AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment") is entered
into as of the 16th day of April, 1997 by and between EMERSON RADIO CORP., a
Delaware corporation (the "Company"), and JOHN P. WALKER (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company and Executive entered into that certain Employment
Agreement dated as of April 1, 1994 (the "Agreement"), whereby, among other
things, Executive agreed to serve the Company as Vice President-Finance (and
currently as Executive Vice President and Chief Financial Officer), on the terms
and conditions therein contained; and
WHEREAS, the Company and Executive desire to extend the term of the
Agreement, amend certain terms and conditions thereof, and further reflect
Executive's other work-related commitments.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Company and Executive hereby agree as follows:
1. TERM. Section 1(a) of the Agreement is hereby amended to extend and
modify the definition of the "Term" to continue until April 1, 2000. Executive
and the Company agree that any further extension of the Agreement beyond the
Term expiring on April 1, 2000 shall be negotiated during the period from July
1, 1998 through December 31, 1998, to be effective after March 31, 2000.
2. POSITION AND DUTIES. Section 2 of the Agreement is hereby amended by
deleting such Section 2 in its entirety and substituting the following in lieu
thereof:
During the Term, the Executive agrees to serve as Executive Vice
President and Chief Financial Officer of the Company, and will have
such powers and duties as are commensurate with such position and as
may be conferred upon or delegated to him by the Board of Directors
(the "Board") of the Company, the Chairman, the President or the Chief
Executive Officer. In addition, the Executive agrees to serve from
time to time in such other positions with the Company or its
subsidiaries or affiliates (including, without limitation, Sport
Supply Group, Inc. ("SSG") as may be specified by the Board, the
Chairman, the President or the Chief Executive Officer of the Company
and thereafter approved by the board of directors of the applicable
entity. During the Term, and except for illness or incapacity, the
Executive shall devote such business time, attention, skill and
efforts as necessary for the business and affairs of the Company and
its subsidiaries and affiliates and the promotion of their interests,
and shall not take part in activities detrimental to the best
interests of the Company. The Company understands and acknowledges
that (i) Executive will devote approximately 30% of his business time
on behalf of the Company, with the balance of such time being devoted
to his responsibilities with SSG, and (ii) Executive will reside in
the Dallas/Ft. Worth metropolitan area, in proximity to the principal
offices of SSG, from which offices Executive will primarily perform
his services. The Company will reimburse Executive for his normal and
reasonable travel costs to the Company's offices which are reasonably
deemed necessary or desirable to fulfill his responsibilities
hereunder, including, without limitation, the cost of first class or
business class air travel in those instances in which Executive does
not have upgrade certificates, or upgrades are not available, from
coach class air travel, estimated by Executive to be necessary on
approximately 10% of all air travel so taken.
3. COMPENSATION. Section 3(a) of the Agreement is hereby amended to
reflect Executive's time commitments, by modifying Executive's Base Salary
effective as of December 11, 1996 (the "Effective Date"), which will be his
initial salary under this Amendment, to $100,000 per annum (the "Initial
Salary"). In addition, Executive hereby waives his right to any bonus from the
Company or its subsidiaries for the fiscal year ending March 31, 1997, to which
he would otherwise be entitled under Section 3(b) of the Agreement; provided,
however, that Executive shall be entitled to be considered for a bonus from the
Company if a material license or sale, if any, of the "Emerson and G-Clef"
trademark for video products, is consummated by the Company on or prior to June
30, 1997. Notwithstanding the foregoing, Executive shall continue to be
provided life insurance with a death benefit in an amount as provided
immediately prior to the Effective Date, and which insurance shall be otherwise
in accordance with the Company's policies for providing such insurance to its
senior executives.
4. EFFECT OF TERMINATION OF EMPLOYMENT. Section 5 of the Agreement is
hereby amended by deleting such Section 5 in its entirety and substituting the
following in lieu thereof:
(a) CERTAIN TERMINATIONS. If Executive's employment hereunder
terminates due either to Permanent Disability, a Without Cause
Termination or a Constructive Discharge, the Company shall, as
liquidated damages or severance pay, or both, subject to the
provisions of Section 6 below, pay the Executive his Initial Salary as
Base Salary payments would otherwise become due and payable until (i)
the expiration of the Term, if such termination occurs prior to July
1, 1998, or (ii) eighteen (18) months from the date of such
termination, if such termination occurs on or after July 1, 1998 (the
"Severance Period"), and the other benefits and qualified stock
options provided hereunder shall continue to vest pursuant to the
terms hereof during the Severance Period; provided, that in the case
of Permanent Disability, such payments shall be offset by any amounts
otherwise paid to Executive under the Company's disability program
generally available to other employees. In addition, earned but
unpaid Base Salary as of the date of termination of employment shall
be payable in full. Group hospitalization, health, dental care, life
or other insurance, travel or accident insurance and disability
insurance shall continue through the end of the Severance Period.
(b) OTHER TERMINATIONS. If the Executive's employment hereunder
terminates due to a Termination for Cause or the Executive
unilaterally severs the employment relationship or terminates
employment with the Company for reason other than a Constructive
Discharge or Permanent Disability, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full and
vested qualified stock options will remain vested in the Executive.
However, no other payments of any nature whatsoever, including
unearned Base Salary, shall be made, or benefits provided, by the
Company under this Agreement except for stock options to the extent
already vested and exercisable hereunder, benefits vested and payable
under any retirement plan and benefit programs maintained by the
Company or its affiliates of its employees, or as otherwise required
by law.
(c) DEFINITIONS. For purposes of this Agreement, the following
terms have the following meanings:
(i) The term "Termination for Cause" means, to the maximum
extent permitted by applicable law, (x) a termination of the
Executive's employment by the Company because the Executive has
breached or failed to perform his duties under the Agreement and this
Amendment, applicable law or the by-laws of the Company, including the
unreasonable neglect or refusal to perform duties assigned by the
Board, (y) abuse of office or malfeasance by Executive, or (z)
conviction of the Executive of a felony which the Board reasonably
deems to be an "abuse of office" or a crime of moral turpitude.
(ii) The term "Constructive Discharge" means a termination
of the Executive's employment by the Executive due to a failure of the
Company or its successors without the prior consent of the Executive
to fulfill its obligations under this Agreement in any material
respect.
(iii) The term "Without Cause Termination" means termination
of the Executive's employment by the Company, upon 30 days written
notice to the Executive, other than due to (v) Permanent Disability,
(x) retirement, (y) expiration of the Term, or (z) Termination for
Cause.
(iv) The term "Permanent Disability" means the inability of
the Executive as determined by the Board and confirmed by competent
medical evidence, to work for a period of three consecutive full
calendar months or 90 non-consecutive days during any twenty-four
consecutive calendar months due to illness or injury of a physical or
mental nature. To determine issues of disability, the Executive
agrees to submit himself for appropriate medical examination to
physicians reasonably acceptable to the Company and the Executive.
(d) SURVIVAL. The terms of this Section 4 shall survive the
expiration of this Agreement and Amendment.
5. FULL FORCE AND EFFECT. Except as specifically amended hereby, the
Agreement shall not be deemed to be further amended or modified, and shall
remain in full force and effect. In addition, the parties hereto expressly
acknowledge and agree that no other agreement nor any breach of or default under
any other agreement shall have any effect on the rights and obligations of the
parties hereto, including, without limitation, under any employment or other
agreement between Executive and SSG.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer and the Executive has signed this Amendment, all
effective as of the Effective Date.
EMERSON RADIO CORP.
By: /s/ Geoffrey P. Jurick
Geoffrey P. Jurick
Chief Executive Officer
EXECUTIVE:
/s/ John P. Walker
John P. Walker