EMPLOYMENT AGREEMENT
AGREEMENT made as of May 5, 1997, by and between Xxxxxxx Sports Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxx (the "Executive").
WHEREAS, the Company, Cheer Acquisition Corp., a Tennessee corporation
and Varsity Spirit Corporation, a Tennessee corporation (collectively with any
successor to its business, "Varsity Spirit") have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of May 5, 1997, pursuant to
which, among other things, Varsity Spirit will become a wholly owned subsidiary
of the Company;
WHEREAS, the Executive is currently serving as Chairman, President,
Chief Executive Officer and Director of Varsity Spirit pursuant to the
Employment Agreement dated September 29, 1989, as amended, between the Executive
and Varsity Spirit (the "Former Agreement");
WHEREAS, the Company desires to engage the Executive as Vice Chairman
of the Company and President and Chief Operating Officer of Varsity Spirit and
the Executive desires to be so engaged by the Company in such position, on the
terms and conditions set forth and described herein;
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company.
NOW, THEREFORE, the parties agree as follows:
1. Employment. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company upon the terms and subject
to the conditions set forth herein.
2. Term. This Agreement is for the three-year period (the "Term")
commencing on the Effective Time (as defined in the Merger Agreement)
("Effective Date") and terminating on the third anniversary of such date or upon
earlier termination of the Executive's employment; provided, however, that if
the Merger Agreement is terminated, then, at the time of such termination, this
Agreement shall be deemed cancelled and of no force and effect.
3. Position. During the Term, the Executive shall serve as President
and Chief Operating Officer ("COO") of Varsity Spirit. The Company shall
nominate the Executive and a designee (the "Designee") of the Executive
reasonably acceptable to the Board of Directors of the Company (the "Company
Board") (it being understood that any person who is a Senior Vice President or
Director of Varsity Spirit on the date of this Agreement is an acceptable
Designee to the Company Board without further action) to the Company Board and
the Company shall use its best efforts to (i) cause the Executive and the
Designee to be elected to the Company Board and (ii) cause the Executive to
serve as Vice Chairman of the Company and on the Executive Committee of the
Company, in each case for the duration of the Term. In particular, the Executive
agrees, effective as of the Effective Date, to become a party to the
Stockholders Agreement dated August 14, 1995 ("Voting Agreement") and the
Company agrees to amend such Voting Agreement so that the parties thereto agree,
for the duration of the Term, to vote their shares of Company common stock (i)
in favor of the election of the Executive and the Designee to the Company Board
and (ii) in favor of the Plan (as defined below). At any time that the Executive
is serving as an officer of the Company, the Company shall provide him with
officer liability insurance and/or indemnification to the same extent provided
to other members of the Company Board and other officers of the Company for all
occurrences while executive is or was a member of the Company Board or an
officer of the Company.
4. Duties and Reporting Relationship. During the Term, the Executive
shall, on a full time basis, use his skills and render services to the best of
his abilities in supervising and conducting the operations of Varsity Spirit. As
part of his duties the Executive shall be responsible for and have general
supervisory control over all operations of Varsity Spirit and shall report to,
and be subject to supervision by, the CEO or Chairman of the Company. The
Executive will also perform such other duties for the Company as are consistent
with his position as the CEO or Chairman of the Company shall reasonably assign.
Nothing in this Agreement shall be deemed to prevent Executive from
participating in, or serving on the governing body of, any civic, community or
charitable organization with which the Executive may currently be, or hereafter
become involved.
5. Place of Performance. The Executive shall perform his duties
and conduct his business at the principal offices of Varsity Spirit in Memphis,
Tennessee except for required travel on Varsity Spirit or the Company's
business.
6. Inducement for Employment. (a) As an inducement for the
Executive's entering into this Agreement and undertaking to perform the services
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referred to in this Agreement, on the later of (i) Effective Date and (ii) the
Company's 1997 Annual Meeting of Shareholders (such applicable date, the "Grant
Date"), the Company shall grant to the Executive a non-qualified option (the
"Option") to purchase 50,000 shares of the common stock, $0.01 par value
("Common Stock") of the Company, which grant may, at the Company's election, be
pursuant to the Company's 1997 Stock Option Plan (the "Plan"), in which case it
shall be subject to shareholder approval of the Plan. The exercise price of the
Option shall be equal to the average closing price of a share of Common Stock
over the ten (10) consecutive trading days ending on the date immediately prior
to the Grant Date. If the shareholders fail to approve the Plan, the Executive
and the Company shall discuss, in good faith, alternative mechanisms to provide
the Executive with the economic equivalent of the Option.
(b) The Option shall become exercisable as to 1/3 of the
shares originally covered by such Option upon the first anniversary of the Grant
Date and as to an additional 1/3 of the shares originally covered by such Option
on each of the second and third anniversaries of the Grant Date, subject to the
acceleration of vesting provisions contained in Section 6(c) hereof.
(c) The Option shall expire on the earlier of the tenth
anniversary of the Grant Date or the thirtieth (30th) day following the date the
Executive's employment is terminated for any reason and may be exercised (to the
extent it has vested), at any time prior to such expiration; provided, however,
that if, (i) prior to the expiration of the Term, the Company terminates the
Executive's employment in breach of this Agreement or the Executive terminates
his employment for Good Reason (as defined below), or (ii) subsequent to the
expiration of the Term, the Company terminates the Executive's employment in a
manner that would have been a breach of this Agreement had the Term not expired
or the Executive terminates his employment on account of actions that would have
constituted Good Reason had the Term not expired, then the Option shall become
fully vested and exercisable and shall remain exercisable for a period of one
year following such termination of employment; and, provided further that if the
Executive's employment is terminated on account of his death or Disability (as
defined below), then upon such termination the Option shall become fully vested
and exercisable and shall remain exercisable for a period of one year following
such termination of employment. The Option shall become fully vested and
exercisable upon the occurrence of a Change in Control (defined below).
(d) As a further inducement for the Executive's entering into
this Agreement and undertaking to perform the services referred to in this
Agreement,
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the Company shall grant, within thirty days immediately following the Effective
Date, to the Executive a non-qualified option (the "Special Option") to purchase
347,760 shares of Common Stock of the Company, which grant may, at the Company's
election be pursuant to the Plan, in which case it shall be subject to
shareholder approval of the Plan. The exercise price of the Special Option shall
be equal to the lower of (i) the average closing price of a share of Common
Stock over the ten (10) consecutive trading days ending on the date immediately
prior to the Effective Date and (ii) $3.80. If the shareholders fail to approve
the Plan, the Executive and the Company shall discuss, in good faith,
alternative mechanisms to provide the Executive with the economic equivalent of
the Special Option. The Special Option shall be fully vested as of the date of
grant and shall become exercisable as of the date of shareholder approval of the
Plan. The Special Option shall expire on the tenth anniversary of the date of
grant.
7. Salary and Annual Bonus.
(a) Base Salary. During the Term, the Executive's base salary
(the "Base Salary") hereunder shall be no less than $375,000 a year, payable no
less often than in monthly installments. The Base Salary shall be subject to
annual review and increase by an amount determined by the Company Board, or an
appropriate committee thereof, after taking into consideration the Executive's
performance, the Company's performance, increases in the cost of living and such
other factors as the Company Board or such committee deems relevant.
(b) Annual Bonus. During the Term, the Executive will
participate in any bonus plan established by the Company at a target level of
40% of his Base Salary. Such bonus shall be payable at such time as bonuses are
paid to other senior executive officers.
8. Vacation, Holidays and Sick Leave. During the Term, the Executive
shall be entitled to paid vacation, paid holidays and sick leave in accordance
with the Company's standard policies for its senior executive officers, which
policies shall provide the Executive with (a) benefits no less favorable than
those provided to any other senior executive officer of the Company and (b) no
fewer than four (4) weeks of paid vacation per year, including no fewer than
three (3) weeks of paid vacation during the calendar year ending December 31,
1997, unless otherwise agreed between the Executive and the Company.
9. Business Expenses. During the Term, the Executive will be
reimbursed for all ordinary and necessary business expenses incurred by him in
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connection with his employment upon timely submission by the Executive of
receipts and other documentation as required by the Internal Revenue Code and in
conformance with the Company's normal procedures.
10. Pension and Welfare Benefits. During the Term, the Executive shall
be eligible to participate fully in all health benefits, insurance programs,
pension and retirement plans and other employee benefit and compensation
arrangements (collectively, the "Employee Benefits") available to officers of
the Company generally, which Employee Benefits shall provide the Executive with
benefits no less favorable than those provided to any other senior executive
officer of the Company. At such time that the Executive becomes covered by any
employee plan, program or policy of the Company, the Executive's service with
Varsity Spirit shall be taken into account for the purpose of determining
eligibility for participation and vesting (but not benefit accrual) under any
such employee plan, program or policy to the same extent that service with the
Company is so taken into account for the executives of the Company.
11. Termination of Employment. (a) General. The Executive's
employment hereunder may be terminated without any breach of this Agreement only
under the circumstances provided in this paragraph 11(a).
(i) Death or Disability. (A) The Executive's employment
hereunder shall automatically terminate upon the death of the Executive.
(B) If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been unable to
perform the essential duties of his position despite the provision of reasonable
accommodations for any six (6) months (whether or not consecutive) during any
twelve (12) month period, the Company may terminate the Executive's employment
hereunder for "Disability."
(ii) Cause. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, "Cause" shall
mean (A) gross neglect by the Executive of the Executive's duties hereunder, (B)
conviction of the Executive of any felony, (C) gross or intentional misconduct
by the Executive in connection with the performance of any material portion of
the Executive's duties hereunder or (D) breach by the Executive of any material
provision of this Agreement (including, but not limited to, Sections 15, 16 and
17 hereof) or of any other agreement between the Executive and the Company or
between the Executive and M.L.C. Partners Limited Partnership.
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(iii) Termination by the Executive. The Executive shall be
entitled to terminate his employment hereunder (A) for Good Reason, within
thirty (30) days of the date the Executive becomes aware of the occurrence of
the event constituting the grounds for such Good Reason, or (B) if his health
should become impaired to an extent that makes his continued performance of his
duties hereunder hazardous to his physical or mental health, provided that the
Executive shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided further, that, at the Company's
request, the Executive shall submit to an examination by a doctor selected by
the Company and such doctor shall have concurred in the conclusion of the
Executive's doctor.
For purposes of this Agreement, "Good Reason" shall mean the occurrence
(without the Executive's express written consent) of any one of the following
acts by the Company, or failure by the Company to act, unless, in the case of
any such act or failure to act, such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination in respect
thereof (which Date of Termination shall not be less than thirty days following
the applicable Notice of Termination): (I) a material adverse alteration in the
nature of status or the Execu-tive's responsibilities from those contemplated by
Section 4 above; (II) Executive being required to relocate to a location more
than 50 miles from Memphis, Tennessee; (III) the failure by the Company to pay
to the Executive any material portion of the Executive's current compensation
(upon failure to cure after 15 days' notice) or the failure by the Company to
provide the Executive with the number of paid vacation days to which the
Executive is entitled; (IV) the failure by the Company to continue to provide
the Executive with Employee Benefits no less favorable than those provided to
any other senior executive officer of the Company; (V) any purported termination
of the Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 11(b), and, for purposes of
this Agreement, no such purported termination shall be effective.
(iv) Voluntary Resignation. Should the Executive wish to
resign from his position with the Company or terminate his employment for other
than Good Reason during the Term, the Executive shall give sixty (60) days
written notice to the Company, setting forth the reasons and specifying the date
as of which his resignation is to become effective.
(v) Change in Control. The Executive shall be entitled
to terminate his employment in the event of a Change in Control. For purposes of
this Agreement, a Change in Control of the Company shall have occurred if a
majority
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of the members of the Company Board are representatives or designees of any
"Person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) other than M.L.C. Partners Limited
Partnership, its former (other than Xx. Xxxxxxx) and present general or limited
partners, or any Person affiliated with any of the foregoing and their heirs; it
being understood that it shall not be deemed to be a Change in Control of the
Company if no Person shall have designated or nominated a majority of the
members of the Company Board.
(b) Notice of Termination. Any purported termination of the
Executive's employment by the Company or by the Executive shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 20. "Notice of Termination" shall mean a notice that 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.
(c) Date of Termination. "Date of Termination" shall mean (i)
if the Executive's employment is terminated because of death, the date of the
Executive's death, (ii) if the Executive's employment is terminated for
Disability, the date Notice of Termination is given, (iii) if the Executive's
employment is terminated pursuant to Subsection 11(a)(ii), (iii) or (iv) hereof
or for any other reason (other than death or Disability), the date specified in
the Notice of Termination (which, in the case of a termination for Good Reason
shall not be less than thirty (30) nor more than sixty (60) days from the date
such Notice of Termination is given, and in the case of a termination for any
other reason thirty (30) days (sixty (60) days in the case of a termination
under Section 11(a)(iv) hereof) from the date such Notice of Termination is
given.
(d) Outplacement Services. If, (i) prior to the expiration of
the Term, the Company terminates the Executive's employment in breach of this
Agreement or the Executive terminates his employment for Good Reason, or (ii)
subsequent to the expiration of the Term, the Company terminates the Executive's
employment in a manner that would have been in breach of this Agreement had the
Term not expired or the Executive terminates his employment on account of
actions that would have constituted Good Reason had the Term not expired, then
the Executive shall be entitled to the services of an outplacement firm for a
period of one (1) year following such termination, which outplacement firm shall
be selected by the executive and the reasonable fees and expenses for which
shall be paid by the Company.
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12. Compensation During Disability, Death or Upon Termination. (a)
During any period that the Executive fails to perform his duties hereunder as a
result of incapacity due to physical or mental illness, the Executive shall
continue to receive (i) his full salary at the rate then in effect until his
employment is terminated pursuant to Section 11(a)(i)(B) hereof and (ii) a pro
rata portion of his bonus that would have been payable pursuant to Section 7(b)
above with respect to the calendar year in which the termination pursuant to
Section 11(a)(i)(B) occurs; provided that such payments shall be reduced by the
sum of the amounts, if any, payable to the Executive with respect to such period
under disability benefit plans of the Company or under the Social Security
disability insurance program, and which amounts were not previously applied to
reduce any such payment.
(b) If the Executive's employment is terminated by his death
or Disability, the Company shall pay (i) any amounts due to the Executive under
Section 7 through the date of such termination (including a pro rata portion of
his bonus that would have been payable pursuant to Section 7(b) above with
respect to the calendar year in which the termination occurs) and (ii) all such
amounts that would have become due (and at the time such amounts would have
become due) to the Executive under Section 7 had the Executive's employment
hereunder continued until the last day of the calendar year in which such
termination of employment occurred, in each case in accordance with Section
14(b), if applicable.
(c) If the Executive's employment shall be terminated by the
Company for Cause or by the Executive for other than Good Reason, the Company
shall pay the Executive his full salary and benefits through the Date of
Termination as in effect at the time Notice of Termination is given, and the
Company shall have no further obligations to the Executive under this Agreement.
(d) If (i) the Company shall terminate the Executive's
employment in breach of this Agreement, or (ii) the Executive shall terminate
his employment for Good Reason or (iii) the Company undergoes a Change in
Control resulting in the termination of Executive's employment, then
(A) the Company shall pay the Executive (x) his full
salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given, (y) all other unpaid amounts, if any, to which the
Executive is entitled as of the Date of Termination under any compensation plan
or program of the Company, at the time such payments are due and (z) a pro rata
portion of the bonus that would have been payable to the Executive pursuant to
Section 7(b) above with respect to the calendar year in which the Date of
Termination occurs had the
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Executive's employment not terminated, at the time such bonus would otherwise
have become payable; and
(B) for periods subsequent to the Date of
Termination, the Company will continue to pay, on a monthly basis, the
Executive's Base Salary for the longer of (i) the remainder of the Term as if
the Term had not been terminated or (ii) 1 year in the event of a termination
pursuant to Section 12(d)(i) or (ii), or 2 years in the event of a termination
pursuant to Section 12(d)(iii) (in any case, the applicable period, the
"Continuation Period"); and
(C) the Company shall (x) continue coverage for the
Executive under the Company's life insurance, medical, health, disability and
similar welfare benefit plans (or, if continued coverage is barred under such
plans, the Company shall provide to the Executive substantially similar
benefits) for the Continuation Period, and (y) provide the benefits which the
Executive would have been entitled to receive pursuant to any supplemental
retirement plan maintained by the Company had his employment continued at the
rate of compensation specified herein for the Continuation Period. Benefits
otherwise receivable by the Executive pursuant to clause (x) of this Subsection
12(d)(iii)(C) shall be reduced to the extent comparable benefits are actually
received by the Executive from a subsequent employer during the Continuation
Period, and the Executive shall report any such benefits actually received to
the Company.
(e) If the Executive shall terminate his employment under
clause (B) of subsection 11(a)(iii) hereof, the Company shall pay the Executive
(A) his full salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given and (B) a pro rata portion of the bonus that
would have been payable to the Executive pursuant to Section 7(b) above with
respect to the calendar year in which the Date of Termination occurs had the
Executive's employment not terminated.
13. Representations. (a) The Company represents and warrants
that this Agreement has been authorized by all necessary corporate action of the
Company and is a valid and binding agreement of the Company enforceable against
it in accordance with its terms.
(b) The Executive represents and warrants that he is not a
party to any agreement or instrument which would prevent him from entering into
or performing his duties in any way under this Agreement.
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14. Successors; Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform 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.
(b) This Agreement is a personal contract and the rights and
interests of the Executive hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by him, except as otherwise expressly
permitted by the provisions of this Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisee and legatees. If the Executive should die while any amount would still
be payable to him hereunder had the Executive continued to live, all such
amounts, to the extent provided in paragraph 12(b), shall be paid in accordance
with the terms of this Agreement to his devisee, legatee or other designee or,
if there is no such designee, to his estate.
15. Confidentiality. The Executive covenants and agrees that he will
not at any time during and after the end of the Term, directly or indirectly,
use for his own account, or disclose to any person, firm or corporation, other
than authorized officers, directors and employees of the Company or its
subsidiaries, Confidential Information (as hereinafter defined) of the Company.
As used herein, "Confidential Information" of the Company means information of
any kind, nature or description which is disclosed to or otherwise known to the
Executive as a direct or indirect consequence of his association with the
Company or its subsidiaries, which information is not generally known to the
public or to the businesses in which the Company or its subsidiaries are engaged
or which information relates to specific investment opportunities within the
scope of the Company's business which were considered by the Executive or the
Company during the term of this Agreement.
16. Noncompetition. (a) During his employment with the Company or any
of its affiliates, and for the longer of (i) a period of twenty-four (24) months
following the termination of his employment for any reason and (ii) the
Continuation Period, if applicable, (such applicable period, the "Noncompete
Period") the Executive shall not, directly or indirectly, enter the employ of,
or render any services to, any person, firm or corporation engaged in any
business which competes in the business conducted or engaged in by the Company
including but not limited to any business which provides products and services
to the school spirit industry (including, but not limited to design, marketing
or sales of cheerleader, dance team
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and booster club uniforms and accessories and design, operation or marketing of
cheerleader and dance team camps, clinics, competitions or tours); and the
Executive shall not become interested in any such business, directly or
indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or in any other relationship or
capacity; provided, however, that nothing contained in this Section 16 shall be
deemed to prohibit the Executive from acquiring, solely as an investment, up to
three percent (3%) of the outstanding shares of capital stock of any public
corporation; provided, further, however, that if the Company shall fail to pay
any compensation due to the Executive under Section 12 hereof, the Noncompete
Period shall terminate upon failure to cure such non-payment after 15 days'
notice.
17. Nonsolicitation. During the Noncompete Period, the Executive
shall not directly or indirectly, for his benefit or for the benefit of any
other person, firm or entity, do any of the following:
(a) solicit from any customer doing business with the Company
as of Executive's termination, business of the same or of a
similar nature to the business of the Company with such customer;
(b) solicit from any known potential customer of the Company
business of the same or of a similar nature to that which has been the
subject of a known written or oral bid, offer or proposal by the
Company, or of substantial preparation with a view to making such a
bid, proposal or offer, within six (6) months prior to Executive's
termination;
(c) solicit the employment or services of, or hire, any person
who upon the termination of Executive's employment, or within six
(6) months prior thereto, was known to be (i) employed by the Company
or (ii) a consultant to the Company with respect to the business
described in Section 16 hereof; or
(d) otherwise interfere with the business or accounts of the
Company in a manner which results in material harm (economic or
otherwise) to the Company or any of its affiliates.
18. Entire Agreement. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred to
herein, and supersedes all undertakings and agreements, whether oral or in
writing, previously entered into by them with respect thereto. The Executive
represents that, in
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executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with regard
to the subject matter, basis or effect of this Agreement or otherwise. The
Executive further agrees and represents that upon the Effective Time, all
promises, representations, understandings, arrangements and prior agreements,
including the Former Agreement, between the Executive and the Company or Varsity
Spirit are merged into, and are superseded by, this Agreement.
19. Amendment or Modification, Waiver. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
20. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or telecopy or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
To Executive at:
0000 Xxxx Xxx
Xxxxxxx, Xxxxxxxxx 00000
To the Company at:
Xxxxxxx Sports Inc.
000 Xxxxx Xxxxxx/00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Any notice delivered personally or by courier under this Section 20 shall be
deemed given on the date delivered, and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
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21. Severability. If any provision of this Agreement (including without
limitation Section 16) or the application of any such provision to any party or
circumstances shall be determined by any court of competent jurisdiction to be
invalid and unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other than those
to which it is so determined to be invalid and unenforceable, shall not be
affected thereby, and each provision hereof shall be validated and shall be
enforced to the fullest extent permitted by law.
22. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
23. Governing Law; Specific Performance; Certain
Acknowledgements. (a) This Agreement will be governed by and construed in
accordance with the laws of the State of Tennessee, without regard to its
conflicts of laws principles.
(b) Executive acknowledges that the services to be rendered by
him to the Company are of a special and unique character, which gives this
Agreement a peculiar value to the Company, the loss of which may not be
reasonably or adequately compensated for by damages in an action at law, and
that a material breach or threatened breach by him of any of the provisions
contained in Sections 15, 16 and 17 hereof will cause the Company irreparable
injury. Executive therefore agrees that the Company shall be entitled, in
addition to any other right or remedy, to a temporary, preliminary and permanent
injunction, without the necessity of proving the inadequacy of monetary damages
or the posting of any bond or security, enjoining or restraining Executive from
any such violation or threatened violations.
(c) Executive further acknowledges and agrees that due to the
uniqueness of his services and confidential nature of the information he will
possess, the covenants set forth in Sections 15, 16 and 17 are reasonable and
necessary for the protection of the business and goodwill of the Company.
24. No Set-Off: Mitigation. The Company's obligation to make the
payments provided in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, defense, or other
claim, right or action which the Company may have or may allege to have against
the Executive or others. The Executive shall have no duty to mitigate the
amount of any payment provided for in Section 12 herein by seeking other
employment, nor shall
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the amount of any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the date of termination of the Executive's employment with the
Company, or otherwise.
25. Arbitration. Any dispute arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Memphis, Tennessee in
accordance with the rules of the American Arbitration Association then in
effect. Judgement may be entered on the arbitrator's award in any court having
jurisdiction. All costs and expenses of any such arbitration (including all
legal fees and expenses incurred by the Executive) shall be borne by the
Company; provided, however, that the legal fees and expenses incurred by the
Executive shall be borne by the Executive and not by the Company if such
arbitration results in a determination (a) in the case of a dispute with respect
to termination of the Executive's employment by the company for Cause or upon
Disability, that a proper basis for such termination did exist and appropriate
procedures were followed by the Company or (b) in the case of a dispute with
respect to termination of the Executive's employment for Good Reason, that a
proper basis for such termination did not exist and appropriate procedures were
followed by the Company or (c) in the case of any other dispute, that the
position taken by the Executive was incorrect.
26. Legal Fees. Subject to Section 25 hereof, the Company shall pay the
Executive all reasonable, documented legal and professional fees and expenses
incurred by the Executive in seeking to obtain or enforce any rights provided
for under this Agreement, provided that the Company shall not be required to pay
any such legal fees or expenses relating to obtaining or enforcing any rights if
the Company affords the Executive the rights under this Agreement within ten
days after notification from the Executive that the Company is in breach under
this Agreement. Any such notification shall set forth in reasonable detail the
rights to which the Executive believes he is entitled and the provision of this
Agreement under which he believes afford such rights.
27. Headings. All descriptive headings of sections and paragraphs
in this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
28. Withholdings. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local law.
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29. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
XXXXXXX SPORTS INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
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