Document:

Amendment to employment contract for Executive VP

 

Exhibit 10.54

April 4, 2002

Mr. Dennis Trausch

Sport Chalet, Inc.

920 Foothill Blvd.

La Canada, California 91011

Dear Dennis:

This letter will serve as an amendment to your current employment contract
dated October 1, 1999.

The Agreement is hereby amended as follows:

	Paragraph 2.1 (i)	  	 “necessary or advisable to manage and conduct the
business of Employer as it relates to store selection and
store leasing, including facilities management.”
	 
	Paragraph 3.1	  	Compensation: As compensation for the services to be
performed hereunder, Executive shall receive a salary in
the amount of One Hundred Fifty-Five Thousand Dollars
($155,000) per annum. Payable in bi-weekly equal
installments effective April 29, 2002.

Please retain this letter in your files with your employment contract.

	 	 	 
	/s/ CRAIG LEVRA

Craig Levra

Chairman and CEO	 	
/s/ DENNIS TRAUSCH

Dennis Trausch

Executive Vice President
	 
	4/15/02

Date	 	
4/15/02

Date

Note: The change in salary does not impact any other benefits currently
provided for in the current employment contract.

E-5Amendment No. 4 Business Loan Agreement

 

Exhibit 10.55

AMENDMENT NO. 4 TO BUSINESS LOAN AGREEMENT

     This Amendment No. 4 to Business Loan Agreement (this “Amendment”) is
entered into as of June 10, 2002, between Bank of America, N.A. (“Bank”) and
Sport Chalet, Inc. (the “Borrower”).

RECITALS

     A. The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of June 19, 1998, as previously amended (the “Agreement”).

     B. The Bank and the Borrower now desire to amend the Agreement on the
terms and conditions set forth below.

AGREEMENT

     1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meanings ascribed to them in the Agreement.

     2. Amendments. The Agreement is hereby amended as follows:

	       	2.1	  	Paragraph 2.1(a) of the Agreement is amended by
inserting the following at the end before the period:
	 
	       	 	  	“provided, however, that the Commitment shall be Thirty
Million Dollars ($30,000,000) during the period of October 1,
2002 through and including December 31, 2002.”
	 
	       	2.2	  	Paragraph 2.1(c) of the Agreement is amended by
inserting the following at the end before the period:
	 
	       	 	  	“provided, however, that the outstanding principal balance of
advances under the line of credit plus the outstanding
amounts of any letters of credit, including amounts drawn on
letters of credit and not yet reimbursed, shall not exceed at
any time the lesser of (i) 45% of the Borrower’s net
inventory at cost (which will be determined utilizing the
first-in-first-out (FIFO) method, based upon the retail
method of accounting and utilizing the Borrower’s cost) and
(ii) the Commitment. The Borrower shall from time to time
prepay advances to the extent necessary to comply with the
foregoing limitation.”
	 
	       	2.3	  	Paragraph 2.2 of the Agreement is amended by
substituting “September 30, 2003” for “August 31, 2002”.
	 
	       	2.4	  	Paragraph 2.3 (a) of the Agreement is amended by
substituting “Bank’s Prime Rate plus .25 percentage points”
for “Bank’s Prime Rate”.
	 
	       	2.5	  	Paragraph 2.9(i) of the Agreement is amended by
deleting “the Expiration Date” and substituting “January 31,
2004” in lieu thereof.
	 
	       	2.6	  	Paragraph 2.9(ii) of the Agreement is amended by
deleting “the Expiration Date” and substituting “September 30,
2004” in lieu thereof.

E-6

 

	       	2.7	  	Paragraph 3.1 of the Agreement is amended by
substituting “.20% per year” for “.125% per year”.
	 
	       	2.8	  	Paragraph 3.3 of the Agreement is amended by
substituting “Seven Thousand Dollars ($7,000)” for “Three
Thousand Dollars ($3,000)”.
	 
	       	2.9	  	Paragraph 8.5 of the Agreement is amended and
restated in its entirety as follows:
	 
	       	 	  	“8.5 Fixed charge Coverage Ratio. To maintain a Fixed Charge
Coverage ratio of at least 1.00:1.0.
	 
	       	 	  	"'Fixed Charge Coverage Ratio” is defined as the sum of net
profit after taxes, tax expense, interest expense,
depreciation, amortization, and rent expense, less dividends,
loans and advances to parents, affiliates and officers, and
cash taxes paid divided by the sum of current portion of long
term debt, rent expense, interest expense, and non-financed
capital expenditures; provided, however, that for purposes of
calculating this ratio (a) for the periods ending March 31,
2002, June 30, 2002 and September 30, 2002, only non-financed
capital expenditures in excess of $6,000,000 in the preceding
4 fiscal quarter period shall be included and (b) for the
period ending December 31, 2002, only non-financed capital
expenditures in excess of $4,000,000 in the preceding 4
fiscal quarter period shall be included; provided, further,
that for purposes of calculating this ratio for the period
ending March 31, 2003 and thereafter, 100% of non-financed
capital expenditures in the preceding 4 fiscal quarter period
shall be included.
	 
	       	 	  	This ratio will be calculated at the end of each fiscal
quarter, using the results of that quarter and each of the 3
immediately preceding quarters. The current portion of long
term debt will be measured as of the last day of the
preceding fiscal year.
	 
	       	2.10	  	Paragraph 8.9 of the Agreement is amended and
restated in its entirety as follows:
	 
	       	 	  	"8.9 Capital Expenditures. Not to spend or incur obligations
to acquire fixed or capital assets for more than (a) Twelve
Million Two Hundred Fifty Thousand Dollars ($12,250,000) for
the 12 months ending March 31, 2002 and (b) Fourteen Million
Five Hundred Thousand Dollars ($14,500,000) in any single
fiscal year thereafter.”
	 
	       	2.11	  	Except as hereby amended, all of the terms and
conditions of the Agreement shall remain in full force and
effect.

     3. Conditions. This Amendment shall not be effective until Bank has
received the following, in form and substance acceptable to Bank:

	       	(a)	  	This Amendment, duly executed;
	 
	       	(b)	  	Evidence that the execution, delivery and
performance by the Borrower of this Amendment has been duly
authorized.
	 
	       	(c)	  	A fee in the amount of Twenty Thousand Dollars
($20,000).

     4. Representations and Warranties. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Bank that: (a) there is
no event which is, or with notice or lapse of time or both would be, a default
under the Agreement, (b) the representations and warranties in the

E-7

 

Agreement are true as of the date of this Amendment as if made on the date
hereof, (c) this Amendment is within Borrower’s powers, has been duly
authorized, and does not conflict with Borrower’s organizational papers, and
(d) this Amendment does not conflict with any law, agreement, or obligation by
which Borrower is bound.

     5. Effect of this Amendment. Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain full force and effect.

     This Amendment is executed as of the date stated at the beginning of this
Amendment.

	 	 	 
	BANK OF AMERICA, N.A	 	
SPORT CHALET, INC.
	 
	By: /s/ JEFFREY THOM

Jeffrey A. Thom, Vice President	 	
By:   /s/ HOWARD KAMINSKY

Howard Kaminsky,

Chief Financial Officer

E-8<PAGE>
                                                                    EXHIBIT 4.10

               THQ INC. AMENDED AND RESTATED NONEXECUTIVE EMPLOYEE
                                STOCK OPTION PLAN

              FORM OF NONEXECUTIVE EMPLOYEE STOCK OPTION AGREEMENT

               THQ Inc., a Delaware corporation (the "Company"), hereby grants
to ___________________________ (the "Optionee") as of * (the "Option Date"),
pursuant to the provisions of the THQ Inc. Amended and Restated Nonexecutive
Employee Stock Option Plan (the "Plan"), a nonqualified option to purchase from
the Company (the "Option") * shares of its Common Stock, $.01 par value
("Stock"), at the price of * (the "Exercise Price") per share upon and subject
to the terms and conditions set forth below. Capitalized terms not defined
herein shall have the meanings specified in the Plan.

(* As set forth in the Notice of Grant of Stock Options attached to this
Nonexecutive Employee Stock Option Agreement as Exhibit A ("your Notice").)

1.      Option Subject to Acceptance of Agreement. The Option shall not be
        exercisable unless and until the Optionee shall accept this Agreement by
        executing it in the space provided below and returning such original
        execution copy to the Company.

2.      Time and Manner of Exercise of Option.

        A.      Maximum Term of Option. In no event may the Option be exercised,
                in whole or in part, later than 5 years after the Option Date
                (the "Expiration Date").

        B.      Exercise of Option.

                1.      Subject to the limitations set forth below, the Option
                        shall be exercisable by the Optionee at the times and in
                        the amounts set forth in your Notice.

                2.      If the Optionee's employment terminates for any reason
                        other than Cause, Disability or death, the Option may
                        thereafter be exercised, only to the extent it is
                        exercisable at the time of such termination, by the
                        Optionee until and including the earlier to occur of (i)
                        the date which is 90 days after the effective date of
                        the Optionee's termination of employment and (ii) the
                        Expiration Date.

                3.      If the Optionee's employment with the Company terminates
                        by reason of Disability or death, the Option may
                        thereafter be exercised, only to the extent it is
                        exercisable at the time of such termination, by the
                        Optionee or the Optionee's Legal Representative (as
                        defined in Section 4.2(c) below) until and including the
                        earlier to occur of (i) the date which is one year after
                        the effective date of the Optionee's termination of
                        employment and (ii) the Expiration Date.

                4.      If the Optionee's employment with the Company is
                        terminated by the Company for Cause, the Option shall
                        terminate automatically on the effective date of the
                        Optionee's termination of employment.

<PAGE>
                5.      If the Optionee dies during the period set forth in
                        Section 2.2(b) following termination of employment for a
                        reason other than Cause, or during the period set forth
                        in Section 2.2(c) following termination of employment by
                        reason of Disability, the Option may thereafter be
                        exercised by the Optionee's Legal Representative, to the
                        extent it is exercisable at the time of death, until and
                        including the earlier to occur of (i) the date which is
                        one year after the date of death and (ii) the Expiration
                        Date.

                6.      If the Optionee breaches a covenant set forth in any
                        employment, noncompetition, nonsolicitation,
                        confidentiality, inventions or similar agreement between
                        the Optionee and the Company (an "Employment Agreement")
                        at any time, the Option shall terminate automatically
                        upon such breach.

3.      Method of Exercise. Subject to the limitations set forth in this
        Agreement, the Option may be exercised by the Optionee (i) by giving
        written notice to the Company specifying the number of whole shares of
        Stock to be purchased and accompanied by payment therefor in full (or
        arrangement made for such payment to the Company's satisfaction) either
        (A) in cash, (B) by delivery (either actual delivery or by attestation
        procedures established by the Company) of Mature Shares having an
        aggregate Fair Market Value, determined as of the date of exercise,
        equal to the aggregate purchase price payable by reason of such
        exercise, (C) in cash by a broker-dealer acceptable to the Company to
        whom the optionee has submitted an irrevocable notice of exercise (if
        the Common Stock has been registered under the Exchange Act and is
        publicly traded) or (D) a combination of (A), (B) and (C), and (ii) by
        executing such documents as the Company may reasonably request. The
        Company shall have sole discretion to disapprove of an election pursuant
        to any of clauses (B) - (D). Any fraction of a share of Stock, which
        would be required to pay such purchase price, shall be disregarded and
        the remaining amount due shall be paid in cash by the Optionee. No
        certificate representing Stock shall be delivered until the full
        purchase price therefor has been paid (or arrangement made for such
        payment to the Company's satisfaction).

4.      Termination of Option. In no event may the Option be exercised after it
        terminates as set forth in this Section 2.4. The Option shall terminate,
        to the extent not exercised pursuant to Section 2.3 or earlier
        terminated pursuant to Section 2.2, on the Expiration Date.

5.      Additional Terms and Conditions of the Option.

        A.      Nontransferability of Option. The Option may not be transferred
                by the Optionee other than by will or the laws of descent and
                distribution or pursuant to beneficiary designation procedures
                approved by the Company. Except to the extent permitted by the
                foregoing sentence, during the Optionee's lifetime the Option is
                exercisable only by the Optionee or the Optionee's Legal
                Representative. Except to the extent permitted by the foregoing,
                the Option may not be sold, transferred, assigned, pledged,
                hypothecated, encumbered or otherwise disposed of (whether by
                operation of law or otherwise) or be subject to execution,
                attachment or similar process. Any attempt to so sell, transfer,
                assign, pledge, hypothecate, encumber or otherwise dispose of
                the Option shall be null and void.

        B.      Investment Representation. The Optionee hereby represents and
                covenants that (a) any share of Stock purchased upon exercise of
                the Option will be purchased for investment and not with a view
                to the distribution thereof within the meaning of the Securities
                Act of 1933, as amended (the "Securities Act"), unless such
                purchase has been registered under the Securities Act and any
                applicable state securities laws; (b) any subsequent sale of any

                                       2

<PAGE>
                such shares shall be made either pursuant to an effective
                registration statement under the Securities Act and any
                applicable state securities laws, or pursuant to an exemption
                from registration under the Securities Act and such state
                securities laws; and (c) if requested by the Company, the
                Optionee shall submit a written statement, in form satisfactory
                to the Company, to the effect that such representation (x) is
                true and correct as of the date of purchase of any shares
                hereunder or (y) is true and correct as of the date of any sale
                of any such shares, as applicable. As a further condition
                precedent to any exercise of the Option, the Optionee shall
                comply with all regulations and requirements of any regulatory
                authority having control of or supervision over the issuance or
                delivery of the shares and, in connection therewith, shall
                execute any documents which the Administrator shall in its sole
                discretion deem necessary or advisable.

        C.      Withholding Taxes.

                1.      As a condition precedent to the delivery of Stock upon
                        exercise of the Option, the Optionee shall, upon request
                        by the Company, pay to the Company in addition to the
                        purchase price of the shares, such amount of cash as the
                        Company may be required, under all applicable federal,
                        state, local or other laws or regulations, to withhold
                        and pay over as income or other withholding taxes (the
                        "Required Tax Payments") with respect to such exercise
                        of the Option. If the Optionee shall fail to advance the
                        Required Tax Payments after request by the Company, the
                        Company may, in its discretion, deduct any Required Tax
                        Payments from any amount then or thereafter payable by
                        the Company to the Optionee.

                2.      The Optionee may elect to satisfy his or her obligation
                        to advance the Required Tax Payments by any of the
                        following means: (1) a cash payment to the Company
                        pursuant to Section 3.3(a), (2) delivery (either actual
                        delivery or by attestation procedures established by the
                        Company) to the Company of Mature Shares (held at least
                        six months by Optionee) having an aggregate Fair Market
                        Value, determined as of the date the obligation to
                        withhold or pay taxes first arises in connection with
                        the Option (the "Tax Date"), equal to the Required Tax
                        Payments, (3) authorizing the Company to withhold whole
                        shares of Stock which would otherwise be delivered to
                        the Optionee upon exercise of the Option having an
                        aggregate Fair Market Value, determined as of the Tax
                        Date, equal to the Required Tax Payments, (4) a cash
                        payment by a broker-dealer acceptable to the Company to
                        whom the Optionee has submitted an irrevocable notice of
                        exercise (if the Stock has been registered under the
                        Exchange Act and is publicly traded) or (5) any
                        combination of (1), (2), (3) and (4). The Company shall
                        have sole discretion to disapprove of an election
                        pursuant to any of clauses (2)-(5). Shares of Stock to
                        be delivered or withheld may not have a Fair Market
                        Value in excess of the minimum amount of the Required
                        Tax Payments. Any fraction of a share of Stock, which
                        would be required to satisfy any such obligation, shall
                        be disregarded and the remaining amount due shall be
                        paid in cash by the Optionee. No certificate
                        representing a share of Stock shall be delivered until
                        the Required Tax Payments have been satisfied in full.

        D.      Adjustment. In the event of any stock split, stock dividend,
                recapitalization, reorganization, merger, consolidation,
                combination, exchange of shares, liquidation, spin-off or other
                similar change in capitalization or event, or any distribution
                to holders of Stock other than a regular cash dividend, the
                number and class of securities subject to the Option and the
                purchase price per security shall be appropriately adjusted by
                the

                                       3

<PAGE>
                Administrator without an increase in the aggregate purchase
                price. If any adjustment would result in a fractional security
                being subject to the Option, the Company shall pay the Optionee,
                in connection with the first exercise of the Option occurring
                after such adjustment, an amount in cash determined by
                multiplying (i) the fraction of such security (rounded to the
                nearest hundredth) by (ii) the excess, if any, of (A) the Fair
                Market Value on the exercise date over (B) the exercise price of
                the Option. The decision of the Administrator regarding any such
                adjustment shall be final, binding and conclusive.

        E.      Corporate Transaction. In the event of a Corporate Transaction,
                the Board (as constituted immediately prior to such Corporate
                Transaction) may, in its discretion:

                1.      require the substitution for each share of Stock subject
                        to the Option the number and class of shares, if any,
                        into which each outstanding share of Common Stock shall
                        be converted pursuant to such Corporate Transaction. In
                        the event of any such substitution, the Exercise Price
                        shall be appropriately adjusted by the Administrator,
                        such adjustment to be made without an increase in the
                        aggregate purchase price; or

                2.      require the Option to be surrendered to the Company by
                        the Optionee, and to be immediately cancelled by the
                        Company, and to provide for the Optionee to receive
                        either (i) a cash payment in an amount not less than the
                        number of shares of Stock then subject to the Option,
                        whether or not the Option is then exercisable with
                        respect to such shares, multiplied by the excess, if
                        any, of the greater of (A) the highest per share price
                        offered to holders of Common Stock in any transaction
                        whereby the Corporate Transaction takes place or (B) the
                        Fair Market Value of a share of Common Stock on the date
                        of occurrence of the Corporate Transaction, over the
                        Exercise Price or (ii) shares of stock into which each
                        outstanding share of Common Stock shall be converted
                        pursuant to such Corporate Transaction having a Fair
                        Market Value not less than the amount determined under
                        clause (i) above.

        F.      Compliance with Applicable Law. The Option is subject to the
                condition that if the listing, registration or qualification of
                the shares subject to the Option upon any securities exchange or
                under any law, or the consent or approval of any governmental
                body, or the taking of any other action is necessary or
                desirable as a condition of, or in connection with, the purchase
                or delivery of shares hereunder, the Option may not be
                exercised, in whole or in part, unless such listing,
                registration, qualification, consent or approval shall have been
                effected or obtained, free of any conditions not acceptable to
                the Company.

        G.      Delivery of Certificates. Upon the exercise of the Option, in
                whole or in part, the Company shall deliver or cause to be
                delivered one or more certificates representing the number of
                shares purchased against full payment therefor. The Company
                shall pay all original issue or transfer taxes and all fees and
                expenses incident to such delivery, except as otherwise provided
                in Section 3.3.

        H.      Option Confers No Rights as Stockholder. The Optionee shall not
                be entitled to any privileges of ownership with respect to
                shares of Stock subject to the Option unless and until purchased
                and delivered upon the exercise of the Option, in whole or in
                part, and the Optionee becomes a stockholder of record with
                respect to delivered shares; and the Optionee shall not be
                considered a stockholder of the Company with respect to any such
                shares not so purchased and delivered. Notwithstanding any
                provision of the Plan or this

                                       4

<PAGE>
                Agreement, the Optionee shall be subject to and bound by all
                provisions of each other agreement between the Company and the
                Optionee.

        I.      Option Confers No Rights to Continued Employment. In no event
                shall the granting of the Option or its acceptance by the
                Optionee give or be deemed to give the Optionee any right to
                continued employment by the Company or any affiliate of the
                Company.

        J.      Designation as Nonqualified Stock Option. The Option is hereby
                designated as not constituting an "incentive stock option"
                within the meaning of section 422 of the Code. This Agreement
                shall be interpreted and treated consistently with such
                designation.

        K.      Company to Reserve Shares. The Company shall at all times prior
                to the expiration or termination of the Option reserve and keep
                available, either in its treasury or out of its authorized but
                unissued shares of Stock, the full number of shares subject to
                the Option from time to time.

        L.      Miscellaneous Provisions.

                1.      Decisions of Administrator. The Administrator shall have
                        the right to resolve all questions, which may arise in
                        connection with the Option or its exercise. Any
                        interpretation, determination or other action made or
                        taken by the Administrator regarding the Plan or this
                        Agreement shall be final, binding and conclusive.

                2.      Meaning of Certain Terms.

                        As used herein, references to employment shall mean an
                        agency or independent contractor relationship and
                        references to employment by the Company shall also mean
                        employment by a Subsidiary.

                        References in this Agreement to sections of the Code
                        shall be deemed to refer to any successor section of the
                        Code or any successor internal revenue law.

                        As used herein, the term "Legal Representative" shall
                        include an executor, administrator, legal
                        representative, guardian or similar person.

                3.      Successors. This Agreement shall be binding upon and
                        inure to the benefit of any successor or successors for
                        the Company and any person or persons who shall, upon
                        the death of the Optionee, acquire any rights hereunder
                        in accordance with this Agreement or the Plan.

                4.      Notices. All notices, requests or other communication
                        provided for in this Agreement shall be made, if to the
                        Company, to THQ Inc., 27001 Agoura Road, Suite 325,
                        Calabasas Hills, California 91301, and if to the
                        Optionee, to the last known mailing address of the
                        Optionee contained in the records of the Company. All
                        notices, requests or other communications provided for
                        in this Agreement shall be made in writing either (a) by
                        personal delivery to the party entitled thereto, (b) by
                        mailing in the United States mail, return receipt
                        requested, to the last known address of the party
                        entitled thereto or (c) by express courier service, with
                        a signature of the recipient required. The notice,
                        request or other communication shall be deemed to be
                        received upon personal delivery, or upon receipt by the
                        party entitled thereto if by United States mail or
                        express courier

                                       5

<PAGE>
                        service; provided, however, that if a notice, request or
                        other communication sent to the Company is not received
                        during regular business hours, it shall be deemed to be
                        received on the next succeeding business day of the
                        Company.

                5.      Partial Invalidity. The invalidity or unenforceability
                        of any particular provision of this Agreement shall not
                        affect the other provisions hereof and this Agreement
                        shall be construed in all respects as if such invalid or
                        unenforceable provisions were omitted.

                6.      Governing Law. This Agreement, the Option and all
                        determinations made and actions taken pursuant hereto
                        and thereto, to the extent not governed by the laws of
                        the United States, shall be governed by the laws of the
                        State of Delaware and construed in accordance therewith
                        without giving effect to principles of conflicts of
                        laws.

                7.      Agreement Subject to the Plan. This Agreement is subject
                        to the provisions of the Plan, and shall be interpreted
                        in accordance therewith. The Optionee hereby
                        acknowledges receipt of a copy of the Plan.

                8.      Counterparts. This Agreement may be executed in two
                        counterparts each of which shall be deemed an original
                        and both of which together shall constitute one and the
                        same instrument.

                                           THQ INC.

                                           By:
                                              --------------------------------
                                              Name:
                                              Title:

Accepted this _______ day of
___________________, 200_

--------------------------------
          Optionee

                                       6

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