with his employment for Employer in accordance with
Employer's policy or (ii) made use of any Confidential Information for
his own purposes or for the benefit of any other person or entity, other
than Employer.
(b) Employee acknowledges and agrees that all manuals, drawings,
blueprints, letters, notes, notebooks, reports, financial records
(including, without limitation, budgets, business plans and financial
statements), computers, computer equipment, computer disks, hard drives,
electronic storage devices, books, procedures, forms, documents, records
or paper, or copies thereof, pertaining to the operations or business of
Employer made or received by Employee or made known to him in any way in
connection with his employment and any other Confidential Information
are and will be the exclusive property of Employer. Employee agrees not
to copy or remove any of the above from the premises and custody of
Employer, or disclose the contents thereof to any other person or entity
except in the ordinary course of business consistent with Employer's
policies. Employee acknowledges that all such papers and records will
at all times be subject to the control of Employer, and Employee agrees
to surrender the same upon request of Employer, and will surrender such
no later than any termination of his employment with Employer, whether
voluntary of involuntary.
3. Non-Compete Covenant.
Employee acknowledges that the Confidential Information specified
above is valuable to the Employer and that, therefore, its protection
and maintenance constitutes a legitimate interest to be protected by the
Employer by the enforcement of this covenant not to compete. Therefore,
in consideration for the promises made by Employer herein, including but
not limited to Employer's promises regarding the payment of severance
benefits set forth in Section 1 and the provision of Confidential
Information set forth in Section 2 herein, Employee covenants and agrees
that, (i) during the term of his employment by the Employer (or an
affiliate of Employer) and (ii) for a period commencing upon the
termination of Employee's employment by Employer (or an affiliate of
Employer) and ending upon the first anniversary thereof, Employee will
not, directly or indirectly, either as an individual or as an employer,
employee, consultant, partner, officer, director, shareholder,
substantial investor, trustee, agent, advisor, or consultant or in any
other capacity whatsoever, of any person or entity (other than the
Employer):
(a) conduct or assist others in conducting any business in
any market area in the United States related to the promotion,
marketing, distribution, manufacturing, sourcing, importing and/or sale
of sports related equipment and/or supplies to institutional customers
(including, without limitation, schools, government agencies, military
facilities, athletic clubs, youth sport leagues, recreational
organizations, sporting goods dealers, etc.) or any other business that
generates more than 10% of Employer's revenues at the time of
termination (the "Employer's Business");
(b) recruit, hire, assist others in recruiting or hiring,
discuss employment with or refer to others for employment (collectively
referred to as "Recruiting Activity") any person who is, or within the
24 month period immediately preceding the date of any such Recruiting
Activity was, at any time, an employee of the Employer or its
affiliates; or
(c) (i) communicate to any competing entity or enterprise any
competitive non-public information concerning any past, present or
identified prospective client or customer of, or supplier to, Employer;
or (ii) call on, solicit or hire or attempt to call on, solicit or hire
any of the customers, suppliers, clients, licensors, licensees,
manufacturers, distributors, dealers or independent salespersons of the
Employer or any of its affiliates which are engaged in the Employer's
Business or that conduct business with Employer in the United States; or
induce, attempt to induce or assist any other person or entity in
inducing or attempting to induce, directly or indirectly, any such
customer, supplier, client, licensor, licensee, manufacturer, dealer,
distributor or independent salesperson to discontinue their relationship
with the Employer or its affiliates.
The existence of any claim or cause of action of Employee against
Employer, or any officer, director, or shareholder of Employer, whether
predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Employer of the covenants of Employee
contained in this Section 3. In addition, the provisions of this
Section 3 shall continue to be binding upon Employee in accordance with
its terms, notwithstanding the termination of Employee for any reason.
If Employee violates any covenant contained in this Section 3 and
Employer brings legal action for injunctive or other relief, Employer
shall not, as a result of the time involved in obtaining the relief, be
deprived of the benefit of the full period of any such covenant.
Accordingly, the covenants of Employee contained in this Section 3
shall be deemed to have durations as specified above, which periods
shall commence upon the later of (i) the termination of Employee's
employment with Employer, and (ii) the date of entry by a court of
competent jurisdiction of a final, non-appealable judgment enforcing the
covenants of Employee in this Section 3. During any period of time in
which Employee is in breach of this covenant not to compete, the parties
agree that the time period of this covenant shall be extended for an
amount of time that Employee is in breach hereof.
Employee understands and agrees that the scope of this covenant
contained in this Section 3 is reasonable as to time, area, and persons
and is necessary to protect the proprietary and legitimate business
interests of the Employer, and but for such covenant the Employer would
not have agreed to enter into the transactions contemplated by this
Agreement. Employee agrees that this covenant is reasonable in light of
the compensation and other benefits Employee has accepted pursuant to
this Agreement. It is further agreed that such covenant will be
regarded as divisible and will be operative as to time, area, and
persons to the extent that it may be so operative. If any part of this
Section is declared invalid, unenforceable, or void as to time, area, or
persons, the validity and enforceability of the remainder will not be
affected. Should a court of competent jurisdiction determine this
covenant unenforceable as written, the parties agree that the court
shall modify this covenant to the extent necessary to make it
enforceable. The alleged breach of any other provision of this
Agreement asserted by Employee shall not be a defense to claims arising
from Employer's enforcement of this covenant.
The provisions of Sections 1, 2, 3 4, 5, 6 and 10 shall survive
any termination or expiration of this Agreement.
4. Proprietary Information. Employee hereby assigns to
Employer all of Employee's right, title and interest to, and shall
promptly disclose to Employer, all ideas, inventions, products,
services, discoveries or improvements (whether or not patentable)
conceived or developed solely or jointly by Employee during the term of
this Agreement (a) which relate to the business or the actual or
anticipated research or development of Employer, (b) which result from
any work performed by Employee for Employer, or (c) for which equipment,
supplies, facilities or Confidential Information of Employer was used.
Employee agrees to execute any further documents and/or patents that
Employer requests and will otherwise assist Employer (at Employer's
expense) in protecting Employer's rights to such ideas, inventions,
products, services, discoveries or improvements. Employee hereby
appoints Employer as his attorney-in-fact, with full power of
substitution, to execute and deliver such documents or patents on behalf
of Employee. Employee represents to Employer that Employee has not
conceived or reduced to practice any ideas, inventions, products,
services, discoveries or improvements at the time of signing this
Agreement.
5. 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.
6. Binding Nature. The rights and obligations of Employer
under this Agreement will inure to the benefit of and will be binding
upon the successors and assigns of Employer.
7. Confidentiality. Employee further agrees to keep the terms
of this Agreement wholly and completely confidential. Further,
Employee 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.
8. Severability. If any provision of this Agreement is declared
or found to be illegal, unenforceable or void, in whole or in part, then
both parties will be relieved of all obligations arising under such
provision, but only to the extent it is illegal, unenforceable or void.
The intent and agreement of the parties to this Agreement is that this
Agreement will be deemed amended by modifying and/or reforming any such
illegal, unenforceable or void provision to the extent necessary to make
it legal and enforceable while preserving its intent, or if such is not
possible, by substituting therefor another provision that is legal and
enforceable and achieves the same objectives. Notwithstanding the
foregoing, if the remainder of this Agreement will not be affected by
such declaration or finding and is capable of substantial performance,
then each provision not so affected will be enforced to the extent
permitted by law.
9. Waiver. No delay or omission by either party to this
Agreement to exercise any right or power under this Agreement will
impair such right or power or be construed as a waiver thereof. A
waiver by either of the parties to this Agreement of any of the
covenants to be performed by the other or any breach thereof will not be
construed to be a waiver of any succeeding breach thereof or of any
other covenant contained in this Agreement. All remedies provided for
in this Agreement will be cumulative and in addition to and not in lieu
of any other remedies available to either party at law, in equity, or
otherwise.
10. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Texas without
giving effect to any principle of conflict-of-laws that would require
the application of the law of any other jurisdiction.
11. Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Employee: If to Employer:
Sport Supply Group, Inc. Sport Supply Group, Inc.
Attention: Xxxx Xxxxx Attention: Chief Executive Officer
0000 Xxxxxxxx Xxxxx 0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 00000 Farmers Xxxxxx, Xxxxx 00000
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
12. Submission to Jurisdiction. Each party agrees that this
Agreement is performable in Dallas, Dallas County, Texas, and that any
action or proceeding arising out of or related in any way to this
Agreement shall be brought solely in a court of competent jurisdiction
sitting in Dallas, Dallas county, Texas. All 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 it 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 waive any claims that any such
suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
14. Assignment. The rights and obligations of Employer may,
without the consent of Employee, be assigned by Employer to any parent,
subsidiary, affiliate, or successor of Employer. Employee may not
assign any of his rights or obligations under this Agreement.
15. Entire Agreement. This Agreement (along with the Exhibit)
constitutes the entire agreement between the parties to this Agreement
with respect to the subject matter of this Agreement and there are no
understandings or agreements relative to this Agreement which are not
fully expressed in this Agreement and the Exhibit. All prior or
contemporaneous agreements between the parties with respect to the
subject matter of this Agreement being expressly superseded by this
Agreement and the Exhibit. No change, waiver, or discharge of this
Agreement will be valid unless in writing and signed by the party
against which such change, waiver, or discharge is to be enforced.
16. Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to receive from the other its
reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties to this Agreement have executed and
delivered this Agreement on the date first above written.
EMPLOYER:
SPORT SUPPLY GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
President and Chief Operating Officer
EMPLOYEE:
/s/ Xxxx Xxxxx
Xxxx Xxxxx
