Exhibit 10.3
Xxxx X. Xxxxx, Xx.
Senior Vice President
Human Resources
(000)000-0000
xxxx_xxxxx@xxxxxxxxxxx.xxx
June 26, 2006
Xxxxx X. Xxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Letter Agreement
Dear Fiona:
The purpose of this letter is to advise you that we mutually acknowledge that
you will resign as the Company's Executive Vice President and Chief Marketing
Officer effective August 27, 2006. The Company further acknowledges and accepts
that you have asked to resign for personal reasons and the Company is
accommodating your request for a transition into a non-executive role.
Effective August 28, 2006 through December 31, 2006, you will assume a new role
with the Company as Executive Advisor of Strategic Branding Initiatives. During
this time period, you and the Company will use reasonable efforts to find
another position within the Company that reflects your skill set and desired
role. However, you specifically acknowledge and agree that the Company is under
no obligation to provide you further employment after December 31, 2006.
Accordingly, this Letter Agreement and its terms and conditions cancel and fully
supersede and replace your Employment Agreement dated December 4, 2003, pursuant
to paragraph 12.3. You agree that you have no further rights and the Company has
no further obligations under that agreement.
As Executive Advisor of Strategic Branding Initiatives, you will receive a base
salary of $237,500 or $9,134.62/biweekly. Upon completion of your obligations
under this Letter Agreement, including execution of a general release, you will
receive an Annual Bonus for fiscal year 2007, in an amount up to a maximum of
$255,778 of your combined former and current base salary for the fiscal year
2007. The Annual Bonus in an amount not less than eighty percent (80%) of your
combined former and current base salary shall be pro-rated by taking the number
of full completed days in the bonus plan year through the last date of your
employment under this Letter Agreement, divided by three hundred sixty-five
(365).
As long as you remain a full-time employee during the period covered by this
Letter Agreement, you will continue to participate in any medical and dental
plans to which you subscribe at the same cost provided to full-time salaried
employees. In addition, as long as you remain a full-time employee during the
period covered by this Letter Agreement, you may continue to participate in the
Company's 401k plan.
As long as you remain a full-time employee during the period covered by this
Letter Agreement, stock awards previously granted to you will continue to vest
under the terms of the Company's stock incentive plans. On the date your
full-time employment with the Company ends, any unvested equity awards will be
forfeited. All vested stock options will continue to be available for exercise
under the terms of the Plan for six months after your employment ends or until
the expiration date of the stock options, whichever is earlier. Please remember
that the provisions of the Company's xxxxxxx xxxxxxx policy may apply to the
timing and execution of any stock exercises.
Your car allowance of $858.00/month will continue to be paid to you through the
end of August 2006. Effective June 26, 2006, you will no longer be eligible for
personal use of Company merchandise under the Officer Evaluation Program (OEP).
You may retain any OEP products in your possession and the value of these
products will be treated as income and reported as such for the current calendar
year. In addition, effective June 26, 2006, you will no longer be eligible for
the financial planning allowance, except to the extent that you have incurred
costs for financial planning services up to and including June 26, 2006. Any
amounts currently outstanding as of the date of this Letter Agreement will be
paid in full by the Company. In addition all other perquisites that were
commensurate with the position of Executive Vice President and Chief Marketing
Officer of the Company will be forfeited as of the date of this Letter
Agreement.
NonCompetition and NonSolicitation
For a period of two (2) years following the last day of the your employment, you
shall not directly or indirectly compete with the Company by engaging, in a
competitive capacity, in any business that is engaged in the same or similar
business of the Company in one or more Metropolitan Statistical Areas ("MSAs"),
specifically including Amazon, Best Buy, CompUSA, Dell, Radio Shack, Tweeter,
and Wal-Mart. A business will not be considered to be in competition with the
Company for purposes of this paragraph or the paragraph below if:
(i) The business or the operating unit of the business in
which you are employed or with which you are
associated (collectively the "Business Unit") is not
engaged in the retail sales of consumer electronics;
(ii) If sales of the Business Unit's products or services
in the retail sales and service of consumer
electronics constitute less than ten percent (10%) of
such Business Unit's sales; or
(iii) If the sales of the Business Unit in the retail sales
and service of consumer electronics do constitute
more than ten percent (10%) of the sales of the
Business Unit, but the Business Unit solely operates
outside of North America.
Notwithstanding the foregoing, nothing herein shall be deemed to prevent or
limit your right to invest in the capital stock or other securities of any
corporation whose stock or securities are regularly traded on any public
exchange, nor shall anything herein contained be deemed to prevent you from
investing in real estate for your own benefit (as long as such investment is not
related to or in support of any entity engaged in the same or similar business
as the Company in competition with the Company in one or more MSA's in which the
Company was doing business during your employment).
For a period of two (2) years following the last day of your employment, you
shall not directly or indirectly compete with the Company by engaging, in a
competitive capacity, in any business engaged in the same or similar business of
the Company in one or more MSAs where, on the last day of your employment, the
Company is engaged in real estate site selection or has taken further steps
toward the commencement of operations in the future, of which you are aware.
You agree that competition shall include, but not be limited to, engaging in
competitive activity, as an individual, as a partner, as a joint venturer with
any other person or entity, or as an employee, agent, or representative of any
other person or entity.
It is the specific intent of the parties that you shall be restricted from
competing directly or indirectly with any segment of the Company's business in
which you were engaged prior to the last day of your employment and from any
segment of the Company's business about which you acquired proprietary or
confidential information during the course of your employment.
If any provision of this noncompetition agreement relating to the time period,
geographic area or scope of restricted activities shall be declared by a court
of competent jurisdiction to exceed the maximum time period, geographic area or
scope of activities, as applicable, that such court deems reasonable and
enforceable, said time period, geographic area or scope of activities shall be
deemed to be, and thereafter shall become, the maximum time period, scope of
activities or largest geographic area that such court deems reasonable and
enforceable and this General Release shall automatically be considered to have
been amended and revised to reflect such determination.
For a period of two (2) years following the last day of your employment, you
shall not, directly or indirectly, solicit or induce, or attempt to solicit or
induce, any employee of the Company to leave the Company for any reason
whatsoever or hire any individual employed by the Company. For purposes of this
paragraph, employee shall mean any individual employed by the Company on the
last day of your employment or within the three-month period prior to the last
day of your employment.
You and the Company have examined in detail this Covenant Not to Compete and
agree that the restraint imposed upon you is reasonable in light of the
legitimate interests of the Company and it is not unduly harsh upon your ability
to earn a livelihood.
The parties hereto acknowledge that your services were of a special,
extraordinary, and intellectual character which gives you unique value, and that
the business of the Company and its subsidiaries is highly competitive, and that
violation of any of the covenants provided in this General Release would cause
immediate, immeasurable, and irreparable harm, loss, and damage to the Company
not adequately compensable by a monetary award. You acknowledge that the time,
scope of activities and geographical area restrained by the provisions of this
General Release are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill of the Company's business. You further
acknowledge that you and the Company have negotiated and bargained for the terms
of this General Release and that you have received adequate consideration for
entering into this General Release. In the event of any such breach or
threatened breach by you of any one or more of such covenants, the Company shall
be entitled to such equitable and injunctive relief as may be available to
restrain you from violating the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
at law or in equity for such breach or threatened breach, including the recovery
of damages.
In consideration for all of the above, you agree to execute a general release
satisfactory to the Company on the last day of your employment with the Company.
A draft of such a release is attached as Exhibit "A", General Release. We advise
you to review this draft release carefully with the assistance of your attorney.
Should you breach any terms of this Letter Agreement, including a failure to
execute the attached General Release, then you agree to pay liquidated damages
in the amount of $100,000. You further agree that any disagreement between you
and the Company concerning this Letter Agreement will be settled by final and
binding arbitration pursuant to the Company's Associate Issue Resolution
Program, the terms of which are incorporated by reference into this Letter
Agreement.
By signing below, you acknowledge that you understand and agree to the above
terms and conditions.
Very truly yours,
/s/ Xxxx X. Xxxxx, Xx.
Xxxx X. Xxxxx, Xx.
Senior Vice President
Human Resources
Seen and Agreed:
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
June 26, 2006
Date
