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EXHIBIT 10.3
XXXXX X. XXXXX
EMPLOYMENT AGREEMENT
This will confirm our agreement under which you are to serve as
EXECUTIVE VICE PRESIDENT-GENERAL MERCHANDISE MANAGER of Hills Department
Store Company (the "Company"), a Delaware corporation and a subsidiary of Hills
Stores Company (the "Parent").
1. Term. The Company will employ you, and you accept employment, as provided
herein, for a term beginning on the Effective Date (as defined in paragraph 6)
and ending on the second anniversary of the Effective Date, unless sooner
terminated as provided in paragraph 4.
2. Duties and Responsibilities. During the term of employment, you shall be
EXECUTIVE VICE PRESIDENT-GENERAL MERCHANDISE MANAGER of the Company and your
primary duties will be the SENIOR SUPERVISION OF ALL MERCHANDISING activities on
behalf of the Company.
3. Compensation and Benefits.
(a) Your compensation ("Base Compensation") during the term of this
agreement shall be at the rate of $325,000.00 per year. Thereafter, Base
Compensation shall be reviewed on an annual basis and increased if the
Compensation Committee of the Board of Directors deems it appropriate. No
decrease in Base Compensation will be permitted during the term of the
Agreement. In accordance with the Company's practice for its senior executives,
you will be paid twice each month.
(b) You shall be entitled to participate in any bonus, stock option or other
incentive compensation plans, profit-sharing plans, retirement plans, life and
health insurance plans, vacation and other benefit plans which are made
generally available to executives of the Company at a level commensurate with
your position and/or years worked for the Company. You shall also be entitled to
such other perquisites as the Company or the Compensation Committee of the Board
of Directors deem appropriate.
(c) You shall be entitled to reimbursement for your ordinary and necessary
business expenses, travel and entertainment incurred in the performance of your
services hereunder. You shall provide the Company with documentation of such
expenses in accordance with the Company's normal practices.
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4. Termination.
(a) By the Company. Your employment hereunder shall terminate upon your
death and may be terminated at the option of the Company (x) forthwith upon
delivery of Notice of Termination for Cause, (y) upon 90 days' Notice of
Termination in the case of Disability or (z) upon 90 days' Notice of Termination
without Cause.
(i) Upon termination by the Company for Cause, the Company shall have
no further obligations whatsoever to you hereunder, other than for payment of
any unpaid Base Compensation (as hereinafter defined) and vested benefits under
any retirement plans to which you are a participant in accordance with the terms
of the specific plans, accrued to the date of termination, and reimbursement of
any unused vacation pay accrued to the date of termination and any reimbursable
expenses incurred prior to the date of termination.
(ii) Upon termination by virtue of death or Disability, your Base
Compensation shall cease to accrue as of the effective date of termination, but
you or your estate shall be entitled to payment of: any unpaid Base Compensation
accrued to the date six (6) months following the date of termination; a pro rata
portion of any bonuses or other incentive compensation payable pursuant to
paragraph 3(b) with respect to the fiscal year of termination, determined on the
basis of the portion of such fiscal year during which you were employed
hereunder; and vested benefits under any retirement plans to which you are a
participant (in accordance with the terms of the specific plans) accrued prior
to date of termination; and reimbursement of any unused vacation pay accrued to
the date of termination and any reimbursable expenses incurred prior to the date
of termination.
(iii) Upon termination, by the Company without Cause (other than for
reasons of death or Disability) or by you, purusant to paragraph 4(b), you
shall, subject to the following sentence, continue to receive your Base
Compensation twice a month in accordance with paragraph 3(a) and the Company
shall maintain in full force and effect Insurance Benefits (as defined and
limited below), in each case for the full term of this Agreement or the date
twelve (12) months after the date (the "Notice Date") on which a Notice of
Termination is given, whichever is later; and you shall be further entitled to
receive: (A) vested benefits under any retirement plans to which you are a
participant in accordance with the terms of the specific plans accrued prior to
date of termination; and (B) reimbursement of any unused vacation pay accrued to
the date of termination and any reimbursable expenses incurred prior to the date
of termination. Should your employment be terminated without Cause, you shall
have an obligation to use reasonable efforts to seek other employment
appropriate to your skill and experience, and to promptly notify the Company
upon obtaining any such employment; and your Base Compensation shall be reduced
by the amount of any direct compensation earned by you and paid to you. For
purposes of this paragraph 4(a)(iii) and paragraph 6, "Insurance Benefits" shall
mean all life and health insurance or other similar plans in which you were
entitled to participate immediately prior to the date of termination. If, your
continued participation in any or all such plans is not possible under the
general terms and provisions thereof because you are no longer deemed to be an
employee of the Company, the Company itself shall pay or provide for payment of
such Insurance Benefits.
(b) By the Employee. Subject to the conditions set forth below, you may
terminate your employment hereunder in the event of occurrence of any of the
following:
(i) A material breach by the Company of any of the provisions of this
Agreement, which failure or breach shall have continued for thirty days after
written notice from you to the Company specifying the nature of such failure or
breach; or
(ii) The Company's failure to retain you as its EXECUTIVE VICE
PRESIDENT-GENERAL MERCHANDISE MANAGER (other than as a result of an effective
promotion); or
(iii) A significant change in the nature or scope of your
responsibilities, authorities, powers, functions or duties (other than a change
resulting from an effective promotion).
Your right to terminate your employment under paragraphs 4(b)(i), (ii),
(iii) is conditioned upon your giving
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written notice to the President, with a copy to the Vice President-Secretary, of
your decision to terminate employment not later than three months after the
occurrence of the event giving rise to the right to terminate. Such termination
of employment shall be effective one month after your written notice has been
delivered to the Company, provided the occurence specified in your notice shall
then be continuing.
(c) In addition to the reasons set forth in paragraph 4(b), you may
terminate your employment hereunder at any time, with or without good cause,
upon 90 days' Notice of Termination to the Company. In the event of a
termination by you pursuant to this paragraph 4(c), the Company shall have no
further obligations whatsoever to you hereunder, other than for payment of any
unpaid Base Compensation accrued to the date of termination and vested benefits
under any retirement plans to which you are a participant in accordance with the
terms of the specific plans accrued prior to date of termination; and
reimbursement of any properly reimbursable expenses incurred prior to the date
of termination.
(d) As used herein:
- "Cause" shall mean (i) the willful failure by you to
perform your functions and assume your responsibilities in accordance with the
terms of this Agreement, which failure amounts to material neglect of your
duties, after a written demand for substantial performance is delivered to you
by the Company, (ii) the willful engagement by you in conduct which is
materially injurious to the Company or any of its subsidiaries or affiliates,
monetarily or otherwise, (iii) the misappropriation (including the unauthorized
use or disclosure of confidential or proprietary information of the Company or
any of its subsidiaries or affiliates) or embezzlement with respect to the
Company or any of its subsidiaries or affiliates, (iv) a conviction of or guilty
plea or confession by you to any fraud, conversion, misappropriation,
embezzlement or felony, or (v) your failure to substantially perform any
material covenant to be performed by you hereunder after a written demand for
substantial performance is delivered to you by the Company, or the taking of any
action in the course of your employment under this Agreement that is known by
you to have been prohibited by Company policy or by this Agreement.
- "Disability" shall mean that, as a result of any
physical or mental disability, you are unable to perform your major duties
hereunder for a continuous period of 120 days or a total of at least 180 days in
any period of 365 consecutive days.
(e) Any purported termination of your employment shall be communicated by
written Notice of Termination from one party to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
5. Covenants.
(a) You recognize that the knowledge of, information concerning and
relationship with customers, suppliers and agents, and the knowledge of the
Company's business methods, systems, plans and policies which you will
establish, receive or obtain as an employee of the Company, are valuable and
unique assets of the business of the Company. You will not, during or within two
(2) years after the term of your employment, disclose any such knowledge or
information pertaining to the Company, its customers, suppliers, agents,
policies or other aspects of its business, for any reason or purpose whatsoever,
except pursuant to your duties hereunder or as otherwise authorized by the
Company in writing. The foregoing restriction shall not apply, following
termination of your employment hereunder, to knowledge or information which (i)
is in or enters the public domain without violation of this Agreement or other
obligations of confidentiality by you or your agents or representatives, (ii)
you can demonstrate was in your possession on a non-confidential basis prior to
the commencement of your employment with the Company, or (iii) you can
demonstrate was received or obtained by you, on a non-confidential basis from a
third party who did not acquire it wrongfully or under an obligation of
confidentiality, subsequent to the termination of your employment hereunder.
(b) All memoranda, notes, records or other documents made or compiled by you
or made available to you
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while employed concerning customers, suppliers, agents or personnel of the
Company, or the Company's business methods, systems, plans and policies, shall
be the Company's property and shall be delivered to the Company on termination
of your employment or at any other time on request.
(c) During the term of your employment and for two (2) years thereafter, you
shall not, except pursuant to and in furtherance of your duties hereunder,
directly or indirectly solicit or contact any employee of the Company with a
view to inducing or encouraging such employee to leave the employ of the Company
for the purpose of being hired by you, an employer affiliated with you or any
competitor of the Company.
(d) You acknowledge that the provisions of this paragraph 5 are reasonable
and necessary for the protection of the Company and that the Company will be
irrevocably damaged if such covenants are not specifically enforced.
Accordingly, you agree that, in addition to any other relief to which the
Company may be entitled in the form of actual or punitive damages, the Company
shall be entitled to seek and obtain injunctive relief from a court of competent
jurisdiction for the purposes of restraining you from any actual or threatened
breach of such covenants.
(e) In the event that, following the termination of this Agreement, you are
entitled to receive any further payments other than for compensation or other
amounts accrued prior to termination or expiration of this Agreement, such
payments shall nonetheless cease and the Company shall no longer be obligated to
make such payments if there is a material breach of any of the covenants in this
paragraph 5 and you shall forthwith upon demand of the Company repay any such
amounts paid to you subsequent to the date such breach occurred.
6. Effective Date of Agreement. This Agreement shall be effective (the
"Effective Date") as of AUGUST 16, 1995.
7. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the parties
hereto with regard to the subject matter hereof, superseding all prior
understandings and agreements whether written or oral. This Agreement may not be
amended or revised except by a writing signed by the parties.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns, but may not be assigned by
either party without the prior written consent of the other.
(c) Any notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly made when delivered by
fax and courier delivery, addressed as follows (or to such other address as you
or the Company may specify by notice hereunder to the other):
If to you:
XXXXX X. XXXXX
00 XXXXXXX XXXXX
XXXXXXXX, XX 00000
If to the Company and the Parent:
Hills Stores Company
00 Xxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Vice President-Secretary
(d) Captions have been inserted solely for convenience of reference and in
no way define, limit or describe the scope or substance of any provisions of
this Agreement.
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(e) The provisions of this Agreement are severable, and the invalidity of
any provision shall not affect the validity of any other provision.
(f) This Agreement shall be construed under and governed by the internal
laws of the Commonwealth of Massachusetts.
(g) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. If the foregoing correctly sets forth
our understanding on the subject matter hereof, kindly sign and return to the
Company the enclosed copy hereof, which will thereupon become our binding
agreement.
Sincerely,
Hills Department Store Company
By:_________________________
X. Xxxxxxx Xxxxxxx
President
Hills Stores Company
By:_________________________
Xxxxxxx X. Friend
Vice President-Secretary
Agreed:
Employee
____________________________
Xxxxx X. Xxxxx
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