EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of this 2nd day of
November, 1998, between Rawlings Sporting Goods Company, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. X'Xxxx (the
"Executive").
1. EMPLOYMENT. The Company agrees to employ the
Executive and the Executive agrees to be employed by the Company
as its Chairman and Chief Executive Officer upon the terms and
conditions of this Agreement commencing as of the date first
above written and continuing until terminated in accordance with
Section 11 hereof.
2. EXECUTIVE'S COMPENSATION.
(a) BASE SALARY. For all services rendered by the
Executive to the Company, the Company shall pay the
Executive a salary of $275,000 per year. Executive's salary
shall be reviewed by the Board of Directors each September
during the term of this Agreement and shall be adjusted as
determined by the Board of Directors of the Company (as
adjusted from time to time, the "Base Salary"). Salary
payments shall be subject to withholding and other
applicable taxes and shall be payable in accordance with the
Company's normal payroll practices.
(b) BONUS. Beginning with the fiscal year ending
August 31, 1999, the Executive shall be eligible to receive
an annual bonus of up to 75% of the Executive's Base Salary
(the "Bonus"). In determining Executive's right to receive
the Bonus, the Company shall rely equally on objective and
subjective factors. The objective standards which must be
achieved shall be determined annually at the end of the
first month of the fiscal year by the Company and the
Executive and shall include, among other things, the
Company's return on investment, return on working capital,
revenue growth, net income growth and other factors mutually
agreeable to Executive and the Company. Executive and the
Company shall use commercially reasonable efforts to agree
to such factors by the end of the first month of the fiscal
year of each year, and a list of such factors shall be
attached hereto and incorporated herein as EXHIBIT A. The
subjective determination of Executive's right to receive the
Bonus shall be made by the Board of Directors of the
Company, taking into account factors such as the Executive's
leadership of the Company, development of the management of
the Company, development and execution of a strategic plan
for the Company, management of customers and vendors,
stockholder relations and management of the Company's
relationships with professional organizations such as Major
League Baseball and the National Collegiate Athletic
Association. On or before December 31 of each year, the
Company shall pay to Executive the amount of any Bonus due
hereunder with respect to the previous fiscal year. All
bonus payments shall be subject to withholding and all other
applicable taxes.
Except as otherwise expressly provided herein, if
Executive voluntarily terminates employment with the
Company, or is terminated by the Company for Cause (under
Section 11), the Executive shall receive no Bonus for the
year in which he leaves the Company. If the Executive is
terminated by the Company because of what the Company in its
sole discretion deems to be unsatisfactory performance, the
Executive shall receive the prorata portion of the average
Bonus paid to the Executive during the past two years.
(c) REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Executive for all ordinary and necessary
expenses incurred and paid by the Executive in the course of
the performance of the Executive's duties pursuant to this
Agreement and consistent with the Company's policies in
effect from time to time with respect to travel,
entertainment and other business expenses, and subject to
the Company's requirements with respect to the manner of
reporting such expenses.
3. BENEFITS.
(a) AUTOMOBILE. The Company shall provide to the
Executive every three years during the term hereof a Company
owned or leased automobile produced by an American
manufacturer of year, make and model selected by the
Executive, and the Company shall pay the expenses related to
the use and upkeep thereof and insurance relating thereto.
Initially, the Company shall provide the Executive with a
Lincoln Navigator.
(b) LIFE INSURANCE. Following a medical examination
by an independent physician and upon determination that no
medical condition exists which would make the cost of such
policy commercially unreasonable, the Executive shall obtain
a split dollar policy insuring the life of the Executive,
which shall have death benefits of not less than $2,000,000
(the "Policy"). The Executive or a trust of which he is the
settlor, shall be the owner of the Policy, which shall be
collaterally assigned to the Company. The Company will pay
all premium payments due under the Policy until the earlier
to occur of (i) the death of the Executive, (ii) the
Disability of the Executive (as hereinafter defined), and
(iii) the date on which the Executive's service with the
Company is terminated whether under Section 11 or following
a Change in Control. The portion of the premiums in excess
of the normal term rate on a $2,000,000 policy (the "Excess
Split Dollar Premiums") will be considered a loan to the
Executive secured by the Policy. The premiums for the
normal term rate will be treated as ordinary compensation to
the Executive. In the event of the death of the Executive
during the term of this Agreement, the face amount of the
Policy less the Excess Split Dollar Premiums paid by the
Company on the Policy shall be paid to the spouse of the
Executive or other beneficiary designated by the Executive.
The Excess Split Dollar Premiums will be repaid to the
Company. At no time will Excess Split Dollar Premium
payments made by the Company exceed the cash surrender value
of the Policy. The Company shall release its collateral
position on the Policy to the Executive when its obligations
to make premium payments hereunder have ceased. The
Executive shall thereafter be responsible for all premium
payments, and the Executive shall reimburse the Company for
all Excess Split Dollar Premium payments previously made by
the Company. Reimbursement to the Company may be made in
cash or by execution and delivery of a promissory note
providing for payments over three months.
(c) RELOCATION EXPENSES. The Company will pay the
relocation expenses of the Executive in connection with his
move from North Easton, Massachusetts to St. Louis,
Missouri, including the Executive's out-of-pocket costs, the
real estate commission with respect to the sale of the
Executive's home, temporary living accommodations, airfare
and one month's salary for expenses.
(d) CLUB MEMBERSHIP. The Company will pay the
initiation fee and membership dues on behalf of the
Executive for one private city club and one country club
during the term of this Agreement.
(e) ADDITIONAL BENEFITS. The Executive shall receive
additional benefits such as insurance and hospitalization
consistent with those provided to other Executives in
similar industries having responsibility commensurate to
that of the Executive, and such additional benefits as may
be from time to time agreed upon in writing between the
Executive and the Company. The Executive shall receive four
weeks of vacation annually.
4. STOCK OPTIONS.
(a) The Company hereby grants to Executive as of the
date of this Agreement a nonqualified stock option (the
"Option") to purchase 250,000 shares of the Company's common
stock, par value $.01 per share (the "Shares"), which Option
shall become exercisable so long as Executive is an employee
of the Company as follows: the Executive may purchase up to
20% of the total number of Shares at any time after the date
hereof and an additional 20% of the total number of Shares
on each of the dates set forth below; provided, however,
that the Option shall become fully exercisable under Section
8(b) hereof. The exercise price for the Shares under the
Option shall be as set forth below.
STOCK OPTION VESTING DATE EXERCISE PRICE
November 2, 1998 $10.00
November 2, 1999 $11.00
November 2, 2000 $12.00
November 2, 2001 $13.00
November 2, 2002 $14.00
The Option shall expire at 11:59 p.m. Fenton, Missouri Time
on November 1, 2003. The number of Shares with respect to
which the Option may be exercised shall be cumulative so
that if, in any of the aforementioned periods, the full
number of Shares shall not have been purchased, any such
unpurchased Shares shall continue to be included in the
number of Shares with respect to which the Option
shall then be exercisable along with any other Shares as to
which the Option may become exercisable. The Option shall
be exercisable following the termination of the Executive's
employment with the Company for other than Cause as defined
in Section 11 hereof, for a period of three (3) months from
the date of such termination, to the extent the Option was
exercisable as of the date of such termination. The Option
shall be exercisable following the termination of the
Executive's employment with the Company for Cause as defined
in Section 11 hereof, for a period of forty-eight (48) hours
from the date of such termination, to the extent the Option
was exercisable as of the date of such termination.
(b) Additionally, in the event the Executive purchases
common stock of the Company other than pursuant to the
Option, the Company grants to the Executive an option to
purchase two additional shares of common stock at an
exercise price equal to the price paid by the Executive for
each of the first 20,000 shares of common stock of the
Company purchased by Executive in such fiscal year
(September 1-August 31). Each such option shall expire at
11:59 p.m. Fenton, Missouri time on the day immediately
preceding the fifth anniversary of the date of grant of such
option.
(c) The options described in (a) and (b) above are not
transferable to any third party by the Executive except to a
revocable living trust established by the Executive of which
the Executive is a trustee and the primary beneficiary. The
options may be exercised only to purchase whole shares. No
fractional shares will be issued upon exercise of the
options. The options shall be exercised and payment made to
the Company in accordance with procedures provided by the
Compensation Committee of the Company.
(d) The Company and the Executive acknowledge that the
shares subject to the options in (a) and (b) above have not
been registered under the Securities Act of 1933, as
amended, or any state securities law. The Company will use
its best efforts and take such actions as it deems necessary
to file a registration statement on Form S-8 with the
Securities and Exchange Commission and submit all listing
applications to the NASDAQ National Market System with
respect to such Shares.
5. DUTIES. The Executive agrees that so long as he
is employed under this Agreement he will (i) devote his best
efforts and his entire business time to further properly the
interests of the Company; provided, however, that the Executive
shall be permitted to serve on two (2) boards of directors
selected by Executive and such other boards as the Compensation
Committee of the Company shall approve, (ii) at all times be
subject to the Company's direction and control with respect to
his activities on behalf of the Company, (iii) comply with all
rules, orders and regulations of the Company, (iv) truthfully and
accurately maintain and preserve such records and make all
reports as the Company may require, and (v) fully account for all
monies and other property of the Company of which he may from
time to time have custody and deliver the same to the Company
whenever and however directed to do so.
6. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION.
The Executive acknowledges that during the course of his
employment with the Company he has or will have access to and
knowledge of certain information and data which the Company
considers confidential and that the release of such information
or data to unauthorized persons would be extremely detrimental to
the Company. As a consequence, the Executive hereby agrees and
acknowledges that he owes a duty to the Company not to disclose,
and agrees that, during or after the term of his employment,
without the prior written consent of the Company he will not
communicate, publish or disclose, to any person anywhere or use
any Confidential Information (as hereinafter defined) for any
purpose other than carrying out his duties as Chairman and Chief
Executive Officer of the Company. The Executive will return to
the Company all Confidential Information in the Executive's
possession or under the Executive's control whenever the Company
shall so request, and in any event will promptly return all such
Confidential Information if the Executive's relationship with the
Company is terminated for any or no reason and will not retain
any copies thereof. For purposes hereof the term "Confidential
Information" shall mean any information or data used by or
belonging or relating to the Company that is not known generally
to the industry in which the Company is or may be engaged,
including without limitation, any and all trade secrets,
proprietary data and information relating to the Company's past,
present or future business and products, price lists, customer
lists, processes, procedures or standards, know-how, manuals,
business strategies, records, drawings, specifications, designs,
financial information, whether or not reduced to writing, or
information or data which the Company advises the Executive
should be treated as Confidential Information.
7. COVENANT NOT TO COMPETE. The Executive
acknowledges that during his employment with the Company he, at
the expense of the Company, will be specially trained in the
business of the Company, will establish favorable relations with
the customers, clients and accounts of the Company and will have
access to Inventions, trade secrets and Confidential Information
of the Company. Therefore, in consideration of such training and
relations and to further protect the Inventions, trade secrets
and Confidential Information of the Company, the Executive agrees
that during the term of his employment by the Company and for a
period of two (2) years from and after the voluntary or
involuntary termination of such employment for any or no reason,
he will not, directly or indirectly, without the express written
consent of the Company except when and as requested to do in and
about the performing of his duties under this Agreement:
(a) own or have any interest in or act as an officer,
director, partner, principal, employee, agent,
representative, consultant or independent contractor of, or
in any way assist in, any business located in or doing
business in the United States or in any other county,
territory or possession in which the Company has engaged in
business during the Executive's employ which is engaged in
competition in any manner with any business of the Company
at any time during the time of the Executive's employment
hereunder;
(b) divert or attempt to divert clients, customers
(whether or not such persons have done business with the
Company once or more than once), accounts of the Company, or
prospective clients, customers or accounts which the Company
has contacted within the 2 years immediately preceding
Executive's termination; or
(c) entice or induce or in any manner influence any
person who is or shall be in the employ or service of the
Company to leave such employ or service for the purpose of
engaging in a business which may be in competition with the
Company.
Notwithstanding anything herein to the contrary, Executive may
own up to 1% of the outstanding equity securities of stock in any
corporation which is listed upon a national stock exchange or
actively traded in the over-the-counter market.
8. CHANGE IN CONTROL.
(a) The Executive shall be entitled to receive from
the Company Severance Benefits if there is a Change in
Control of the Company and, if within twenty-four calendar
months thereafter, the Executive's service with the Company
shall end for any Qualifying Termination or the Executive
terminates his service with the Company for Good Reason.
The Company shall pay to Executive and provide him with
Severance Benefits as follows:
(1) an amount equal to two (2) times the Base
Salary in effect at the Effective Date of Termination;
(2) benefits provided pursuant to Section 3
(a),(d) and (e) of this Agreement for a period of one (1)
year from the Effective Date of Termination. These benefits
shall be provided to the Executive at the same premium cost,
and at the same coverage level, as in effect as of the
Executive's Effective Date of Termination. However, in the
event the premium cost and/or level of coverage shall change
for management executives of the Company generally, the cost
and/or coverage level, likewise, shall change in a
corresponding manner. If and to the extent these benefits
are not or cannot be paid under an existing policy, plan or
program of the Company, the Company shall make alternative
arrangements for the provisions of such benefits at no
greater cost to the Executive. These welfare benefits shall
be discontinued in the event the Executive has available
similar benefits from a subsequent employer, as determined
by the Committee; and
(3) an amount equal to the prior year's Bonus.
The Severance Benefits provided in 8(a)(1) and (3) hereof
shall be paid in cash to the Executive in a single lump sum
as soon as practical following the Effective Date of
Termination, but in no event later than thirty (30) days
from such date. The Company shall withhold from any amounts
payable under this Section 8 all federal, state, city or
other taxes as legally shall be required. The Executive
shall not be entitled to receive Severance Benefits under
this Section 8 if employment with the Company ends due to
death, Disability, or voluntary retirement without Good
Reason under a pension plan maintained by the Company, due
to any other voluntary termination of employment by
the Executive without Good Reason, or due to termination of
the Executive's employment by the Company for Cause.
(b) Upon a Change in Control, the Option granted in
Section 4(a) hereof shall immediately vest and become
exercisable.
(c) Any termination of employment by the Company for
any reason following a Change in Control or by the Executive
shall be communicated by Notice of Termination to the other
party. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall
indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under
the provision so indicated.
(d) For purposes of this Agreement, the following
terms shall have the following meanings:
(1) "Beneficial Ownership" shall mean the
ownership of securities as determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(2) "Cause" solely with respect to Section 8 of
this Agreement shall mean any of the following acts by the
Executive:
(i) an intentional act of fraud,
embezzlement or theft in connection with his duties or in
the course of his employment with the Company;
(ii) intentional wrongful damage to property
of the Company;
(iii) intentional wrongful disclosure of
secret processes or of confidential information of the
Company; or
(iv) intentional violation of the Company's
code of conduct or ethics, as in effect immediately prior to
a Change in Control.
(3) "Change in Control" of the Company shall be
deemed to have occurred as of the first day any one or more of
the following conditions is satisfied, except that, if a Change
in Control occurs and if the Executive's employment with the
Company is terminated prior to the date on which the Change in
Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably
calculated to effect a Change in Control or (ii) otherwise arose
in connection with or anticipation of a Change in Control, then
for all purposes of this Agreement the Change in Control shall be
deemed to have occurred on the date immediately prior to the date
of such termination of employment:
(i) The acquisition by any Person (other
than a trustee or other fiduciary holding securities under
an executive benefit plan of the Company, or a corporation
owned solely, directly or indirectly, by the Company
or by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company
90 days prior to such acquisition, or an entity the
ownership by which would not constitute a Change of Control
under (iii) below), of Beneficial Ownership of securities of
the Company representing thirty-three percent (33%) or more
of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the
election of directors of the Company (the "Voting Stock");
provided, however, that an acquisition of thirty-three
percent (33%) or more of the Voting Stock directly from the
Company shall not constitute a Change in Control; or
(ii) A change in the composition of the Board
of the Company during any period of two (2) consecutive
years (not including any period prior to the date hereof)
such that individuals who at the beginning of such period
constitute the Board, cease for any reason to constitute a
majority thereof; provided, however, that any new Director,
who is elected by the Company's stockholders and who was
approved by a vote of a majority of the members of the Board
in office who were Directors at the beginning of the two
consecutive year period shall not be considered for purposes
of determining a Change in Control hereunder; or
(iii) Approval by the stockholders of the
Company of: (A) a plan of complete liquidation of the
Company; or (B) an agreement for the sale or disposition of
all or substantially all of the Company's assets (except as
otherwise provided in (C)); or (C) a merger, consolidation,
or reorganization of the Company (a "Corporate Transaction")
with or involving any other corporation, OTHER THAN a
Corporate Transaction that would result in (x) the owners of
more than sixty-seven percent (67%) of the Voting Stock
continuing to have (either by such stock remaining
outstanding or by being converted into common stock of
another entity or entities) more than sixty-seven percent
(67%) of the Voting Stock immediately after such Corporate
Transaction of either (A) the Company or (B) an entity or
all entities, if more than one, which own(s) more than
sixty-seven percent (67%) of the Voting Stock or which has
(have) acquired all or part of the assets of the Company by
sale, transfer, or Corporate Transaction; (y) no Person
(excluding any corporation resulting from such Corporate
Transaction or any Executive benefit plan (or related trust)
of the Company or such corporation resulting from such
Corporate Transaction) beneficially owning, directly or
indirectly, twenty percent (20%) or more of, respectively,
the then outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the then outstanding voting
securities of such corporation except to the extent that
such ownership existed prior to the Corporate Transaction;
and (z) at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction being members of the Board at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Corporation Transaction;
(iv) The determination by a majority of the
Board that, because of the occurrence, threat or imminence
of an event with consequences similar to the foregoing, the
Executive is entitled to the protection of this Section 8.
However, in no event shall a Change in Control be deemed to have
occurred, if the Executive is part of a purchasing group which
consummates the Change in Control transaction. The Executive
shall be deemed "part of a purchasing group" for purposes of the
preceding sentence if the Executive is an equity participant in
the purchasing company or group (except for: (i) passive
ownership of less than three percent (3%) of the stock of the
purchasing company; or (ii) ownership of equity participation in
the purchasing company or group which is otherwise not
significant, as determined prior to the Change in Control by a
majority of the Company's non-employee continuing directors).
(4) "Code" means the Internal Revenue Code of
1986, as amended.
(5) "Committee" means the Compensation Committee
of the Board of Directors of Rawlings Sporting Goods Company,
Inc.
(6) "Disability" means permanent and total
disability, within the meaning of Section 22(e)(3) of the Code,
as determined by the Committee in the exercise of good faith and
reasonable judgment, upon receipt of and in reliance on
sufficient competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give professional
medical advice.
(7) "Effective Date of Termination" means the
date on which a Qualifying Termination occurs which triggers the
payment of Severance Benefits hereunder.
(8) "Good Reason" means, without the Executive's
express written consent, the occurrence after a Change in Control
of the Company of any one or more of the following:
(i) The assignment of the Executive to
duties materially inconsistent with the Executive's
authorities, duties, responsibilities, and status (including
offices, titles, and reporting requirements) as Chairman and
Chief Executive Officer of the Company, or a reduction or
alteration in the nature or status of the Executive's
authorities, duties, or responsibilities from those in
effect as of ninety (90) days prior to the Change in
Control, other than an insubstantial and inadvertent act
that is remedied by the Company or the entity succeeding to
the Company's responsibilities after the Change in Control
(such "Successor" is referred to herein also as the
"Company") promptly after receipt of notice thereof given by
the Executive and other than any such alteration primarily
attributable to the fact that the Company may no longer be a
public company;
(ii) The relocation of the Executive to a
worksite more than thirty-five (35) miles from the office at
which the Executive was based as of the date hereof, except
for required travel on the business of the Company to an
extent substantially consistent with the Executive's present
business obligations;
(iii) A reduction by the Company in the
Executive's Base Salary as in effect on the date immediately
preceding a Change in Control;
(iv) The failure of the Company to continue
in effect any of the Company's benefit or compensation
plans, or retirement plans, policies, practices, or
arrangements in which the Executive participates, or the
failure by the Company to continue the Executive's
participation in such plans on substantially the same basis,
both in terms of the amount of benefits provided and the
level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control of the Company;
(v) The failure of the Company to obtain a
satisfactory agreement from any Successor to the Company to
assume and agree to perform the obligations under Section 8
of this Agreement; or
(vi) Any purported termination by the Company
of the Executive's employment that is not effected pursuant
to a Notice of Termination. The Executive's determination
of Good Reason shall be conclusive, if made in good faith.
The Executive's right to terminate employment for Good
Reason shall not be affected by the Executive's incapacity
due to physical or mental illness. The Executive's
continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance
constituting Good Reason.
(9) "Person" shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act as used in
Sections 13(d) and 14(d) thereof, including a "group" as defined
in Section 13(d).
(10) "Qualifying Termination" means any of the
following events, the occurrence of which triggers the payment of
Severance Benefits hereunder:
(i) A termination of the Executive's
employment with the Company for reasons other than death,
Disability, normal retirement (as defined under any pension
plan maintained by the Company), any other voluntary
termination of employment by the Executive without Good
Reason, or termination of the Executive's employment by the
Company for Cause;
(ii) A termination of the Executive's
employment with the Company, by the Executive, for Good
Reason;
(iii) The failure or refusal of a
Successor to assume the Company's obligations under Section
8 of this Agreement; or
(iv) The breach by the Company of any of the
provisions of Section 8 of this Agreement.
(d) SUCCESSORS. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation,
or otherwise) of all or substantially all of the business and/or
assets of the Company or of any division or subsidiary thereof to
expressly assume and agree to perform Section 8 of this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be a breach of Section 8 of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and
on the same terms as he would be entitled hereunder if terminated
voluntarily for Good Reason, except that for the purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Effective Date of
Termination.
Section 8 of this Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive should die
while any amount would still be payable to him hereunder had he
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of Section 8
of this Agreement, to the Executive's devisee, legatee, or other
designee, or if there is no such designee, to the Executive's
estate.
(e) BENEFICIARIES. The Executive may designate one or
more persons or entities as the primary and/or contingent
beneficiaries of any Severance Benefits, other than as provided
in Section 4(c), to be made under Section 8 of this Agreement.
Such designation must be in the form of a signed writing
acceptable to the Committee. The Executive may make or change
such designation at any time.
9. SPECIFIC PERFORMANCE. Recognizing that
irreparable damage will result to the Company in the event of the
breach or threatened breach of any of the foregoing covenants and
assurances by the Executive contained in Sections 6 or 7 hereof,
and that the Company's remedies at law for any such breach or
threatened breach will be inadequate, the Company and its
successors and assigns, in addition to such other remedies which
may be available to them, shall be entitled to an injunction,
including a mandatory injunction, to be issued by any court of
competent jurisdiction ordering compliance with this Agreement or
enjoining and restraining the Executive, and each and every
person, firm or company acting in concert or participation with
him, from the continuation of such breach and, in addition
thereto, he shall pay to the Company all ascertainable damages,
including costs and reasonable attorneys' fees sustained by the
Company by reason of the breach or threatened breach of said
covenants and assurances. The obligations of the Executive and
the rights of the Company, its successors and assigns under
Sections 6, 7, 9, 10, 12, 16, 18 and 19 of this Agreement shall
survive the termination of this Agreement. The covenants and
obligations of the Executive set forth in Sections 6 and 7 hereof
are in addition to and not in lieu of or exclusive of any other
obligations and duties of the Executive to the Company, whether
express or implied in fact or in law.
10. POTENTIAL UNENFORCEABILITY OF ANY PROVISION. If a
final judicial determination is made that any provision of this
Agreement is an unenforceable restriction against the Executive,
the provisions hereof shall be rendered void only to the extent
that such judicial determination finds such provisions
unenforceable, and such unenforceable provisions shall
automatically be reconstituted and become a part of this
Agreement, effective as of the date first written above, to the
maximum extent that is lawfully enforceable. A judicial
determination that any provision of this Agreement is
unenforceable shall in no instance render the entire
Agreement unenforceable, but rather the Agreement will continue
in full force and effect absent any unenforceable provision to
the maximum extent permitted by law.
11. TERMINATION.
(a) This Agreement shall terminate immediately
upon the death, Disability or adjudication of legal
incompetence of the Executive, or upon the Company's ceasing
to carry on its business or becoming bankrupt.
(b) This Agreement may be terminated by either
the Company or the Executive upon 60 days notice at any time
with or without Cause and for any or no reason. Nothing in
this Agreement shall be deemed or construed to require the
Company to employ, or to continue to employ, the Executive
for any specified period of time and, regardless of the
manner or duration of the Executive's compensation, nothing
contained herein shall create employment for a definite
term. The Executive acknowledges that no representative of
the Company has any authority to make any agreement contrary
to the foregoing.
(c) In the event this Agreement is terminated,
the parties' obligations under this Agreement shall
terminate immediately (except as otherwise provided herein),
and neither the Executive nor his estate, heirs, successors
or assigns shall be entitled to any further compensation
hereunder. If the Company terminates the Executive's
employment, other than for Cause (as defined below), at a
time when the Executive is fully willing and able to perform
his duties as an employee of the Company or if the Executive
voluntarily terminates his employment with the Company
because the Company has assigned the Executive to duties
materially inconsistent with the Executive's authorities,
duties, responsibilities, and status (including offices,
titles, and reporting requirements) as Chairman and Chief
Executive Officer of the Company, or has reduced or
alterated in nature or status the Executive's authorities,
duties, or responsibilities, other than an insubstantial and
inadvertent act that is remedied by the Company, or the
Company has reduced Executive's Base Salary and in no other
circumstances during the term hereof (e.g., the Executive's
death or disability or voluntary termination for any reason
other than hereinbefore set forth); the Company shall be
required to pay Executive an amount equal to his Base Salary
for twenty-four (24) months at the rate then in effect
pursuant to Section 2 above and Executive shall continue to
receive for a twenty-four (24) month period the medical
benefits Executive was receiving at the time of termination
under Section 3(e) hereof. Notwithstanding the foregoing or
anything herein to the contrary, in the event the Executive
is receiving Severance Benefits provided in Section 8
hereof, the Executive shall NOT also receive the payments
described in this Section 11(c). For purposes of this
Section 11, "Cause" shall mean the occurrence of any of the
following events:
(1) Performance by the Executive of illegal
or fraudulent acts, criminal conduct or willful misconduct,
or gross negligence relating to the activities of the
Company;
(2) Willful or grossly negligent failure by
the Executive to perform his duties in a manner which he
knows, or has reason to know, to be in the Company's best
interests;
(3) Willful and bad faith refusal by the
Executive to carry out reasonable instructions of the Board
of Directors of the Company not inconsistent with the
provisions of this Agreement;
(4) Violation by the Executive of the
covenants and agreements contained in Section 7 hereof;
(5) Any other material breach of the
Executive's obligations hereunder which are incurable or
which he fails to cure promptly after receiving written
notice thereof; or
(6) The Company ceases operations due to a
voluntary or involuntary discontinuance of its business
operations.
12. WAIVER OF BREACH. Failure of the Company to
demand strict compliance with any of the terms, covenants or
conditions hereof shall not be deemed a waiver of the term,
covenant or condition, nor shall any waiver or relinquishment by
the Company of any right or power hereunder at any one time or
more times be deemed a waiver or relinquishment of the right or
power at any other time or times.
13. NO CONFLICTS. The Executive represents and
warrants to the Company that neither the execution nor delivery
of this Agreement, nor the performance of the Executive's
obligations hereunder will conflict with, or result in a breach
of, any term, condition, or provision of, or constitute a default
under, any obligation, contract, agreement, covenant or
instrument to which the Executive is a party or under which the
Executive is bound, including without limitation, the breach by
the Executive of a fiduciary duty to any former employers.
14. ENTIRE AGREEMENT; AMENDMENT. This Agreement
cancels and supersedes all previous agreements relating to the
subject matter of this Agreement, written or oral, between the
parties hereto and contains the entire understanding of the
parties hereto and shall not be amended, modified or supplemented
in any manner whatsoever except as otherwise provided herein or
in writing signed by each of the parties hereto.
15. CAPTIONS. The headings of the sections of this
Agreement have been inserted for convenience of reference only
and shall in no way restrict or otherwise modify any of the terms
or provisions hereof.
16. GOVERNING LAW. This Agreement and all rights and
obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the laws of the
State of Missouri applicable to agreements made and to be
performed entirely within the State, including all matters of
enforcement, validity and performance.
17. NOTICE. All notices, requests, demands and other
communications hereunder shall be deemed duly given if delivered
by hand or if mailed by certified or registered mail with postage
prepaid as follows:
If to the Company:
Rawlings Sporting Goods Company, Inc.
X.X. Xxx 00000
Xx. Xxxxx, Xxxxxxxx 00000
Attn:Corporate Secretary
If to the Executive:
Xxxxxxx X. X'Xxxx
000 Xxxxxx Xxxxx
Xxxx xxx Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxxx Xxxxxxx
GW & Xxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
or to any other address as either party may provide to the other
in writing.
18. ASSIGNMENT. This Agreement is personal and not
assignable by the Executive but it may be assigned by the Company
without notice to or consent of the Executive to, and shall
thereafter be binding upon and enforceable by any person which
shall acquire or succeed to substantially all of the business or
assets of the Company (and such person shall be deemed included
in the definition of the "Company" for all purposes of this
Agreement) but is not otherwise assignable by the Company.
19. ARBITRATION. Except with respect to disputes or
controversies arising out of Sections 6 and 7 hereof, any dispute
between any of the parties hereto or claim by a party against
another party arising out of or in relation to this Agreement or
in relation to any alleged breach thereof shall be finally
determined by arbitration in accordance with the rules then in
force of the American Arbitration Association. The arbitration
proceedings shall take place in St. Louis, Missouri, or such
other location as the parties in dispute hereafter may agree
upon; and such proceedings shall be governed by the laws of the
State of Missouri as such laws are applied to agreements between
residents of such State entered into and to be performed entirely
within that State.
The parties shall agree upon one arbitrator, who shall
be an individual skilled in the legal and business aspects of the
subject matter of this Agreement and of the dispute. If the
parties cannot agree upon one arbitrator, each party in dispute
shall select one arbitrator and the arbitrators so selected shall
select a third arbitrator. In the event the arbitrators cannot
agree upon the selection of a third arbitrator, the third
arbitrator shall be appointed by the American Arbitration
Association at the request of any of the parties in dispute. The
arbitrators shall, if possible, be individuals skilled in the
legal and business aspects of the subject matter of this
Agreement and of the dispute.
The decision rendered by the arbitrator or arbitrators
shall be accompanied by a written opinion in support thereof.
The decision shall be final and binding upon the parties in
dispute without right of appeal. Judgment upon the decision may
be entered into in any court having jurisdiction thereof, or
application may be made to that court for a judicial acceptance
of the decision and an order of enforcement. Costs of the
arbitration shall be assessed by the arbitrator or arbitrators
against any or all of the parties in dispute, and shall be paid
promptly by the party or parties so assessed.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be duly executed in duplicate, and the Executive has
hereunto set his hand, on the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board
/s/ Xxxxxxx X. X'Xxxx
Xxxxxxx X. X'Xxxx
