EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into this 28th day of October, 2002 by
and between SHOPKO STORES, INC., a Wisconsin corporation (the "Company"), and
Xxx X. Xxxxxx (the "Executive").
RECITALS
The Executive has been offered the position of President and Chief Executive
Officer of the Company. The Company desires to employ the Executive pursuant to
the terms of this Employment Agreement and the Executive desires to be employed
by the Company in accordance with the terms and provisions contained herein.
In consideration of the premises and mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows.
1. Employment.
(a) Agreement. The Company hereby employs the Executive, and the Executive
hereby accepts such employment, on the terms and subject to the conditions
contained herein. The Executive represents and warrants to the Company that he
has no non-compete, non-solicitation or other agreements with his current or
former employers which would prevent him from accepting employment with the
Company or fulfilling the obligations of his position as set forth herein.
(b) Title and Duties. During the Employment Term (as defined in Section 2
below), the Executive shall serve as the President and Chief Executive Officer
("CEO") of the Company. In such capacity, the Executive shall faithfully and to
the best of his ability supervise, manage and administer the operations,
business and affairs of the Company. The Executive shall have responsibility,
subject to the control and direction of the Board of Directors, for the overall
strategic policies, management and leadership of Company and its subsidiaries.
(c) Other Responsibilities. The Executive will be appointed as a director of
the Company by the Board of Directors as soon as reasonably practicable and will
also serve as an officer and/or director of such subsidiaries of the Company as
may be designated by the Board of Directors. The Executive will not receive
compensation in addition to that specified in this Agreement for serving as a
director of the Company or an officer or director of any Company subsidiaries.
If the Executive's employment with the Company terminates for any reason, he
will promptly resign as an officer and/or director of the Company and any of its
subsidiaries.
(d) Commitment. During the Employment Term, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
devote substantially all of his business time, efforts and skills to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During his employment with the Company, Executive may
participate in charitable activities and personal investment activities to a
reasonable extent, so long as such activities do not interfere with the
performance of his duties and responsibilities hereunder.
2. Employment Term.
The term of the employment of the Executive under this Agreement (the
"Employment Term") shall commence as on October 30, 2002 (the "Effective Date")
and shall continue, unless sooner terminated under Section 7 hereof, until the
third anniversary of the Effective Date; provided, however, that the Employment
Term shall be automatically extended for one additional year on the third
anniversary of the Effective Date and on every subsequent anniversary thereafter
(such date and each anniversary thereof referred to as a "Renewal Date"), until
the earlier of (i) termination of the Employment Term under Section 7 hereof or
(ii) the Company giving Executive notice 60 days prior to a Renewal Date that
the Employment Term will not be so extended.
3. Salary.
(a) Annual Base Salary. During the Employment Term, the Executive shall
be paid a salary at the rate of $725,000 per annum (the "Annual Base
Salary"), payable in equal installments in accordance with the Company's
customary payroll practices for its senior executives in effect from time to
time, but not less frequently than monthly.
(b) Review. The Board of Directors, or a designated committee of the
Board, shall review the Executive's Annual Base Salary at least annually,
and may increase such Annual Base Salary at any time and from time to time
as the Board of Directors, or its designee, in its sole discretion, shall
deem appropriate. The term "Annual Base Salary" as utilized in this
Agreement shall refer to Annual Base Salary as so increased. Any increase in
Annual Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. Annual Base Salary shall not be
reduced at any time during the Employment Term.
4. Bonus and Long-Employment Term Incentives.
(a) Signing Bonus. Once the Executive has (i) signed this Agreement and
(ii) worked for the Company in its Green Bay, Wisconsin offices for five
business days, the Company will pay the Executive a one-time, signing bonus
in the amount of $150,000. The bonus will be paid as soon as
administratively practicable after the criteria for the signing bonus are
met.
(b) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be eligible to receive, for each fiscal year ending during the
Employment Term, an annual bonus (the "Annual Bonus") determined in
accordance with the Company's 1999 Executive Incentive Plan, as amended, or
if the Executive Incentive Plan is no longer in effect, such successor plan
as is approved by the Board of Directors (the "Bonus Plan"). The amount of
the Executive's Annual Bonus shall be 60% of Annual Base Salary at the
target level of performance and 120% of Annual Base Salary if the maximum
level of performance is achieved. The performance goals to be used in
determining the amount of the Executive's Annual Bonus shall be determined
by the Compensation and Stock Option Committee of the Board of Directors of
the Company (the "Compensation Committee") and Board of Directors. Any
Annual Bonus payable to the Executive shall
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be paid at the same time as bonus payments are made to the Company's other
senior executives. Notwithstanding the foregoing, the Annual Bonus for the
fiscal year which ends on February 1, 2003 will be determined based on the
company-wide performance goals established by the Compensation Committee for
that fiscal year and will be prorated in accordance with the provisions of
the Bonus Plan to take into account the fact that he was not employed for
the entire performance period. As regards the Annual Bonus for the fiscal
year ending in January 2004, the minimum that the Executive will be paid is
$275,000.
(c) Participation in Long-Term Incentive Plan. The Executive shall be a
participant in the 2000 Executive Long Term Incentive Plan or any successor
thereto (the "Incentive Plan"). Awards under the Incentive Plan will equal
50% of Annual Base Salary at the target level of performance and 100% of
Annual Base Salary if the maximum level of performance is achieved. The
performance goals under the Incentive Plan will be determined from time to
time by the Compensation Committee. The Incentive Plan award is based on the
performance over a three-year period. Thus, the first complete program for
which the Executive will be eligible to participate begins in February of
2003 and ends with January of 2006. For the three-year periods ending prior
thereto, the Executive will be entitled to the award he otherwise would have
received, prorated in accordance with the provisions of the Incentive Plan
to take into account the fact that he was not employed for the entire
performance period.
(d) Award of Options. On the Effective Date, the Executive will be
awarded options for 100,000 shares of Company common stock (the "Option").
The exercise price shall be the closing sale price of a share of the
Company's common stock on the date of grant, and the Option shall vest as to
33,333 shares on the first anniversary of the date of grant, as to 33,333
shares on the second anniversary of the date of grant and as to the
remaining 33,334 shares on the third anniversary of the date of grant. All
other terms and conditions of the Option shall be governed by the Company's
2001 Stock Incentive Plan and the standard option grant form thereunder.
(e) Award of Restricted Stock. On the Effective Date, the Executive
will be awarded 50,000 shares of Company common stock subject to the
following transfer restrictions (the "Restricted Stock"). The Executive will
not have to pay anything for the Restricted Stock. The transfer restrictions
will lapse ratably over four years, i.e., as to 12,500 shares on the first
anniversary of the date of grant and as to 12,500 shares on each of the
second, third and fourth anniversaries of the date of grant. All other terms
and conditions of the Restricted Stock shall be governed by the Company's
1993 Restricted Stock Plan and the standard form used for awards of
restricted stock. Notwithstanding the foregoing, if the Executive so
requests before the Effective Date, the period over which the transfer
restrictions lapse may be extended. The Executive also has the right under
the federal income tax laws to file a Section 83(b) election as regards the
Restricted Stock during the first thirty days after the Effective Date. The
Executive should consult with his tax advisor as to the advisability of
filing such an election.
(f) SERP Participation. The Executive shall also be eligible to
participate in the Company's Executive Retirement Plan (the "SERP") starting
on the Effective Date with
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the following modification: the reference under "Early Retirement Date" in
Section 1.8 to "at least ten Years of Service" shall be "at least five Years
of Service." Any dispute as to the computation of Executive's Retirement
Benefit under the SERP shall be decided by the Company's outside actuarial
firm. Such decision shall be conclusive and binding on both Executive and
the Company.
(g) Reservation of Rights. Notwithstanding anything contained herein,
the Company will have the right to amend or discontinue the Bonus Plan
and/or Incentive Plan, to substitute another plan for one or both of these
Plans or to change the percentages for different performance levels. Such
amendment, discontinuance, substitution or change will not give rise to any
claim by the Executive against the Company unless the Executive is
discriminated against (when compared with the other senior officers of the
Company) in connection with such amendment, discontinuance, substitution or
change.
5. Benefits.
(a) In General. Subject to the application of any applicable
anti-discrimination rules, the Executive shall be entitled to participate in
all employee benefit plans, programs, practices or arrangements of the
Company in which other senior executives of the Company are eligible to
participate from time to time, including, without limitation, any qualified
or non-qualified pension, profit sharing and savings plans including the
Senior Officers Deferred Compensation Plan, any death benefit and disability
benefit plans, and any medical, dental, health and welfare plans. In
addition, the Executive shall be eligible to participate in the Company's
Executive Retirement Plan in accordance with its terms.
(b) Fringe Benefits. During the Employment Term, the Executive shall be
entitled to fringe benefits applicable to other senior executives of the
Company. In addition to the foregoing, the Company will allow the Executive
to use one of its corporate golf memberships at Oneida Golf & Country Club
while the Executive is employed by the Company. The Company will reimburse
the Executive for the annual dues for the golf membership, but all other
club expenses, except to the extent they are reimbursable as business
expenses, will be the Executive's responsibility.
(c) Vacation. The Executive will be entitled to five weeks of vacation
per year, except that if the Executive is not employed by the Company for
the entire calendar year, the amount of vacation to which he is entitled
will be prorated based on the number of days in the calendar year he is
employed by the Company. To the extent the full amount of vacation time is
not taken, the Executive may only carry over vacation time to a subsequent
year to the extent provided by the Company's policies, procedures and/or
practices applicable to senior executives then in effect.
6. Expenses. The Company shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in the course of performing
his duties for the Company in accordance with the Company's reimbursement
policies as in effect from time to time for other senior executives of the
Company. the Executive shall keep accurate records and receipts of
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such expenditures and shall submit such accounts and proof thereof as may from
time to time be required in accordance with such expense account or
reimbursement policies that the Company may establish for its senior executives
generally. In addition the Executive will be entitled to reimbursement for
moving expenses to Green Bay, Wisconsin and reasonable temporary living expenses
in Green Bay, Wisconsin in accordance with the Company policy applicable to
senior executives.
7. Termination of Employment. During the Employment Term, the Executive's
employment hereunder may be terminated under any of the following circumstances:
(a) Death or Disability. The Executive's employment hereunder shall
terminate automatically upon the Executive's death during the Employment
Term. If the Company determines in good faith that a Disability (as defined
below) of the Executive has occurred during the Employment Term, the Company
may give the Executive written notice in accordance with Section 7(d) of
this Agreement of its intention to terminate the Executive's employment
hereunder. In such event, the Executive 's employment with the Company shall
terminate effective on the thirtieth (30th) day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that, within
thirty (30) days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" means a mental or physical condition which, in the
opinion of the Board of Directors, renders the Executive unable or
incompetent to carry out the material job responsibilities which the
Executive held or the material duties to which the Executive was assigned at
the time the disability was incurred, which has existed for at least three
months and which, in the opinion of a physician mutually agreed upon by the
Company and the Executive, or his representative if the Executive his unable
to agree (provided that neither party shall unreasonably withhold such
agreement), is expected to be permanent or to last for an indefinite
duration or a duration in excess of six months.
(b) Termination by Company. The Company may terminate the Executive's
employment for Cause or without Cause in accordance with the provisions of
this Section 7. For purposes of this Agreement, "Cause" means:
(i) an act or acts of personal dishonesty taken by
the Executive and intended to result in substantial personal
enrichment of the Executive or his family at the expense of
the Company,
(ii) repeated violations by the Executive of the
Executive's obligations under Section l(b) of this Agreement
which are demonstrably willful and deliberate on the
Executive's part and which are not remedied in all material
respects within 30 days after the Executive's receipt of
written notice from the Company that specifically describes
such violations,
(iii) the conviction of the Executive of a felony;
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(iv) conduct by the Executive which evinces a want of
integrity or an intentional breach of trust and which directly
causes (or the Board of Directors determines is reasonably
likely to cause) material injury to the Company; or
(v) a violation of Section 9 or 10 of this Agreement.
(c) Termination by the Executive. The Executive may terminate his
employment with the Company for Good Reason upon 60 days advance written
notice to the Company in accordance with Section 7(d) of this Agreement. For
purposes of this Agreement, "Good Reason" means (i) a breach of any of the
material terms or conditions of this Agreement by the Company, not caused by
the Executive, which breach has not been cured by the Company within 30 days
after written notice thereof to the Company from the Executive; (ii) a
reduction in the Executive's Base Salary; (iii) a reduction in his title of
President and Chief Executive Officer or a material reduction in the duties
which might reasonably be associated with such title without the Executive's
consent; or (iv) the Company giving the Executive notice that the Employment
Term will not be renewed pursuant to Section 2 hereof.
(d) Notice of Termination. Any purported termination of the Executive's
employment by either party shall be communicated by Notice of Termination to
the other party. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which (i) indicates the specific termination
provision in this Agreement relied upon; (ii) if applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated;
and (iii) indicates the Termination Date. "Termination Date" shall mean in
the case of the Executive's death, his date of death, or in all other cases
of termination by the Company, the date specified in the Notice of
Termination; provided, however, that the date specified in the Notice of
Termination shall be at least thirty (30) days after the date the Notice of
Termination is given by the Company to the Executive or by the Executive to
the Company (other than in the case of death); and provided, further, that
in the case of Disability, the Executive shall not have returned to the
full-time performance of his duties during such period of at least thirty
(30) days.
8. Obligations Upon Termination.
(a) Termination by the Company for Cause. If the Executive's employment
with the Company is terminated by the Company for Cause, the Company will
pay and/or provide the Executive with the following: (i) in a lump sum
within thirty (30) days after the Termination Date, all amounts of the
Executive's Annual Base Salary, vacation pay (but only for unused vacation
days during the current year (including any unused vacation days for the
prior year that pursuant to Company policy may be carried forward to the
current year and which have not yet been used)), Annual Bonus (for the prior
fiscal year), and long-term incentive awards (for a completed performance
measurement period) that have been earned but are unpaid as of the
Termination Date (such amounts collectively, the "Accrued Obligations") and
(ii) all benefits to which the Executive is entitled under any benefit plans
set forth in Section 5 hereof in accordance with the terms of such plans
through the Termination Date.
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(b) Termination by Reason of Disability or Death. If the Executive's
employment with the Company is terminated during the Employment Term by
reason of the Executive's Disability or death, the Company will pay and/or
provide the Executive or the Executive's legal representative or
Beneficiary, as the case may be, with the following:
(i) in a lump sum within thirty (30) days after compliance
with subsection (d) hereof, all Accrued Obligations;
(ii) no later than the date on which the other senior
executives receive their Annual Bonus payments and after compliance
with subsection (d) hereof, a fraction of the Annual Bonus that would
have been earned by the Executive for the fiscal year including the
Termination Date, determined in accordance with the terms of the Bonus
Plan; and
(iii) all benefits to which the Executive is entitled under
any benefit plans set forth in Section 5 hereof in accordance with the
terms of such plans through the Termination Date.
(c) Termination by the Company Without Cause or by the Executive for
Good Reason. If the Company terminates the Executive's employment without
Cause, or the Executive terminates his employment for Good Reason, the
Company will pay and/or provide the Executive with the following:
(i) after compliance with subsection (d) hereof, Salary
continuation for longer of (a) two years or (b) the remainder of the
Employment Term, with Salary being defined as the sum of (x) the Annual
Base Salary as in effect on the day the Notice of Termination is
delivered and (y) the lesser of (A) the target bonus under the Bonus
Plan or (B) the average Bonus actually paid to the Executive during the
Employment Term, annualizing any part-year payment and treating the
bonus amount as zero for any year in which the minimum target was not
achieved; and
(ii) continuation of health and dental coverage under the
Company's plans, subsidized by the Company to the same extent as active
employees, as in effect on the day the Notice of Termination is
delivered for the longer of (a) two years or (b) the remainder of the
Employment Term; provided, however, that if the Executive becomes
eligible to receive health or other benefits under another
employer-provided plan, the health and dental benefits provided
hereunder shall cease. The coverage period for purposes of the group
health and dental continuation requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1987, as amended ("COBRA"), shall commence
on the Termination Date.
(d) Release of Claims. Notwithstanding the foregoing, the Company will
not pay to the Executive, and the Executive will not have any right to
receive any payments described in Sections 8(b) and (c), above, unless and
until the Executive or his legal representative (in the case of the
Executive's death or if the Executive is disabled such that he is unable to
consent) executes, and there shall be effective following any statutory
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period for revocation, a release, in a form reasonably acceptable to the
Company, that irrevocably and unconditionally releases, waives, and fully
and forever discharges the Company and its past and current shareholders,
directors, officers, employees, and agents from and against any and all
claims, liabilities, obligations, covenants, rights, demands and damages of
any nature whatsoever, whether known or unknown, anticipated or
unanticipated, relating to or arising out of the Executive's employment with
the Company, including without limitation claims arising under the Age
Discrimination in Employment Act of 1977, as amended, Title VII of the Civil
Rights Act of 1974, as amended, the Civil Rights Act of 1991, as amended,
the Equal Pay Act, as amended, and any other federal, state, or local law or
regulation.
9. Nondisclosure.
(a) During the Employment Term and during the two-year period following
his termination of employment with the Company, the Executive shall not make
any Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean use by the Executive or disclosure by the Executive
without the consent of tile Board of Directors to any person, other than use
or disclosure that is reasonably necessary or appropriate in connection with
the performance by the Executive of his duties as an executive of the
Company or as may be legally required (provided the provisions of Section
9(c) hereof are complied with), of any confidential information obtained by
the Executive while in the employ of the Company, including, but not limited
to, confidential information with respect to any of the Company's customers,
suppliers, contractors, methods of operation, services, products,
mechanisms, databases, processes, programs and access codes (the
"Confidential Information"); provided, however, that Confidential
Information shall not include any information which was or becomes generally
available to the public (i) other than as a result of a wrongful disclosure
by the Executive, (ii) as a result of disclosure by the Executive during the
Employment Term which he reasonably and in good faith believes is required
by the performance of his duties under this Agreement, or (iii) any
information compelled to be disclosed by applicable law or administrative
regulation; provided that the Executive, to the extent not prohibited from
doing so by applicable law or administrative regulation, shall give the
Company written notice of the information to be so disclosed pursuant to
clause (iii) of this sentence as far in advance of its disclosure as is
practicable. Nothing herein shall limit the Executive's confidentiality
obligation as regards any information which is a trade secret as defined in
Section 134.90 of the Wisconsin Statutes, or any successor thereto.
(b) All memoranda, notes, records, papers, financial models,
mechanisms, programs, flow charts, work papers, source codes, computer
codes, designs, software, data and other documents and all copies thereof
relating to the operations or business of the Company, some of which may be
prepared by the Executive, and all objects associated therewith (such as
samples) in any way obtained by him in connection with the performance of
the Executive's duties hereunder shall be the exclusive property of the
Company. The Executive shall not, except for the Company's use, copy or
duplicate any of the aforementioned, not remove them from the Company's
facilities, nor use any information concerning them, in each case, except
for the Company's benefit, either
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during his employment or thereafter. The Executive will deliver the original
and all copies of all of the aforementioned that may be in his possession to
the Company on termination of his employment, or at any other time on the
request of the Board of Directors.
(c) If the Executive is requested or becomes legally required or
compelled (by oral questions, interrogatories, requests for information or
documents, subpoena, civil or criminal investigative demand, or similar
process) or is required by a governmental body to make any disclosure that
is prohibited or otherwise constrained by this Agreement, the Executive will
provide the Company with prompt notice of such request so that it may seek
an appropriate protective order or other appropriate remedy. Subject to the
foregoing, the Executive may furnish that portion (and only that portion) of
the Confidential Information that the Executive is legally compelled or is
otherwise required to disclose or else stand liable for contempt or suffer
other material censure or material penalty.
10. Noncompetition, Nonsolicitation and Nondisparagement. In consideration
for the Company entering into this Agreement, during the Employment Term and
during the two-year period following termination of the Executive's employment
with the Company:
(a) The Executive will not, directly or indirectly, contact any
supplier or prospective supplier of the Company with whom the Executive has
had contact on behalf of the Company during the two-year period preceding
the date of such termination so as to cause or attempt to cause such
supplier or prospective supplier of the Company not to do business or to
reduce or limit such supplier's business with the Company or divert any
business from the Company.
(b) The Executive will not, directly or indirectly, own more than five
percent (5%) of, or act as an officer, director, partner, principal,
employee, agent, representative, advisor, consultant or independent
contractor of, or in any way assist, whether or not for consideration, any
business, incorporated or otherwise, which is engaged, directly or
indirectly, in the retail sale of a diversified offering of apparel and
household goods, the retail sale of a diversified offering of discount
household goods, the retail sale of health, hygiene or prescriptive
products, or the retail sale of grocery products and which engages in
business within, or is located within, any state in which the Company's
business generated more than $30 million in revenues in the fiscal year
preceding the termination of the Executive's employment with the Company.
The Executive acknowledges that the scope of this limitation is reasonable
in that, among other things, providing any such services or assistance
during such two-year period would permit the Executive to use unfairly his
close identification with the Company and the supplier contacts the
Executive developed while employed by the Company and would involve the use
or disclosure of Confidential Information pertaining to the Company.
(c) The Executive will not, directly or indirectly, induce, solicit,
entice or procure any person who is a management or exempt employee of the
Company, or has been such a management or exempt employee within the six
months preceding such contact by the Executive, to terminate his or her
employment with the Company so as to accept
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employment with any person, company, business entity, or other organization
whatsoever.
(d) The Executive, except as may be required by legal process, will
refrain from making any written or oral statement, publicly or privately,
which disparages the Company or its current or former directors or
employees.
(e) The Company (by and through its executive officers and directors),
except as may be required by law or by the rules of any stock exchange on
which the Company's securities trade, will refrain from making any written
or oral statement, publicly or privately, which disparages the Executive.
11. Enforcement of Covenants. The Executive recognizes that irreparable and
incalculable injury will result to the Company, its businesses or properties in
the event of his breach of any of the restrictions imposed by Sections 9 and 10,
above. In the event of any such actual, impending or threatened breach, the
Company will be entitled, in addition to any other remedies and damages, to stop
payment under Section 8 hereof and to temporary and permanent injunctive relief
(without the necessity of posting a bond or other security) restraining the
violation, or further violation, of such restrictions by the Executive and by
any other person or entity for whom the Executive may be acting or who is acting
for the Executive or in concert with the Executive.
12. Exclusive Remedy. The payments, severance benefits and severance
protections provided to the Executive pursuant to this Agreement are to be paid
and provided in lieu of any severance payments, severance benefits and severance
protections provided in any other plan or policy of the Company, and any
payments relating to the period after employment terminates are not to be
included as compensation for purposes of any qualified or nonqualified pension,
deferred compensation or welfare benefit plan or program of the Company.
13. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors.
14. Legal Fees and Disbursements. The Company shall pay on the Executive's
behalf reasonable attorneys' fees and disbursements incurred in connection with
the negotiation of this Agreement to the law firm retained by the Executive for
this purpose upon receipt of an itemized statement for such services, but not in
an amount in excess of $5,000.
15. Miscellaneous.
(a) Choice of Law, Captions and Amendment. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Wisconsin,
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without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the Company and the Executive or their
respective successors and legal representatives.
(b) Beneficiaries. If the Executive dies prior to receiving all of the
amounts payable to him in accordance with the terms and conditions of this
Agreement, such amounts shall be paid to the beneficiary ("Beneficiary")
designated by the Executive in writing to the Company during his lifetime,
or if no such Beneficiary is designated, to the Executive's estate. Such
payments shall be made in a lump sum to the extent so payable and, to the
extent not payable in a lump sum, in accordance with the terms of this
Agreement. The Executive, without the consent of any prior Beneficiary, may
change his designation of Beneficiary or Beneficiaries at any time or from
time to time by a submitting to the Company a new designation in writing.
(c) Notice. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party, delivered by
nationally-recognized overnight courier, or by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: His most recent home address on file with
the Company
If to the Company: ShopKo Stores, Inc.
000 Xxxxxxx Xxx
X.X. Xxx 00000
Xxxxx Xxx, XX 00000-0000
Attention: Secretary
With a copy to: Xxxxx Xxxxx Xxxxxx
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(d) Enforceability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(e) No Waiver. The Executive's or Company's failure to insist upon
strict compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) Entire Understanding. This Agreement contains the entire
understanding of the Company and the Executive with respect to the subject
matter hereof. This Agreement supersedes and replaces any other agreements,
if any, understandings and
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arrangements, oral or written, between the parties hereto regarding the
subject matter of this Agreement other than the Change of Control Severance
Agreement between the Company and the Executive entered into on the same
date as this Agreement (the "Change of Control Agreement"). In all events,
and notwithstanding anything herein contained to the contrary, if a Change
of Control (as defined in the Change of Control Agreement) occurs, this
Agreement shall be of no further force and effect and the Change of Control
Agreement shall govern the terms of the Executive's employment and any
payments he is to receive upon the termination of his employment with the
Company. In no event will the Executive be entitled to payments upon
termination of his employment under this Agreement if he is entitled to
payments upon termination of his employment under the Change of Control
Agreement.
(g) Withholding Taxes. All dollar amounts set forth herein are stated
before reduction for any applicable federal and state income and employment
tax withholding and all payments to be made and benefits to be provided to
the Executive hereunder shall be reduced by any such applicable withholding
taxes to the extent required by law.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first set forth above.
SHOPKO STORES, INC.
By:
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Xxxx X. Xxxxxxx
Chairman of the Board
EXECUTIVE
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Xxx X. Xxxxxx
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