Exhibit 10(e)
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into August 1, 1996, between XXXXXXXX
STORES INC., a Michigan corporation, of Jackson, Michigan (the "Company"),
and Xxxxxxxx X. Xxxxxx (the "Employee").
RECITALS
A. The Company is currently considering whether to consolidate
various functions into its Orlando, Florida office, including the functions
performed by Employee, but has not yet determined whether to do so. The
potential consolidation of functions has created uncertainty among some of
the Company's employees.
B. The Company is dependent on Employee's services during this
critical stage of its development, and the loss of Employee's services could
have a material adverse effect on the Company.
C. In light of the foregoing and to allow Employee to focus less on
his employment status with the Company and more on the Company's business,
the Company and Employee desire to provide for the extension of the term of
Employee's employment with the Company and to provide for a bonus if Employee
continues employment with the Company for a minimum period and moves to the
Orlando, Florida area if and when requested to do so by the Company after it
determines whether to consolidate Employee's functions in that office.
THE PARTIES AGREE AS FOLLOWS:
1. Employment and Term. The Company employs Employee as Senior Vice
President, General Merchandise Manager, and Employee agrees to serve in that
capacity and/or in such other capacity or capacities as the Chief Executive
Officer of the Company or his designee deems advisable for the compensation
and on the terms set forth in this Agreement. The term of Employee's
employment under this Agreement shall begin on the date of this Agreement and
shall continue through July 31, 1997 (the "Expiration Date"), unless
terminated sooner pursuant to the provisions of paragraph 5.
2. Compensation. Subject to the provisions of paragraph 5, the
Company agrees (i) to pay Employee salary at an annual rate of $140,000, in
bi-weekly or other regular periodic installments no less frequent than
monthly, and (ii) to provide Employee with such insurance and other employee
benefit plans that are generally applicable to all employees of the Company
and that are maintained by the Company from time to time.
3. Bonus. Subject to the provisions of paragraph 5, the Company
agrees to pay employee a bonus if (i) either (A) Employee's employment under
this Agreement continues at least through the Expiration Date, in which case
such bonus will be equal to 50% of Employee's base salary on the Expiration
Date and such bonus will be paid on the Expiration
Date, or (B) the "Entity" (as defined in paragraph 5.(d)(vi)) terminates
Employee's employment without "Cause" (as defined in paragraph 5.(d)(v))
before the Expiration Date, in which case such bonus will be equal to 50% of
Employee's base salary on the date of such termination and will be paid on or
before the regular payroll date with respect to the period that includes the
date of termination, and (ii) Employee relocates to the Orlando, Florida area
if and when requested to do so by the Company's Chairman of the Board, Vice
Chairman of the Board or President before the termination of Employee's
employment under this Agreement.
4. Duties. Employee agrees, as long as employment by the Company
continues, to devote Employee's entire time and best efforts to furthering
the interests of the Company; to comply with all regulations and policies of
the Company; and to perform the duties requested by any officers and
executives of the Company to whom the Employee is directed to report.
5. Termination. Employee's employment under this Agreement shall
terminate on the earliest to occur of the following: (1) immediately upon
Employee's death, (2) at the Company's option, immediately when notice to
Employee of such termination is given after Employee's permanent incapacity
(established to the reasonable satisfaction of the Chief Executive Officer of
the Company), (3) at the Company's option, immediately when notice to
Employee of such termination is given (for any reason or for no reason and
regardless of whether there is good cause for such termination), (4) 30 days
after notice of such termination is given to the Company by Employee, and (5)
the Expiration Date. Notice will be deemed to be given on the earliest of (1)
when delivered, or (2) three business days after mailed by certified or
registered mail, postage prepaid, return receipt requested, or (3) one
business day after sent by recognized overnight courier, if to Employee, to
Employee's address on the Company's corporate records, and if to the Company,
to the address of its principal executive offices, attention Chief Financial
Officer. The following events during the term of this Agreement shall have
the following respective effects on the obligations of the Company pursuant
hereto:
(a) If employment is terminated due to Employee's death or
permanent incapacity, the Company shall have no obligation to pay any salary
or other amounts or benefits under this Agreement or otherwise for any period
after the date of termination of employment, but benefits may continue to the
extent provided in any wage continuation program, insurance, or other
employee benefit plans that are generally applicable to all employees of the
Company and that are maintained by the Company at that time.
(b) Except as otherwise provided in paragraph 5.(c) or
paragraph 5.(d), if employment is terminated by the Company, or if Employee
resigns or retires before the Expiration Date, the Company shall have no
obligation to pay any salary or other amounts or benefits under this
Agreement or otherwise for any period after the date of termination of
employment.
(c) If Employee terminates Employee's employment with the
"Entity" (as defined in paragraph 5.(d)(vi)) for "Good Reason" (as defined in
paragraph 5.(d)(iv)) or the "Entity" terminates Employee's employment without
"Cause" (as defined in paragraph 5.(d)(v)), both before the Expiration Date,
Employee will receive the bonus described in
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paragraph 3 if Employee has satisfied the condition described in paragraph
3(ii), and, for the period from the date of such termination through the
Expiration Date, (i) Employee's salary at the rate set forth in paragraph 2,
and (ii) any benefits to the extent provided in any wage continuation
program, insurance, or other employee benefit plans that are generally
applicable to all employees of the Company and that are maintained by the
Company at that time. Any of the foregoing that are cash payments shall be
made in a lump sum on or before the regular payroll date with respect to the
period that includes the termination date. The Company may withhold from such
payments all federal, state, city and other taxes to the extent such taxes
are required to be withheld by applicable law.
(d) If (1) a "Change in Control" (as defined below) occurs
during the term of the Employee's employment under this Agreement, and (2)
either Employee terminates Employee's employment with the "Entity" (as
defined below) for "Good Reason" (as defined below) or the "Entity"
terminates Employee's employment without "Cause" (as defined below), both
within one year after the Change in Control, Employee will receive the bonus
described in paragraph 3, if Employee has satisfied the condition described
in paragraph 3(ii) and if not already paid, and Employee's salary at the rate
set forth in paragraph 2 for the period from the date of such termination
through the date that is 12 months after the date such Change in Control
occurs. Any of the foregoing that are cash payments shall be made in a lump
sum on or before the regular payroll date with respect to the period that
includes the termination date. The Company may withhold from such payments
all federal, state, city and other taxes to the extent such taxes are
required to be withheld by applicable law. The Company's obligation to pay
the payments based on Employee's salary and provided in this paragraph 5.(d)
shall survive the expiration of the term.
(i) For purposes of this Agreement, a "Change in Control"
occurs on the first day any one or more of the following occurs:
(A) any person (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), together with all affiliates and
associates of such person (as such terms are defined in Rule
12b-2 under the Exchange Act) but excluding all "Excluded
Persons" (as defined in paragraph 5.(d)(ii)), becomes the
direct or indirect beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of securities of the Company
representing (A) 40% or more of the combined voting power of
all of the Company's outstanding securities entitled to vote
generally in the election of the Company's directors, or (B)
40% or more of the combined shares of the Company's capital
stock then outstanding, all except in connection with any
merger, consolidation, reorganization or share exchange
involving the Company;
(B) the consummation of any merger, consolidation,
reorganization or share exchange involving the Company, unless
the holders of the Company's capital stock outstanding
immediately before such transaction own more than 50% of the
combined outstanding shares of capital stock and have more than
50% of the combined voting power in the surviving entity after
such transaction and they own such securities in substantially
the same proportions (relative to
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each other) as they owned the Company's capital stock
immediately before such transaction;
(C) the consummation of any sale or other
disposition (in one transaction or a series of related
transactions) of all, or substantially all, of the Company's
assets to a person whose acquisition of 40% or more of the
combined shares of the Company's capital stock then outstanding
would have caused a Change in Control under paragraph
5(d)(i)(A); or
(D) the "Continuing Directors" (as defined in
paragraph 5(d)(iii)) cease to be a majority of the Company's
directors.
A determination by the Company's Continuing Directors (by resolution
of at least a majority of the Continuing Directors) as to whether a
Change in Control has occurred for purposes of this Agreement, the
date on which it has occurred or both shall be conclusive for
purposes of this Agreement.
(ii) For purposes of this Agreement, the "Excluded
Persons" are (1) Employee, (2) any "group" (as that term is used in
Section 13(d) of the Exchange Act and the rules thereunder) that
includes Employee or in which Employee is, or has agreed to become,
an equity participant, (3) any entity in which Employee is, or has
agreed to become, an equity participant, (4) the Company, (5) any
subsidiary of the Company, (6) any employee benefit plan of the
Company or any subsidiary of the Company or the related trust, (7)
any entity to the extent it is holding capital stock of the Company
for or pursuant to the terms of any employee benefit plan of the
Company or any subsidiary of the Company, and (8) any director,
officer or beneficial owner of at least 10% of the Company's
outstanding Common Stock as of the date of this Agreement. For
purposes of this Agreement, Employee shall not be deemed an "equity
participant" in any group or entity (1) in which Employee owns for
investment purposes only no more than 5% of the stock of a
publicly-traded entity whose stock is either listed on a national
stock exchange or quoted in The Nasdaq National Market, if Employee
is not otherwise affiliated with such group or entity, or (2) if
Employee's participation is fully-disclosed to, and approved by, the
Company's Chief Executive Officer before the Change in Control
occurs.
(iii) For purposes of this Agreement, the "Continuing
Directors" are the directors of the Company as of the date of this
Agreement, and any person who subsequently becomes a director if
such person is appointed to be a director by a majority of the
Continuing Directors or if such person's initial nomination for
election or initial election as a director is recommended or
approved by a majority of the Continuing Directors.
(iv) Termination of Employee's employment for "Good
Reason" means Employee's voluntary termination of employment with
the Entity after a Change in Control as a result of (1) any decrease
by the Entity (without Employee's consent) in Employee's salary from
Employee's salary immediately before such Change in Control;
provided, that no such decrease shall constitute "Good Reason" if
such decrease is applied in the same manner to all officers or
employees at the same
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employment level as Employee (such as all officers or all store
managers, as the case may be), (2) a substantial change by the
Entity (without Employee's consent) in Employee's duties or
responsibilities from Employee's duties and responsibilities
immediately before such Change in Control, or (3) any requirement by
the Entity (to which Employee does not consent) that Employee change
Employee's primary place of business. "Good Reason" will not include
Employee's death, permanent incapacity or Retirement (as defined
below), or Employee's resignation other than as provided in the
preceding sentence. For purposes of this Agreement, "Retirement"
means Employee's retirement from the Entity in accordance with the
Entity's normal policies.
(v) The Entity's termination of Employee's employment
without "Cause" means a termination other than for (1) Employee's
continued failure either to (A) devote substantially full time to
Employee's employment duties (except because of Employee's illness
or disability) or (B) make a good faith effort to perform Employee's
employment duties; (2) any other willful act or omission which
Employee knew, or had reason to know, would materially injure the
Entity; or (3) Employee's conviction of a felony involving
dishonesty or fraud.
(vi) For purposes of this Agreement, the "Entity" shall
mean both (1) the Company and (2) in connection with a Change in
Control defined in paragraph 5(d)(i)(B) or paragraph 5(d)(i)(C), the
survivor of the merger, consolidation, reorganization or share
exchange involving the Company and the buyer of all, or
substantially all, of the Company's assets, if such additional
entity described in this clause (2) (if other than the Company) has
offered to employ Employee on such terms that would not constitute
"Good Reason" for termination of Employee's employment if imposed by
the Company. Therefore, for purposes of this paragraph 5(d),
Employee shall not be deemed to have terminated Employee's
employment with the "Entity" for "Good Reason" and the "Entity"
shall not be deemed to have terminated Employee's employment without
"Cause" unless such actions are taken by all entities included
within the definition of "Entity". In addition, for purposes of this
paragraph 5(d), Employee shall not be deemed to have terminated
Employee's employment with the "Entity" for "Good Reason" and the
"Entity" shall not be deemed to have terminated Employee's
employment without "Cause" if (1) the survivor of the merger,
consolidation, reorganization or share exchange involving the
Company and the buyer of all, or substantially all, of the Company's
assets has offered to employ Employee on such terms that would not
constitute "Good Reason" for termination of Employee's employment if
imposed by the Company, (2) Employee refuses such employment, and
(3) the Company terminates Employee's employment for any reason or
for no reason.
(e) The severance benefits provided in this paragraph 5 are in
addition to any other severance benefits to which Employee may be entitled.
(f) There is not, nor will there be unless in writing signed by
both Employee and the Company, any express or implied agreement as to
Employee's continued employment by the Company during or after the end of the
term of Employee's employment under this Agreement. Employee's employment
with the Company will be employment "at will", and the
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provisions of this Agreement will not apply to any such employment after the
end of the term of Employee's employment under this Agreement.
6. Previous Agreements Superseded. This Agreement supersedes all
previous employment agreements between the parties.
7. Miscellaneous Provisions. This Agreement may be amended only by
written agreement signed by either the Chairman, or Vice Chairman or the
President of the Company. It shall be construed according to the laws of
Michigan, and shall be binding on and enforceable by the parties and their
successors in interest.
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IN THE PRESENCE OF: XXXXXXXX STORES INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Its President
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COMPANY
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxxx X. Xxxxxx
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EMPLOYEE
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