EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 5, 1996, between XXXXX X. XXXXXX
("Executive") and XXX. A. BANK CLOTHIERS, INC. ("Employer").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment of Executive
Employer hereby agrees to employ Executive, and Executive hereby agrees to
be and remain in the employ of Employer, upon the terms and conditions
hereinafter set forth. This Agreement is a contract for the personal services of
Executive and services pursuant hereto may only be performed by Executive.
2. Employment Period
The term of Executive's employment under this Agreement (the "Employment
Period") shall commence as of the date hereof and shall, subject to earlier
termination as provided in Section 5, continue through February 4, 1998 and
shall continue thereafter for successive one-year periods if, at least 180 days
before the end of the initial two year period or any subsequent one-year period,
Employer gives notice to Executive of its desire to continue the Employment
Period, in which case the Employment Period shall continue for one year beyond
the then-current term. Notwithstanding the foregoing, the Employment Period
shall not continue beyond its then-current term as a result of said notice from
Employer if, within thirty (30) days after receipt of such notice, Executive
shall notify Employer of Executive's intent to terminate this Agreement as of
the end of the then-current term.
3. Duties and Responsibilities
During the Employment Period, Executive (i) shall have the title of
Executive Vice President - Chief Financial Officer and (ii) shall devote
substantially all of his business time and expend his best efforts, energies and
skills to the business of the Company. Executive shall perform such duties,
consistent with his status as Executive Vice President - Chief Financial
Officer, as he may be assigned from time to time by Employer's Chief Executive
Officer (the "Chief Executive Officer").
4. Compensation and Related Matters
4.1 Base Salary. Employer shall pay to Executive during the Employment
Period an annual base salary (the "Base Salary") of $170,000 for each year of
the Employment Period. The Base Salary for each year shall be payable in
installments in accordance with the Company's policy on payment to executives in
effect from time to time.
4.2 Annual Bonus. For fiscal year 1996 and for each fiscal year that begins
during the Employment Period (each such fiscal year, a "Bonus Year"), Executive
shall be eligible to receive a bonus (each, a "Bonus") of up to 40% of Base
Salary pursuant to the terms and conditions of Employer's Bonus Plan in effect
from time to time.
4.3 Other Benefits. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such fringe benefits as are, or are from time to time
hereafter, generally provided by Employer to Employer's senior management
employees (other than those provided under or pursuant to separately negotiated
individual employment agreements or arrangements).
5. Termination of Employment Period
5.1 Termination Without Cause or Good Reason. Employer may terminate the
Employment Period at any time without cause. Executive may, by delivery of not
less than 60 days' notice to Employer at any time during the Employment Period,
terminate the Employment Period without good reason.
5.2 By Employer for Cause. Employer may, at any time during the Employment
Period by notice to Executive, terminate the Employment Period "for cause"
effective immediately. For the purposes hereof, "for cause" means any
misconduct, including, but not limited to (a) conviction of Executive in a court
of competent jurisdiction of a crime constituting a felony or other serious
offense; or (b) the commission of an act not approved of or ratified by the
Board of Directors involving a conflict of interest or self-dealing relating to
Employer or any subsidiary or affiliate thereof; or (c) commission of an act of
fraud or misrepresentation (including the omission of material facts); or (d)
failure of Executive to obey any order or directive of the Board of Directors of
the Company or the Chief Executive Officer, provided such order or directive is
lawful and not contrary to Executive's duties, responsibilities and authority as
an Executive Vice President of the Company and is consistent with Executive's
status as an Executive Vice President of the Company; or (e) violation by
Executive of any rule, regulation or policy of Employer generally applicable to
other employees of the Company.
5.3 By Executive for Good Reason. Executive may, at any time during the
Employment Period by notice to Employer, terminate the Employment Period under
this Agreement "for good reason" effective immediately. For the purposes hereof,
"for good reason" means (i) any material breach by Employer of any provision of
this Agreement which, if susceptible of being cured, is not cured within 30 days
of delivery of notice thereof to Employer by Executive or (ii) the occurrence of
a change in control (as hereinafter defined) of Employer provided that not more
than 90 days shall have elapsed subsequent to Executive's becoming aware of the
occurrence of the change in control. Without limitation of the generality of the
foregoing, each of the following shall be deemed to be a material breach of this
Agreement by Employer: (y) any failure timely to pay (or any reduction in)
compensation paid or payable to Executive pursuant to the provisions of Section
4 hereof; and (z) any reduction in the duties, responsibilities or perquisites
of Executive as provided in Section 3.1 hereof.
For purposes of this Agreement, a "change in control" of the Company shall
be deemed to have occurred if, as a result of a single transaction or a series
of transactions, (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company ( including any nominee corporation that holds
shares of the Company on behalf of the beneficial owners of such corporation),
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the Company's then
outstanding securities; or (B) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under any employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company
(including any nominee corporation that holds shares of the Company on behalf of
the beneficial owners of such corporation), in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities and there are
at least a majority of directors serving on the Board of Directors who were not
serving in such capacity as of the date hereof or who were not elected with the
consent of the Executive; or (C) the shareholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation 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) at least 70% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or 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.
5.4 Death. The Employment Period shall end on the date of Executive's
death.
6. Termination Compensation; Non-Compete
6.1 Termination Without Cause by Employer or for Good Reason by Executive.
If the Employment Period is terminated by Employer pursuant to the provisions of
Section 5.1 hereof or by Executive pursuant to the provisions of Section 5.3
hereof, Employer will pay to Executive the greater of (a) Base Salary for the
balance of the Employment Period, or (b) Base Salary for one (1) year,
calculated in each case, at the applicable Base Salary rate which would have
been in effect for each year during the balance of Employment Period, assuming
no termination, payable in equal installments at the times Base Salary would
have been paid had the Employment Period not been terminated. All other benefits
provided for in Section 4.3 shall be continued at the expense of Employer for
the period that payments are required to be made pursuant to the preceding
provisions of this Section 6.1.
6.2 Certain Other Terminations. If the Employment Period is terminated by
Employer pursuant to the provisions of Section 5.2, by Executive pursuant to
Section 5.1 or as a result of the death of Executive pursuant to the provisions
of Section 5.4, Employer shall pay to Executive Base Salary (calculated at its
then current rate per year) through the date of termination. Employer shall have
no obligation to continue any other benefits provided for in Section 4 past the
date of termination.
6.3 No Other Termination Compensation. Executive shall not, except as set
forth in this Section 6, be entitled to any compensation following termination
of the Employment Period, except as otherwise provided in any stock options
granted by Employer to Executive.
6.4 Mitigation. Executive shall not be required to mitigate the amount of
any payments or benefits provided for hereunder upon termination of the
Employment Period by seeking employment with any other person, or otherwise, nor
shall the amount of any such payments or benefits be reduced by any
compensation, benefit or other amount earned by, accrued for or paid to
Executive as the result of Executive's employment by or consultancy or other
association with any other person, provided, that any medical, dental or
hospitalization insurance or benefits provided to Executive with his employment
by or consultancy with an unaffiliated person during such period shall be
primary to the benefits to be provided to Executive pursuant to this Agreement
for the purposes of coordination of benefits.
6.5 Non-Compete. For so long as any termination compensation is being paid
to Executive pursuant to this Section 6 or, in the event of termination of this
Agreement by Employer for cause or by Executive without good reason, for the
balance of what would have been the current Employment Period assuming no such
termination, Executive shall not, directly or indirectly, (i) engage in any
activities that are in competition with the Company in any geographic area where
the Company is engaged in business, (ii) solicit any customer of the Company or
(iii) solicit any person who is then employed by the Company or was employed by
the Company within one year of such solicitation to (a) terminate his or her
employment with the Company, (b) accept employment with anyone other than the
Company, or (c) in any manner interfere with the business of the Company.
Executive acknowledges and agrees that in the event of any violation or
threatened violation by Executive of his obligations under the preceding
sentence, Employer shall be entitled to injunctive relief without any necessity
to post bond.
7. Indemnification
The Company shall indemnify and hold Executive harmless from and against
any expenses (including attorneys' fees of the attorneys selected by Executive
to represent him, which shall be advanced as incurred), judgements, fines and
amounts paid in settlement incurred by him by reason of his being made a party
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of any act or omission to act by Executive during the Employment
Period or otherwise by reason of the fact that he is or was a director or
officer of Employer or any subsidiary or affiliate included as a part of
the Company, to the fullest extent and in the manner set forth and permitted
by the General Corporation Law of the State of Delaware and any other
applicable law as from time to time in effect. The provisions of this
Section 7 shall survive any termination of the Employment Period or any
deemed termination of this Agreement.
8. Miscellaneous
8.1 Notices. Any notice, consent or authorization required or permitted to
be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, by
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally or by facsimile transmission (deemed given upon
receipt), or at such other address as either party shall designate by notice
given to the other in the manner provided herein. Notices to Employer shall be
sent to: Xxx. A. Bank Clothiers, Inc., 000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx
00000-0000, Attn: Secretary. Notices to Executive shall be sent to: Xx. Xxxxx
Xxxxxx, Xxx. A. Bank Clothiers, Inc., 000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx
00000-0000.
8.2 Taxes. Employer is authorized to withhold (from any compensation or
benefits payable hereunder to Executive) such amounts for income tax, social
security, unemployment compensation and other taxes as shall be necessary or
appropriate in the reasonable judgement of Employer to comply with applicable
laws and regulations.
8.3 Interpretation. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland applicable to
agreements made and to be performed therein. All descriptive headings in this
Agreement are inserted for convenience only and shall be disregarded in
construing or applying any provision of this Agreement. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument. If any
provision of this Agreement, or any part thereof, is held to be unenforceable,
the remainder of such provision and this Agreement, as the case may be, shall
nevertheless remain in full force and effect.
8.4 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Baltimore,
Maryland in accordance with the rules of the American Arbitration Association
then in effect. Judgement may be entered on the arbitration award in any court
having jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of his right to be paid until expiration of the Employment
Period during the pendency of any arbitration.
8.8 Entire Agreement and Representation. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. No representations or warranties of any kind or nature
relating to the Company or its several businesses, or relating to the Company's
assets, liabilities, operations, future plans or prospects have been made by or
on behalf of Employer to Executive. This Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof.
8.9 Successor and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors,
heirs (in the case of Executive) and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXX. A. BANK CLOTHIERS, INC.
By:_____________________________________
Xxxxxxx X. Xxxxxx, Chairman, Chief
Executive Officer and President
________________________________________
XXXXX X. XXXXXX
