EXHIBIT 10.1
COST PLUS, INC.
EXECUTIVE TRANSITION AGREEMENT
This agreement (the "Agreement") is made and entered into by and between
Xxxxx X. Xxxxxx ("Employee") and Cost Plus, Inc. (the "Company"), effective as
of May 7, 1999.
WHEREAS, Employee is and has been employed by the Company and is currently
Chairman Emeritus of the Company's Board of Directors (the "Board"); and
WHEREAS, Employee desires to provide services to the Company as an Employee
pursuant to this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, the parties hereto agree as follows:
1. Duties of Employee. During the Employment Term, Employee shall serve as
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an advisor to the Chief Executive Officer providing management advice and
strategic planning services to the Company as mutually agreed by the parties.
Employee shall render such business and professional services as shall
reasonably be requested of him by the Chief Executive Officer. After February
12, 2001, Employee's duties will be limited to consultation by telephone for
such time periods as are mutually agreed to between Employee and the Company.
2. Employment Term. Employee's employment under this Agreement shall
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continue until September 30, 2005, unless sooner terminated as provided herein
("Employment Term").
3. Resignation from Board. Employee hereby resigns from the Board of
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Directors as of the date of this Agreement.
4. Compensation and Benefits.
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(a) Base Salary. The Company shall pay Employee a base salary (the
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"Base Salary") at a rate of (i) $185,500 per year from the date of this
Agreement until March 31, 2000; (ii) $214,000 per year from April 1, 2000 until
March 31, 2001; and (iii) $14,000 per year for the remainder of the Employment
Term (or such greater amount as shall be necessary to comply with federal,
Wisconsin or California minimum wage laws). Such salary is payable in accordance
with normal Company policy. If Employee should die before March 31, 2001, the
payments Employee would be entitled to until March 31, 2001 (as provided for
under this Section 4(a)) shall be paid by the Company to his named beneficiary,
or, if no beneficiary has been named, then to his estate in accordance with
normal Company policy.
(b) Benefits. Employee shall be included in all employee benefits
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plans, programs or arrangements, including, without limitation, any plans,
programs or arrangements providing for retirement benefits, disability benefits,
health and life insurance, vacation and paid holidays, which shall be
established by the Company for, or made available to, its senior employees and
shall further be entitled to fringe and other employee benefits and perquisites
equivalent to those he received prior to entering into this Agreement and to
such other benefits and perquisites as are specifically set forth herein.
5. Stock Options. During the Employment Term Employee shall continue to
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vest in any outstanding stock options, pursuant to the terms of the respective
stock option agreements.
6. Termination of Employment.
(a) Voluntary Termination. If, prior to the expiration of the
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Employment Term, Employee voluntarily terminates his employment with the
Company, then Employee shall be entitled only to payment of all amounts earned
or owed to Employee and all vesting of equity compensation through and including
the date of such termination or resignation.
(b) Material Breach. In the event the Company determines that Employee
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has materially breached this Agreement and notwithstanding anything to the
contrary in this Agreement, (i) the Company may not (A) terminate Employee's
employment, (B) change or cancel Employee's medical benefits or (C) modify or
cancel any of Employee's outstanding stock options (including modifying the
vesting of any such options) until a final determination is made by the
arbitrators (as provided below) that Employee has breached this Agreement; (ii)
the Company may reduce Employee's pay to $14,000 per year (or such higher amount
as required by law to maintain full time employment) upon giving written notice
to Employee; and (iii) the Company must notify Employee in writing that the
Company believes Employee has materially breached the Agreement. A material
breach of this Agreement shall include a breach of Section 7, 8 or 9 of this
Agreement. A panel of three arbitrators, one selected by each of the parties and
the third mutually agreed to by the parties, in accordance with the rules of the
American Arbitration Association (the "AAA"), shall determine whether Employee
materially breached this Agreement using a "clear and convincing" evidence
standard (i.e., the Company must meet the "clear and convincing" evidence
standard in proving Employee's breach) in making their determination and
applying the National Rules for the Resolution of Employment Disputes of the
AAA. The arbitrators may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrators shall be final, conclusive and
binding upon the parties. Judgment may be entered on the arbitrators' decision
in any court having jurisdiction. Arbitration shall take place in Dane County,
Wisconsin. In the event that the arbitrators fail to determine that Employee
breached this Agreement, then Employee shall be entitled to the benefits
provided for under this Agreement including any salary which the Company had not
paid.
7. Covenants Not to Compete and Not to Solicit.
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(a) During the Employment Term, the Employee agrees that he shall not,
on his own behalf, or as owner, manager, advisor, principal, agent, partner,
consultant, director, officer, stockholder or employee of any business entity,
or otherwise participate in the development or
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provision of products or services in a manner directly competitive with the
Business of the Company in any of the states in which the Company operates
during the Employment Term without the express written authorization of the
Company. For purposes of this Agreement, the "Business of the Company" shall
mean the sale at retail of gourmet foods, wines, and casual home furnishings.
The Employee may participate in one or more business whose products or services
constitute less than twenty-five percent (25%) of the goods or services offered
for sale by the Company. The foregoing covenant shall not be deemed to prohibit
Employee from acquiring an investment of not more than three percent (3%) of the
capital stock of a competing business, whose stock is traded on a national
securities exchange or through the automated quotation system of a registered
securities association.
(b) During the Employment Term, the Employee agrees that he shall not
either directly or indirectly solicit, induce, attempt to hire, recruit,
encourage, take away, hire any employee of the Company or cause an employee to
leave their employment either for Employee or for any other entity or person.
(c) The Employee represents that he (i) is familiar with the foregoing
covenants not to compete and not to solicit, and (ii) is fully aware of his
obligations hereunder, including, without limitation, the reasonableness of the
length of time, scope and geographic coverage of these covenants.
8. Confidentiality. Employee agrees at all times during the Employment
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Term and thereafter, to hold in strictest confidence, and not to use, except for
the benefit of the Company, or to disclose to any person, firm or corporation
without written authorization of the Board of Directors of the Company, any
Confidential Information of the Company. Employee understands that "Confidential
Information" means any Company proprietary information and trade secrets
protected by the Uniform Trade Secrets Act including, but not limited to, market
research, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company to whom Employee
becomes acquainted during the term of Employee's employment), markets,
developments, marketing, finances or other business information disclosed to
Employee by the Company either directly or indirectly in writing, orally or by
drawings or observation of parts or equipment. Confidential Information does not
include any of the foregoing items which has become publicly known through no
wrongful act of Employee or of others who were under confidentiality obligations
as to the item or items involved. The terms of this provision shall survive the
Employment Term.
9. Representations.
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(a) Non-Disparagement. Employee agrees to refrain from any defamation,
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libel or slander of the Company or any of its officers or any members of its
Board of Directors, or tortious interference with the contracts and
relationships of the Company. Similarly, the Company shall refrain from any
defamation, libel or slander of the Employee, and from tortious interference
with the contracts and relationships of the Employee.
(b) Representing the Company. Employee understands and agrees that he
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shall not represent himself as an agent or representative of the Company to any
person unless he has received the Chief Executive Officer's express written
authorization prior to the representation. The
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foregoing covenant shall not, however, prohibit the Employee from disclosing to
others his employment with the Company.
10. Assignment. Employee's rights and obligations under this Agreement
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shall not be assignable by Employee. The Company's rights and obligations under
this Agreement shall not be assignable by the Company except as incident to the
transfer, by merger, liquidation, or otherwise, of all or substantially all of
the business of the Company.
11. Notices. Any notice required or permitted under this Agreement shall
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be given in writing and shall be deemed to have been effectively made or given
if personally delivered, or mailed to the other party at its address set forth
below in this Section 11, or at such other address as such party may designate
by written notice to the other party hereto. Any effective notice hereunder
shall be deemed given on the date personally delivered or on the date facsimile
or deposited in the United States mail (sent by certified mail, return receipt
requested), as the case may be, at the following address:
(i) If to the Company:
Cost Plus, Inc.
000 0xx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
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(ii) If to Employee:
Xx. Xxxxx X. Xxxxxx
(Xxxxx X. Xxxxxx'x
address here)
With a copy to:
Xxxxx & Lardner
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
12. Mediation. Employee and the Company agree that any dispute or
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controversy arising out of, relating to, or in connection with this Agreement,
or the interpretation, validity, construction, performance, breach or
termination thereof, shall first be submitted to mediation, except as provided
for in Section 6(b). The mediation shall be conducted within 45 days of one
party notifying the other of a dispute or controversy regarding this Agreement
or Employee's employment relationship with the Company. Such mediation shall
take place in Madison, Wisconsin. Unless otherwise provided for by law, the
Company and Employee shall each pay half the costs and expenses of the
mediation, not including any legal fees or legal costs incurred by the parties
themselves. In the event that the parties fail to successfully mediate any
dispute, or otherwise to settle any dispute, either party shall be free to
initiate a lawsuit with respect thereto. Any such lawsuit shall be brought only
in a state or federal court located in Dane County, Wisconsin.
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13. Severability. If a court of law determines that any term or provision
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hereof is invalid or unenforceable, (a) the remaining terms and provisions
hereof shall be unimpaired, and (b) such court shall have the authority to
replace such invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision.
14. Entire Agreement. This Agreement and any written agreement or plan
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referenced herein represent the entire agreement of the parties with respect to
the matters set forth herein, and to the extent inconsistent with other prior
contracts, arrangements or understandings between the Company and Employee,
supersede all such previous contracts, arrangements or understandings between
the Company and Employee. This Agreement may be amended only by mutual written
agreement of the Company and Employee.
15. Withholding. Company shall be entitled to withhold, or cause to be
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withheld, any amount of withholding taxes required by law with respect to
payments made to Employee in connection with his employment hereunder.
16. Waiver. Any waiver or consent from the Company with respect to any
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term or provision of this Agreement or any other aspect of Employee's conduct or
employment shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of the
Company at any time or times to require performance of, or to exercise any of
its powers, rights or remedies with respect to any term or provision of this
Agreement or any other aspect of Employee's conduct or employment in no manner
(except as otherwise expressly provided herein) shall affect the Company's right
at a later time to enforce any such term or provision.
17. Governing Law. This Agreement shall be construed, interpreted, and
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governed in accordance with the laws of California without reference to rules
relating to conflicts of law.
18. Successors. This Agreement shall be binding upon and inure to the
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benefit of, and shall be enforceable by Employee and the Company, their
respective heirs, executors, administrators and assigns. In the event the
Company is merged, consolidated, liquidated by a parent corporation, or
otherwise combined into one or more corporations, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parent
corporation or the corporation resulting from such merger or to which the asset
shall be sold or transferred, which corporation from and after the date of such
merger, consolidation, sale or transfer shall be deemed to be the Company for
purposes of this Agreement. In the event of any other assignment of this
Agreement by the Company, by operation of law or otherwise, the Company shall
remain primarily liable for its obligations hereunder. This Agreement shall not
be assignable by Employee.
19. Headings. The headings of section herein are included solely for
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convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
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20. Counterparts. This Agreement may be executed by either of the parties
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hereto in counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY COST PLUS, INC.
/s/ Xxxxxx X. Xxxxx
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Signature
Xxxxxx X. Xxxxx
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Please print name
Chairman, CEO, and President
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Please print title
EMPLOYEE /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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