EX-10.3 3 exh10p3.htm RESIGNATION AND GENERAL RELEASE AGREEMENT

Exhibit 10.3

RESIGNATION AND GENERAL RELEASE AGREEMENT

This Resignation and General Release Agreement (this “Agreement”) is entered
into by and between Galyan’s Trading Company, Inc., an Indiana corporation (the
“Company”), and Joel L. Silverman, an individual residing at 4612 Brentridge
Parkway, Greenwood, Indiana (“Executive”).

WHEREAS, the Company and Executive are parties to an employment agreement
entered into as of October 1, 2000 (the “Employment Agreement”);

WHEREAS, pursuant to the Employment Agreement Executive has served as President
and Chief Operating Officer of the Company, and Executive has served as a member
of the Company's Board of Directors;

WHEREAS, effective March 4, 2002, Executive has resigned from all positions with
the Company, including his position on the Company’s Board of Directors, by
mutual agreement;

WHEREAS, Executive and the Company each desire to set forth in this Agreement
the terms and conditions of Executive’s resignation and resolve any and all
claims or potential claims between them arising out of or in any way related to
Executive’s employment with the Company, his separation of employment from the
Company, or his Employment Agreement;

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

        1.         Resignation. The Company and Executive agree and acknowledge
that Executive shall resign, and his employment with the Company will end in all
respects, at the close of business on March 4, 2002 (the “Resignation Date”).
The Company and Executive further agree and acknowledge that Executive will
resign from his position on the Company’s Board of Directors at the close of
business on March 4, 2002.

        2.         Payments and Benefits to Executive. The Company agrees to
provide the following payments and benefits to Executive:

             (a) the Company shall pay Executive his regular and usual base
salary ($550,000 annual rate) and usual benefits earned through the Resignation
Date plus his earned but unpaid bonus for fiscal year 2001;

             (b) the Company shall continue to pay Executive his regular and
usual base salary ($550,000 annual rate) through October 1, 2003, pursuant to
the Company’s normal payroll practices and subject to applicable withholdings
and authorized deductions;

             (c) the Company shall pay Executive a Target Bonus for fiscal year
2002 of $330,000, subject to applicable withholdings and authorized deductions,
payable at the time the Company pays annual bonuses, and without regard to
whether the Company reaches or exceeds its Target Income;

             (d) subject to the terms of the Company’s health insurance plan and
subject to Executive’s timely payment of the Executive portion of the health
care premium, the Company shall also allow Executive to continue his group
health insurance coverage through October 1, 2003. After October 1, 2003,
Executive shall have the option to continue his health insurance pursuant to the
provisions of the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), in
which event he will be responsible for the full cost of premiums permitted by
COBRA;

             (e) subject to the terms of the Company’s retirement plans and
deferred compensation program, the Company shall provide Executive with a
payment equal to the value of all vested and unvested retirement benefits as of
the Resignation Date, which absent Executive’s resignation would have been
vested as of October 1, 2003;

             (f) all unvested options granted to the Executive under the
Company's 1999 Stock Option Plan shall vest immediately upon the execution of
this Agreement;

             (g) all vested options granted to the Executive under the Company’s
1999 Stock Option Plan, including those vested upon execution of this Agreement,
shall be exercisable through the last day of the Non-Competition Term, as
defined herein in Paragraph 5.

        3.        Release.

                  (a) In consideration for the obligations contained in this
Agreement, Executive acknowledges and agrees that upon and following the
Resignation Date, he shall be entitled to no further payments, rights, or
benefits pursuant to the Employment Agreement or any other agreement with the
Company or any affiliate of the Company existing as of the date hereof, other
than the payments, rights, or benefits set forth herein. In this regard,
Executive hereby (i) waives his right to receive any further compensation and
benefits from the Company or any affiliate of the Company pursuant to the
Employment Agreement or any other agreement with the Company or any affiliate of
the Company existing as of the date hereof (other than pursuant to this
Agreement), and (ii) agrees that all other obligations of the Company pursuant
to the Employment Agreement (including, without limitation, all payment and
benefit obligations pursuant to the Employment Agreement, and all obligations
arising out of the termination of the Employment Agreement) are hereby
discharged; provided, however, that nothing in this Agreement shall affect (x)
any vested interest Executive may have in Galyan's Trading Company, Inc.'s
401(k) Plan, or (y) any COBRA rights Executive may have.

                  (b) Except for those obligations created by or arising out of
this Agreement, Executive, on behalf of himself, his descendants, dependents,
heirs, executors, administrators, assigns, and successors, and each of them,
acknowledges full and complete satisfaction of and releases and discharges and
covenants not to sue the Company, its subsidiaries, parent, and affiliated
companies, past and present, and each of them, as well as its and their
trustees, directors, officers, agents, attorneys, insurers, and employees, past
and present, and each of them, (together and each of them collectively referred
to as "Releasees") from and with respect to any and all claims, wages,
agreements, obligations, demands, and causes of action, known or unknown,
suspected or unsuspected, arising out of or in any way connected with
Executive's employment relationship with the Company, the termination of the
Employment Agreement, Executive's termination from employment, or any other
transactions, occurrences, acts, or omissions or any loss, damage, or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said Releasees, or any of them, committed or
omitted prior to the date of this Agreement (collectively "Claims"). Without
limiting the generality of the foregoing, Executive acknowledges and agrees that
the claims being released include, but are not limited to, any claim under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Family and Medical Leave Act of 1993,
the Indiana Civil Rights Law, or common law theory, or any Claim for severance
pay, bonus, stock options, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance, or any other fringe benefit.

        4.         ADEA Waiver. Executive expressly acknowledges and agrees that
among the matters waived are any and all rights or claims arising under the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”), which have
arisen on or before the date of execution of this Agreement. Because the ADEA
contains special provisions affecting the release of ADEA claims, Executive also
expressly acknowledges and agrees that:

             (a) in return for this Agreement, he will receive consideration,
i.e., something of value, beyond that which he was already entitled to receive
before entering into this Agreement;

             (b) he was orally advised by the Company and is hereby advised in
writing to consult with an attorney before signing this Agreement;

             (c) he was given a copy of this Agreement on February 21, 2002, and
informed that he had 21 days within which to consider the Agreement; and

             (d) he has been informed that he has seven days following the date
he executes this Agreement in which to revoke it, understanding that the
Agreement will not be effective or enforceable until this seven-day revocation
period has expired without revocation. Any revocation of the Agreement must be
in writing and delivered to Chuck Nelson before expiration of the revocation
period.

        5.         Non-Competition. Executive acknowledges that by virtue of his
position with the Company he has been given access to confidential and highly
sensitive non-public information of substantial importance to the Company,
including but not limited to financial information, identities of distributors,
contractors, and vendors utilized in the Company’s business, non-public forms,
contracts, and other documents used in the Company’s business, trade secrets
used, developed, or acquired by the Company, information concerning the manner
and details of the Company’s operation, organization and management, the
Company’s business plans and strategies, price information, customer lists, and
research and development data, and that the services he has provided to the
Company are unique. For a period of two (2) years commencing on the Resignation
Date (the “Non-Competition Term”), Executive agrees that he will not directly or
indirectly engage in, as an employee, consultant, or otherwise, any business in
the United States primarily engaged in the retail sporting goods or retail
sports apparel business, nor will he accept employment, consult for, or
participate, directly or indirectly, in the ownership or management of any
enterprise in the United States engaged in such a business. Notwithstanding the
foregoing, Executive may invest as the holder of not more than four percent (4%)
of the outstanding shares of any corporation whose stock is listed on any
national or regional securities exchange or reported by the National Association
of Securities Dealers Automated Quotation System or any successor thereto.

        6.         Non-Solicitation. For a period of two (2) years, commencing
on the Resignation Date (the “Non-Solicitation Term”), Executive and/or any
entity with which he is at the time affiliated (and which is not affiliated with
the Company), shall not, directly or indirectly, hire or offer to hire or entice
away or in any other manner persuade or attempt to persuade any officer,
employee, agent, or customer of the Company or any of its affiliates, or any
person who supplies goods or services or licenses intangible or tangible
property to the Company or any of its affiliates to discontinue his, her, or its
relationship with such entity. Executive represents and warrants that he has
not, prior to the date hereof, acted or failed to act in a way that would
constitute a breach of the terms of this covenant not to solicit.

        7.         Confidential or Proprietary Information or Material.
Executive recognizes and acknowledges that, through his association with the
Company, he has had access to confidential or proprietary information or
material relating in the reasonable opinion of the Company to the Company’s
operations or businesses, including the Company’s subsidiaries, which he may
have obtained from the Company, its subsidiaries, or their officers, directors,
or employees, or otherwise by virtue of his employment by the Company.
Confidential or proprietary information or material includes, without
limitation, the following types of information or material, both existing and
contemplated, regarding the Company, its direct or indirect parents,
subsidiaries, affiliates, or related companies: proprietary data processing
systems and software; corporate information, including contractual arrangements,
plans, strategies, tactics, policies, resolutions, patent, copyright, trademark,
and tradename applications, and any litigation or negotiations; marketing
information, including sales or product plans, strategies, methods, customers,
prospects, or market research data; financial information, including cost and
performance data, debt arrangements, equity structure, investors, and holdings;
operations and scientific information, including trade secrets and technical
information; and personnel information, including personnel lists, resumes,
personnel data, organizational structure, and performance evaluations; provided,
however, that confidential or proprietary information or material does not
include any information or material that is generally available to the public.
Executive recognizes that this confidential or proprietary information or
material constitutes a valuable and unique asset of the Company, developed and
perfected over considerable time and at substantial expense to the Company.
Executive shall not disclose, without the written consent of the Company or as
required by law, to any person, firm, partnership, association, or corporation
such confidential or proprietary information or material, and Executive agrees
to hold such confidential or proprietary information or material in trust for
the sole benefit of the Company. Executive shall not, for the direct or indirect
benefit of himself or another: (1) take with him, without the written consent of
the Company, any lists of Company customers or potential customers, pricing
lists, or other documents, computer software, electronically-stored data,
recordings, master videotapes of any of the foregoing, or any other confidential
or proprietary information or material; or (2) reconstruct the same or similar
information from memory or from some other source associated with the Company.

        8.         Non-Disparagement/No Publicity. Executive agrees not to make
any disparaging remarks, or any remarks that could reasonably be construed as
disparaging, regarding the Company or its officers, directors, employees,
partners, owners, affiliates, or agents. Executive further agrees that he will
not take any action or provide information or issue statements, to the media or
otherwise, or cause anyone else to take any action or provide information or
issue statements, to the media or otherwise, regarding the Company or its
officers, directors, employees, partners, owners, affiliates, or agents.

        9.         Confidentiality. Executive agrees to keep the terms of this
Agreement confidential and agrees that he will not disclose any information
concerning it to anyone, except that he may disclose the terms of this Agreement
to his attorneys, accountants, advisors, and immediate family members, provided
that he advises such persons of the confidential nature of this Agreement and
they agree not to disclose such information further, and except as may otherwise
be necessary to enforce its terms or as required by law.

        10.        Representation and Warranties. Executive hereby represents
and warrants that (i) he is free to enter into this Agreement and that he is not
subject to any obligations or disabilities which will or might prevent him or
interfere with his keeping and performing all of the agreements, covenants, and
conditions to be kept or performed hereunder, and (ii) he has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and he shall defend, indemnify, and hold
harmless the Company from and against any claim (including the payment of
attorneys’ fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported, or claimed.

        11.        Amendments; Waivers. This Agreement may be amended only by
agreement in writing of each of the parties hereto. No waiver of any provision
or consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent, and instance so provided.

        12.        Severability. If any provision of this Agreement or the
application thereof is held invalid, the invalidity shall not affect other
provisions or applications of the Agreement which can be given effect without
the invalid provisions or application and, to this end, the provisions of this
Agreement are declared to be severable.

        13.        Entire Agreement. This instrument constitutes and contains
the entire agreement and final understanding concerning Executive’s employment,
separation from the same, and the other subject matters addressed herein between
the parties. It is intended by the parties as a complete and exclusive statement
of the terms of their agreement. It supersedes and replaces all prior
negotiations and all agreements, proposed or otherwise, whether written or oral,
concerning the subject matters hereof. Any representation, promise, or agreement
not specifically included in this Agreement shall not be binding upon or
enforceable against either party. This is a fully integrated agreement.

        14.        Further Action. The parties shall execute and deliver all
documents, provide all information and take or forbear from taking all action as
may be necessary or appropriate to achieve the purposes of this Agreement.
Nothing herein shall prohibit Executive from seeking a judicial determination of
the validity of the waivers set forth herein.

        15.        Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana applicable to
contracts made and performed in the State of Indiana and without regard to
conflicts of laws doctrines.

        16.        Succession. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the Company and its
respective successors and assigns. The obligations and duties of Executive
hereunder are personal and not assignable, and any attempt of assignment or
transfer of Executive's duties or obligations shall be void.

        17.        Headings. The headings of the several paragraphs herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning of this Agreement.

        18.        Arbitration.

(a) Any controversy or claim arising out of or relating to this Agreement, its
enforcement, arbitrability, or interpretation, or because of an alleged breach,
default, or misrepresentation in connection with any of its provisions, or
arising out of or relating in any way to Executive’s employment or termination
of the same, including, without limiting the generality of the foregoing, any
alleged violation of statute, common law, or public policy, shall be submitted
to final and binding arbitration, to be held in Hendricks, Indiana before a
single arbitrator. The arbitrator shall be selected by mutual agreement of the
parties or, if the parties cannot agree, then by striking from a list of
arbitrators supplied by the American Arbitration Association or JAMS. The
arbitrator shall issue a written opinion revealing, however briefly, the
essential findings and conclusions upon which the arbitrator’s award is based.
The Company will pay the arbitrator’s fees and arbitration expenses and any
other costs associated with the arbitration hearing (recognizing that each side
bears its own deposition, witness, expert, and attorneys’ fees and other
expenses as and to the same extent as if the matter were being heard in court).
If, however, any party prevails on a statutory claim that affords the prevailing
party attorneys’ fees and costs, then the arbitrator may award reasonable fees
and costs to the prevailing party. Any dispute as to the reasonableness of any
fee or cost shall be resolved by the arbitrator.

(b) Except as may be necessary to enter judgment upon the award or to the extent
required by applicable law, all claims, defenses, and proceedings (including,
without limiting the generality of the foregoing, the existence of a controversy
and the fact that there is an arbitration proceeding) shall be treated in a
confidential manner by the arbitrator, the parties and their counsel, each of
their agents, and employees and all others acting on behalf of or in concert
with them. Without limiting the generality of the foregoing, no one shall
divulge to any third party or person not directly involved in the arbitration
the content of the pleadings, papers, orders, hearings, trials, or awards in the
arbitration, except as may be necessary to enter judgment upon an award as
required by applicable law.

        19.        Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same instrument. A signature by
facsimile shall have the same force and effect as an original.

The undersigned have read and understand the consequences of this Agreement and
voluntarily sign it.

EXECUTED this 6th day of March 2002, at Indianapolis (city), Indiana (state).

  /s/ Joel L. Silverman
Joel L. Silverman

EXECUTED this 12th day of March 2002, at Indianapolis (city), Indiana (state).

  Galyan's Trading Company, Inc.

  By:   /s/ Robert B. Mang             
Name: Robert B. Mang               
Title: Chief Executive Officer and Chairman