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Exhibit 10.23
EMPLOYMENT AGREEMENT
This Agreement dated as of February 9, 1998 by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("Employee"), and CROWN BOOKS CORPORATION, a Delaware corporation
("Employer").
W I T N E S S E T H:
WHEREAS, the parties hereto desire by this Agreement to provide for the
employment of Employee by Employer;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which the parties conclusively
acknowledge, the parties hereto, intending to be legally bound, agree as
follows:
1. EMPLOYMENT
(a) Duties. Employer hereby employs Employee, and Employee
accepts employment by Employer, as Senior Vice President, Chief Financial
Officer during the Employment period (as defined in Section 2), with such
duties, responsibilities and authority as are commensurate with and appropriate
to such position and as are from time to time set forth in the bylaws of the
Employer and otherwise delegated to him by the Board of Directors of the
Employer ("the Board of Directors"), and shall report to the Executive
Committee of the Board, the Board of Directors, or other Senior Executive as
directed by the Board. Employee agrees to observe and comply with the rules
and regulations of Employer as adopted by the Board of Directors respecting the
performance of his or her duties and to carry out and follow the orders,
policies and directions stated by Employer to him or her from time to time,
provided, however, that such regulations and directions are consistent with the
authority and responsibility of the position specified above.
(b) Full Time Employment. During the Employment period Employee
shall devote all his or her time and attention to his services for Employer and
shall diligently perform his or her duties and responsibilities under this
Agreement. Employee acknowledges that the proper performance of his or her
duties and responsibilities may require the rendering of services not only
during normal business hours, but over and beyond those hours as well.
(c) Place of Employment and Travel. Employee's principal place of
employment shall be at the executive offices of Employer in Landover, Maryland.
If Employer's executive offices are moved from Landover, Maryland, Employee's
principal place of employment shall be changed to the location where such
executive offices are moved. Employee agrees to travel for the performance of
his or her duties under this Agreement as Employer may request from time to
time. If Employer's executive offices are relocated a distance greater than
100 miles from Landover, Maryland, Employee's relocation expenses will be paid
by Employer if Employee elects to relocate. At the
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Employee's option, if Employee decides not to relocate, the relocation of the
executive offices will be deemed a termination without cause and the Employee
will be eligible to receive severance benefits as outlined in Section 7 (e) of
this Agreement.
2. TERM
The term of Employee's employment under this Agreement (the
"Employment Period") shall commence on February 9, 1998 and end on February 9,
2000. If the Employer decides not to renew this Agreement, notice will be
delivered in writing at least 30 days prior to the end of the term of this
Agreement. If such notice is not delivered then the Agreement will continue for
an additional one (1) year after which it will automatically expire, unless it
is renewed in writing.
3. COMPENSATION
(a) Base Salary. Employee's annual base salary shall be One
Hundred Eighty Thousand Dollars ($180,000.00), subject to an annual increase
as recommended to the Board of Directors by the Compensation Committee of the
Board of Directors following review and performance appraisal of Employee, and
following approval by the Board of Directors. Employee's base salary shall be
paid in accordance with Employer's normal payroll procedure.
(b) Bonus. A target bonus of 30% of base salary. Any payments
made will be based on the components of Employee's target bonus program. A
bonus payment of any amount is not to be construed as an obligation of the
company and must first be presented to the Board of Directors to consider for
approval. Receipt of this bonus is subject to Employee's active employment at
Crown Books Corporation at the time the Board of Directors approves the bonus
payments. This bonus is not payable if Employee has been, or is being
terminated pursuant to Section 7.
(c) Withholding Tax. All compensation shall be subject to
withholding tax and other employment taxes as required with respect to
compensation paid by a corporation to an employee.
4. STOCK OPTIONS
(a) Stock Options. Employee shall be eligible for the annual
award of stock options pursuant to the stock option plans under which the
Employee is a participant, as determined by the Board(s) of Directors of the
company(s), pursuant to the individual company(s) stock option plan(s).
(b) Exercise upon Certain Terminations of Employment. In the
event of the termination of Employee's employment hereunder for any reason
other than pursuant to Section 7 (d), Employee shall have the right to
exercise, on or before the effective date of the termination of this Agreement,
any option which has vested in Employee hereunder coincident with or prior to
the effective date of the termination of Employee's employment hereunder,
subject to the other terms and conditions of such option plan(s). In addition,
in the event of the termination of Employee's employment due to his or her
death, the personal representative of the Employee shall have the right to
exercise any such
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option within the later of (i) thirty (30) days notice of such right by
Employer to Employee's personal representative or (ii) sixty (60) days of the
date of Employee's death.
5. EMPLOYEE BENEFITS
During the Employment Period, Employer shall provide Employee with the
following benefits:
(a) Health Plan Coverage. Employer shall provide Employee with
health benefits, including major medical health insurance, Accidental Death and
Dismemberment (AD&D) and such other benefits as are made available to other
officers of the Employer and in effect at the time of this Agreement. The
health benefits provided hereunder shall be available to Employee and his or
her immediate family all in accordance with Employer's "Executive Health Plan."
(b) Further Benefits. Employee shall, during the term of this
Agreement (and thereafter to the extent provided herein), be eligible to
participate in all applicable profit sharing and 401 (k) plans and insurance
benefits in effect for all salaried employees of the Employer, together with
any future modifications or amendments to such plans or benefits, subject to
the eligibility requirements of such plans. In addition, Employee shall be
entitled during the term of this Agreement, and thereafter to the extent
provided for herein or in any such plan, to receive such other and further
benefits as shall be generally made applicable to key executive employees of
the Employer, and such additional benefits, as may be granted from time-to-time
by the Board of Directors, in it's sole discretion.
(c) Vacation. Employee shall be entitled to paid vacation leave
of three (3) weeks in every year of employment, increased pursuant to
Employer's vacation policy. All vacation earned subsequent to the date of this
Agreement shall be taken no later than by the end of the following year or be
forfeited, unless prior approval is granted by the Compensation Committee of
the Board of Directors.
(d) Business Expenses. Employer shall reimburse Employee pursuant
to Employer's policy of employee expense reimbursement of all items of travel,
entertainment and miscellaneous expenses reasonably incurred by Employee on
behalf of Employer and presented to Employer on the appropriate voucher.
(e) Automobile Allowance: Employer shall pay to Employee as an
automobile allowance the sum of Six Hundred Fifty Dollars ($650.00) per month.
These amounts will be paid at the same time as other Executives on this plan.
6. PROPRIETARY DATA
(a) Trade Secrets and Other Confidential Information. During the
Employment Period and for three (3) years thereafter, Employee shall keep
confidential any data, documents, or financial
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or other information of a trade secret or confidential nature relating to
Employer's past, present or future operations (the "Proprietary Data"), shall
not disclose the Proprietary Data to any third parties other than officers,
employees or agents of Employer on a "need to know" basis, shall take all
necessary steps to ensure that such officers, employees or agents keep such
Proprietary Data confidential, and shall use the Proprietary Data only in
connection with rendering services to Employer. Upon the end of the Employment
Period, Employee shall promptly return to Employer the originals and all copies
of the Proprietary Data in the possession of Employee, and shall not use any of
the Proprietary Data for his or her own benefit or for the benefit of any third
parties. The covenants contained in this Section 6 (a) shall not apply to
Proprietary Data which is or becomes a matter of general knowledge in the
industry otherwise than by a breach of the provisions of this Section 6 (a).
(b) Injunctive Relief. Employee acknowledges that the covenants
contained in Sections 6 (a) are necessary for the protection of the legitimate
business interests of Employer and are reasonable limitations of activities,
that the rights of Employer are of a specialized and unique character, and that
immediate and irreparable damage will result to Employer if Employee fails to
or refuses to perform or comply with such covenants. Therefore,
notwithstanding any election by Employer to claim damages from Employee as a
result of any such failure or refusal, Employer may, in addition to any other
remedies and damages available, seek an injunction in a court of competent
jurisdiction to restrain any such failure or refusal (and no bond or other
security shall be required in connection therewith). In that connection,
Employee represents and warrants that his or her expertise and capabilities are
such that performance or compliance with the covenants (and the enforcement
thereof by injunction or otherwise) will not prevent him or her from earning a
livelihood. If a court refuses to enforce the covenants set forth in Section 6
(a) because they are found to be unreasonable, Employee and Employer agree to
abide by any lesser restrictions (for instance, as to duration and geographic
area) that are found to be reasonable.
7. TERMINATION
(a) Definition of Compensation. For purposes of termination,
compensation at the time of termination shall be deemed to be base
compensation, and any bonuses or stock options available to employee. If
Employee is being terminated as described in Section 7(d), the compensation
shall be deemed to be base compensation exclusive of any bonuses and stock
options. As used in this Section 7, the term compensation shall also include
accrued sick and vacation through the effective date of termination.
(b) Death. The Employment Period shall forthwith terminate upon
the death of Employee, whereupon Employer shall not have any further
obligations or liability hereunder except to pay the Employee's estate the
unpaid portion, if any, of Employee's compensation accrued for the period up to
the date of Employee's death.
(c) Total Disability. In the event of the Total Disability (as
that term is hereafter defined) of Employee for a period of six (6) consecutive
full calendar months, Employer shall have
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the right to end the Employment Period by giving Employee ten (10) days'
written notice. Upon the expiration of such ten (10) day period, the
Employment Period shall end and Employer shall not have any further obligations
hereunder except (i) to pay Employee the unpaid portion, if any, of Employee's
compensation accrued for the period up to the date of termination of Employee's
employment; and (ii) to pay the benefits provided for in the insurance or
disability policies provided to key company executives. As used in this
Agreement, the term "Total Disability" shall mean a mental or physical
condition which, in the opinion of Employer and in the opinion of two
consulting physicians selected by Employer, renders Employee unable or
incompetent to satisfactorily carry out his or her obligations. In no event
shall Employee be considered disabled if Employee's mental or physical
condition does not constitute a "disability" under the Company's Long Term
Disability coverage and, therefore, Employee shall be eligible for such Long
Term Disability coverage
(d) With Cause. Employer shall have the right to immediately
terminate the employment of Employee at any time for just cause. For purposes
of the foregoing, "just cause" shall include, but not be limited to: (i)
Employee's commission of any act which constitutes an offense involving moral
turpitude under federal, state or local law; (ii) Employee's material breach
of any of the terms of this Agreement; (iii) Employee's refusal to follow
lawful and reasonable directive(s) of the Board of Directors made in compliance
with Section 1(a) hereof; (iv) one or more performance problems, identified and
documented with the employee, that are not corrected within the time frame
defined by the Employer in the document; or (v) violation of any part of the
Crown Books Corporation Statement of Business Ethics, a copy of which is
incorporated with this Agreement. Upon such termination, Employer shall have
no further obligations or liability hereunder except to pay Employee the unpaid
portion, if any, of Employee's compensation accrued for the period up to the
date of termination of Employee's employment.
(e) Dissatisfaction by Employer Without Cause. Employer shall
have the right to terminate the employment of Employee without cause upon at
least thirty (30) days written notice to Employee. If Employer shall terminate
the employment of Employee pursuant to this Section 7 (e), the Employment
Period shall end at the expiration of the notice period and Employer shall not
have any further obligations or liability hereunder except (i) to pay Employee
the unpaid portion, if any, of Employee's compensation accrued for the period
up to the date of termination of Employee's employment, together with an
additional amount of one (1) year of base salary as severance in accordance
with Employer's normal payroll schedule to commence immediately following the
effective date of the termination of the Employee's employment hereunder; and
(ii) to pay to Employee in a lump sum an amount equal to the number of days of
accrued and unused vacation and sick leave computed at the Employee's base
salary in effect on the date of termination. If new employment (defined as
employment for another company, or self-employment) for the Employee commences
at any time during the severance period and the base salary is the same or more
than that paid by the Employer, then Employer shall cease payments under this
section. If the base salary paid by the new employment is less than the base
salary paid by the Employer then the Employer will continue to pay the
difference between the new base salary and that paid by the Employer for the
balance of the one (1) year severance period. Employee must notify Employer
immediately in writing upon starting new employment. If Employee does not
notify Employer immediately upon
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starting new employment, then Employee agrees that should Employer need to hire
legal counsel to retrieve monies that should not have been paid, that Employee
will be responsible for the Employer's reasonable expenses including attorney
fees and costs. Lastly, Employee shall be entitled to utilize the services of
a professional out placement service, the reasonable cost and duration of which
shall be determined and borne by Employer.
(f) Dissatisfaction by Employee. If Employee at any time is for
any reason dissatisfied with the terms and conditions of his or her employment
hereunder, Employee shall have the right to terminate his or her employment
upon at least thirty (30) days written notice to Employer. If Employee shall
terminate his or her employment pursuant to this Section 7 (f), the Employment
Period shall end at the expiration of the notice period and Employer shall have
no further obligations or liability hereunder except to pay to Employee the
unpaid portion, if any, of Employee's compensation accrued for the period up to
the date of termination. (If Employee gives thirty (30) days written notice
due solely to Employer's decision not to renew this Agreement as set forth in
Section 2, or Employee's dissatisfaction with the terms of a new Agreement,
then the Employee will be eligible for the severance terms outlined in Section
7(e).) Such written notice by the Employee must be given no later than the
30th day after the termination or expiration of the Agreement outlined in
Section 2. If Employee does not give written notice to the Employer within
said thirty (30) day period then Employee understands and acknowledges that he
or she will not be eligible to receive the severance and other benefits
outlined in Section 7(e) and agrees that if he or she continues to be employed,
his or her employment will be at-will and for no definite or determinable
period and may be terminated at any time, with or without notice, at the option
of the Employee or the Company.
8. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by the laws
of the State of Delaware applicable to agreements made by and to be performed
by Delaware corporations.
(b) Amendment of Agreement. No amendment or variation of the
terms of this Agreement, with or without consideration, shall be valid unless
made in writing and signed by the Employee and a duly authorized representative
of the Employer (other than Employee).
(c) Waiver of Conditions. Any waiver agreed to between Employer
and Employee of any provision should not be construed as a general waiver of
the provision, or waiver of any other provision of this Agreement.
(d) Entire Agreement. This Agreement contains the entire
agreement between then parties and supersedes all prior oral and written
agreements, understandings, commitments, and practices between the parties,
whether or not fully performed by Employee before the date of this Agreement.
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(e) Headings. The section headings of this Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
(f) Notice. All notices, requests and other communications under
this Agreement shall be in writing and shall be deemed given when delivered
personally or upon receipt when sent by an express mail service, provided that
in each case a copy is mailed by first-class, registered mail, return receipt
requested, addressed as follows (or as may otherwise have been specified by the
intended recipient by notice as herein provided)
If to Employee:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
#▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Employer:
Chief Executive Officer
Crown Books Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
President
Crown Books Corporation
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(g) Severability. If any provision of this Agreement is held
invalid or unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect. If any provision is held invalid or
unenforceable with respect to particular circumstances, it shall nevertheless
remain in full force and effect in all other circumstances.
(h) Merger or Consolidation. This Agreement shall not be
terminated by any merger, consolidation, transfer of any or all of the assets
of the Employer or voluntary or involuntary dissolution of the Employer. In
the event of a merger or consolidation or upon the transfer of assets, the
surviving or resulting corporation or the transferee of the Employer's assets
shall be bound by and shall have the benefit of the provisions of this
Agreement, and the Employer shall take all actions necessary to ensure that
such corporation or transferee is bound by the provisions of this Agreement.
This Agreement shall be binding upon the Employer notwithstanding any change in
the composition of the Board of Directors or change in ownership of the
Employer.
(i) No Covenants. Employee hereby represents and warrants that he
or she is not subject to or bound by any employment contract, restrictive
covenant or other agreement or any order or
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decree that prevents him or her from entering into this Agreement or from
performing his or her responsibilities as contemplated by this Agreement.
(j) Arbitration. Should a claim for breach of this Agreement
arise, the parties agree that it shall be submitted to binding arbitration in
the State of Maryland before an arbitrator experienced in employment matters
who is licensed to practice law in the State of Maryland. Any asserted
violation of this Agreement shall be arbitrated pursuant to the then-existing
rules of the American Arbitration Association applicable to the resolution of
employment disputes, and shall not be subject to suit in any court of law
(except as necessary to confirm or enforce any arbitration award).
(k) Attorney's Fees. If a dispute arises with respect to the
Employer's obligations or the Employee's rights under this Agreement, or if any
legal proceedings shall be brought to enforce or interpret any provisions
contained herein, or to recover damages for breach hereof, or in the event of
any other litigation or arbitration involving this Agreement, each party shall
be responsible for their own legal and/or arbitration fees, unless the
arbitrator, or a court of law, deems the claim or defense of either party to be
frivolous.
(l) Assignment; Binding Effect. This Agreement shall be binding
upon, and shall inure to the benefit of, and be enforceable by , the parties
hereto and their respective successors and assigns, provided, that (i) this
Agreement is a personal service agreement and no right hereunder may be
assigned by Employee, except that it shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors or
administrators; and (ii) unless Employer shall have complied with Section 8 (h)
hereof, no right hereunder may be assigned or transferred by Employer by
operation of law or otherwise. Any purported assignment or transfer in
violation of this Section 8 (l) shall be null and void.
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IN WITNESS WHEREOF, this Agreement has been signed by a duly authorized officer
of Employer and by Employee as of the date first above-written.
CROWN BOOKS CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ 2/9/98
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▇▇▇▇ ▇▇▇▇▇▇▇▇ Date
President, Chief Operating Officer
EMPLOYEE
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 2/9/98
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Name Date
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