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Exhibit 10.9
FORM OF
SALARY CONTINUATION
AGREEMENT
THIS AGREEMENT is entered into between NS Group, Inc., a
corporation having its corporate office in Newport, Kentucky
("Company"), and ____________________. ("Participant") effective
________, 2000.
WITNESSETH:
WHEREAS, Participant is employed by the Company, and by
reason thereof, has acquired experience and knowledge of
considerable value to the Company; and
WHEREAS, the Company wishes to offer an inducement to
Participant to remain in its employ by compensating him beyond
his regular salary for services which he had rendered or will
hereafter render; and
WHEREAS, Participant is willing to continue in the employ of
the Company until his retirement, or until it is mutually agreed
by both the Company and Participant that his services are no
longer necessary.
NOW, THEREFORE, it is mutually agreed as follows:
1. As of the date of this Agreement, [and subject to the terms
of the employment agreement, dated ___________, ______, and any
subsequent or successor agreement between Participant and the
Company ("Employment Agreement"),] Participant is employed by the
Company, and Participant hereby agrees to continue such
employment upon the terms and conditions set forth in this
Agreement. [Except as provided for in the Employment Agreement,]
Participant is an "at will" employee of the Company and this
Agreement does not impose any obligation for the employment
relationship to continue for a specified period of time.
2. As compensation for his services, the Company hereby agrees
to pay Participant and Participant hereby agrees to accept from
the Company, a yearly salary to be determined by the Board of
Directors of the Company.
3. Subject to the limitations set forth in Sections 9 and
11 below, in the event that Participant retires from active
employment with the Company after attaining age 62, the Company
shall pay Participant a monthly amount for life commencing on the
first day of the month following the date of such retirement
equal to fifty-percent (50%) of the Participant's monthly base
salary for the month prior to the month in which the Participant
retires from active employment with the Company (the "Monthly
Payment"); provided, however, that such Monthly Payment shall be
no less than one-twenty-fourth (1/24th) of the Participant's
annualized base salary for the calendar year immediately
preceding the Participant's retirement from active employment
with the Company. The Company may, in its sole discretion,
provide that Participant may begin receiving the benefits
provided for in this Agreement before attaining age 62, subject
to such actuarial reductions as the Company may deem appropriate
to reflect the early commencement of benefits.
4. In the event that Participant dies (a) while in the
active employ of the Company, or (b) after becoming fully vested
in the benefits provided pursuant to this Agreement because of
either a permanent disability or a Change of Control (as provided
for in Sections 6 and 7) but prior to the commencement of
payments hereunder, Participant's spouse at the time of death
shall be entitled to receive Monthly Payments commencing on the
first day of the month following Participant's death and ending
on the earlier of (i) the first day of the month during which the
spouse dies and (ii) the date on which the 120th Monthly Payment
is made. In the event that Participant dies (and is survived by
a spouse) while receiving Monthly Payments hereunder but prior to
receipt of at least 120 such payments, the spouse shall be
entitled to continue receiving such payments until the earlier of
(i) the first day of the month during which the spouse dies and
(ii) the date on which the 120th Monthly Payment is made.
5. Upon retirement from the Company at or following
attainment of age 62, continued health insurance coverage shall
be provided for Participant and the person (if any) who is his
spouse at the time of retirement. The coverage will be the same
as that which may be provided from time to time to active
employees, and will be paid for by the Company. Such coverage
will continue for Participant until Participant reaches the age
at which he is eligible for Medicare and for Participant's spouse
until she reaches the age at which she is eligible for Medicare;
provided, however, for any period during which the Participant or
the Participant's spouse is eligible for any other group health
plan, as an employee or otherwise, the health insurance coverage
provided under this Section shall be the secondary plan and the
group health plan under which the Participant or Participant's
spouse is eligible shall be the primary plan.
6. In the event that Participant becomes permanently
disabled (as defined in the Company's long-term disability plan
which covers the Participant) while in the active employ of the
Company, Participant shall become fully vested in the benefits
provided pursuant to Section 3 of this Agreement, and shall begin
receiving such benefits at the later of age 62 or when long-term
disability benefits are no longer payable to Participant.
7. In the event of a Change of Control (as defined herein)
of the Company while Participant is in the active employ of the
Company, Participant shall become fully vested in the benefits
provided pursuant to Section 3 of this Agreement. Participant
must wait until age 62 to begin receiving these benefits. Change
of Control shall mean the happening of any of the following:
(a) the direct or indirect sale, lease, exchange or
other transfer of all or substantially all of the assets of
the Company to any Person (i.e., individual, corporation,
partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or
any agency or political subdivision thereof or any other
entity within the meaning of Section 13(d)(3) of 14(d)(2) of
the Securities Exchange Act of 1934) or entity or group of
Persons or entities acting in concert as a partnership or
other group ("Group of Persons") other than a Person
described in clause (i) of the definition of Affiliate, as
set forth herein. Affiliate of any specified Person means:
(i) any other Person which, directly or indirectly, is in
control of, is controlled by or is under common control with
such specified Person or (ii) any other Person who is a
director or officer (a) of such specified Person, (b) of any
subsidiary of such specified Person or (c) of any Person
described in clause (i) above or (iii) any Person in which
such person has, directly or indirectly, a 5% or greater
voting or economic interest or the power to control.
Control of a Person means the power, direct or indirect, to
direct or cause the direction of the management or policies
of such Person whether through the ownership of voting
securities, or by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing:
(b) the consummation of any consolidation or merger of
the Company with or into another corporation with the effect
that the stockholders of the Company immediately prior to
the date of the consolidation or merger hold less than 51%
of the combined voting power of the outstanding voting
securities of the surviving entity of such merger or the
corporation resulting from such consolidation ordinarily
having the right to vote in the election of directors (apart
from rights accruing under special circumstances)
immediately after such merger or consolidation;
(c) the stockholders of the Company shall approve any
plan or proposal for the liquidation or dissolution of the
Company;
(d) a Person or Group of Persons acting in concert as
a partnership, limited partnership, syndicate or other group
shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or
otherwise, have become the direct or indirect beneficial
owner (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) ("Beneficial Owner") of
securities of the Company representing 30% or more of the
combined voting power of the then outstanding securities of
the Company ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the
election of directors;
(e) a Person or Group of Persons, together with any
Affiliate thereof, shall succeed in having sufficient number
of its nominees elected to the Board of Directors of the
Company such that such nominees, when added to any existing
director remaining on the Board of Directors of the Company
after such election who is an Affiliate of such Person or
Group of Persons, will constitute a majority of the Board of
Directors of the Company;
provided that the Person or Group of Persons referred to in
clauses (a), (d) and (e) shall not mean Clifford Borland or any
Group of Persons with respect to which Clifford Borland is the
Beneficial Owner of the majority of the voting equity interests.
8. Notwithstanding any other provision of the Agreement,
the Company has an unconditional right to offset any amounts
which Participant owes the Company against amounts due under this
Agreement.
9. Participant agrees that if his employment with the
Company is terminated with "Cause" (as defined below and
regardless of whether Participant has attained the age of 62),
Participant shall not be entitled to any benefits whatsoever
provided under this Agreement and the Company shall have no
liability or obligation to provide any such benefits to
Participant pursuant to this Agreement. "Cause" shall be defined
as (i) commission by Participant of any felony criminal act, a
crime involving moral turpitude, or a crime of fraud or
dishonesty; (ii) acts by Participant constituting gross
negligence or willful misconduct to the detriment of the Company;
(iii) conduct which is detrimental to the reputation, goodwill or
business operation of the Company; (iv) Participant's misfeasance
or nonfeasance in the performance of his duties; [or] (v)
Participant's failure or refusal to comply with the lawful
directions of the Company's Board of Directors or with the
policies, standards and regulations of the Company; [or (vi)
Participant's breach of Sections 4, 5, 6, 7 or 9 of the
Employment Agreement, or any similar provisions contained in any
subsequent or successor agreement between Participant and
Company.]
10. Participant agrees that, without the written consent of
the Board of Directors of the Company, he will not, during the
term of his employment with the Company or any business entity
controlling, controlled by or under common control with the
Company (an "Affiliate"), directly or indirectly (a) engage in
any activity, or in any manner be connected with or employed by
any person, firm, corporation, or any other entity, in
competition with the Company or any Affiliate, or (b) call upon,
solicit, divert, or take away or attempt to solicit, divert, or
take away any of the customers or employees of the Company or any
Affiliate. The parties agree that these restrictions against
competition and solicitation will continue to apply after
Participant's employment with the Company ends if and only if
Participant's benefits are vested (i.e. Participant is entitled
to receive Monthly Payments hereunder either immediately or upon
the attainment of age 62), and in such event will remain in
effect for 5 years after Participant's termination of employment.
Participant further agrees that he will not, during the term of
his employment with the Company or any Affiliate and for a period
of 5 years thereafter, use or disclose to anyone not legally
entitled thereto any confidential or proprietary information or
trade secrets relating to the business of the Company. The
covenants contained in this Section 10 are enhanced covenants not
to compete that relate specifically to the salary continuation
benefits provided under this Agreement and are not intended to
supersede any covenants not to compete contained in any
employment agreement between Participant and the Company.
11. Participant agrees that, if he breaches any covenant of
Section 10 above, no further payments shall be due or payable by
the Company hereunder either to Participant or to Participant's
spouse and the Company shall have no further liability or
obligation hereunder. Solely with respect to this Agreement, the
Company waives the right to injunctive relief with respect to a
breach of any covenant of Section 10 after the Participant's
termination of employment with the Company.
12. The benefits provided hereunder shall not affect the
right of the Participant to participate in any current or future
Company retirement plan or in any supplemental compensation
arrangement which constitutes a part of the Company's regular
compensation structure. Upon Participant's termination of
employment, his annual base salary and other benefits shall cease
upon commencement of the benefits provided hereunder, except as
required by applicable law or the applicable benefit plan.
13. It is agreed that neither Participant nor Participant's
spouse shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder,
which payments and the right thereto are expressly declared to be
non-transferable. In the event that Participant or Participant's
spouse takes any action or agrees to take any action in violation
of this Section, the Company shall have no further liability or
obligation hereunder.
14. If the Company acquires an insurance policy or any
other asset in connection with the liabilities assumed by it
hereunder, it is expressly understood by Participant and agreed
to by him that neither Participant nor Participant's spouse shall
have any right with respect to, or claim against, such policy or
asset. Such policy or asset: (a) shall not be deemed to be held
under any trust for the benefit of Participant or Participant's
spouse; (b) shall not be held in any way as collateral security
for the fulfillment of the obligations of the Company under this
Agreement; and (c) shall be, and remain, a general unpledged,
unrestricted asset of the Company.
15. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors, permitted assigns and other legal
representatives. Nothing in this Agreement, whether expressed or
implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any other persons other than the
Company, each of the Company's Affiliates, Participant or
Participant's spouse, and their respective successors, permitted
assigns and other legal representatives.
16. This Agreement sets forth the entire agreement and
understanding of the parties in respect of the transactions
contemplated hereby and supersedes all prior agreements,
arrangements and understandings relating to the subject matter
hereof.
17. This Agreement may be executed simultaneously in two
counterparts, each of which shall be deemed an original but both
of which taken together shall constitute one and the same
instrument.
18. If any question shall arise in regard to the
interpretation of any provision of this Agreement or as to the
rights and obligations of either of the parties hereunder, the
Participant and a designated representative of the Company shall
meet to negotiate and attempt to resolve such question in good
faith. The Participant and such representative may, if they so
desire, consult outside experts for assistance in arriving at a
resolution. In the event that a resolution is not achieved
within fifteen (15) days after their first meeting, then either
party may submit the question for final resolution by binding
arbitration in accordance with the rules and procedures of the
American Arbitration Association applicable to commercial
transactions, and judgment upon any award thereon may be entered
in any court having jurisdiction thereof. The arbitration shall
be held in Covington, Kentucky. In the event of any arbitration,
the Participant shall select one arbitrator, the Company shall
select one arbitrator and the two arbitrators so selected shall
select a third arbitrator, any two of which arbitrators together
shall make the necessary determinations. All out-of-pocket costs
and expenses of the parties in connection with such arbitration,
including, without limitation, the fees of the arbitrators and
any administration fees and reasonable attorney's fees and
expenses, shall be borne by the parties in such proportions as
the arbitrators shall decide that such expenses should, in
equity, be apportioned.
19. If any provision of this Agreement is determined by a
court of competent jurisdiction to be unenforceable because it is
overbroad, the other provisions hereof shall not be effected, and
this agreement shall be modified to the extent necessary to make
the invalid or unenforceable provision valid and enforceable to
the maximum extent permissible under applicable law. This
Agreement shall be construed in accordance with the laws of the
State of Kentucky, and Participant and the Company hereby consent
to the filing and conduct of any litigation concerning this
Agreement exclusively in the State of Kentucky.
20. Whenever the singular number is used herein it shall
include the plural if the context so requires and reference to
the masculine gender herein shall be deemed to refer to all
genders.
21. The Company, or any successor thereto, may not amend or
terminate this Agreement, without the written consent of
Participant.
22. The Company shall use its best efforts to cause this
Agreement to be assumed by any successor to the Company by virtue
of a sale of substantially all of its assets or otherwise.
23. This Agreement shall supersede any previous agreement
between Participant and the Company with regard to salary
continuation benefits, which is deemed to be terminated.
I HAVE READ THIS SALARY CONTINUATION AGREEMENT AND, UNDERSTANDING
ALL ITS TERMS, INCLUDING THAT THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES, I
SIGN IT AS MY FREE ACT AND DEED.
IN WITNESS WHEREOF, Participant and the Company, by its duly
authorized officer, have executed this Agreement as of
_______________, 2000.
NS GROUP, INC.:
By:
PARTICIPANT:
SCHEDULE OF DOCUMENTS OMITTED
The following agreements are substantially identical to the Form
of Salary Continuation Agreement shown here, except for the
identity of the employees, dates of execution and the amount of
the monthly benefit. These documents are not filed as separate
documents in accordance with Exchange Act rule 12b-31.
Employee Monthly Benefit
Clifford R. Borland $16,406
Rene J. Robichaud $15,000
William W. Beible, Jr. $10,417
Thomas J. Depenbrock $ 6,667
Thomas L. Golatzk $ 6,042
Frank J. LaRosa $ 5,833
