Non-Compete and Severance Agreement

Change in Control Agreement

 

 

Exhibit 10.03

 

Execution Copy

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is made effective September 30, 2003, by and between KP Sports, Inc., a Maryland corporation doing business as Under Armour Performance Apparel (hereinafter, the “Company”), and Kevin A. Plank (hereinafter, the “Executive”).  For purposes hereof, the Company and the Executive are referred to collectively as the “Parties” and, individually, as a “Party.”

 

RECITALS

 

WHEREFORE, the Company desires to employ the Executive as President and Chief Executive Officer, subject to the terms and provisions of this Agreement, and the Executive desires such employment with the Company, subject to the terms and provisions of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

 

1.                                      Term.  Unless earlier terminated as provided herein, the Company hereby agrees to employ the Executive and the Executive hereby accepts such employment for a five year period commencing September 30, 2003 and ending on September 30, 2008, upon the terms and conditions hereinafter set forth.  Commencing on September 30, 2008 and each September 30th thereafter, the Term (as defined below) shall automatically be extended for one additional year, unless the Executive’s employment with the Company has been previously terminated pursuant to Section 9 of this Agreement or unless the Executive or the Company shall have given written notice to the other at least sixty (60) days prior thereto that the Term shall not be so extended.  For the purposes of this Agreement, the employment term as defined in this Section, including any extension thereof, shall be the “Term.”

 

2.                                      Duties.  During the Term, the Executive shall serve as President and Chief Executive Officer (hereinafter, “President and CEO”) of the Company and shall report to, and have those duties, responsibilities, and authority assigned him from time to time by, the Board of Directors of the Company (the “Board”).  The Executive shall have the powers and authority consistent with such responsibilities, duties, and authority.  The Executive shall devote substantially all his working time, attention, knowledge, and skills faithfully, diligently, and to the best of his ability, in furtherance of the business and activities of the Company.  During the Term, the Executive shall refrain from engaging in any activity which is or may be contrary to the welfare, interests, or benefits of the Company and from engaging in any activity which is or may be competitive with the activities of the Company.  Nothing in this Section shall preclude the Executive from engaging in charitable, professional, and community activities, in each case as long as such

 

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activities do not interfere, conflict, or give the appearance of conflicting in any way with the Executive’s performance under this Agreement.  In addition, the Executive shall be permitted to perform incidental duties and responsibilities for his family investments provided that such family business duties shall not interfere with his duties to the Company.  The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted from time to time by the Company, and the Executive acknowledges receipt of copies of all such rules, regulations, instructions, personnel practices and policies of the Company committed to writing as of the date of this Agreement.

 

3.                                      Base Salary.  In consideration for the services to be rendered by the Executive hereunder and for all rights and covenants granted herein, the Company shall pay to the Executive a gross salary at a rate of $350,000 per year (hereinafter, the “Base Salary”).  This Base Salary shall be paid in equal monthly or bi-weekly installments, in accordance with the customary payroll practices of the Company and subject to such deductions and withholdings as are required by law and applicable regulations.  This Base Salary may be adjusted from time to time at the discretion of the Compensation Committee of the Board (the “Compensation Committee”) or the Board if there is no Compensation Committee.

 

4.                                      Bonus.  The Executive shall receive an annual incentive bonus (the “Bonus”) equal to the sum of (a) three percent (3.0%) of the Company’s EBITDA (as defined below) in excess of $5.0 million up to and including $10.0 million and (b) seven percent (7.0%) of the Company’s EBITDA in excess of $10.0 million, in each case in any fiscal year of the Company during the Term, provided that the Bonus shall not exceed $2.5 million in any fiscal year.  For purposes hereof, “EBITDA” means the Company’s consolidated earnings before interest, taxes, depreciation and amortization  calculated in accordance with generally accepted accounting principles consistently applied.  The Bonus shall be calculated on the basis of the Company’s audited financial statements for each fiscal year of the Company during the Term and shall be paid to the Executive no later than 120 days after the end of the applicable fiscal year.  Any Bonus will be subject to such deductions and withholdings as are required by law and applicable regulations.

 

5.                                      Equity Incentives.  The Executive will be eligible in the sole discretion of the Compensation Committee, or the Board if there is no Compensation Committee, to receive equity incentives pursuant to the Company’s Stock Incentive Plan.  All awards pursuant to the Company’s Stock Incentive  Plan shall be subject to the terms and provisions of that plan, or any similar plan, and any award agreement with respect to such award.  The vesting, exercisability and termination provisions regarding such awards shall be subject to the terms and provisions of the Company’s Stock Incentive Plan, or other similar plan, pursuant to which the award was made, and the corresponding award agreement.

 

6.                                      Employee Benefits.   The Executive shall be entitled to participate in or receive benefits under any employee benefit plan, arrangement or perquisite generally made available by the Company from time to time to all of its executives and key management employees, subject to and on a basis consistent with the terms, conditions

 

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and overall administration of such plans, arrangements and perquisites.  Any payments or benefits payable to the Executive hereunder in respect of any year during which the Executive is employed by the Company for less than the entire such year shall, unless otherwise provided in the applicable plan or arrangement be prorated in accordance with the number of days in such year during which he is so employed.  Nothing contained in this Agreement shall prevent the Company from changing insurance carriers or from effecting modifications in insurance coverage for the Executive.  The Executive shall also receive an automobile allowance of $1,000 per month.

 

7.                                      Vacations; Holidays.  The Executive shall be entitled to vacation days in accordance with the applicable vacation policies for senior executives of the Company established by the Board, which shall be no less than three (3) weeks per year and which shall be taken at a reasonable time or times.  The Executive shall be entitled to all public holidays observed by the Company.

 

8.                                      Reimbursement of Expenses.  The Company shall reimburse the Executive for all reasonable business expenses paid or incurred by the Executive in connection with the performance of his duties and responsibilities under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers and/or such other supporting information as the Company may reasonably request.

 

9.                                      Termination.  Notwithstanding the provisions of Section 1 hereof, the Executive’s employment with the Company shall terminate upon the occurrence of any of the following:

 

(a) expiration or non-extension of the Term in accordance with Section 1;

 

(b) at any time during the Term, the Company may terminate the Executive’s employment with the Company for Cause upon written notice to the Executive, which termination shall be effective immediately upon such written notice except as otherwise provide in this Section 9(b).  For purposes hereof, “Cause” shall be defined as any of the following: (i) the Executive’s willful material misconduct or neglect in the performance of his duties as determined by the Board; (ii) the Executive’s conviction by a court of competent jurisdiction, or the entry of a plea of guilty or nolo contendere by the Executive, of any felony, offense punishable by imprisonment in a state or federal penitentiary, or any offense, civil or criminal, involving material dishonesty, fraud, moral turpitude or immoral conduct; (iii) the Executive’s use of illegal drugs or abusive use of prescription drugs as determined by a licensed physician or physicians designated by the Company to examine the Executive; or (iv) the Executive’s willful material breach of this Agreement as determined by the Board, which breach is not cured within thirty (30) days after the Executive’s receipt of written notice from the Company specifying such breach and demanding a cure thereof;

 

(c) at any time during the Term, the Executive may terminate his employment with the Company for “Good Reason” upon written notice to the Company, which termination shall be effective as provided in this Section 9(c).  For the purposes of

 

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this Agreement, “Good Reason” shall mean (i) the Company’s failure to perform or observe any of the material terms or provisions of this Agreement and the continued failure of the Company to cure such default within thirty (30) days after written demand for performance has been given to the Company by the Executive, which demand shall describe specifically the nature of such alleged failure to perform or observe such material terms or provisions, (ii) a material reduction in the scope of the Executive’s duties, authority, responsibilities or title as in effect immediately prior to such reduction; (iii) the Company’s assignment to the Executive of duties which are materially inconsistent with the Executive’s position as President and CEO; (iv) a material reduction by the Company in the Executive’s Base Salary, in the formula for determining the Bonus or in any other benefits made available to other senior executives of the Company; or (v) the Executive’s relocation to a facility or a location more than fifty (50) miles from the then present location without the Executive’s prior written consent, and in each case the failure of the Company to cure the same within thirty (30) days after receipt of written notice thereof from the Executive specifying such Good Reason and demanding cure thereof;

 

(d)  at any time during the Term, the Company may terminate the Executive’s employment with the Company for any reason other than Cause, which termination shall be effective upon thirty (30) days prior written notice to the Executive;

 

(e)  at any time during the Term, the Executive may terminate his employment with the Company for any reason other than Good Reason, which termination shall be effective upon thirty (30) days prior written notice to the Company; or

 

(f) at any time during the Term upon the Executive’s death or Inability to Perform (as defined herein), which termination shall be effective immediately upon the Executive’s death or written notice by either Party of the Executive’s Inability to Perform.  For the purposes of this Agreement, “Inability to Perform” shall mean the Executive’s inability to perform all of the Executive’s duties hereunder by reason of illness, physical or mental incapacity or other similar condition, as determined by the Board in its sole discretion, which inability shall exist for more than ninety (90) days.

 

10.                               Effect of Termination.

 

(a)  Termination due to expiration or non-extension of the Term pursuant to Section 1.  Upon termination of the Executive’s employment due to expiration or non-extension of the Term as described in Section 9(a) of this Agreement by the Company, the Company shall continue to pay the Executive’s Base Salary through the twenty-fourth (24th) full month following the effective date of the termination and pay the Executive’s COBRA premiums, on the same terms as existed before termination, if the Executive elects and continues COBRA coverage in connection with the health benefits plan that covered him as an employee, through the twelfth (12th) full month following the effective date of termination.  In addition, the Executive shall be entitled to a Bonus based on the EBITDA for the fiscal year in which the termination occurs, calculated in accordance with Section 4 hereof, provided that the Bonus shall be pro-rated based on the Executive’s length of service with the Company in that fiscal year.  Any Bonus shall be paid to the Executive no later than 120 days after the end of the fiscal year in which the

 

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termination occurs, and any such Bonus will be subject to such deductions and withholdings as are required by law and applicable regulations.  The Company shall have no further obligation or duties to the Executive except as provided in this Section 10(a), and the Executive shall have no further obligations or duties to the Company except as provided in Sections 11, 12, and 13 of this Agreement.  The Executive’s entitlement to amounts owing pursuant to this Agreement shall not be dependent upon the Executive’s efforts to “mitigate” loss or to find other employment, nor shall the amounts owing pursuant to this Agreement be subject to offset by compensation earned from a subsequent employer, provided, however, that the Company’s obligation to continue to provide the Executive with payments equal to the premiums for COBRA benefits shall cease if the Executive becomes eligible to participate in a health benefits arrangement as an employee that is substantially similar to those provided for under the COBRA continuation coverage.  Any benefits pursuant to this Section 10(a) are contingent on the Executive’s executing an agreement containing a general release of claims against the Company, in a form acceptable to the Company.

 

(b)  Termination by the Company for Cause or by the Executive for any reason other than Good Reason.  Upon termination of the Executive’s employment by the Company for Cause, as described in Section 9(b) of this Agreement, or by the Executive for any reason other than Good Reason, as described in Section 9(e) of this Agreement, the Executive shall be entitled to only his Base Salary and benefits up to the date of the termination of his employment, and the Company shall have no further obligation or duties to the Executive except as provided in this Section 10(b), and the Executive shall have no further obligation or duties to the Company except as provided in Sections 11, 12 and 13.  The Executive shall not be entitled to any Bonus for the fiscal year in which his employment is terminated by the Company for Cause or by him for any reason other than Good Reason.

 

(c)  Termination by the Company other than for Cause or by the Executive for Good Reason.  Upon termination of the Executive’s employment by the Company for any reason other than Cause, as described in Section 9(d) of  this Agreement, or by the Executive for Good Reason, as described in Section 9(c) of this Agreement, the Company shall continue to pay the Executive’s Base Salary through the twenty-fourth (24th) full month following the effective date of the termination and pay the Executive’s COBRA premiums, on the same terms as existed before termination, if the Executive elects and continues COBRA coverage in connection with the health benefits plan that covered him as an employee, through the twelfth (12th) full month following the effective date of termination.  In addition, the Executive shall be entitled to a Bonus based on the EBITDA for the fiscal year in which the termination occurs, calculated in accordance with Section 4 hereof, provided that the Bonus shall be pro-rated based on the Executive’s length of service with the Company in that fiscal year.  Any Bonus shall be paid to the Executive no later than 120 days after the end of the fiscal year in which the termination occurs, and any such Bonus will be subject to such deductions and withholdings as are required by law and applicable regulations.  The Company shall have no further obligation or duties to the Executive except as provided in this Section 10(c), and the Executive shall have no further obligations or duties to Company except as provided in Sections 11, 12, and 13 of this

 

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Agreement.  The Executive’s entitlement to amounts owing pursuant to this Agreement shall not be dependent upon the Executive’s efforts to “mitigate” loss or to find other employment, nor shall the amounts owing pursuant to this Agreement be subject to offset by compensation earned from a subsequent employer, provided, however, that the Company’s obligation to continue to provide the Executive with payments equal to the premiums for COBRA benefits shall cease if the Executive becomes eligible to participate in a health benefits arrangement as an employee that is substantially similar to those provided for under the COBRA continuation coverage.  Any benefits pursuant to this Section 10(c) are contingent on the Executive’s executing an agreement containing a general release of claims against the Company, in a form acceptable to the Company.

 

(d)                                 Termination Due to the Executive’s Death or Inability to Perform.  If the Executive’s employment is terminated by his death or by reason of his Inability to Perform, the Company shall pay to the estate of the Executive or to the Executive, as the case may be, the Base Salary and benefits up to the date of the termination of his termination of employment with the Company.   In addition, the estate of the Executive or the Executive, as the case may be shall be entitled to a Bonus based on the EBITDA for the fiscal year in which the termination occurs, calculated in accordance with Section 4 hereof, provided that the Bonus shall be pro-rated based on the Executive’s length of service with the Company in that fiscal year.  Any Bonus shall be paid to the to the estate of the Executive or to the Executive, as the case may be, no later than 120 days after the end of the fiscal year in which the termination occurs, and any such Bonus will be subject to such deductions and withholdings as are required by law and applicable regulations.  The Company shall have no further obligation or duties to the Executive or to his estate or to his beneficiaries other than as set forth in this Section 10(d).

 

11.                               Restrictive Covenants.

 

(a)                                  Confidentiality.  During the Term and continuing subsequent to any termination of the Executive’s employment with the Company, the Executive shall maintain Confidential Information, as defined in Section 11(a)(i) below, as secret and confidential unless the Executive is required to disclose Confidential Information pursuant to the terms of a valid and effective order issued by a court of competent jurisdiction or a governmental authority.  The Executive shall use Confidential Information solely for the purpose of carrying out those duties assigned him as an employee of the Company and not for any other purpose.  The disclosure of Confidential Information to the Executive shall not be construed as granting to the Executive any license under any copyright, trade secret or any right of ownership or right to use the Confidential Information whatsoever.

 

(i)                                     For the purposes of this Section 11, “Confidential Information” shall mean all information related to the Company’s business that is not generally known to the public. Confidential Information shall include, but shall not be limited to: (w) any financial, business, planning, operations, services, potential services, products, potential products, technical information, intellectual property, trade secrets and/or know-how, formulas, production, purchasing, marketing, sales, personnel, customer, supplier, or other information of the Company; (x) any papers, data, records, processes,

 

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methods, techniques, systems, models, samples, devices, equipment, compilations, invoices, customer lists, or documents of the Company; (y) any confidential information or trade secrets of any third party provided to the Company in confidence or subject to other use or disclosure restrictions or limitations; and (z) any other information, written, oral or electronic, whether existing now or at some time in the future, whether pertaining to current or future developments, and whether accessed prior to the Executive’s tenure with the Company or to be accessed during his future employment or association with the Company, which pertains to the Company’s affairs or interests or with whom or how the Company does business.  The Company acknowledges and agrees that Confidential Information shall not include information which is or becomes publicly available other than as a result of a disclosure by the Executive.

 

(ii)                                  The Executive shall promptly notify the Company if he has reason to believe that the unauthorized use, possession, or disclosure of any Confidential Information has occurred or may occur.

 

(iii)                               All physical items containing Confidential Information, including, without limitation, the business plan, know-how, collection methods and procedures, advertising techniques, marketing plans and methods, sales techniques, documentation, contracts, reports, letters, notes, any computer media, customer lists and all other information and materials of the Company’s business and operations, shall remain the exclusive and confidential property of the Company and shall be returned, along with any copies or notes that the Executive made thereof or therefrom, to the Company when the Executive ceases his employment with the Company.

 

(b)                                 Non-Competition.  The Executive hereby covenants and agrees that at no time during the Executive’s employment with Company and for a period of two (2) years immediately following termination of the Executive’s employment with the Company, whether voluntary or involuntary, shall the Executive (i) develop, own, manage, operate, or otherwise engage in, participate in, represent in any way or be connected with, as officer, director, partner, owner, employee, agent, independent contractor, consultant, proprietor, stockholder (except for the ownership of a less than 1% stock interest in a publicly traded company), or otherwise, any business or activity competing with the Company or its affiliates such that he performs duties similar to those performed while employed by the Company or otherwise acts in any capacity similar to the capacity in which the Executive served the Company, or in any capacity in which the Executive may use or disclose any Confidential Information, or use, profit from, or enable others to use or profit from the Company’s goodwill or any goodwill developed by the Executive while an employee of the Company, within any geographic area in which the Company does or plans to do business while the Executive was employed, including but not limited to the United States, Canada and Japan; (ii) act in any way, directly or indirectly, with the purpose or effect of soliciting, diverting or taking away any business, customer, client or any supplier of the Company; or (iii) otherwise compete with Company in the sale or licensing, directly or indirectly, as principal, agent or otherwise, of any products competitive with the products, or services competitive with the services, developed or marketed by Company within any geographic area in which the Company does or plans to do business while the Executive was employed, including but not limited to the United States, Canada and

 

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Japan.  The Executive acknowledges that he will provide unique services to the Company and that this covenant has unique, substantial, and immeasurable value to the Company.

 

(c)                                  Non-Solicitation and Non-Interference with Customers and Other Business Relationships.  The Executive hereby covenants and agrees that at no time during the Executive’s employment with the Company and for a period of two (2) years immediately following termination of the Executive’s employment with the Company, whether voluntary or involuntary, shall the Executive (i) solicit (other than on behalf of the Company) business or contracts for any products or services of the type provided, developed or under development by the Company during the Executive’s employment by the Company, from or with (x) any person or entity which was a customer of the Company for such products or services as of, or within one year prior to the Executive’s date of termination of employment with the Company, or (y) any prospective customer which the Company had solicited as of, or within one year prior to the Executive’s termination of employment with the Company or (ii) directly or indirectly contract with any such customer or prospective customer for any product or service of the type provided, developed or which was under development by the Company during the Executive’s employment with the Company.  Further, the Executive shall not during the Executive’s employment with the Company and for a period of two (2) years immediately following termination of the Executive’s employment with the Company, whether voluntary or involuntary, knowingly interfere or attempt to interfere with any transaction, agreement or business relationship in which the Company was involved during the Executive’s employment with the Company.

 

(d)                                 Non-solicitation or hiring of employees.  The Executive hereby covenants and agrees that at no time during the Executive’s employment with the Company and for a period of two (2) years immediately following termination of the Executive’s employment with the Company, whether voluntary or involuntary, will the Executive act in any way with the purpose or effect of (i) hiring anyone who has been an employee of the Company, its divisions or subsidiaries within the preceding six (6) months or (ii) soliciting, recruiting or encouraging, directly or indirectly, any of the Company’s employees to leave the employ of the Company, its divisions or its subsidiaries.

 

12.                               Discoveries, Inventions, Trade Secrets, Trade Names, Copyrights, and Patents.  As part of the rights granted herein to the Company, the Executive agrees that all right, title and interest of any kind and nature whatsoever in and to any inventions, product, know-how, trade secrets, patents, trademarks, methods, procedures, copyrights, seminars, discoveries, improvements, ideas, creations, and other technical properties, whether or not patentable or subject to rights of copyright and/or trademark, which are conceived or made by the Executive during the Term, and which are related to any of the business and/or activities of the Company and any other lines of business which the Company subsequently pursues in any form to include but not be limited to a strategic plan, research, feasibility studies, development, manufacturing, and customer contact (including but not limited to intellectual property, know-how, trade secrets, and patents in process or granted) or the performance by the Executive of his services hereunder, shall be considered “Works for Hire” and shall be and become the sole

 

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and exclusive property of the Company for all purposes.  The Executive shall promptly disclose to the Company any such conception or other work product of the type as is generally described in the immediately preceding sentence.  The Executive agrees to execute any and all applications, assignments and other written instruments that the Company may deem necessary and appropriate to confirm the title and interest of the Company therein and thereto.  The obligations of the Executive under this Section 12 shall be binding upon his assignees, employers, other corporate or research affiliates, executors, administrators and heirs.  The grant, transfer and assignment to the Company by the Executive of rights to intellectual properties shall remain effective for such periods of time as applicable law may permit with respect to the ownership of any such intellectual property or materials.

 

13.                               Enforcement; Remedies.   The Executive understands and agrees that he will provide unique services to the Company and that the restrictions contained in Sections 11 and 12 of this Agreement are reasonable, fair, and equitable in scope, terms, and duration, are necessary to protect the legitimate business interests, trade secrets, and good will of the Company, and are a material inducement to the Company to enter into this Agreement, and that any breach or threatened breach of the restrictions stated in Sections 11 and 12 would cause the Company substantial and irreparable harm for which there is no adequate remedy at law.  The Executive further acknowledges that the restrictions set forth in Sections 11 and 12 may limit his employment opportunities, but he represents that he will be able to obtain suitable employment without violating the provisions of Sections 11 and 12.  Therefore, the Executive agrees and consents to the issuance of injunctive relief in favor of the Company by any court of competent jurisdiction, where, in the Company’s sole discretion, the Company has acted upon reasonable information concerning a breach or potential breach of this Agreement, to enjoin the breach of any of the covenants of the Executive contained in Sections 11 and 12 of this Agreement.  The Executive will provide the Company a full accounting of all proceeds and profits received by the Executive as a result of or in connection with a breach of this Agreement.  Unless prohibited by law, the Company shall have the right to retain any amounts otherwise payable by the Company to the Executive to satisfy any obligations of the Executive as a result of any breach of this Agreement.  The Executive hereby agrees to indemnify and hold harmless the Company from and against any damages incurred by the Company as assessed by a court of competent jurisdiction as a result of any breach of Sections 11 and 12 of this Agreement by the Executive.  Nothing contained in this Section shall invalidate or waive any other rights or remedies which the Company may have at law or in equity.

 

14.                               Change in Control.  Notwithstanding any other provisions of this Agreement, the Company agrees that in the event a Change of Control (as hereinafter defined) occurs and the Executive leaves the employ of the Company and the combined entity for whatever reason (other than (i) termination for Cause, (ii) death, (iii) Inability to Perform as described in Section 9(f) of this Agreement or (iv) by Executive for any reason other than Good Reason):

 

(a)                                  If the termination occurs within twelve (12) months after a Change of Control, the Company shall continue to pay the Executive’s Base Salary through

 

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the thirty-sixth (36th) full month following the effective date of termination.  In addition, the Executive shall be entitled to a Bonus based on the EBITDA for the fiscal year in which the termination occurs, calculated in accordance with Section 4 hereof, provided that the Bonus shall be pro-rated based on the Executive’s length of service with the Company in that fiscal year.  Any Bonus shall be paid to the Executive no later than 120 days after the end of the fiscal year in which the termination occurs, and any such Bonus will be subject to such deductions and withholdings as are required by law and applicable regulations

 

(b)                                 To the extent the Executive remains eligible, for twelve (12) months after termination of his employment, the Company shall continue to allow the Executive to remain covered by all applicable noncash benefit plans of the Company, except for the retirement plans or retirement programs in which the Executive participates or any successor plans or programs in effect on the date of a Change in Control; provided, however, that if during such time the Executive should enter into the employment of a competitor of the Company, participation in such noncash benefit plans would cease.  In the event the Executive is ineligible under the terms of such plans to continue to be so covered, the Company shall use its best efforts to provide substantially equivalent coverage through other sources.  If the Company is unable to provide substantially equivalent coverage through other sources, then the Company shall pay in cash to the Executive the amount the Company would have had to expend to provide such coverage assuming standard risk.

 

(c)                                  The Executive’s payments received hereunder shall be considered severance pay in consideration of past service, continued service from the date of this Agreement, and full adherence to all restrictions that survive the termination of this Agreement, and entitlement thereto shall not be governed by any duty to mitigate damages by seeking further employment nor offset by any compensation which may be received from future employment.

 

(d)                                 The Executive’s payments received hereunder shall be in lieu of any payments or other benefits that the Executive would be entitled to receive pursuant to Sections 10(a) or 10(c) of this Agreement.

 

(e)                                  The specific arrangements referred to above are not intended to exclude the Executive’s participation in other benefits available to executive personnel generally or to preclude other compensation or benefits as may be authorized by the Board from time to time, or as a result of the Change of Control.

 

(f)                                    This Section shall be binding upon and shall inure to the benefit of the respective successors, assigns, legal representatives and heirs to the Parties hereto.

 

(g)                                 For the purpose of this Agreement, a “Change of Control” shall mean: (i) a merger, reorganization or consolidation of the Company into or with another entity, a sale of stock or other similar transaction or series of related transactions in which the stockholders of the Company immediately prior to such merger, reorganization, consolidation, sale of stock or similar transaction own less than a majority of the surviving

 

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entity’s voting securities immediately after such merger, reorganization, consolidation, sale of stock or other similar transaction or (ii) the sale, transfer or lease of all or substantially all of the assets of the Company, including assets of the Company’s subsidiaries taken as a whole, to an unaffiliated third party in one or a series of related transactions.

 

15.                               Gross Up Payments  If the payment provided under Section 14 of this Agreement (the “Contract Payment”) is subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (“Code”), the Company shall pay the Executive on or before the fifth day following the date of termination, an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Contract Payment and such other Total Payments (as defined below) and any federal and state and local income tax and Excise Tax upon the payment provided for by this Section, shall be equal to the Contract Payment and such other Total Payments.  For purposes of determining whether any of the payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change of Control of the Company or the Executive’s termination of employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a Change of Control of the Company or any corporation affiliated (or which, as a result of the completion of a transaction causing a Change of Control, will become affiliated) with the Company within the meaning of Section 1504 of the Code (together with the Contract Payment, the “Total Payments”) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company and acceptable to the Executive, whose acceptance shall not be unreasonably withheld, the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(b)(3) and (4) of the Code.  For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.  In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive’s employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined

 

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the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(d) of the Code.  In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive’s employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.

 

16.                               Termination and Survivability.  This Agreement shall terminate upon the termination of the Executive’s employment with the Company; provided, however, that the provisions of Sections 10, 11, 12, 13, 14, 15 and 18 through 29 of this Agreement shall survive its termination.

 

17.                               Section Titles.  The titles of the sections of this Agreement are for convenience only and shall not affect the interpretation of any section of this Agreement.

 

18.                               Waiver.  A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach of this Agreement.  All remedies, rights, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.

 

19.                               Severability.  The rights and restrictions in this Agreement may be exercised and are applicable only to the extent that they do not violate applicable laws, and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid, or unenforceable.  If any provision of this Agreement shall be deemed to be invalid or unenforceable, then that provision shall be modified to make it enforceable to the maximum extent possible, and the remaining provisions of this Agreement shall not be affected thereby and shall remain in full force and effect.

 

20.                               Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both Parties and their respective successors and assigns, including any entity with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that this Agreement requires the personal services of the Executive only, and the Executive shall not be entitled to assign any portion of his duties or obligations hereunder.

 

21.                               Notices.  For the purposes of this Agreement, notices, demands 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 (unless otherwise specified) mailed

 

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by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

 

Kevin A. Plank

 

 

2901 Boston Street, #511

 

 

Baltimore, Maryland 21224

 

 

 

If to the Company:

 

KP Sports, Inc.

 

 

1020 Hull Street, 3rd Floor

 

 

Baltimore, Maryland 21230

 

22.                               Governing Law.  This Agreement has been made and executed in the State of Maryland and shall be governed by the laws of Maryland applicable to contracts fully to be performed therein (but without giving effect to the conflicts or choice of law provisions of this Agreement that would give rise to the application of the domestic substantive law of any other jurisdiction).

 

23.                               Waiver of Jury Trial.  THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT.  EACH OF THE PARTIES REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.

 

24.                               Consent to Jurisdiction.  (a)  EACH OF THE PARTIES HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF MARYLAND AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF THE STATE OF MARYLAND SITTING IN BALTIMORE CITY, MARYLAND, AS WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(b)                                 EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING ANY SUIT, ACTION OR OTHER PROCEEDING

 

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IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE COURTS OF THE STATE OF MARYLAND AND COVENANTS THAT IT SHALL NOT SEEK IN ANY MANNER TO RESOLVE ANY DISPUTE OTHER THAN AS SET FORTH IN THIS SECTION 24 OR TO CHALLENGE OR SET ASIDE ANY DECISION, AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE PROVISIONS HEREOF.

 

(c)                                  EACH OF THE PARTIES EXPRESSLY WAIVES ANY AND OBJECTIONS IT MAY HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS.  IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE DELIVERED HEREUNDER IN ACCORDANCE WITH SECTION 21.

 

25.                               Entire Agreement.  This Agreement constitutes the entire agreement of the Parties and supersedes any and all previous agreements between the Parties relating to the subject matter hereof, including the Employment Agreement between the Company and the Executive dated September 30, 2001 (the “Prior Agreement”).  Upon the execution by the Parties of this Agreement, the Prior Agreement immediately shall be terminated and of no further force and effect.  This Agreement may not be modified orally, but only by an agreement in writing supplied by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought.

 

26.                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall deemed to be an original but all of which together will constitute one and the same instrument.

 

27.                               Legal Expenses.  In the event that any legal action is pursued to enforce any term or provision of this Agreement, including but not limited to any action seeking injunctive relief to prevent breach or reasonably anticipated breach of any term or provision of this Agreement, the prevailing party shall be entitled to recover all costs and expenses incurred thereby, specifically including reasonable attorneys’ fees.

 

28.                               Representations of the Executive.  The Executive hereby represents to the Company as follows: (i) he is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of his employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or other party, (ii) his performance of all of the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by him in confidence or in trust prior to his employment with the Company, (iii) he has carefully read this Agreement, understands the contents herein, and freely and voluntarily assents to all of the terms and conditions of this Agreement, and (iv) he has had an opportunity to fully discuss and review the terms of this Agreement with an attorney

 

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29.                               Miscellaneous.  The Parties agree to execute all other such documents as may be required to effectuate or more readily carry out the provisions of this Agreement.

 

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IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement.

 

COMPANY:

 

EMPLOYEE:

 

 

 

KP SPORTS, INC.

 

Kevin A. Plank

 

 

 

 

 

 

By:

/s/ J. S. Plank

 

 

/s/ Kevin A. Plank

 

 

 

Kevin A. Plank

Name:

J. S. Plank

 

 

 

 

 

Date:

September 30, 2003

 

Title:

VP Finance

 

 

 

 

 

 

Date:

9/30/05

 

 

 

 

 

 

 

 

 

 

 

 

 

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Top of the Document

Exhibit 10.09

 

NON-COMPETE AND SEVERANCE AGREEMENT

 

This Non-Compete and Severance Agreement (“Agreement”) is entered into this      day of                   ,                  , by and between KP SPORTS, INC. dba UNDER ARMOUR PERFORMANCE APPAREL (“Under Armour” or the “Company”) and                          (“Employee”).

 

EXPLANATORY NOTE

 

The Employee recognizes that the Employee will have access to confidential proprietary information during the course of his or her employment and that the Employee’s subsequent employment by a competitor would inevitably result in the disclosure of that information and, thereby, create unfair competition and would likely to cause substantial loss and harm to the Company.  The Employee further acknowledges that his/her employment with the Company is based on the Employee’s agreement to abide by the covenants contained herein.  Additionally, the Company desires to recognize the service of the Employee to the Company by providing certain economic benefits to the Employee upon the occurrence of certain events.

 

NOW THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

 

1.                                       Non-Competition.   In exchange for Employee’s continued employment with the Company, the Employee agrees that during the term of Employee’s employment with Under Armour and for a period of two (2) months after the termination of Employee’s employment with the Company, (the “Non-Compete Period”), the Employee will not compete, directly or indirectly, either as proprietor, stockholder, partner, officer, employee or otherwise, with Under Armour by engaging within any geographic area in which Under Armour does or plans to do business while Employee was employed with Under Armour (including, but not limited to, the United States, Canada and Japan) in the business of developing, producing, marketing, or selling products or performing services similar to those distributed, sold or provided by Under Armour at any time during the two (2) years preceding the Employee’s termination of employment and throughout the end of the Non-Compete Period.

 

2.                                      Severance Payments.  In the event the Employee’s employment with the Company is terminated by the Company without Cause (as defined below), and upon execution of a Separation Agreement substantially in the form of Exhibit A attached hereto (the “Separation Agreement”), the Employee will be entitled to receive severance payments during the Non-Compete Period, as set forth in the Separation Agreement.  For purposes of this Agreement, “Cause” for termination shall be deemed to exist upon a good faith finding by the Company of (1) an inability of the Employee, through sickness or other incapacity, except for leave qualified under the Federal Family and Medical Leave Act of 1993, to perform his duties under this Agreement for a period in excess of one hundred and twenty (120) substantially consecutive days; (2) an action or failure to act by the Employee constituting fraud, misappropriation or intentional damage to the property or business of the Company; the commission of an act of

 

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deliberate and material dishonesty; the commission of a crime involving an act of moral turpitude or constituting a felony, or causing the Company to commit such a crime; (3) insubordination, misconduct, gross negligence, drunkenness or illicit drug use while acting in his/her capacity as an employee of the Company; (4) a material breach of this Agreement or the Business Protection Agreement between the Employee and the Company, dated as of the date hereof (the “Business Protection Agreement”); (5) the failure of the Employee for any reason to comply with instructions or other action or omission to act, or violation of the Company’s policies by the Employee which has or is likely to have a significant adverse effect upon the Company’s business operations; or (6) the failure of the Employee to perform his assigned duties for the Company.

 

3.                                      At Will Employment.  Anything contained herein to the contrary notwithstanding, the Employee hereby acknowledges and agrees that that he/she is employed by the Company on an at-will basis, and that the Company shall have the right to terminate the employment of the Employee as an employee at anytime, with or without cause.

 

4.                                      Survival of Obligations.  The Employee’s obligations under Section 1 of this Agreement and under the Business Protection Agreement shall survive regardless of whether the Employee’s employment is terminated by the Company with or without Cause, or the Employee terminates his or her employment, and regardless of whether the Employee executes the Separation Agreement.

 

5.                                      Company’s Remedies for Breach.  The parties stipulate that a violation by the Employee of the non-competition covenant would cause irreparable injury to the Company and, further, that there is no adequate remedy at law for such violation.  Therefore, the Company shall have the right, in addition to any other remedies available at law or in equity, to seek to enjoin the Employee from violating said covenant.

 

6.                                      Amendments and Termination; Entire Agreement.  This Agreement may not be amended or terminated except by a writing executed by all the parties hereto.  The Business Protection Agreement shall survive the termination of this Agreement.  This Agreement constitutes the entire agreement of the Company and the Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.

 

7.                                      Governing Laws and Forum.  This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Maryland, without regard to any conflicts of law principle that would apply the law of another jurisdiction.  The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction and venue of the state or federal courts located in Maryland.

 

8.                                      Disputes.  The parties mutually waive the right to a jury trial with respect to any claims related to or arising out of this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above written.

 

 

KP Sports, Inc. dba Under Armour Performance Apparel

 

 

 

 

 

By:

 

 

 

 

Kevin Plank, President

 

 

 

 

Employee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

SEPARATION AGREEMENT

 

This SEPARATION AGREEMENT (“Agreement”) is entered into this        day of                 , 200  , by and between KP SPORTS, INC. dba UNDER ARMOUR PERFORMANCE APPAREL (“Under Armour” or the “Company”) and                       (“Employee”).

 

The Employee and the Company are parties to a Non-Compete and Severance Agreement dated as of January 5, 2004, which provides for the payment by the Company to the Employee of certain economic befits upon the occurrence of certain events.  The Employee’s employment with the Company has been terminated effective                                  , 200  , and this Agreement sets forth the understandings and agreements of Employee and the Company.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the receipt and adequacy of which are hereby acknowledged, it is agreed as follows:

 

1.                                      Severance Payments.  The Company agrees to pay to the Employee, for a period of two (2) months after such termination, an amount equal to the Employee’s salary as of the date of the Employee’s termination (the “Termination Salary”) at the time and in accordance with the method for payment of salaries to employees.

 

2.                                      Extension of Non-Compete Period.  The Company, at its option, may extend the Non-Compete Period (as defined in the Non-Compete and Severance Agreement) for an additional period of up to eighteen (18) months from the date of termination of Employee’s employment (the “Additional Non-Compete Period”), upon written notice given to Employee within thirty (30) days following the date of termination of Employee’s employment, provided that the Company undertakes to pay to the Employee the Termination Salary through the end of the Additional Non-Compete Period.

 

3.                                      Offset and Withholding.  Any and all amounts payable to the Employee hereunder shall be subject to and offset by any amounts payable by the Employee to the Company for any reason.  Employee hereby authorizes the Company to deduct any and all such amounts from all sums payable by the Company to the Employee for any reason.

 

4.                                      Compliance with Agreements.   The Employee’s right to receive the moneys payable to the Employee under this Agreement is expressly conditioned upon the Employee’s satisfying his obligations under this Agreement, the Non-Compete and Severance Agreement and the Business Protection Agreements he/she executed on                       , 200  .

 

5.                                      General Release.  Employee releases and discharges the Company and its officers, directors, employees and agents from all claims, rights, charges and/or causes of action (hereinafter referred to as “claims”) which he had, now has or hereafter may have arising out of or related to his employment with the Company, the

 

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termination of his employment, and/or any other matter through the date this Agreement is signed, including but not limited to, claims under all other employment discrimination laws, tort claims, contract claims, and claims under all federal, state and local laws, but excluding claims under the Age Discrimination in Employment Act of 1967, as amended.  Employee confirms that the consideration provided under this Agreement is in addition to that to which he was already entitled.  Employee voluntarily agrees to accept the consideration set forth in Section 1 of this Agreement in full accord and satisfaction of all claims.  This release is agreed to without reliance upon any statement or representation.  Employee agrees that he or she will not file or maintain any suit (or otherwise seek or accept any compensation or benefits in any non-judicial forum) arising out of or related to the matters released.

 

6.                                      Company’s Remedies for Breach.  The parties stipulate that in the event the Company extends the Non-Compete Period, a violation by the Employee of the non-competition covenant would cause irreparable injury to the Company and, further, that there is no adequate remedy at law for such violation.  Therefore, the Company shall have the right, in addition to any other remedies available at law or in equity, to seek to enjoin the Employee from violating said covenant.  In the event the Employee breaches any commitment made in this Agreement, then in addition to any other rights the Company may have: (a) Employee agrees that no further payments under this Agreement shall be due and the Company shall have the right to recover any amounts paid under Sections 1 and 2 of this Agreement, and (b) Employee shall pay the Company’s reasonable attorney’s fees and other costs incurred by the Corporation in connection with the breach, or a threatened breach, including, but not limited to, seeking to recover such payments and/or to obtain injunctive relief with respect to the breach or any subsequent breach.

 

7.                                      Amendments and Termination; Entire Agreement.  The Company has not made any representation or promise except as expressly set forth in this Agreement.  This Agreement may not be amended or terminated except by a writing executed by all the parties hereto.  Both the Business Protection Agreement and the Non-Compete and Severance Agreement shall survive the termination of this Agreement.  This Agreement constitutes the entire agreement of the Company and the Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.

 

8.                                      Severability.  If any provision of this Agreement is determined to be invalid or unenforceable, the parties agree that the invalid or unenforceable provision shall be modified to the minimum extent necessary so that the rights and obligations of the parties under the Agreement are preserved to the fullest extent permitted by law, and the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it is held to be invalid or unenforceable, shall not be affected thereby.

 

9.                                      Governing Laws and Forum.  This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Maryland, without regard to any conflicts of law principle that would apply

 

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the law of another jurisdiction.  The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction and venue of the state or federal courts located in Maryland.

 

10.                               Disputes.  The parties mutually waive the right to a jury trial with respect to any claims related to or arising out of this Agreement.

 

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IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above written.

 

 

KP Sports, Inc. dba Under Armour Performance Apparel

 

 

 

 

 

By:

 

 

 

 

Kevin Plank, President

 

 

 

 

Employee

 

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EX-10.15 3 dex1015.htm EXHIBIT 10.15

Exhibit 10.15

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

This CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is made as of the          day of                 , 200    , between Under Armour, Inc., a corporation organized under the laws of the State of Maryland (together with its affiliates, the “Company”), and                                          (“Executive”).

WITNESSETH THAT:

WHEREAS, should Under Armour, Inc. or shareholders of Under Armour, Inc. receive any proposal from a third person regarding a possible Change in Control, the Board of Directors of Under Armour, Inc. (the “Board”) believes it is important that the Company be able to rely upon the Executive to continue in his position until after such Change in Control and that Under Armour, Inc. be able to receive and rely upon the Executive’s advice, if requested, as to the best interest of Under Armour, Inc. and its shareholders in connection with any such Change in Control, without concern that the Executive might be distracted or his advice affected by the personal uncertainties and risks created by such a Change in Control.

NOW THEREFORE, in order to provide an incentive to the Executive for the continued dedication of Executive and the availability of his advice and counsel notwithstanding the possibility of a Change in Control, and to encourage Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and Executive hereby agree as follows:

1. Definitions.

(i) “AAA” shall have the meaning set forth in Section 7(ii).

(ii) “Accrued Obligations” shall mean the sum of the following: (a) the full base salary earned by the Executive through the Termination Date and unpaid as of the Termination Date, calculated at the highest rate of base salary in effect at any time during the twelve (12) months immediately preceding the Termination Date; (b) the amount of any base salary attributable to vacation earned by the Executive but not taken before the Termination Date; (c) any Bonus accrued to the Executive with respect to the calendar year preceding the termination of employment and unpaid as of the Termination Date; (d) a pro-rata Bonus for the year in which the Change in Control occurs, equal to the Bonus times a fraction, the numerator of which is the number of days during the calendar year preceding the Termination Date and the denominator of which is 365; and (e) all other amounts earned by the Executive and unpaid as of the Termination Date.

(iii) “Arbitration Rules” shall have the meaning set forth in Section 7(ii).

 

Private and Confidential

  

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(iv) “Bonus” shall mean the greater of: (a) the annual average of the Executive’s bonus paid to the Executive with respect to the two (2) calendar years prior to Executive’s termination of employment with the Company or (b) the Executive’s target bonus for the year of such termination of employment.

(v) “Cause” shall mean the occurrence of any of the following: (a) the Executive’s material misconduct or neglect in the performance of his duties; (b) the Executive’s commission of any felony; offense punishable by imprisonment in a state or federal penitentiary; any offense, civil or criminal, involving material dishonesty, fraud, moral turpitude or immoral conduct; or any crime of sufficient import to potentially discredit or adversely affect the Company’s ability to conduct its business in the normal course; (c) the Executive’s use of illegal drugs or abusive use of prescription drugs; (d) the Executive’s material breach of the Company’s written Code of Conduct, as in effect from time to time; (e) the Executive’s commission of any act that results in severe harm to the Company excluding any act taken by the Executive in good faith that he reasonably believed was in the best interests of the Company; or (f) the Executive’s material breach of this Agreement, including, but not limited to, a material breach of the Employee Confidentiality, Non-Competition and Non-Solicitation Agreement attached hereto as Attachment A.

(vi) “Change in Control” shall mean the occurrence of any of the following:

 

 

a.

Any ‘person’ (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the ‘beneficial owner’ (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of Under Armour, Inc. representing fifty percent (50%) or more of the total voting power represented by Under Armour, Inc.’s then-outstanding voting securities, provided, however that a Change in Control shall not be deemed to occur if an employee benefit plan (or a trust forming a part thereof) maintained by Under Armour, Inc., and/or Kevin Plank and/or his immediate family members, directly or indirectly, become the beneficial owner, of more than fifty percent (50%) of the then-outstanding voting securities of Under Armour, Inc. after such acquisition;

 

 

b.

A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. ‘Incumbent Directors’ shall mean directors who either (A) are directors of Under Armour, Inc. as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to Under Armour, Inc.);

 

Private and Confidential

  

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Date


 

c.

The consummation of a merger or consolidation of Under Armour, Inc. with any other corporation, other than a merger or consolidation which would result in (a) the voting securities of Under Armour, Inc. outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of Under Armour, Inc. or such surviving entity outstanding immediately after such merger or consolidation in substantially the same proportion as prior to such merger or consolidation; or (b) the directors of Under Armour, Inc. immediately prior thereto continuing to represent at least fifty percent (50%) of the directors of Under Armour, Inc. or such surviving entity immediately after such merger or consolidation; or

 

 

d.

The consummation of the sale or disposition by Under Armour, Inc. of all or substantially all of Under Armour, Inc.’s assets.

(vii) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(viii) “Contract Period” shall mean the period staring on the date hereof and ending on the second anniversary of the date hereof. The Company, in its sole discretion, shall have the right to extend the Contract Period.

(ix) “Disability” shall mean a physical or mental incapacity of the Executive which entitles the Executive to benefits at least as favorable as the benefits provided under the long term disability plan applicable to and maintained by the Company as in effect immediately prior to the Change in Control.

(x) “Good Reason,” shall mean the occurrence of any of the following events: (a) a diminishment in the scope of the Executive’s duties or responsibilities with the Company; (b) a reduction in the Executive’s current base salary, bonus opportunity or a material reduction in the aggregate benefits or perquisites; (c) a requirement that the Executive relocate more than fifty (50) miles from his primary place of business as of the date of a Change in Control, or a significant increase in required travel as part of the Executive’s duties and responsibilities with the Company; (d) a failure by any successor to the Company to assume this Agreement pursuant to Section 5(a) hereof; or (e) a material breach by the Company of any of the terms of this Agreement.

(xi) “Protection Period” shall mean the twelve (12) month period following a Change in Control.

(xii) “Termination Date” shall mean the effective date as provided hereunder of the termination of Executive’s Employment.

 

Private and Confidential

  

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(xiii) “Without Cause” shall mean the termination of the Executive’s employment by the Company other than for Cause, death or Disability.

2. Application of this Agreement. This Agreement shall apply if and only if: (a) the Executive’s employment terminates during the Protection Period and (b) the Change in Control occurs during the Contract Period. This Agreement shall not apply to any termination of the Executive’s employment other than what is described in the preceding sentence. Notwithstanding the foregoing, if three (3) months prior to the date on which a Change in Control occurs, the Executive’s employment with the Company is terminated by the Company other than by reason of the Executive’s death, Disability or circumstances that would constitute Cause or the terms and conditions of the Executive’s employment are adversely changed in a manner which would constitute grounds for a termination of employment by the Executive for Good Reason, and it is reasonably demonstrated that such termination of employment or adverse change (i) was at the request of a third party who has taken steps reasonably calculated to effect the Change in Control, or (ii) otherwise arose in connection with or in anticipation of the Change in Control, then for all purposes of this Agreement such termination of employment shall be deemed to have occurred during the Protection Period and shall be considered either termination of the Executive’s employment Without Cause by the Company or termination of the Executive’s employment by the Executive for Good Reason, as the case may be.

3. Termination of Employment of Executive. The Executive’s employment may be terminated by following the procedures specified in this Section 3.

(i) Cause. The Executive may not be terminated for Cause unless and until a notice of intent to terminate the Executive’s employment for Cause, specifying the particulars of the conduct of the Executive forming the basis for such termination, is given to the Executive by the Company and, subsequently, a majority of the Board finds, after reasonable notice to the Executive (but in no event less than fifteen (15) days prior notice) and an opportunity for the Executive and his counsel to be heard by the Board, that termination of the Executive’s employment for Cause is justified. Termination of the Executive’s employment for Cause shall become effective after such finding has been made by the Board and five (5) business days after the Board gives to the Executive notice thereof, specifying in detail the particulars of the conduct of the Executive found by the Board to justify termination for Cause. It shall not constitute Good Reason to the Executive to the extent the Executive is relieved of any duties and responsibilities during the period the Board is considering whether such termination for Cause is justified.

(ii) Disability. Termination of the Executive’s employment for Disability shall become effective thirty (30) days after a notice of intent to terminate the Executive’s employment, specifying Disability as the basis for such termination, is given to the Executive by the Company.

(iii) Termination Without Cause. At all times, the Company shall have the right by notice to the Executive of the Company’s intention to terminate Executive’s employment Without Cause. Termination of Executive’s employment by the Company Without Cause shall become effective immediately upon the receipt by the Executive of such notice.

 

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(iv) Voluntary Termination by the Executive. The Executive may terminate his employment with the Company by giving a notice of voluntary termination to the Company, and if such termination is for Good Reason, such notice shall set forth in reasonable detail the acts and circumstances claimed by the Executive to constitute Good Reason. Termination of the Executive’s employment by the Executive without Good Reason shall be effective five (5) business days after the Executive gives notice thereof to the Company. The Company shall have twenty (20) days after receipt of such notice from the Executive of claimed Good Reason to cure any Good Reason. If the Company is unable to cure the Good Reason during such cure period, termination of the Executive’s employment by the Executive for Good Reason shall be effective five (5) business days after the expiration of such cure period.

(v) Death. Termination of the Executive’s employment for death shall be effective on the date of the Executive’s death.

4. Benefits Upon Termination of Employment.

(i) Termination Without Cause or by the Executive for Good Reason. Upon the termination of the employment of Executive Without Cause by the Company or by the Executive for Good Reason, the Company shall pay or provide to the Executive:

(a) a lump sum payment equal to the sum of the following:

 

 

1.

the Accrued Obligations; and

 

 

2.

an amount equal to the sum of the annual base salary of the Executive at the highest rate in effect during the Protection Period and the Bonus.

The payment described in this Section 4(i)(a) shall be made by the Company not later than the earlier of the date required by applicable law or five (5) days following the Termination Date. Executive shall not be required to mitigate the amount of the payment provided for in this Section 4(i)(a) by seeking other employment or otherwise. The amount of the payment provided for in this Section 4(i)(a) shall not be reduced by any compensation or other amounts paid to or earned by Executive as the result of employment with another employer after the date on which his employment with the Company terminates or otherwise.

(b) the continuance of the Executive’s life, medical, dental, prescription drug and long and short-term disability plans, programs or arrangements, whether group or individual, of the Company in which the Executive was entitled to participate at any time during the twelve (12) month period prior to the Termination Date until the earliest to occur of (1) one (1) year after the Termination Date; (2) the Executive’s death (provided that compensation and benefits payable to his beneficiaries shall not terminate upon his death); or (3) with respect to any particular plan, program or arrangement, the date the Executive is afforded a comparable benefit at a comparable cost to the Executive by a subsequent employer. In the event that the Executive’s participation in any such plan, program or arrangement of the Company is prohibited, the Company shall arrange to provide the Executive with compensation and benefits substantially similar to those which the Executive is entitled to receive under such plan, program or arrangement for such period.

 

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Notwithstanding the foregoing, in the event the payments or benefits under this Section 4 would result in the imposition of a tax under Section 409A of the Code, then such payments or benefits will be paid or provided at such time when such payments or benefits would not be subject to such tax.

(ii) Cobra Continuation Coverage. Upon the expiration of the provision of benefits in Section 4(i)(b), the Executive and his dependents shall be entitled to exercise such rights as they may have under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

(iii) Death and Disability. Upon a termination of the Executive’s employment on account of the Executive’s death or Disability, the Company shall pay to the Executive or his estate or beneficiary (in the event of his death), the Accrued Obligations within five (5) days of the Termination Date and the Company shall provide to the Executive or his estate or beneficiary (in the event of his death), such benefits that the Company provides in the event of an employee’s death or Disability.

(iv) Cause, Voluntary Termination by the Executive. Upon the termination of the Executive’s employment by the Company for Cause or by the Executive without Good Reason, the Company shall pay to the Executive the Accrued Obligations within five (5) days of the Termination Date.

(v) Effect of Stock Options and Other Equity Awards. The terms and conditions of the Executive’s award agreements or employment agreement (as applicable to such Executive) shall govern the effect of termination of the Executive’s employment on equity awards granted by the Company and held by the Executive as of the Termination Date.

(vi) Conditions to Receiving Benefits. The benefits described in Sections 4(i)(a)(2) and 4(i)(b) shall be subject to the Executive’s execution of the Employee Confidentiality, Non-Competition, and Non-Solicitation Agreement attached hereto as Attachment A and the benefits described in Sections 4(i)(a)(2) and 4(i)(b) will not be paid to the Executive unless and until the Executive executes the release attached hereto as Attachment B, and such release becomes effective and irrevocable.

 

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(vii) No Further Payments due to Executive. Except as provided in this Section 4, the Company shall have no obligation to make any other payment, in the nature of severance or termination pay.

(viii) Exception to Benefit Entitlements. The Executive shall not receive the payments and benefits under this Agreement if the Executive has executed an individually negotiated employment contract, agreement or offer letter with the Company relating to severance benefits that is in effect on the Termination Date, unless the Executive waives any such severance benefits under such contract, agreement or letter.

(viii) Retirement Payments. No amounts paid pursuant to this Agreement will constitute compensation for any purpose under any retirement plan or other employee benefit plan, program, arrangement or agreement of the Company or any of its affiliates, unless such plan, program, arrangement or agreement specifically so provides.

5. Successors; Binding Agreement.

(a) This Agreement shall be binding upon any successor (whether direct or indirect, by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the business and/or assets of Under Armour, Inc. Additionally, Under Armour, Inc. shall require any such successor expressly to agree to assume and to assume of the obligations of the Company under this Agreement upon or prior to such succession taking place. A copy of such assumption and agreement shall be delivered to the Executive promptly after its execution by the successor.

(b) This Agreement is personal to the Executive and the Executive may not assign or transfer any part of his rights or duties hereunder, or any payments due to the Executive hereunder, to any other person, except that this Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or beneficiaries. No payment pursuant to any will or the laws of descent and distribution shall be made hereunder unless the Company shall have been furnished with a copy of such will and/or such other evidence as the Board may deem necessary to establish the validity of the payment.

6. Modification; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and by an officer of the Company thereunto expressly authorized by the Board. Waiver by any party of any breach of or failure to comply with any provision of this Agreement by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or a waiver of any other breach of, or failure to comply with, any other provision of this Agreement.

7. Arbitration of Disputes.

(i) Any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation or validity hereof shall be settled exclusively and finally by arbitration. It is specifically understood and agreed that any such disagreement, dispute or controversy which cannot be resolved between the parties, including without limitation any matter relating to interpretation of this Agreement, may be submitted to arbitration irrespective of the magnitude thereof, the amount in controversy or whether such disagreement, dispute or controversy would otherwise be considered justiciable or ripe for resolution by a court or arbitral tribunal.

 

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(ii) The arbitration shall be conducted in accordance with the Commercial Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (“AAA”).

(iii) The arbitral tribunal shall consist of one arbitrator. The parties to the arbitration jointly shall directly appoint such arbitrator within thirty (30) days of initiation of the arbitration. If the parties shall fail to appoint such arbitrator as provided above, such arbitrator shall be appointed by the AAA as provided in the Arbitration Rules and shall be a person who (a) maintains his principal place of business within thirty (30) miles of the City of Baltimore and (b) has substantial experience in executive compensation. The parties shall each pay an equal portion of the fees, if any, and expenses of such arbitrator.

(iv) The arbitration shall be conducted within thirty (30) miles of the City of Baltimore or in such other city in the United States of America as the parties to the dispute may designate by mutual written consent.

(v) At any oral hearing of evidence in connection with the arbitration, each party thereto or its legal counsel shall have the right to examine its witnesses and to cross-examine the witnesses of any opposing party. No evidence of any witness shall be presented unless the opposing party or parties shall have the opportunity to cross-examine such witness, except as the parties to the dispute otherwise agree in writing or except under extraordinary circumstances where the interests of justice require a different procedure.

(vi) Any decision or award of the arbitral tribunal shall be final and binding upon the parties to the arbitration proceeding. The parties hereto hereby waive to the extent permitted by law any rights to appeal or to seek review of such award by any court or tribunal. The parties hereto agree that the arbitral award may be enforced against the parties to the arbitration proceeding or their assets wherever they may be found and that a judgment upon the arbitral award may be entered in any court having jurisdiction.

(vii) Nothing herein contained shall be deemed to give the arbitral tribunal any authority, power, or right to alter, change, amend, modify, add to or subtract from any of the provisions of this Agreement.

(viii) If any dispute is not resolved within sixty (60) days from the date of the commencement of an arbitration, then the Company shall, at its option, elect to pay Executive either (a) within five (5) days after the end of such sixty (60)-day period, the amount or amounts which would have been payable to Executive had there been no dispute, subject to reimbursement to the extent consistent with the final disposition of the dispute or (b) following final disposition of the dispute, the amount determined in such

 

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final disposition to have been payable, together with Interest from the date when such sums were originally payable to the date of actual payment. For purpose of this paragraph (viii) the term “Interest” means interest at a rate equal to the Company’s borrowing rate per annum, compounded monthly.

(ix) Notwithstanding anything to the contrary in this Agreement, the arbitration provisions set forth in this Section 7 shall be governed exclusively by the Federal Arbitration Act, Title 9, United States Code.

(x) If the Executive prevails in the arbitration concerning any substantial matter of this Agreement or the rights and duties of any party hereunder, in addition to such other relief as may be granted, the Company shall reimburse the Executive for the Executive’s reasonable attorneys’ fees incurred by reason of such arbitration to the extent the attorneys’ fees relate to such substantial matter.

8. Notice. All notices, requests, demands and other communications required or permitted to be given by either party to the other party to this Agreement (including, without limitation, any notice of termination of employment and any notice of an intention to arbitrate) shall be in writing and shall be deemed to have been duly given when delivered personally or received by certified or registered mail, return receipt requested, postage prepaid, at the address of the other party, as follows:

 

If to the Company, to:

 

If to the Executive, to:

Under Armour, Inc.

 

 

Attn: Vice President,

 

 

Human Resources

 

 

1020 Hull Street

 

Baltimore, Maryland 21230

 

With a copy to:

 

With a copy to:

Under Armour, Inc.

 

 

Attn: Legal Department

 

 

1020 Hull Street

 

 

Baltimore, Maryland 21230

 

Either party hereto may change its address for purposes of this Section 8 by giving fifteen (15) days’ prior notice to the other party hereto.

9. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

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10. Headings. The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of this Agreement.

11. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original.

12. Governing Law. This Agreement has been executed and delivered in the State of Maryland and shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of Maryland without reference to its principles of conflicts of law.

13. Certain Withholdings. The Company shall withhold from any amounts payable to Executive hereunder all federal, state, city and other taxes and withholdings that the Company determines are required to be withheld pursuant to any applicable law or regulation.

14. Entire Agreement. This Agreement supersedes any and all other oral or written agreements heretofore made relating to amounts payable pursuant to a change in control and constitutes the entire agreement relating to such change in control. Any existing employment agreement is hereby superseded only with regard to amounts payable pursuant to a change in control.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

UNDER ARMOUR, INC.

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

Title:

 

 

Title:

 

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ATTACHMENT A

EMPLOYEE CONFIDENTIALITY, NON-COMPETITION, AND

NON-SOLICITATION AGREEMENT

This Confidentiality, Non-Competition, and Non-Solicitation Agreement (“Agreement”) is entered into this         day of                 , 2008, by and between Under Armour, Inc. (together with its affiliates, the “Company”) and                                          (“Employee”).

EXPLANATORY NOTE

The Employee recognizes that the Employee has had or will have access to confidential proprietary information during the course of his or her employment and that the Employee’s subsequent employment with a Competitor Business, as defined in Section 3, would inevitably result in the disclosure of that information and, thereby, create unfair competition and would likely cause substantial loss and harm to the Company. The Employee further acknowledges that employment with the Company is based on the Employee’s agreement to abide by the covenants contained herein.

NOW THEREFORE, in consideration of Employee’s employment with the Company and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

1. Confidentiality. Employee acknowledges Employee’s fiduciary duty and duty of loyalty to the Company. Further, Employee acknowledges that the Company, in reliance on this Agreement, will provide Employee access to trade secrets, customers, proprietary data and other confidential information. Employee agrees to retain said information as confidential and not to use said information for the Employee’s personal benefit or to disclose same to any third party, except when required to do so to properly perform duties to the Company. Further, as a condition of employment, during the time Employee is employed by the Company and continuing after any termination of the Employee’s employment with the Company, Employee agrees to protect and hold in a fiduciary capacity for the benefit of the Company all Confidential Information, as defined below, unless the Employee is required to disclose Confidential Information pursuant to the terms of a valid and effective order issued by a court of competent jurisdiction or a governmental authority. The Employee shall use Confidential Information solely for the purpose of carrying out those duties assigned Employee as an employee of the Company and not for any other purpose. The disclosure of Confidential Information to the Employee shall not be construed as granting to the Employee any license under any copyright, trade secret, or any right of ownership or right to use the Confidential Information whatsoever. In the event that Employee is compelled, pursuant to a subpoena or order of a court or other body having jurisdiction over such matter, to produce any Confidential Information or other information relevant to the Company, Employee agrees to promptly provide the Company with written notice of such subpoena or order so that the Company may timely move to quash if appropriate.

 

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(a) For the purposes of this Agreement, “Confidential Information” shall mean all information related to the Company’s business that is not generally known to the public. Confidential Information shall include, but shall not be limited to: any financial (whether historical, projections or forecasts), pricing, cost, business, planning, operations, services, potential services, products, potential products, technical information, intellectual property, trade secrets and/or know-how, formulas, production, purchasing, marketing, sales, personnel, customer, supplier, or other information of the Company; any papers, data, records, processes, methods, techniques, systems, models, samples, devices, equipment, compilations, invoices, customer lists, or documents of the Company; any confidential information or trade secrets of any third party provided to the Company in confidence or subject to other use or disclosure restrictions or limitations; this Agreement and its terms; and any other information, written, oral or electronic, whether existing now or at some time in the future, whether pertaining to current or future developments or prospects, and whether accessed prior to the Employee’s tenure with the Company or to be accessed during Employee’s future employment or association with the Company, which pertains to the Company’s affairs or interests or with whom or how the Company does business. The Company acknowledges and agrees that Confidential Information shall not include information which is or becomes publicly available other than as a result of a disclosure by the Employee.

(b) The Employee shall promptly notify the Company if he or she has reason to believe that the unauthorized use, possession, or disclosure of any Confidential Information has occurred or may occur.

(c) All physical items containing Confidential Information, including, but not limited to, the business plan, know-how, collection methods and procedures, advertising techniques, marketing plans and methods, sales techniques, documentation, contracts, reports, letters, notes, any computer media, customer lists and all other information and materials of the Company’s business and operations, shall remain the exclusive and confidential property of the Company and shall be returned, along with any copies or notes that the Employee made thereof or therefrom, to the Company when the Employee ceases employment with the Company. The Employee further agrees to return copies of any Confidential Information contained on Employee’s home computer, portable computer or other similar device. Employee also agrees to allow the Company, upon reasonable notice and for just cause, access to any home computer, portable computer or other similar device maintained by Employee, including but not limited to, for the purpose of determining whether said Confidential Information has been misappropriated. The Employee further agrees to promptly return all other property belonging to the Company upon the termination of Employee’s employment.

2. Ownership of Works for Hire.

(a) The Employee agrees that any inventions, ideas, developments, methods, improvements, discoveries, innovations, software, works of authorship and any other intangible property (hereinafter collectively referred to as “Intellectual Property”), whether patentable or not, which are developed, partially developed, considered, contemplated or reduced to practice by the Employee or under his or her direction or jointly with others during his or her employment with the Company, whether or not

 

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during normal working hours or on the premises of the Company, shall be considered “Works for Hire” for the exclusive use and benefit of the Company. The Employee will make full and prompt disclosure to the Company of all such Works for Hire. The Company shall own all rights to any Works for Hire, including all copyrights and the right to market (or not to market) any such property, and the Employee agrees to assign and does hereby assign to the Company (or any person or entity designated by the Company) all his or her right, title and interest in and to all Works for Hire and all related patents, patent applications, copyrights and copyright applications.

(b) The Employee agrees to cooperate fully with the Company, both during and after his or her employment with the Company, with respect to the procurement, maintenance and enforcement of copyrights and patents (both in the United States and foreign countries) relating to Works for Hire. The Employee shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignment of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Works for Hire.

(c) The Employee specifically acknowledges that his or her compensation and benefits constitute full payment for any Works for Hire and waives any claim of right to the Company.

(d) The Company may, at its election and discretion, waive and/or relinquish any of its rights of ownership and royalties with respect to any Works for Hire, by agreeing to do so in a written instrument executed by the Company.

3. Non-Competition. Except as otherwise provided in this Agreement, without the prior written consent of the Company, the Employee hereby covenants and agrees that at no time during the Employee’s employment with Company and for a period of one (1) year immediately following termination of Employee’s employment with the Company, whether voluntary or involuntary, shall the Employee:

(a) directly or indirectly work for or engage in any capacity in any activities or provide strategic advice to Competitor Businesses. Competitor Businesses shall be defined as (i) any business that is involved in the manufacture, sale, development of fabrications or manufacturing methods, or marketing of: athletic apparel or footwear (e.g., Reebok, Nike, Adidas); sporting goods; tactical (military and/or law enforcement) apparel; hunting and fishing apparel; mountain sports apparel; accessories of such industries; or any business substantially similar to the present business of the Company or such other business activity in which the Company may substantially engage; and (ii) retail enterprises which sell products that compete with the Company’s products;

(b) act in any way, directly or indirectly, with the purpose or effect of soliciting, diverting or taking away any business, customer, client or any supplier of the Company; or

 

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(c) otherwise compete with Company in the sale or licensing, directly or indirectly, as principal, agent or otherwise, of any products competitive with the products, or services competitive with the services, developed or marketed by Company.

Written request for consent to be released from the Non-Competition provisions of this Agreement may be submitted by the Employee to the Company following the termination of Employee’s employment and must include all available information described in Section 5 below. The Company will respond to the request for such consent within two (2) weeks of the request, except as provided in Section 5. In the Company’s sole discretion, it may release Employee from the Non-Competition provisions of this Agreement, or reduce the non-competition period from a period of one (1) year immediately following Employee’s termination to a shorter duration (“Non-Competition Period”). In the event the Company does not release the Employee from the Non-Competition provision, for the duration of the Non-Competition Period, the Company will pay Employee an amount equal to sixty percent (60%) of Employee’s base salary as of the date of the termination of Employee’s employment (“Non-Competition Payment”), in accordance with the Company’s customary pay practices in effect at the time each payment is made. The Non-Competition Payment shall be reduced by (a) the amount of any severance Employee receives from the Company; and (b) the amount of any salary received during the Non-Competition Period from employment in any capacity with an entity that is not a Competitor Business to the extent that any such salary exceeds forty percent (40%) of Employee’s base salary as of the date of Employee’s termination from employment with the Company (annualized or pro-rated to correspond to the Non-Competition Period). By way of example, assuming that the Non-Competition Period is six (6) months and that Employee’s base salary as of the termination date is $100,000, the Non-Competition Payment would not be reduced pursuant to subsection (b) herein so long as any salary received during the Non-Competition Period by Employee from an entity that is not a Competitor Business remained under $20,000.

4. Non-Solicitation and Non-Interference. The Employee hereby covenants and agrees that at no time during the Employee’s employment with Company and for a period of one (1) year immediately following termination of Employee’s employment with the Company, whether voluntary or involuntary, shall the Employee:

(a) solicit (other than on behalf of the Company) business or contracts for any products or services of the type provided, developed or under development by the Company during the Employee’s employment by the Company, from or with any person or entity which was a customer of the Company for such products or services, or any prospective customer which the Company had solicited as of, or within one (1) year prior to, the Employee’s termination of employment with the Company; or directly or indirectly contract with any such customer or prospective customer for any product or service of the type provided, developed or which was under development by the Company during the Employee’s employment with the Company; or

(b) knowingly interfere or attempt to interfere with any transaction, agreement or business relationship in which the Company was involved during the Employee’s employment with the Company, nor will the Employee act in any way with the purpose or effect of hiring anyone who has been an employee of the Company, its divisions or subsidiaries; or soliciting, recruiting or encouraging, directly or indirectly, any of the Company’s employees to leave the employ of the Company, its divisions or its subsidiaries.

 

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5. Notification of New Employment. Employee acknowledges and agrees that for a period of one (1) year following the date of termination of Employee’s employment with the Company, Employee will inform the Company, prior to the acceptance of any job or any work as an independent contractor, of the identity of any new employer or other entity to which Employee is providing consulting or other services, along with Employee’s starting date, title, job description, salary, and any other information which the Company may reasonably request to confirm Employee’s compliance with the terms of this Agreement. If Employee does not provide all information reasonably requested by the Company as provided in this Section, the Company’s time to respond to a request for release from the Non-Competition provision under Section 3 will be extended to six (6) weeks, or until such time as the information is provided for the Company to make an informed decision.

6. Reasonableness of Restrictions. Employee acknowledges and agrees that the restrictions imposed by this Agreement are fair and reasonably required for the protection of the Company, and will not preclude Employee from becoming gainfully employed following the termination, for any reason, of employment with the Company. The Employee acknowledges that Employee will provide unique services to the Company and that this covenant has unique, substantial, and immeasurable value to the Company. In the event that the provisions of this Agreement should ever be deemed to exceed the limitations permitted by applicable laws, Employee and the Company agree that such provisions shall be reformed to the maximum limitations permitted by the applicable laws. The Employee further acknowledges that the decision whether to consent to release Employee from the provisions of this Agreement is within the sole discretion of the Company.

7. Injunctive Relief. Employee acknowledges and agrees that in the event of a violation or threatened violation of any provision of this Agreement, the Company will sustain irreparable harm and will have the full right to seek injunctive relief, in addition to any other legal remedies available, without the requirement of posting bond.

8. Survivability. This Agreement shall remain binding in the event of the termination, for any reason, of employment with the Company.

9. Governing Law. The formation, construction and interpretation of this Agreement shall at all times and in all respects be governed by the laws of the State of Maryland.

10. Severable Provisions. The provisions of this Agreement are severable, and if any court determines that any provision of this Agreement is invalid or unenforceable, in whole or in part, any invalidity or unenforceability shall affect only that provision, and shall not make any other provision of this Agreement invalid or unenforceable; and this Agreement shall be narrowed by the court to the extent required to be valid and enforceable.

 

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11. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter contained herein, and may not be modified except in a written document signed by each of the parties hereto. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any other breach of that or any other provision hereof.

IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above written.

 

 

 

 

 

UNDER ARMOUR, INC.

 

 

By:                                                                                       

 

 

Name:                                                                                  

 

 

Title:                                                                                    

WITNESS:

 

 

EMPLOYEE

                                                                                              

 

 

                                                                                          

 

 

(signature)

 

 

Print Name:                                                                      

 

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ATTACHMENT B

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Under Armour, Inc Change in Control Severance Agreement (the “Agreement”).

I understand that this Release, together with the Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Agreement.

I hereby confirm my obligations under the Company’s Employee Confidentiality, Non-Competition and Non-Solicitation Agreement.

Except as otherwise set forth in this Release, I hereby generally and completely release the Company and its parents, subsidiaries, successors, predecessors and affiliates, and its and their partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date I sign this Release. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company (other than compensation and benefits accrued before any termination of employment or any rights you may have under stock option grants); (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended), and the federal Employee Retirement Income Security Act of 1974 (as amended).

I understand that I may consider whether to agree to the terms contained herein for a period of twenty-one days after the date hereof. Accordingly, I will sign and return the acknowledgment copy of this Release to acknowledge my understanding of and agreement with the foregoing. Prior to my signing this Release, I was advised to consult with an attorney.

This Release will become effective, enforceable and irrevocable seven days after the date on which I sign it. During the seven-day period prior to this date, I may revoke this Release to accept the terms hereof by indicating in writing to the Company my

 

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intention to revoke. I understand that if I exercise my right to revoke hereunder, I will forfeit my right to receive any of the special benefits offered to me under the Agreement, and to the extent such payments have already been made, I agree that I will immediately reimburse the Company for the amounts of such payment.

 

 

By:

 

Date:

 

 

 

Private and Confidential

  

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