Document:

Exhibit
10.1

October 5, 2006

Mr. David Contis

401 Wilshire Blvd., Suite 700

Santa Monica, CA 90401

Dear David:

I am writing concerning your employment with the
Macerich Company and its affiliates (collectively, the “Company”).  The Company is pleased to offer you the
following separation agreement (the “Agreement”):

	
  Employment

  Relationship with
  the Company

  	
  You will remain an active Company employee through October 31, 2006
  (the “Employment Period”).  During the
  Employment Period, you will continue to receive your base salary and
  associated benefits, in accordance with the Company’s regular and usual
  payroll and benefits practices and subject to applicable payroll and benefits
  deductions.

   

  Effective at the close of business on October 31, 2006 (the “Separation
  Date”), you are resigning from all employment with the Company.  In addition to receiving your base salary
  and associated benefits through the Employment Period, you will be paid for
  any accrued but unused vacation and personal days.  On the Separation Date, you will receive
  your final regular paycheck, irrespective of whether you agree to the terms
  of the Agreement.  In regard to Profit
  Sharing/401(k) Plans and Deferred Compensation Plan, eligibility will terminate
  effective on the Separation Date. 
  Marsha Chappell and Scott Kingsmore are the respective contacts for
  additional information under these Plans.

   

  As you are currently enrolled in the Company’s medical and dental

  

 

 

 

	
   

  	
  plans, you will have the right to convert to COBRA, at your own
  expense, the coverage you currently are enrolled in.  Your current medical and dental coverage
  will remain active through the Separation Date.  If you choose to elect COBRA conversion,
  the first date of coverage under COBRA will be November 1, 2006.  COBRA notification (which will detail your
  rights, response deadlines, cost, and payment procedures) will be mailed to
  you from our third party administrator. 
  Please keep in mind that if you want coverage beyond the Separation
  Date, you must initiate the enrollment
  process.  Luisa Sheldon is
  the contact for COBRA information.

  
	
   

  	
   

  
	
  Accelerated
  Vesting of Restricted Stock

  	
  This agreement confirms that notwithstanding
  anything contained in the Restricted Stock Agreements dated as of March 31,
  2004, March 31, 2005, March 31, 2006 and April 27, 2006 (collectively,
  the “Restricted Stock Agreements”), the Compensation Committee of the Board
  of Directors has by resolution accelerated the vesting date of your 34,829
  shares of  restricted stock which were granted
  under the Restricted Stock Agreements, and therefore all of such shares shall
  vest, and the restrictions thereon shall lapse, as of the Separation Date.  

  
	
   

  	
   

  
	
  Continued
  Eligibility for Annual Bonus

  	
  Notwithstanding any contrary provisions of the
  Company’s annual bonus plan or otherwise, at the time when annual bonuses are
  paid to the Company’s other Executive Officers for the 2006 calendar year, you
  shall be paid a proportionate share (based upon the percentage of the year
  during which you were employed by the Company) of an annual cash bonus under
  such plan in an amount equal to the annual bonus to which you would have been
  entitled had your employment with the Company not become subject to this
  Separation Agreement, which amount, if any, shall be determined by the
  Compensation Committee of the Board of Directors in its sole and absolute
  discretion.

  
	
   

  	
   

  
	
  Confidential
  Information

  	
  You understand and agree that during the course of your employment
  with the Company, you had access to certain “Confidential Information.”  Confidential Information includes all
  information of, about or concerning the business of the Company that derives
  actual or potential economic value from not being known to the Company’s
  competitors or any part of the public or that is otherwise proprietary to the
  Company.  Both during and subsequent to
  your employment with the Company, you shall not

  

 

 

 

	
   

  	
  disclose any Confidential Information to any other person or entity
  or use such information in any manner that is detrimental to the Company’s
  interests.  For the purposes of this
  Agreement, the term “Confidential Information” also includes, but is not
  limited to, personnel or finance information; leasing techniques (to the
  extent unique to the Company), development plans, acquisition strategies (to
  the extent unique to the Company), operational plans, procedures, policy or
  history concerning the Company; property budgets or strategies; property
  marketing or brand research information; financial information; business
  plans, procedures, policy or history; claims handling practices or procedures;
  potential, contingent, unasserted or threatened claims, liabilities or
  actions against the Company; employee or consultant incentive compensation
  plan structures, salaries or fees; marketing and/or finance plans or surveys;
  future plans or projections; costs or expenses, bonus plans; training
  materials or information; the Company’s stock option plan or agreements, or
  any information in connection therewith or relating to the Company’s stock;
  business records; business files; computer data; business operating forms and
  other documents; and plans and compilations of information or other
  proprietary material in connection with or concerning the business, future
  business or potential employees of the Company; or any and all information
  defined as “Trade Secrets” under the Trade Secrets Act.  Confidential Information may have been
  contained in written materials, in verbal communications, in the unwritten
  knowledge of employees, and/or any other tangible medium of expression,
  including, but not limited to, hard disk and soft disk drive mechanism and
  CD-roms disks.  Such information is
  confidential without regard to the manner in which it was obtained.  The term “Confidential Information” does
  not include information which (i) is or becomes generally available to the
  public other than as a result of a disclosure by you, or (ii) was or becomes
  available to you on a non-confidential basis from a source other than through
  or as a result of your prior employment by the Company, provided that such source is not known
  by you to be bound by a confidentiality agreement with or other contractual,
  legal or fiduciary obligation of confidentiality to the Company or any other
  party with respect to such information. You acknowledge that all Confidential
  Information has been disclosed to or learned by you in confidence, and you
  agree not to use any Confidential Information and to maintain absolute and
  strict confidentiality with respect to any and all Confidential Information
  for all time.  You understand and agree
  that this confidential information provision is a material term of this
  Agreement and that any breach of this provision will cause the

  

 

 

 

	
   

  	
  Company irreparable harm for which it will have no adequate remedy at
  law.  Therefore, you agree that the
  Company shall be entitled to injunctive or other equitable relief to prevent
  a breach or threatened breach of this provision.

  
	
   

  	
   

  
	
  Non-Solicitation

  	
  You agree that, for a period of two years commencing on the
  Separation Date, without the prior written consent of the Company, you will
  not (and will not assist or encourage others to), directly or indirectly,
  solicit to hire or hire or cause or seek to cause to leave the employ of the
  Company or any of its affiliates any person then employed by the Company or
  any of its affiliates; provided, however, that you may employ any such person
  who responds to general solicitations for employment by any company you are
  affiliated with provided that such general solicitations are in the ordinary
  course of business and consistent with past practice, and not targeted
  directly to any specific individual or individuals.

  
	
   

  	
   

  
	
  No Derogatory
  Comments

  	
  Each of us agrees to not make any detrimental or derogatory comments
  concerning the other party, or, as to the Company, any of its directors,
  officers, partners, employees or affiliates, past, present or future.  Each of us understands and agrees that this
  no derogatory comments provision is a material term of this Agreement and
  that any breach of this provision will cause the other party irreparable harm
  for which it will have no adequate remedy at law.  Therefore, you agree that the aggrieved
  party shall be entitled to injunctive or other equitable relief to prevent a
  breach or threatened breach of this provision.

  
	
   

  	
   

  
	
  No Other Payments or Benefits 

  	
  You agree that in exchange for the payments and benefits provided for
  in this Agreement, you are not entitled to any other payments or benefits
  from the Company of any kind, including but not limited to, salary,
  restricted stock, severance pay, termination benefits, change of control
  benefits, fringe benefits, vacation pay, bonuses, incentive compensation,
  sick pay, life insurance, disability insurance, medical benefits, new
  participation in deferred compensation or profit sharing/401k or other
  retirement benefits, or any other payments or benefits contained in any
  employment agreement or any other agreements, whether written or oral,
  between you and the Company.

  
	
   

  	
   

  
	
  Release of the
  Company

  	
  You agree that in exchange for the payments and benefits provided for
  in this Agreement, you will release the Company, and you covenant not to sue
  the Company, with respect to any and all actions or causes of action, whether
  known or unknown, from the beginning

  

 

 

 

	
   

  	
  of time to the date of this Agreement.  Claims being released by you include, but
  are not limited to, any and all claims arising out of, concerning, or related
  to:  (a) your employment with the
  Company, your employment agreement, or your separation from employment with
  the Company; (b) any federal, state, or local law prohibiting employment
  discrimination, including the Age Discrimination Employment Act, as amended
  by the Older Workers Benefit Protection Act, Title VII of the Civil Rights
  Act, the Civil Rights Acts of 1866, 1871 and 1991, the Americans with
  Disabilities Act, Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. §§
  1981, 1983, the Vocational Rehabilitation Act of 1973, the Employee
  Retirement Income Security Act, and the Arizona Civil Rights Act; (c) any
  contract or tort claims, including any claims for breach of implied or
  express contract, whether written or oral, tortious interference with
  contractual relations, breach of promise, misrepresentation, negligence,
  fraud, estoppel, defamation, intentional or negligent infliction of emotional
  distress, prima facie tort, loss of consortium, violation of public policy,
  wrongful, abusive or constructive discharge, or any other employment-related
  tort; (d) any other federal, state, or local law relating to employment,
  including the Fair Labor Standards Act and any state’s wage and hour law; or
  (e) any transactions, occurrences, acts, statements, disclosures, or
  omissions occurring prior to the date of this Agreement.  Notwithstanding the foregong, you do not
  release any claims (i) for breach of this Agreement, (ii) under any and all
  reimbursement and indemnification obligations we owe you, whether by
  contract, at law or otherwise, or (iii) that by law cannot be waived.

  
	
   

  	
   

  
	
  Indemnification

  	
  The Company shall indemnify you to the fullest extent permitted by
  Maryland law in effect on the date hereof and as amended from time to time
  if, by reason of your employment by the Company, you are, or are threatened
  to be, made a party to or a witness in any threatened, pending or completed
  action, suit, arbitration, alternate dispute resolution mechanism,
  investigation, administrative hearing or any other proceeding, whether civil,
  criminal, administrative or investigative (including on appeal), except one
  initiated by you to enforce your rights under this Separation Agreement.

  
	
   

  	
   

  
	
  Cooperation in
  Legal Proceedings

  	
  You agree that, after the Separation Date,
  upon the reasonable request of the Company, you shall cooperate with and
  assist the Company in undertaking and preparing for legal and other
  proceedings relating to the affairs of the Company. You shall be reimbursed
  for the reasonable expenses you incur in connection with

  

 

 

 

	
   

  	
  any such cooperation and/or assistance, and
  shall receive from the Company reasonable per diem compensation in
  connection therewith.

  
	
   

  	
   

  
	
  Return of Company
  Property

  	
  On the Separation Date, you shall return to the Company all documents
  (and all copies thereof) and other property belonging to the Company that you
  have in your possession or control, whether in hard copy or electronic
  form.  The documents and property to be
  returned by you include, but are not limited to, all files, correspondence,
  email, memoranda, notes, notebooks, drawings, records, plans, forecasts,
  reports, studies, analyses, compilations of data, proposals, agreements,
  tenant lease forms and lease related documents, property acquisition files
  and documents, policy and procedure documents and financial information,
  specifications, research and development information, sales and marketing
  information, operational and personnel information manuals, code, software,
  databases, computer-recorded information, tangible property and equipment
  (including, but not limited to, computers, facsimile machines, mobile
  telephones, and servers), credit cards, entry cards, identification badges
  and keys; and any materials of any kind which contain or embody any
  proprietary or confidential information of the Company or any of its
  Affiliates (and all reproductions or excerpts thereof, in whole or in
  part).  You agree to make a diligent
  search to locate any such documents, property and information.  You further agree, on a mutually agreeable
  day and time, to provide the Company’s representatives access to any
  personally owned computer, server, or e-mail system that you have used to
  receive, store, review, prepare or transmit any Company confidential or
  proprietary data, materials or information, so that the Company can make a
  computer-useable copy of all such information and the Company can also
  permanently delete and expunge such confidential or proprietary information
  from those systems.  You understand and
  agree that this return of Company property provision is a material term of
  this Agreement and that any breach of this provision will cause the Company
  irreparable harm for which it will have no adequate remedy at law.  Therefore, you agree that the Company shall
  be entitled to injunctive or other equitable relief to prevent a breach or
  threatened breach of this provision.

  
	
   

  	
   

  
	
  ADEA Waiver

  	
  In connection with your release of claims, you acknowledge the
  following:  (a) in return for this
  Agreement, in addition to the payments and benefits to which you were
  entitled under your Employment Contract, you will receive payments beyond
  that which

  

 

 

 

	
   

  	
  you were already entitled to receive before entering into this
  Agreement; (b) you have been advised in writing (by this Agreement) to
  consult with an attorney prior to signing this Agreement; (c) you have been
  given a period of 21 days within which to consider this Agreement and, if you
  elect to sign it before that time, acknowledge that you have done so
  voluntarily; and (d) you are fully aware of your rights and have carefully
  read and understand all provisions of this Agreement before signing it.

   

  You shall have seven (7) days after signing this Agreement to revoke
  your agreement to its terms.  Any
  revocation shall be in writing and addressed to Richard Bayer, Executive Vice President & Chief Legal
  Officer at The Macerich Company,  401
  Wilshire Blvd., Suite 700, Santa Monica, California 90401.  This Agreement, and its terms, shall not
  become effective and none of the payments and benefits set forth herein shall
  become due or payable until the earliest date after:  (a) both you and the Company have signed
  this Agreement; and (b) your seven-day revocation period has passed without
  revocation.

  
	
   

  	
   

  
	
  Governing Law

  	
  The rights and obligations contained in this Agreement shall be
  construed and enforced in accordance with, and shall be governed by, the laws
  of the State of California, without regard to principles of conflict of
  laws.  This Agreement shall be binding
  upon the successors and assigns of the parties hereto.

  
	
   

  	
   

  
	
  Arbitration

  	
  You agree that any and all claims or disputes that might arise
  between you and the Company under this Agreement shall be decided by
  arbitration in Los Angeles, in accordance with the Model Employment
  Arbitration Procedures of the American Arbitration Association (including
  such procedures governing selection of the specific arbitrator or
  arbitrators), unless mutually agreed otherwise.  The Company shall pay the costs of the
  arbitration.  The award by the
  arbitrator or arbitrators shall be final, and judgment may be entered upon it
  in accordance with applicable law in any state or federal court having
  jurisdiction.

  
	
   

  	
   

  
	
  Integrated
  Agreement and No

  Oral Modifications

  	
  This Agreement shall supersede and replace all prior negotiations and
  agreements proposed or otherwise, whether written or oral, concerning the
  subject matter herein.

   

  This Agreement cannot be modified except in a writing signed by you
  and the Company.

  

 

 

 

Sincerely,

 

Richard A. Bayer

Executive Vice President & Chief Legal Officer

 

	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  David Contis

  	
  DateExhibit
10.2

AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into this 9th day
of October, 2006 by and between Golf Galaxy, Inc. (the “Company”) and Randall
K. Zanatta (the “Executive”).

WITNESSETH:

WHEREAS, the Company has
retained the services of Executive pursuant to the terms of that certain
Employment Agreement between Company and Executive dated December 31, 1997 (the
“1997 Employment Agreement”);

WHEREAS, the Company desires to
amend the terms of Executive’s employment pursuant to the terms of this
Agreement; and

WHEREAS, following execution of
this Agreement, the 1997 Employment Agreement shall terminate and be of no
further force or effect.

NOW, THEREFORE, in consideration
of the mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

ARTICLE
I.

EMPLOYMENT AND TERM

1.1           EMPLOYMENT.  Upon the terms and subject to the conditions
herein contained, the Company hereby employs Executive as President and Chief
Executive Officer or in such other capacity as may be determined from time to
time by the Board of Directors of the Company (the “Board”), and Executive
hereby accepts such employment.

1.2           TERM.  Except as otherwise provided in this
Agreement, the term (the “Term”) of this Agreement shall commence as of the
date hereof and shall continue until this Agreement is terminated by either
party pursuant to the terms hereof.

ARTICLE
II.

COMPENSATION

2.1           SALARY.  As compensation for his services to the
Company and as compensation for his confidentiality, non-competition and
non-solicitation agreement provided in Article 3 of this Agreement, Executive
shall receive an annual salary in the amount of Two Hundred Eighty Thousand
Dollars ($280,000) (the “Salary”) payable on a pro rata, bi-weekly basis.  The Salary shall be reviewed by the Board on
the first business day of each fiscal year occurring during the Term (the “Review
Date”), the first such review to take place on March 1, 2007 and the Board may
(but shall not be obligated to) increase or decrease said salary as of the
Review Date by such amount as the Board deems appropriate.

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2.2           BENEFITS.  Except as the Board may otherwise provide,
Executive shall be entitled to participate in any retirement savings plan,
profit sharing plan, life insurance, health insurance, dental insurance,
disability insurance or any other fringe benefit plan which the Company may
from time to time make available to its salaried senior executives to the
extent that Executive’s age, tenure and title make him eligible to receive
those benefits.

Any
of such benefits may be modified or withdrawn by the Company in its discretion
during the Term to the extent the same are withdrawn or modified or
supplemented for other employees similarly situated.

2.3           DISCRETIONARY BONUS.  Executive may from time to time receive a
bonus in the sole discretion of the Board.

2.4           PAID TIME OFF.  Executive shall be entitled to twenty (20)
days Paid Time Off (PTO) per calendar year, which shall be prorated during any
partial year during the Term. Any additional PTO that is unused as of the last
day of the calendar year shall be forfeited. Any unused PTO shall be paid to
Executive at termination.

2.5           EXPENSES.  The Company shall reimburse Executive for all
reasonable expenses properly incurred by Executive in the discharge of his
duties hereunder upon production of evidence therefor.

2.6           CELL PHONE.  Executive will be issued a Company-owned cell
phone for his business and personal use during the Term of this Agreement.  Executive agrees to immediately discontinue
use and return such cell phone upon termination of this Agreement.

ARTICLE
III.

DUTIES OF EXECUTIVE

3.1           SERVICES; DUTIES.  Executive shall have the normal duties,
responsibilities and authority of a President and Chief Executive Officer,
subject to the power of the Board to expand or limit such duties,
responsibilities and authority. 
Executive shall devote Executive’s full time and best efforts to the
business of the Company.  Executive shall
perform the duties and obligations required of Executive hereunder in a competent,
efficient and satisfactory manner at such hours and under such conditions as
the performance of such duties and obligations may require.

3.2           CONFIDENTIALITY AND
LOYALTY.  Executive
acknowledges that, during the course of Executive’s employment Executive will
produce and have access to trade secrets, materials, records, data and
information not generally available to the public regarding the Company, its
customers and affiliates (collectively “Confidential Information”).  Accordingly, during and subsequent to the
termination of this Agreement, Executive shall hold in confidence and not ,
directly or indirectly disclose, use, copy or make lists of any Confidential
Information, except to the extent authorized in writing by the Company, or as
required by law or any competent administrative agency or as otherwise is
reasonably necessary or appropriate in connection with the performance by
Executive of his duties pursuant to this Agreement.  Upon termination of Executive’s employment
for any reason, Executive shall promptly deliver to the Company (i) all
records, manuals, books, documents, client lists, letters, reports, data,
tables,

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calculations and
all copies of any of the foregoing which are the property of the Company or
which relate in any way to the business or practices of the Company, and (ii)
all other property of the Company and Confidential Information which in any of
these cases are in his possession or under his control.

3.3           NON-COMPETITION AND
NON-SOLICITATION.

(a)           In further consideration of the
compensation to be paid to Executive hereunder, Executive acknowledges that
during the course of his employment with the Company he has become familiar
with the Company’s trade secrets and with other Confidential Information
concerning the Company and that his services have been and shall be of special,
unique and extraordinary value to the Company, and therefore, Executive agrees
that, during the Term and for a period of eighteen (18) months thereafter (the “Noncompete
Period”), he shall not, without the Company’s prior written consent, directly
or indirectly, own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as a director,
officer, employee, partner, consultant or otherwise with, any business or
organization in the United States, Canada or Mexico that sells or markets golf
equipment, apparel, accessories or services directly to consumers, whether
through retail or direct marketing channels, including, but not limited to
catalogs and the internet (a “Competitive Business”); provided, however, that
nothing herein shall prohibit Executive from (i) being a passive owner of not
more than 2% of the outstanding stock of any class of a corporation which is
publicly traded, so long as Executive has no active participation in the
business of such corporation; or (ii) becoming involved with a business or
organization for which activities comprising a Competitive Business do not
represent  more than $10 million in
revenues or more than 10% of such business or organization’s total revenues.
If, at the time of enforcement of this Article III, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted
by law.  Executive acknowledges that the
restrictions contained in this Article III are reasonable and that he has
reviewed the provisions of this Agreement with his legal counsel

(b)           During the Term and for a period of
two (2) years thereafter (the “Non-Solicit Period”), Executive shall not
directly or indirectly through another person or entity (i) induce or attempt
to induce any employee of the Company to leave the employ of the Company, or in
any way interfere with the relationship between the Company and any employee
thereof, (ii) hire any person who was an employee of the Company at any time
during the Term or (iii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company to cease
doing business with the Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company (including, without limitation, making any negative or disparaging
statements or communications regarding the Company).

(c)           In the event of the breach or a
threatened breach by Executive of any of the provisions of this Section 3.3(c),
the Company would suffer irreparable harm, and in addition and supplementary to
other rights and remedies existing in its favor, the Company shall be entitled
to specific performance and/or injunctive or other equitable relief from a
court of

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competent jurisdiction
in order to enforce or prevent any violations of the provisions hereof (without
posting a bond or other security).  In
addition, in the event of an alleged breach or violation by Executive of this
Article III, the Noncompete Period and the Non-Solicit Period shall be tolled
until such breach or violation has been duly cured.

3.4           PATENT AND RELATED MATTERS.

(a)           Disclosure and Assignment.  Executive agrees to promptly disclose in
writing to the Company complete information concerning each and every
invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by Executive, either
solely or in collaboration with others, during the term of this Agreement, or
within six (6) months thereafter, whether or not during regular working hours,
relating either directly or indirectly to the business, products, practices or
techniques of the Company (hereinafter referred to as “Developments”).  Executive,
to the extent that he has the legal right to do so, hereby acknowledges that any
and all of said Developments are the property of the Company and hereby assigns
and agrees to assign to the Company any and all of Executive’s right, title and
interest in and to any and all of such Developments.

(b)           Future Developments.  As to any future Developments made by
Executive which relate to the business, products or practices of the Company
and which are first conceived or reduced to practice during the term of this
Agreement, but which are claimed for any reason to belong to an entity or person
other than the Company, Executive agrees to promptly disclose the same in
writing to the Company and shall not disclose the same to others if the
Company, within twenty (20) days thereafter, shall claim ownership of such
Developments under the terms of this Agreement.

(c)           Limitation on Sections 3.4(a) and
(b).  The provisions of Sections
3.4(a) and (b) shall not apply to any Development meeting the following
conditions:

(i)            such Development was developed
entirely on Executive’s own time;

(ii)           such Development was made without the
use of any Company equipment, supplies, facility or trade secret information;

(iii)          such Development does not relate (a)
directly to the business of the Company, or (b) to the Company’s actual or
demonstrably anticipated research or development; and

(iv)          such Development does not result from
any work performed by Executive for the Company.

(d)           Assistance of Executive.  Upon request and without further compensation
therefore, but at no expense to Executive, and whether during the term of this
Agreement or thereafter, Executive will do all lawful acts, including, but not
limited to, the execution of papers and lawful oaths and the giving of
testimony, that in the opinion of the Company, its successors

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and assigns, may
be necessary or desirable in obtaining, sustaining, reissuing, extending and
enforcing United States and foreign patents, including, but not limited to,
design patents, on any and all of such Developments, and for perfecting,
affirming and recording the Company’s complete ownership and title thereto, and
to cooperate otherwise in all proceedings and matters relating thereto.

(e)           Records.  Executive will keep complete, accurate and
authentic accounts, notes, data and records of all Developments in the manner
and form requested by the Company.  Such
accounts, notes, data and records shall be the property of the Company, and,
upon its request, Executive will promptly surrender same to it or, if not
previously surrendered upon its request or otherwise, Executive will surrender
the same, and all copies thereof, to the Company upon the conclusion of his
employment.

3.5           UNDERSTANDINGS.  Executive acknowledges and agrees that (a) he
has carefully considered the restrictions contained in this Agreement and (b)
the restrictions in this Agreement are reasonable and will not unduly restrict
him in securing other employment in the event of termination.

3.6           REMEDIES.  Executive agrees and understands that any
breach of any of the covenants or agreements set forth in Article III of this Agreement
will cause the Company irreparable harm for which there is no adequate remedy
at law, and, without limiting whatever other rights and remedies the Company
may have under this Agreement, Executive consents to the issuance of an
injunction by any court of competent jurisdiction in favor of the Company
enjoining the breach of any of the aforesaid covenants or agreements.  If any or all of the aforesaid covenants or
agreements are held to be unenforceable because of the scope or duration of
such covenant or agreement, the parties agree that the court making such
determination shall have the power to reduce or modify the scope and/or
duration of such covenant to the extent that allows the maximum scope and/or
duration permitted by applicable law.

3.7           SURVIVAL.  The obligations of this Article III shall
survive the expiration or termination of this Agreement and/or termination of
Executive’s employment for any reason.

ARTICLE
IV.

TERMINATION

4.1           TERMINATION FOR CAUSE.  Notwithstanding anything contained in this
Agreement to the contrary, the Company shall have the right to terminate the
employment of Executive upon the occurrence of any of the following events
(which events shall constitute “Cause” for termination):

(a)           Executive shall commit any breach or violation
of any of Executive’s representations or covenants under this Agreement, which
breach continues for a period of ten (10) days following notice thereof from
the Company (except in the event of a breach of any provision of Article III,
which shall require no notice to Executive prior to termination);

 5
 

 

(b)           Executive shall willfully and
continually fail to substantially perform Executive’s duties with the Company
(other than due to incapacity resulting from physical or mental illness) which
failure has continued for at least 30 days following receipt by Executive of
written notice specifying the failure to substantially perform;

(c)           Executive shall willfully engage in
conduct that is demonstrably and materially injurious to the Company,
monetarily or otherwise, which injurious conduct has continued for at least 30
days following Executive’s receipt of written notice specifying the injurious
conduct and offering Executive the opportunity to explain the conduct to the
Board;

(d)           Executive shall, in the performance
of Executive’s duties under this Agreement, engage in any act of misconduct,
including misconduct involving moral turpitude, which is injurious to the
Company;

(e)           Executive shall violate or willfully
refuse to obey the lawful and reasonable instructions of the Board of the
Company, provided that such instructions are not in violation of this
Agreement;

(f)            Executive shall become disabled
during the Term (Executive shall be deemed to be disabled if Executive is
eligible to receive disability benefits under any long-term disability plan the
Company may then have in effect, or, if no such plan is then in effect,
Executive shall be deemed to be disabled if Executive is unable to perform the
material functions of his position with the Company, with or without reasonable
accommodation, by reason of a physical or mental infirmity, for a period of
ninety (90) consecutive days within any 180-day period);

(g)           Executive shall die during the Term
of this Agreement.

An
act or failure to act is considered “willful” if done or not done with an
absence of good faith and without a reasonable belief that the act or failure
to act was in the best interests of the Company.  If the employment of Executive is terminated
pursuant to this Section 4.1, such termination shall be effective upon the
delivery of notice thereof to Executive, except in the event of the death of
Executive, in which case termination shall be effective immediately upon death,
and termination pursuant to subsection 4.1(a), (b) or (c) under circumstances
in which Executive is entitled to notice of breach (or failure) and an
opportunity to cure, in which case termination shall be effective immediately
after the notice period if Executive fails to cure the breach or failure to the
reasonable satisfaction of the Company. 
In the event of termination for “Cause”, Executive shall not be entitled
to any severance payments or any other payments under this Agreement.

4.2           TERMINATION BY COMPANY FOR
ANY OTHER REASON.

Notwithstanding
anything contained in this Agreement to the contrary, the Company shall have
the right to terminate the employment of Executive for any reason, including
reasons other than those described in Section 4.1, upon thirty (30) days notice
to Executive.  Such termination shall be
effective upon the expiration of such 30 day period.  In the event of termination by the

 6
 

 

Company for any
reason not constituting “Cause” (as defined above), Executive shall be entitled
to the severance payments described in Section 4.5 of this Agreement.

4.3           TERMINATION BY EXECUTIVE
FOR GOOD REASON. 
Notwithstanding anything contained in the Agreement to the contrary,
Executive shall have the right to terminate his employment at any time for “Good
Reason”.  “Good Reason” shall exist if
any of the following events or conditions occurs:

(a)           a material change in Executive’s
title, position or responsibilities which represents a substantial reduction of
the title, position or responsibilities in effect immediately prior to the
change; the assignment of Executive to a position which requires Executive to
relocate permanently to a site outside of the Minneapolis-St. Paul metropolitan
area; the assignment to Executive of any duties or responsibilities (other than
due to a promotion) which are inconsistent with such title, position or
responsibilities; or any removal of Executive from or failure to reappoint or
reelect Executive to any of such positions, except in connection with the
termination of employment for Cause, as a result of permanent disability (as
determined by Executive’s eligibility to receive disability benefits under any
long-term disability plan the Company may then have in effect, as a result of
Executive’s death, or by Executive other than for Good Reason; or

(b)           any material breach by the Company of
any provision of this Agreement.

In
the event of termination of employment by Executive for Good Reason, Executive
shall be entitled to the severance payments described in Section 4.5 of this
Agreement.

4.4           TERMINATION BY EXECUTIVE.  Executive shall have the right to terminate
his employment under this Agreement for any reason.  In the event of termination by Executive for
any reason not constituting a termination for “Good Reason” (as defined above),
Executive shall not be entitled to any severance payment or any other payments
under this Agreement.

4.5           SEVERANCE PAYMENTS.  In the event that Executive’s employment is
terminated by the Company for reasons other than Cause, or, in the event that
Executive terminates Executive’s employment for Good Reason, the Company shall
pay to Executive, within ten (10) days of the date of such termination, the
Salary through such date of termination, and, in lieu of any further
compensation and benefits under this Agreement, Executive shall be entitled to
the following benefits during the “Severance Period” (which Severance Period is
defined herein to be the eighteen (18) - month period beginning on the date of
such termination of Executive’s employment).

(a)           During the Severance Period, the
Company shall continue to pay to Executive the annual base salary payable to
Executive at the rate and according to the payment schedule in place
immediately prior to the termination of employment subject to federal and state
withholding, FICA, FUTA and withholding for all other applicable taxes;

 7
 

 

(b)           During the Severance Period, the
Company shall continue on behalf of Executive (and Executive’s dependents and
beneficiaries), life insurance, disability insurance, medical and dental
benefits and any/all other benefits which were being provided to Executive at
the time of termination of employment and the expense shall be allocated
between the Company and Executive on the same basis as prior to the date of
termination of employment.  The benefits
provided pursuant to this Section 4.5(b) shall be no less favorable to
Executive than the coverage provided to Executive under the plans providing
such benefits at the time notice of termination was given to Executive.  The obligation of the Company under this
Section 4.5(b) shall be limited to the extent that Executive obtains any such
benefits pursuant to a subsequent Executive’s benefit plans, in which case the
Company may reduce the coverage of any benefit it is required to provide
Executive under this Section 4.5(b) as long as the aggregate coverage of the
combined benefit plans is no less favorable to Executive, in terms of amounts
and deductibles and costs to Executive, than the coverage required to be
provided under this Section 4.5(b).  This
Section 4.5(b) shall not be interpreted so as to limit any benefits to which
Executive (or Executive’s dependents or beneficiaries) are entitled under any
of the Company’s Executive benefit plans, programs or practices following
Executive’s date of termination of employment. 
The provision of continued benefits to Executive under this Section
4.5(b) shall not deprive Executive of any independent statutory right to
continue benefits coverage pursuant to Sections 601 through 606 of Executive
Retirement Income Security Act of 1974, as amended; and

(c)           For the Company’s fiscal year in
which Executive’s employment is terminated, the Company shall pay Executive
such bonus, if any, equal to the amount found by multiplying (x) the lesser of
(i) such amounts as Executive would have received based on the Company’s actual
results pursuant to any bonus plan in effect during such fiscal year and (ii)
such amounts as Executive would have received based on the Company’s achieving
100% of its financial targets as reflected in such bonus plan (in each case as
though Executive had been employed the full fiscal year) by (y) a fraction, the
numerator of which is the number of days in the applicable fiscal year through
the date of Executive’s termination and the denominator of which is 365.  All bonuses payable pursuant to this
subsection (c) shall be payable to Executive at such time as bonuses for such
period are paid to Company employees under such bonus plan generally.

(d)           In the event Executive is entitled to
severance benefits, all of Executive’s rights to exercise option(s) granted under
the Company’s stock option plan and held by Executive upon termination of
employment shall immediately vest resulting in these option(s) becoming
immediately exercisable for the period specified in the section of the
respective option(s) relating to vesting of options in the event of termination
of employment, or, if no period is so specified, then for six months, after
which time the option(s) shall expire.

(e)           Notwithstanding
anything contained in this Agreement to the contrary, Executive shall be entitled
to the severance pay and benefits described in this Section 4.5 only if
(i) on or within thirty (30) days following Executive’s last date of employment
Employee

 8
 

 

signs and does not rescind a Release Agreement in a
form prepared by the Company, to include but not be limited to a comprehensive
release of all legal claims by Executive in favor of the Company, (ii)
Executive fully complies with his confidentiality obligations under Section 3.2
herein, (iii) Executive fully complies with his non-competition and
non-inducement obligations under Section 3.3 herein, and (iv) Executive fully
complies with his disclosure and assignment obligations under Section 3.4
herein.  Executive further understands
and agrees that if he does not sign the required Release Agreement, if he
rescinds the required Release Agreement after signing, or if he does not fully
comply with the confidentiality, non-competition, non-inducement, and/or
disclosure and assignment requirements of Sections 3.2, 3.3 and 3.4 herein, he
will not be entitled to the severance pay or benefits described in Section 4.5
and will be obligated to return any severance pay and/or benefits already
received.

4.6           PAYMENT OF COMPENSATION.  Notwithstanding anything in this Agreement or
elsewhere to the contrary:

(a)           If payment or provision of any amount
or other benefit that is “deferred compensation” subject to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) at the time otherwise
specified in this Agreement or elsewhere would subject such amount or benefit
to additional tax pursuant to Section 409A(a)(1)(B) of the Code, and if payment
or provision thereof at a later date would avoid any such additional tax, then
the payment or provision thereof shall be postponed to the earliest date on which
such amount or benefit can be paid or provided without incurring any such
additional tax.  In the event this
Article IV requires a deferral of any payment, such payment shall be
accumulated and paid in a single lump sum on such earliest date together with
interest for the period of delay, compounded annually, equal to the prime rate
(as published in The Wall Street Journal), and in effect as of the date the
payment should otherwise have been provided.

(b)           If any payment or benefit permitted
or required under this Agreement, or otherwise, is reasonably determined by
either party to be subject for any reason to a material risk of additional tax
pursuant to Section 409A(a)(1)(B) of the Code, then the parties shall promptly
agree in good faith on appropriate provisions to avoid such risk without
materially changing the economic value of this Agreement to either party.

4.7           SURVIVING RIGHTS.  Notwithstanding the termination of Executive’s
employment, the parties shall be required to carry out any provisions hereof
which contemplate performance subsequent to such termination; and such
termination shall not affect any liability or other obligation which shall have
accrued prior to such termination, including, but not limited to, any liability
for loss or damage on account of a prior default.

ARTICLE
V.

SETTLEMENT BY ARBITRATION

5.1           ARBITRATION.  The Company and Executive agree that any
claim or controversy arising out of or relating to this Agreement, including
but not limited to the making

 9
 

 

of it or the
alleged breach of it, and any alleged violation of any right created by
statute, shall be discussed between the disputing parties in a good faith
effort to arrive at a mutual settlement of any such claim or controversy.  If, notwithstanding, such claim or controversy
cannot be resolved, the Company and Executive agree that any claim or
controversy will be settled by arbitration in the City of Minneapolis,
Minnesota, in accordance with the provisions of this Agreement, and the
arbitration rules of the American Arbitration Association, unless such rules
are inconsistent with the provisions of this Agreement.  Limited civil discovery shall be permitted
for the production of documents and taking of depositions.  Unresolved discovery disputes may be brought
to the attention of the arbitrator who may dispose of such dispute.  The arbitrator shall have the authority to
award any remedy or relief that a court of this state could order or grant;
provided, however, that punitive or exemplary damages shall not be
awarded.  The award rendered pursuant to
such arbitration shall be final, binding and conclusive as to the Company and
Executive, and judgment upon such award may be entered without notice and
enforced in any court having jurisdiction. 
Costs of arbitration (excluding the costs of each party’s own counsel or
advisors) shall be borne equally by the Company and Executive.  Notwithstanding the foregoing, the Company
shall have the right to submit any claim against Executive arising out of any
provision of Article III hereof to any court of competent jurisdiction in
Hennepin County, Minnesota, in lieu of seeking arbitration pursuant to this
Section.

ARTICLE
VI.

GENERAL PROVISIONS

6.1           NOTICES.  All notices, requests, and other
communications shall be in writing and except as otherwise provided herein,
shall be considered to have been delivered if personally delivered or when
deposited in the United States Mail, first class, certified or registered,
postage prepaid, return receipt requested, addressed to the proper party at its
address as set forth below, or to such other address as such party may
hereafter designate by written notice to the other party:

	
  

  	
  (a)

  	
   

  	
  If to the Company, to:

  	
   

  	
  Golf Galaxy, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  7275 Flying
  Cloud Drive

  
	
   

  	
   

  	
   

  	
   

  	
  Eden Prairie, MN
  55344

  
	
   

  	
   

  	
   

  	
   

  	
  ATTN: President]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  If to Executive, to:

  	
   

  	
  Randall K. Zanatta

  
	
   

  	
   

  	
   

  	
   

  	
  4721 White Oak
  Court

  
	
   

  	
   

  	
   

  	
   

  	
  Eagan, Minnesota
  55122

  

 

6.2           NO CONFLICTION OBLIGATIONS.  Executive represents and warrants to the
Company that he is not under, or bound to be under in the future, any
obligation to any person, firm, or corporation that is or would be inconsistent
or in conflict with this Agreement or would prevent, limit, or impair in any
way the performance by him of his obligations hereunder.

6.3           WAIVER, MODIFICATION OR
AMENDMENT.  No waiver,
modification or amendment of any term, condition or provision of this Agreement
shall be valid or of any effect

 10
 

 

unless made in
writing, signed by the party to be bound or its duly authorized representative
and specifying with particularity the nature and extent of such waiver,
modification or amendment.  Any waiver by
any party of any default of the other shall not affect or impair any right
arising from any subsequent default. 
Nothing herein shall limit the rights and remedies of the parties hereto
under and pursuant to this Agreement, except as set forth above.

6.4           ENTIRE AGREEMENT.  This Agreement contains the entire
understanding of the parties hereto in respect of the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to such subject matter; provided that the parties acknowledge that they
have also entered into a retention agreement of even date herewith and that,
pursuant to Section 2(b)(iv) of such agreement, the severance payments and/or
benefits shall be reduced in a dollar-for-dollar basis by the severance
payments and/or benefits provided hereunder, it being the intention of the
parties hereto that Executive shall only be entitled to receive “one” set of
severance payments and benefits under any circumstances.

6.5           INTERPRETATION.  The provisions of this Agreement shall be
applied and interpreted in a manner consistent with each other so as to carry
out the purposes and intent of the parties hereto, but if for any reason any
provision hereof is determined to be unenforceable or invalid, such provision
or such part thereof as may be unenforceable or invalid shall be deemed severed
from this Agreement and the remaining provisions shall be carried out with the
same force and effect as if the severed provision or part thereof had not been
a part of this Agreement.

6.6           GOVERNING LAW.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Minnesota, without regard
to its principles of conflict of laws.

6.7           ASSIGNMENT.  Executive acknowledges that Executive’s
services are unique and personal. 
Accordingly, Executive may not assign Executive’s rights or delegate
Executive’s duties or obligations under this Agreement.  This Agreement shall inure to the benefit of
and be enforceable by the Company and any successor or permitted assignee, and
may be assigned by the Company to any purchaser of all or substantially all of
the Company’s business or assets (by merger, sale of assets, consolidation,
acquisition of stock or otherwise) without the consent of Executive, and may
otherwise be assigned by the Company only with Executive’s consent.

6.8           CAPTIONS AND HEADINGS.  The captions and section headings used in
this Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
thereof

6.9           TERMINATION OF 1997
EMPLOYMENT AGREEMENT. Effective the date of this Agreement, the
1997 Employment Agreement shall terminate and be of no further force and
effect, and shall be superseded and replaced in its entirety by this Agreement.

 11
 

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first above written.

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  GOLF GALAXY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GREGORY B. MAANUM

  	
   

  
	
   

  	
   

  	
  Its: 

  	
  Chief Operating
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ RANDALL K.
  ZANATTA

  	
   

  
	
   

  	
  Randall K. Zanatta

  	
   

  
					

 

 12

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