EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
Jan. 12th, 2004, by and between Bakers Footwear Group, Inc., a Missouri
corporation (the "Company"), and Xxxxx X. Xxxxxx ("Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to retain the services of Executive as
Chairman and Chief Executive Officer of the Company; and
WHEREAS, the Company and Executive desire to enter into this Agreement
to set forth the terms and conditions of the employment relationship between the
Company and Executive.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Term. Executive's term of employment (the "Employment Term")
under this Agreement shall initially be three (3) years, commencing on the
consummation of an offering by the Company pursuant to a registration statement,
and an amendment or amendments thereto, on Form S-1 (File No. 333-86332) filed
under the Securities Act of 1933, as amended ("Effective Date"). Each year on
the anniversary of the Effective Date, the Employment Term shall automatically
be extended for one additional year, unless (a) either party notifies the other
in writing of its or his intention not to extend the Employment Term at least
ninety (90) calendar days prior to such anniversary, or (b) the Employment Term
is earlier terminated pursuant to the terms and conditions set forth in this
Agreement.
2. Duties. During the Employment Term, Executive shall have the
title of Chairman and Chief Executive Officer and shall perform all duties
incident to that position.
3. Exclusive Services and Best Efforts. During the Employment
Term, Executive agrees to devote his best efforts, energies and skill to the
discharge of the duties and responsibilities attributable to his position, and
to this end, he will devote substantially all of his business time and attention
to the business and affairs of the Company.
4. Base Salary. During the Employment Term, the Company shall pay
Executive a salary ("Base Salary"), at an initial rate of $290,000 per annum
payable in equal installments at such payment intervals as are the usual custom
of the Company, but not less often than monthly. The Base Salary shall be
reviewed for merit increases and may, by action and in the discretion of the
Compensation Committee of the Company's Board of Directors, be increased at any
time or from time to time.
5. Bonus. During the Employment Term, Executive shall be eligible
to participate in such Company executive bonus plan or plans as the Company may
from time to time establish, on the same basis as other participants at his
level and pursuant to the terms of the Plan in effect on the date eligibility
for a bonus is determined.
6. Benefits. During the Employment Term and as otherwise provided
herein, Executive shall be entitled to participate in any and all employee
welfare and health benefit plans
established by the Company from time to time for the benefit of all executives
of the Company. Executive shall be entitled to paid vacation from work in
accordance with the terms of the Company's vacation policy. Executive shall be
required to comply with the conditions attendant to coverage by such plans and
policies and shall comply with and be entitled to benefits only in accordance
with the terms and conditions of such plans and policies as they may be amended
from time to time. Nothing herein contained shall be construed as requiring the
Company to establish or continue any particular benefit plan in discharge of its
obligations under this Employment Agreement.
7. Deduction from Salary and Benefits. The Company may withhold
from any salary or benefits payable to Executive hereunder all federal, state,
local and other taxes and other amounts as permitted or required pursuant to law
or legal compulsion.
8. Reimbursement of Business Expenses. During the Employment
Term, Executive shall be paid or reimbursed for all reasonable, ordinary and
necessary business expenses incurred by Executive in the performance of his
responsibilities and the promotion of the Company's businesses, including, but
not limited to, any air travel, lodging, and automobile and related travel
expenses. Executive shall submit to the Company periodic statements of all
expenses so incurred. Subject to such audits as the Company may deem necessary,
the Company shall reimburse Executive the full amount of any such expenses
advanced by him in the ordinary course of business.
9. Certain Additional Payments.
(a) For purposes of this Agreement, the following terms
shall be defined as indicated below:
(i) "Trigger Event" shall mean any of the following which
occur during the Employment Term: (x) Executive's employment is
terminated without cause pursuant to Section 12(b) or otherwise or (y)
following a Change of Control of the Company, there is either (1) a
material reduction in Executive's Base Salary, (2) a breach by the
Company of Section 5, or (3) a material diminution in the nature or
status of Executive's duties and responsibilities,
(ii) "Change of Control" shall mean:
(A) the purchase or other acquisition by any
person, entity or "group", within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act") (excluding, for this purpose, the Company or
its subsidiaries or any employee benefit plan of the Company
or its subsidiaries), of beneficial ownership (within the
meaning of Rule 13d-3 of the 0000 Xxx) of either the
then-outstanding shares of the Company's common stock or the
combined voting power of the Company's then-outstanding voting
securities entitled to vote generally in the election of
directors, exceeding (x) that of Executive, provided that this
does not occur because Executive has reduced the number of
shares or voting power owned by him by more than 20% from the
date hereof, or (y) 50% of either the then-outstanding shares
of Common Stock or the combined voting power of the Company's
then-outstanding voting securities entitled to vote generally
in the election of directors; or
2
(B) approval by shareholders of a
reorganization, merger, consolidation, sale of all or
substantially all of the assets of the Company, or similar
transaction, in each case with respect to which persons who
were the shareholders of the Company immediately prior to such
reorganization, merger, consolidation or sale would not
immediately thereafter own more than 50% of, respectively, the
Company's common stock and the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged, consolidated or successor corporation's
then-outstanding voting securities; notwithstanding the
foregoing, if Executive owns 10% or more of either the then
outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors, and
Executive votes to approve such reorganization, merger,
consolidation or sale, then such reorganization, merger,
consolidation or sale shall not be deemed a "Change of
Control" for purposes of this Agreement; or
(C) a liquidation or dissolution of the Company.
(iii) "Trigger Payment" shall mean an aggregate payment in
one (1) lump sum within thirty (30) days following any Trigger Event
totaling an amount equal to three times Executive's annual Base Salary
in effect at the time of the Trigger Event.
(b) If, during the Employment Term, a Trigger Event
occurs with respect to Executive, Company shall make the Trigger Payment to
Executive.
(c) In no event shall Executive be entitled to receive
more than one (1) Trigger Payment under this Section 9, even if there is more
than one (1) reason or set of circumstances that gives rise to the Company's
obligation to make a Trigger Payment.
(d) If paid, the Trigger Payment shall be in lieu of and
complete satisfaction for any claim for damages by Executive for breach of this
Agreement by the Company, except for claims under Sections 6, 8 and 25.
10. Death. The Employment Term shall terminate on the date of
Executive's death, in which event Executive's salary owing to Executive through
the date of Executive's death, any unpaid Trigger Payment that had earlier
accrued, Executive's benefits owing to Executive through the date of Executive's
death, and reimbursable expenses owing to Executive through the date of
Executive's death shall be paid to his estate. Executive's estate will not be
entitled to any other compensation under this Agreement.
11. Disability. During the Employment Term, the Company shall
purchase disability insurance for the benefit of Executive. If during the
Employment Term Executive is materially unable to perform his duties under this
Agreement because of disability, Company shall be entitled to terminate the
Employment Term for disability, in which event Executive's salary owing to
Executive through the date of Executive's termination for disability,
Executives' benefits owing to Executive through the date of such termination,
and reimbursable expenses owing to Executive through the date of such
termination shall be paid to Executive. Executive shall not be entitled to any
other compensation under this Agreement except for the proceeds
3
of the disability insurance.
12. Termination.
(a) Termination for Cause by the Company. The Company may
immediately terminate the Employment Term under this Agreement for cause. Upon
such termination, the Company shall be released from any and all further
obligations under this Agreement, except for accrued salary, benefits and
reimbursable expenses owing to Executive through the effective date of the
termination of the Employment Term.
(i) For the purposes of this Agreement, "cause"
shall mean:
(A) misconduct in connection with the
performance of any of Executive's duties, including, without
limitation, misappropriation of funds or property of the
Company, securing or attempting to secure personally any
profit in connection with any transaction entered into on
behalf of the Company, knowing misrepresentation to the
Company, or any material violation of law or regulations on
Company premises or while in the Company's employ or to which
the Company is subject;
(B) commission by Executive of an act
involving moral turpitude, dishonesty, theft or unethical
business conduct, or conduct that impairs or injures the
reputation of, or xxxxx, the Company;
(C) disloyalty by Executive, including,
without limitation, aiding a competitor; or
(D) any material breach of this
Agreement.
provided, however, in the event of an event under subsection (D), cause
shall not exist unless Executive was first given written notice of the
event and fails to cure such event within ten (10) days following such
notice.
(b) Termination Without Cause by the Company. The Company
may immediately terminate the Employment Term under this Agreement, at any time,
without any cause or reason, upon ninety (90) days prior written notice to
Executive. If Company chooses to terminate Executive's employment under this
Section 12(b) by providing the appropriate notice, Company may opt to have
Executive cease working at any time prior to the expiration of the ninety (90)
day period so long as Company fully compensates Executive for the portion of
time that Executive would have otherwise been paid during the remainder of the
ninety (90) day notice period. The Company may terminate the Employment Term
under this provision notwithstanding the existence of cause.
(c) Termination Without Cause by Executive. Executive may
terminate the Employment Term under this Agreement, at any time, with or without
cause or reason, upon ninety (90) days prior written notice to the Company.
4
13. Non-Competition, Non-Solicitation and Confidential
Information.
(a) Non-Competition. At all times during the Employment
Term, and for a two (2) year period immediately following the termination of the
Employment Term for any reason, Executive shall not, directly or indirectly,
engage in competition or have any interest in any sole proprietorship,
corporation, company, partnership, association, venture or business or any other
person or entity (whether as an employee, officer, director, partner, agent,
security holder, creditor, consultant or otherwise) that directly or indirectly
(or through any affiliated entity) competes with the Company's Business (as
defined below), provided that such provision shall not apply to Executive's
ownership of stock of the Company or the acquisition by Executive, solely as an
investment, of securities of any issuer that is registered under Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed
or admitted for trading on any United States national securities exchange or
that are quoted on the National Association of Securities Dealers Automated
Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as Executive does not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control of, more than five percent of any class of
capital stock of such corporation. For purpose of this Section 13(a) Business
shall mean the sale at retail of women's or men's shoes.
(b) Non-Solicitation. At all times during the Employment
Term, other than in connection with the performance of Executive's duties under
this Agreement, and for a two (2) year period immediately following the
termination of the Employment Term for any reason, Executive shall not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity employ or attempt to employ or enter
into any contractual arrangement with any employee or former employee of the
Company, unless such employee or former employee has not been employed by the
Company for a period in excess of six months.
(c) Confidentiality. Executive acknowledges that he will
have access to certain proprietary and confidential information and trade
secrets ("Confidential Information") of the Company, including, but not limited
to, Company store volume data, sales projections, merchandise sales information,
profit data, lease terms, marketing and advertising strategies and plans,
product information, cost information, and financial information of the Company.
Executive will not use or disclose any Confidential Information during the
Employment Term or thereafter other than in connection with performing
Executive's services for the Company in accordance with this Agreement.
(d) Enforcement. (i) Executive agrees that the
restrictions set forth in this Section are reasonable and necessary to protect
the Company's goodwill and other legitimate business interests. If any of the
covenants set forth herein are deemed to be overbroad or unenforceable the
parties contemplate that such provisions shall be modified to make them
enforceable to the fullest extent permitted by law.
(ii) In the event of a breach or threatened
breach by Executive of any of the provisions of this Section, (i) Executive
acknowledges that the Company will be irreparably harmed and that money damages
may be an insufficient remedy to the Company; and (ii) Executive shall pay all
of the Company's attorneys fees, costs and expenses incurred in enforcing this
Agreement, if litigation is commenced and the Company prevails in such
litigation to any extent. Executive acknowledges that enforcement of the
provisions of this Section by
5
way of injunctive relief would not prevent Executive from earning a livelihood.
(iii) The provisions of this Section shall be
deemed independent of the other provisions of this Agreement and shall be
enforceable in all events, notwithstanding the termination, for any reason, of
Executive's employment or even a breach by the Company of any provision of this
Agreement; provided, however, in the event that the Company is in breach of any
material term or provision of this Agreement and fails to cure such breach
within sixty (60) days following written notice by Executive to the Company
detailing the facts which constitute such breach, Executive shall be relieved of
his obligations under Section 13(a) of this Agreement but not of his obligations
under Section 13(b) of this Agreement.
14. Representations and Warranties of Executive. Executive hereby
represents and warrants to the Company as follows: (a) Executive's execution and
delivery of this Agreement and the performance of his obligations hereunder will
not violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement or other understanding to which Executive is a
party or by which he is or may be bound or subject; and (b) Executive is not a
party to any instrument, agreement, document, arrangement or other understanding
with any person (other than the Company) requiring or restricting the use or
disclosure of any confidential information or the provision of any employment,
consulting or other services.
15. Other Executive Obligations During the Employment Term.
(a) Company Property. All records, files, lists,
including computer generated lists, documents, computers, computer software
programs, equipment, telephones, telephone numbers, and similar items relating
to the Company's business that Executive shall prepare or receive from the
Company during the Employment Term shall remain the Company's sole and exclusive
property. Upon termination of the Employment Term, Executive shall promptly
return to the Company all property of the Company in his possession. During the
Employment Term, Executive further represents that he will not copy or cause to
be copied, print out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company. Executive additionally
represents that, upon termination of the Employment Term, he will not retain in
his possession any such software, documents or other materials.
(b) Cooperation. Executive agrees that both during the
Employment Term and thereafter he shall, at the request of the Company, render
all assistance and perform all lawful acts that the Company considers necessary
or advisable in connection with any litigation involving the Company or any
director, officer, employee, shareholder, agent, representative, consultant,
customer or vendor of the Company.
(c) Independence. The provisions of this Section shall be
deemed independent of the other provisions of this Agreement and shall be
enforceable in all events, notwithstanding the termination, for any reason, of
the Employment Term or even a breach by the Company of any provision of this
Agreement; provided, however, in the event that the Company breaches any
material term or provision of this Agreement and fails to cure such breach
within sixty (60) days following written notice by Executive detailing the facts
which constitute the breach, Executive shall then be relieved of his obligations
under Section 15(b) of this Agreement, but not of his obligations under Section
15(a) of this Agreement.
16. Arbitration. Except to the extent Company seeks injunctive or
other equitable relief, any and all disputes arising under or relating to the
interpretation or application of this
6
Agreement or concerning Executive's employment with the Company during the
Employment Term or termination of the Employment Term, including, but not
limited to, claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
Section 1981, the Age Discrimination in Employment Act, Executive Retirement
Income Security Act, the Family and Medical Leave Act, the Missouri Human Rights
Act, the Missouri Service Letter Law, and any other federal, state, or local
law, and the common law of contract or tort, shall be subject to arbitration in
St. Louis County, Missouri, under the then existing rules of the American
Arbitration Association. Judgment upon the award rendered may be entered in any
court of competent jurisdiction. Nothing contained in this Section shall limit
the right of the Company to enforce by court injunction or other equitable
relief Executive's obligations under this Agreement, including but not limited
to those under Sections 13 and 15 of this Agreement.
17. Continuation of Executive's Obligations. Upon the ending of
the Employment Term, Executive's other obligations under this Agreement,
including but not limited to those under Sections 13 through 24, shall continue
pursuant to the terms and conditions of this Agreement. Prior to the Employment
Term, this Agreement shall have no force and effect.
18. Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Missouri, without
regard to the conflicts of law rules thereof.
19. Jurisdiction. In the event that the Company seeks injunctive
or other equitable relief, to which the arbitration provisions of Section 16 of
this Agreement are inapplicable, each of the parties hereto hereby irrevocably
consents and submits to the jurisdiction of the Circuit Court of St. Louis
County, Missouri, and of the United States District Court for the Eastern
District of Missouri in connection with any such suit, action or other
proceeding. Executive waives and agrees not to assert any defense that the court
lacks jurisdiction, that venue is improper, that the forum is inconvenient, or
otherwise.
20. Successors and Assigns. Neither this Agreement, nor any of
Executive's rights, powers, duties or obligations hereunder, may be assigned by
Executive. This Agreement shall be binding upon and inure to the benefit of
Executive and his heirs and legal representatives and the Company and its
successor and assigns.
21. Waiver. Any waiver or consent from a party with respect to any
term or provision of this Agreement or any other aspect of Executive'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 a party 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 Executive's conduct or employment shall
not in any manner (except as otherwise expressly provided herein) affect a
party's right at a later time to enforce any such term or provision.
22. Notices. All notices under this Agreement must be in writing
and shall be deemed to have been duly given if delivered by hand or mailed by
first class mail, registered mail, return receipt requested, postage and
registry fees prepaid, to the applicable party and addressed as follows:
7
(a) The Company:
Bakers Footwear Group, Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Board of Directors
(b) Executive:
Xxxxx X. Xxxxxx
Bakers Footwear Group, Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Addresses may be changed by notice in writing signed by the addressee.
23. Amendment. No amendment or modification of this Agreement
shall be valid or effective, unless in writing and signed by the parties to this
Agreement.
24. Entire Agreement.
(a) This Agreement embodies the entire agreement of the
parties hereto with respect to its subject matter and, as of the Effective Date,
merges with and supersedes all prior discussions, agreements, commitments or
understandings or every kind and nature relating thereto, whether oral or
written, between Executive and the Company, including without limitation the
Employment Agreement between the Company and Executive dated as of October 31,
1997. Neither party shall be bound by any term or condition other than as is
expressly set forth herein.
(b) Executive represents and agrees that he fully
understands his right to discuss all aspects of this Agreement with his private
attorney, that to the extent he desired, he availed herself of this right, that
he has carefully read and fully understands all of the provisions of the
Agreement, that his decision to execute this Agreement has not been obtained by
any duress and that he has read this document in its entirety and fully
understands the meaning, intent and consequences of this Agreement.
25. Excise Tax Payments. Notwithstanding anything contained in
this Agreement to the contrary, in the event that any payment (within the
meaning of Section 280G(b)(2) of the Code, or distribution to or for the benefit
of Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise in connection with, or arising out
of, his or her employment with the Company (a "Payment" or "Payments"), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by Executive with respect to such excise tax (such excise
tax, interest and penalties collectively referred to as the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all such taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments; provided, that Executive shall not be entitled to receive
8
any additional payment relating to any interest or penalties attributable to any
action or omission by Executive in bad faith.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. THE NEXT PAGE IS THE SIGNATURE
PAGE]
9
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first hereinabove set forth.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
COMPANY: EXECUTIVE:
BAKERS FOOTWEAR GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx, Xx. /s/ Xxxxx X. Xxxxxx
------------------------------ ---------------------------------
Xxxxx X. Xxxxxx
Title: Vice President - Secretary
---------------------------
10
