EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 1st day of
May, 1997 by and between JUST FOR FEET, INC., an Alabama corporation (the
"Company"), and XXXX X. XXXX (the "Executive"), an individual.
For and in consideration of the mutual covenants described below, the
parties hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive, and Executive
agrees to accept such employment, upon the following terms and conditions.
2. DUTIES. Executive shall assume the responsibilities and perform the
duties of Executive Vice President and Chief Financial Officer of the Company.
Such duties may be revised from time to time at the sole discretion of the Board
of Directors of the Company, and Executive shall perform such duties as the
Company may direct from time to time. Executive agrees to devote his full time
and energy to the furtherance of the business of the Company and shall be loyal
to the Company and use his best efforts to further its interests, and shall not
during the term hereof, without the prior written consent of the Company, work
or perform services in any advisory or other capacity for any individual, firm,
company, or corporation other than for the Company.
3. COMPENSATION.
3.1 Base Salary. The Company shall pay Executive as compensation for all
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the services to be rendered by Executive hereunder a base salary equal to a rate
of $250,000 per year ("Base Salary") for each of the years during the Initial
Term hereof (as hereinafter defined). Thereafter, if this Agreement is extended
pursuant to Section 4(a) below, Executive's base salary shall be subject to
review and increase in the discretion of the Board of Directors. Executive's
salary shall be payable beginning with the period starting May 19, 1997 in equal
monthly installments and shall be prorated on a daily basis for the years in
which Executive commences and terminates his employment pursuant to this
Agreement. The Company's obligation to pay Executive any compensation shall
cease upon termination of Executive's employment with the Company; provided,
however, if Executive's employment is terminated due to his death, Company shall
pay as a lump sum payment to the estate of Executive his Base Salary for one
year.
3.2 Living Allowance. During the Initial Term (as hereinafter defined)
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Company shall pay to Executive as an annual living allowance a sum equal to the
product obtained by multiplying $500,000 times Executive's mortgage interest
rate on the home he purchases in the Birmingham, Alabama area. Said amount
shall be payable in equal monthly installments beginning with the first month
after Executive purchases his home as set forth in the preceding sentence; and
shall be prorated on a daily basis for the years in which Executive commences
and terminates his employment relationship with the Company.
3.3 Bonus.
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(a) Executive shall be eligible to receive a performance-based bonus during
each year of his employment hereunder beginning with the year ending January 31,
1998 equal in an amount up to fifty (50%) percent of Base Salary per year. Such
bonus shall be based on the performance of the Company and shall be calculated
and paid to Executive on the same basis as the Company's Chief Executive Officer
is paid a bonus.
(b) On May 18, 2002, if Executive is employed hereunder or if Executive is
not employed hereunder, if Executive's employment hereunder has been terminated
other than "for cause" (as defined in Section 4.2 below), or voluntarily by
Executive, Company shall pay Executive a bonus of $500,000.00.
3.4 Stock Options. Subject to Executive's execution of and compliance with
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the terms of that certain Just For Feet, Inc. Incentive Stock Option Agreement
substantially in the form attached hereto as Exhibit A, which executed agreement
shall in all respects be in form and substance satisfactory to the Company,
Executive is hereby granted options to acquire 200,000 shares of the common
stock of the Company.
3.5 Other Benefits. Executive shall be entitled to receive health and
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dental insurance benefits, vacation benefits and other benefits substantially
similar to those provided to other executives of the Company. Company shall
have the right to change said benefit program at any time or times.
3.6 Reimbursement of Expenses. In addition to the compensation described
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in this Agreement, Employee shall be entitled to reimbursement by Company for
all actual, reasonable and direct expenses incurred by him in the performance of
his duties hereunder, provided such expenses are properly characterized as being
business expenses that are properly tax deductible for Company, and further
provided that such expenses were incurred only in accordance with the policies
and procedures established by the Board of Directors from time to time.
Employee shall provide Company with written documentation of such expenses in
form complying with the records required of Company by the Internal Revenue
Service and appropriate state authorities for tax deductibility purposes in such
cases, and reimbursement for each item of approved expense shall be made within
a reasonable time after receipt by Company of the written documentation thereof.
3.7 Vacation. The Employee shall be entitled to two (2) weeks annual paid
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vacation and such holidays as the Board of Directors may approve. In the event
of any termination of employment, Executive shall not be entitled to receive
payment for any unused vacation time.
3.8 Withholdings. All amounts payable to Executive pursuant to this
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Agreement shall be subject to all applicable withholdings as required by all
laws.
4. TERM AND TERMINATION.
4.1 Term. This Agreement shall be effective upon the date first set forth
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above and, unless earlier terminated as provided herein, shall remain in full
force and effect for an initial period which ends on May 18, 2002 (the "Initial
Term"). This Agreement may be renewed on the same terms
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and conditions for additional successive periods of one (1) year upon the
execution of a written agreement by the parties hereto.
4.2 Termination. Notwithstanding anything contained herein to the
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contrary, the Company may terminate Executive's employment immediately for
cause. For purposes of this Agreement, "for cause" shall mean the occurrence of
the following: (i) the commission of any act of fraud, dishonesty,
misappropriation or moral turpitude on the part of the Executive, (ii) a
material breach by the Executive of, or a material failure by the Executive to
perform, his duties and obligations hereunder, (iii) continued neglect by
Executive in fulfilling his duties as an executive officer of the Company as a
result of alcoholism, addiction to illegal substances, or excessive unauthorized
absenteeism, after written notification from the Board of Directors of such
neglect, setting forth in detail the matters involved and Employee's failure to
cure the problem resulting in such neglect within a reasonable time thereafter,
(iv) the Executive becomes Completely Disabled (as hereinafter defined), or (v)
the death of Executive. For purposes of this Agreement, "Completely Disabled"
shall mean Executive's inability, due to illness, accident or any other physical
or mental incapacity, to perform the duties provided for herein for an aggregate
of 91 days during any period of 180 consecutive days during the term hereof. In
addition, termination of Executive's employment upon the occurrence of any act
specified in (i) through (iii) above shall result, to the extent not otherwise
prohibited by law, in Executive's loss of any benefits provided by the Company.
4.3 Return of Property. Upon termination of employment for any reason,
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Executive shall return immediately to the Company all documents, property, and
other records of the Company, and all copies thereof, within Executive's
possession, custody or control, including but not limited to any materials
containing any Trade Secrets or Confidential Information (each as defined below)
or any portion thereof.
5. RELOCATION EXPENSES.
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The Company agrees to reimburse Employee for the following expenses incurred
with respect to Employee's relocation from Augusta, Georgia to Birmingham,
Alabama: (i) reasonable expenses incurred for the movement of normal household
goods provided Executive obtains bids from three (3) moving companies and takes
the lowest bid, (ii) actual closing costs and real estate commissions paid with
respect to the sale of Employee's existing home up to a maximum of six (6%)
percent of the sales price, (iii) the costs of temporary living quarters for
Executive in Birmingham, Alabama, not to exceed $_____ per month until the
earlier of: (i) the date Executive sells his home in Augusta, Georgia or (ii)
six (6) months from the date hereof; and (v) the reasonable costs of two (2)
trips for Executive and his spouse to Birmingham, Alabama to search for a new
residence.
To the extent that the amounts payable to Executive pursuant to this Section
5 are taxable to Executive, Company shall pay to Executive an amount equal to
the federal and state income tax payable by Executive on said amounts (grossed
up for taxes).
6. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
6.1 Confidentiality. The Company may disclose to Executive certain Trade
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Secrets and Confidential Information (each as defined below). Executive
acknowledges and agrees that the Trade Secrets and Confidential Information are
the sole and exclusive property of the Company (or a third party providing such
information to the Company) and that the Company or such third party owns
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all worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property rights laws. Executive acknowledges and agrees
that the disclosure of the Trade Secrets and Confidential Information to
Executive does not confer upon Executive any license, interest or rights of any
kind in or to the Trade Secrets or Confidential Information. Executive may use
the Trade Secrets and Confidential Information solely for the benefit of the
Company while Executive is employed or retained by the Company. Except in the
performance of services for the Company, Executive will hold in confidence and
not reproduce, distribute, transmit, reverse engineer, decompile, disassemble,
or transfer, directly or indirectly, in any form, by any means, or for any
purpose, the Trade Secrets or the Confidential Information or any portion
thereof. Executive agrees to return to the Company, upon request by the Company,
the Trade Secrets and Confidential Information and all materials relating
thereto.
6.2 Duration. Executive's obligations under this Agreement with regard to
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the Trade Secrets shall remain in effect for as long as such information shall
remain a trade secret under applicable law. Executive acknowledges that its
obligations with regard to the Confidential Information shall remain in effect
while Executive is employed or retained by the Company and for five (5) years
thereafter. As used herein, "Trade Secrets" means information of the Company,
its licensors, suppliers, customers, or prospective licensors or customers,
including, but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or a list of actual
or potential customers or suppliers, which (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. As used herein,
"Confidential Information" means information, other than Trade Secrets, that is
of value to its owner and is treated as confidential, including, but not limited
to, future business plans, financial information, marketing strategies and
advertising campaigns, information regarding Company's executives and employees,
and the terms and conditions of this Agreement. For purposes of this Agreement,
"Confidential Information" and "Trade Secrets" shall not include the following:
(i) anything or any information that was or becomes generally available to the
public other than as a result of a disclosure by the Executive, (ii) was
available to the Executive on a nonconfidential basis prior to its disclosure to
the Executive by the Company, (iii) becomes available to the Executive on a
nonconfidential basis from a source other than the Company, provided that such
source is not prohibited from disclosing such information by a contractual or
legal obligation to the Company of such information, or (iv) that the Executive
can conclusively show by documentary evidence was independently developed by the
Executive without use of any information disclosed to Executive by the Company.
Executive and the Company acknowledge that the intent of this Section 5 is not
to restrict Executive's employment following his tenure with the Company, but
rather it is to protect the rights that the Company has in its Trade Secrets and
Confidential Information.
7. COVENANT NOT TO COMPETE.
7.1 Term. Executive will not, during the term of his employment with the
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Company and for a period of one (1) year after termination for any reason of his
employment with the Company, directly or indirectly, engage in or carry on
within a fifty (50) mile radius of any of the Company's retail outlets existing
upon the date of termination of such employment (the "Territory"), any business,
like or similar to that engaged in by Company, either individually or as a
stockholder, director, officer, consultant, independent contractor, Executive,
agent, member or otherwise of or
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through any corporation, partnership, association, joint venture, firm,
individual or otherwise, or in any other capacity: The above one (1) year period
shall be extended by any period of time during which Executive is in default of
the covenants contained in this Agreement.
7.2 Remedies. In the event of a breach or threatened breach by Executive
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of all or any part of the provisions of Section 7.1, the Company shall be
entitled to an injunction restraining Executive from such breach without
limiting any other rights or remedies available to the Company for such breach
or threatened breach.
7.3 Exclusions. Notwithstanding any provision to the contrary herein
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contained, Section 7.1 shall not apply:
(i) Upon the termination of the Executive's employment by the Company
other than for cause within one (1) year following a Sale of the Company; and
(ii) Upon the voluntary termination of employment by the Executive for
any reason within the thirty (30) day period immediately after the one (1) year
period following a Sale of the Company.
7.4 Sale of Company.
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(a) In the event of a Sale of the Company following the execution of this
Agreement, Executive expressly agrees that the terms and conditions set forth in
this Section 7 shall be binding upon Executive and shall be fully enforceable by
the successor to the Company.
(b) For purposes of this Agreement, "Sale of the Company" shall mean (i)
the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (a "Person"), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either the
then outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), or (ii) consummation by the Company of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Company; unless, following such
acquisition of beneficial ownership or transaction (A) more than 60% of the then
outstanding shares of common stock of the Person resulting from such
reorganization, merger or consolidation, or (B) more than 60% of the then
outstanding shares of common stock of the Person acquiring such beneficial
ownership or assets, and the combined voting power of the then outstanding
voting securities of such Person entitled to vote generally in the election of
directors of such Person, is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such acquisition or transaction, in
substantially the same proportion as their ownership of Outstanding Common Stock
and Outstanding Voting Securities prior to such event.
8. CUSTOMER NON-SOLICITATION. Executive agrees that for a period of
eighteen (18) months immediately following termination of Executive's employment
with the Company for any reason, including, without limitation, voluntary
resignation from employment by Executive (the "Non-Solicitation Period"),
Executive shall not, on Executive's own behalf or on behalf of any
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person, firm, partnership, association, corporation or business organization,
entity or enterprise, solicit, contact, call upon, communicate with or attempt
to communicate with any customer or prospect of the Company, or any
representative of any customer or prospect of the Company, with a view to
selling or providing any product or service competitive or potentially
competitive with any product or service sold or provided or under development by
the Company during the time of two (2) years immediately preceding cessation of
Executive's employment with the Company, provided that the restrictions set
forth in this paragraph shall apply only to customers or prospects of the
Company, or representatives of customers or prospects of the Company, with which
Executive had contact during such two (2) year period. Executive acknowledges
that the Company provides products and services to customers throughout the
Territory.
9. EMPLOYEE NON-SOLICITATION. Executive agrees that Executive shall not
call upon, solicit, recruit, or assist others in calling upon, recruiting or
soliciting any person who is or was an employee of the Company within the Non-
Solicitation Period, for the purpose of having such person work in any other
corporation, association, entity, or business engaged in providing products or
services of the same or similar kind as offered by the Company.
10. EQUITABLE RELIEF. The parties to this Agreement acknowledge that a
breach by Executive of any of the terms or conditions of this Agreement will
result in irrevocable harm to the Company and that the remedies at law for such
breach may not adequately compensate the Company for damages suffered.
Accordingly, Executive agrees that in the event of such breach, the Company
shall be entitled to injunctive relief or such other equitable remedy as a court
of competent jurisdiction may provide. Nothing contained herein will be
construed to limit the Company's right to any remedies at law, including the
recovery of damages for breach of this Agreement.
11. ARBITRATION. Any difference, claim or matter in dispute arising
between the parties out of this Agreement or connected therewith (other than
claims by the Company to enforce the provisions of Paragraphs 7 through 10
hereof) shall be submitted by them to arbitration by a panel of three
arbitrators appointed by and in accordance with the rules of the American
Arbitration association. The determination or decision rendered by the
arbitrators shall be final and absolute. The arbitrators shall apply Alabama law
and the arbitration shall take place in Birmingham, Alabama. The decision of
the arbitrators may be entered as a judgment in any court of the State of
Alabama or elsewhere.
12. CHANGE IN CONTROL OF THE COMPANY.
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12.1 Subject to Section 12.2 hereof, the Company shall pay the Executive the
payments described in this Section 12.1 (the "Change of Control Payments") upon
the termination of the Executive's employment following a Change in Control and
during the term of this Agreement, in addition to any of the then unpaid
compensation and benefits previously required to be paid to Executive through
the date of termination, unless such termination is (i) by the Company for
cause, or (ii) by reason of death, disability (as defined in Section 4.2) or
voluntary resignation or retirement of Executive. The Change of Control
Payments shall be as follows:
(a) In lieu of any further salary payments to the Executive for periods
subsequent to the date of termination and in lieu of any severance benefit
otherwise payable to the Executive, the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to two (2) times
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the Executive's annual Base Salary in effect immediately prior to the occurrence
of the event or circumstance upon which the notice of termination is based;
(b) The Company shall pay to the Executive a lump sum amount, in cash,
equal to the sum of (i) any annual and quarterly performance or discretionary
bonuses which have been allocated or awarded to the Executive for a completed
fiscal year preceding the date of termination but has not yet been paid
(pursuant to Section 3.3 hereof or otherwise), and (ii) a pro rata portion of
any annual and quarterly performance or discretionary bonuses for the fiscal
year in which the date of termination occurs, determined by multiplying the
Executive's bonuses awarded or paid for the most recently completed fiscal year
by a fraction, the numerator of which shall be the number of full days the
Executive was employed by the Company during the fiscal year in which the
Executive's date of termination occurred and the denominator of which shall be
three hundred and sixty-five (365) days; and
(c) For a twelve (12) month period after the date of termination, the
Company shall arrange to provide the Executive with life, disability, accident
and health insurance benefits substantially similar to those which the Executive
is receiving immediately prior to the notice of termination (without giving
effect to any reduction in such benefits subsequent to a Change in Control which
reduction constitutes Good Reason). Benefits otherwise receivable by the
Executive pursuant to this Section 12.1(c) shall be reduced to the extent
comparable benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the Executive's
termination of employment (and any such benefits actually received by the
Executive shall be reported to the Company by the Executive). If the benefits
provided to the Executive under this Section 12.1.(c) shall result in a
decrease, pursuant to Section 12.2, in the Change of Control Payments and these
Section 12.1(c) benefits are thereafter reduced pursuant to the immediately
preceding sentence because of the receipt of comparable benefits, the Company
shall, at the time of such reduction, pay to the Executive the lesser of (a) the
amount of the decrease made in the Change of Control Payments pursuant to
Section 12.2, or (b) the maximum amount which can be paid to the Executive
without being, or causing any other payment to be, nondeductible by the Company
by reason of section 280G of the Code.
12.2 Notwithstanding any other provisions of this Agreement, in the event
that any payment or benefit received or to be received by the Executive in
connection with and contingent on a Change in Control or the termination of the
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a Change in Control or any person affiliated with the Company or such
person) (all such payments and benefits, including the Change of Control
Payments, being hereinafter called "Total Payments") would not be deductible (in
whole or part), by the Company, an affiliate or person making such payment or
providing such benefit, as a result of section 280G of the Code, then, to the
extent necessary to make the remaining portion of the Total Payments deductible
(and after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or
agreement), (A) the cash Change of Control Payments and/or other cash payments
provided for hereunder, in each case, to the extent still unpaid, shall first be
reduced (if necessary, to zero), and (B) all other noncash Change of Control
Payments and/or other noncash benefits provided for hereunder, in each case, to
the extent still unfurnished, shall next be reduced (if necessary, to zero), and
(C) the Executive shall have no right to receive hereunder, and neither the
Company, any person whose actions result in a Change in Control or any person
affiliated with the Company or such person shall be obligated to make, pay or
furnish to the
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Executive hereunder any payment or benefit in excess of those payments or
benefits provided hereunder as reduced, if applicable, pursuant to clause (A) or
clause (B) above. For purposes of this limitation (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have effectively
waived in writing prior to the date of termination shall be taken into account,
(ii) no portion of the Total Payments shall be taken into account which in the
opinion of tax counsel selected by the Company's independent auditors and
reasonably acceptable to the Executive does not constitute a "parachute payment"
within the meaning of section 280G(b)(2) of the Code, including by reason of
section 280G(b)(4)(A) of the Code, (iii) the Change of Control Payments shall be
reduced only to the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)) in their entirety constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance
as deductions, in the opinion of the tax counsel referred to in clause (ii); and
(iv) the value of any noncash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Company's independent
auditors in accordance with the principles of sections 280G(d)(3) and (4) of the
Code.
If it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Section 12.2, the
aggregate "parachute payments" paid to or for the Executive's benefit are in an
amount that would result in any portion of such "parachute payments" not being
deductible by reason of section 280G of the Code, then the Executive shall have
an obligation to pay the Company upon demand an amount equal to the sum of (i)
the excess of the aggregate "parachute payments" paid to or for the Executive's
benefit over the aggregate "parachute payments" that could have been paid to or
for the Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at the rate provided in section
1274(b)(2)(B) of the Code from the date of the Executive's receipt of such
excess until the date of such payment.
12.3 The payments and other items provided for in Section 12.1 (other than
Section 12.1(c)) hereof shall be made not later than the fifteenth (15th) day
following the date of termination or the date of exercise by Executive of any of
Executive's rights hereunder; provided, however, that if the amounts of such
payments, and the limitation on such payments set forth in Section 12.2 hereof,
cannot be finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the Company,
of the minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the thirtieth (30th) day
after the date of termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive, payable on the
fifth (5th) business day after demand by the Company (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code). At the time that
payments are made under this Section 12.3, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from outside
counsel, auditors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement).
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12.4 The Company also shall pay to the Executive all legal and accounting
fees and expenses incurred by the Executive as a result of a termination which
entitles the Executive to the Change of Control Payments (including all such
fees and expenses, if any, incurred in disputing any such termination or in
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder). Such payments shall be made within fifteen (15)
business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.
12.5 For purposes of this Agreement, the following terms shall have the
meanings indicated below:
(i) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) any persons becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired
directly from the Company or its affiliates, as such term is defined
in the rules and regulations of the Securities and Exchange
Commission) representing 50.1% or more of the combined voting power of
the Company's then outstanding securities; or
(II) during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at
the beginning of such period constitute the Board and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(I), (III) or (IV) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or
(III) the shareholders of the Company approve a merger or statutory
share exchange of the Company with any other corporation, other than
(i) a merger or statutory share exchange which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or statutory share exchange, or (ii) a merger or statutory
share exchange effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires more than 25% of
the combined voting power of the Company's then outstanding
securities; or
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(IV) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
(ii) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(iii) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, of any one of the
following acts by the Company, or failures by the Company to act:
(I) the assignment to the Executive of any duties inconsistent
with the Executive's status as an executive officer of the Company or
a substantial adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to
the Change in Control;
(II) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased
from time to time;
(III) the relocation of the Company's principal executive
offices to a location outside a forty (40) mile radius from the city
limits of Birmingham, Alabama or the Company's requiring the Executive
to be based anywhere other than the metropolitan area in which the
Executive is based immediately prior to the Change in Control except
for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(IV) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the Executive's
current compensation or to pay to the Executive any portion of an
installment of deferred compensation under any deferred compensation
program of the Company, within seven (7) days of the date such
compensation is due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's
total compensation, including but not limited to the Company's stock
option, incentive compensation, bonus and other plans or any
substitute plans adopted prior to the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to
other participants, as existed at the time of the Change in Control;
or
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical,
dental, health and accident, or disability
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plans in which the Executive was participating at the time of the
Change in Control, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of the Change in Control, or the failure by the
Company to provide the Executive with the number of paid vacation days
to which the Executive is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control;
provided, that, the Executive's right to terminate Executive's employment for
--------------
Good Reason shall not be affected by the Executive's incapacity due to physical
or mental illness and the Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(iv) "person" shall mean legal person, whether an individual or an
entity, as the context may require.
13. SEVERABILITY. If any provision or part of any provision of this
Agreement is held invalid or unenforceable by a court of competent jurisdiction,
such holding shall not affect the enforceability of any other provisions or
parts thereof, and all other provisions and parts thereof shall continue in full
force and effect.
14. MISCELLANEOUS. This Agreement shall not be amended or modified except
by a writing executed by both parties. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns. Due to the
personal nature of this Agreement, Executive shall not have the right to assign
Executive's rights or obligations under this Agreement without the prior written
consent of Company. This Agreement shall be governed by the laws of the State
of Alabama without regard to its rules governing conflicts of law. This
Agreement and any attached exhibits represent the entire understanding of the
parties concerning the subject matter hereof and supersede all prior
communications, agreements and understandings, whether oral or written, relating
to the subject matter hereof. All communications required or otherwise provided
under this Agreement shall be in writing and shall be deemed given when
delivered to the address provided below such party's signature (as may be
amended by notice from time to time), by hand, by courier or express mail, or by
registered or certified United States mail, return receipt requested, postage
prepaid. Exhibit A attached hereto is incorporated herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal effective as of the date first above written.
JUST FOR FEET, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------------------------
Title: Chairman and Chief Executive Officer
-------------------------------------
[CORPORATE SEAL]
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Address:
000 Xxxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
EXECUTIVE:
/s/ Xxxx X. Xxxx
----------------------------------(SEAL)
XXXX X. XXXX
Address:
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
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