EXHIBIT 10.7
WEINER'S STORES, INC.
EMPLOYMENT AGREEMENT
Draft: 2/23/95
AGREEMENT made as of this 24th day of February, 1995 between Weiner's
Stores, Inc., a Texas corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the
"Executive").
RECITALS:
The Company desires to assure itself of the services of the Executive
on a full time basis for an extended period.
The Executive desires to join and continue in the employ of the Company
and is willing to enter into this Agreement to provide his services to the
Company for such period and upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
Section 1. Employment.
1.1 Position. Subject to the terms and conditions hereof, the Company
agrees to employ the Executive, and the Executive agrees to accept employment by
the Company, for the term of employment hereinafter agreed. The Executive shall
serve as Chief Financial Officer of the Company. The Executive shall report to
the new Chief Executive Officer at the time the new Chief Executive Officer
joins Weiner's and shall perform such duties and services as are customarily
performed by executives holding the aforesaid position. The Executive agrees to
devote such efforts, skills and time during reasonable business hours to the
performance of his duties hereunder as is customary with executive employees
holding a position comparable to that of the Executive.
1.2 Outside Services.
(a) During the term of this Agreement, the Executive shall not,
directly or indirectly, without the written consent of the Vice President -
Operations, render any services to any person, firm or entity, or own manage,
operate, control or participate in the management of any other person, firm or
entity which is in competition with the business of the Company or its
subsidiaries as such businesses are being conducted on the date the activities
prohibited by this subparagraph are alleged to have occurred. The foregoing
provision shall not, however, prohibit or prevent the Executive from acquiring
or holding investments in securities on a national or regional securities
exchange or sold in the over-the-counter public market, provided that the
Executive is not part of any control group of such corporation or entity. So
long as it does not interfere with his duties under this Agreement, the
Executive shall have the right to serve as a director of any other corporation
upon the written approval of a majority of the Board of Directors of the
Company, which approval will not be unreasonably withheld.
(b) Notwithstanding the provisions of subsection (a) of this
Section 1.2, from February 7, 1995 to and including March 20, 1995 (the
"Consulting Period"), the Executive shall be permitted to provide financial,
operational and other consulting services to Carlisle Retailers, Inc.
("Carlisle"), including reasonable travel to Carlisle's corporate offices in
Ashtabula, Ohio upon not less than 24 hours prior notice to the Company. The
Executive shall exert his best efforts to avoid material disruption to or in the
rendering of his services to the Company by virtue of his rendering of
consulting services to Carlisle during the Consulting Period.
1.3 Location. The Executive's services during the term of this
Agreement shall be performed primarily in Houston, Texas, and, without his prior
consent, the Executive shall not be required to move his place of permanent
employment out of Houston, Texas. The Executive may be required to travel from
time to time within the continental United States in the course of his duties,
but the Executive shall not be required to devote more than a reasonable amount
of his working time during the term of this Agreement to performing his duties
and responsibilities at locations outside of Houston, Texas.
Section 2. Term.
The initial term of this Agreement shall be for the period beginning as
of February 7, 1995 and ending on January 31, 1998 (the "Initial Term"). The
parties hereto anticipate that, commencing six calendar months prior to the
expiration of the Initial Term, such parties will attempt to negotiate an
extension or renewal of this Agreement. Pending execution and delivery of such
agreement, this Agreement shall continue in effect subsequent to expiration of
the Initial Term but may be terminated by
Exhibit 10.7 - Page 2
either party hereto as of the end of any calendar month after the end of the
Initial Term upon the giving of thirty (30) days' advance notice by such party
to the other. If this Agreement is terminated after the expiration of the
Initial Term without extension or renewal hereof, the Company agrees to pay to
the Executive a lump-sum severance payment in cash of $43,750.
Section 3. Compensation.
3.1 Base Salary. In consideration of the services and duties to be
rendered and performed by the Executive, the Company will pay the Executive a
fixed salary (the "Base Salary"), payable in accordance with the policies of the
Company of general application to executive personnel. As of the date hereof,
those policies provide for payment of salaries to executive personnel in arrears
in equal biweekly installments at the end of each two week period. The amount of
the Base Salary shall, unless otherwise increased by act of the Board of
Directors, be determined as follows:
(a) For the period from February 7, 1995 through January 31, 1996,
the amount of the Base Salary shall be $162,500;
(b) for the period from February 1, 1996 through January 31, 1997,
the Base Salary shall be $175,000; and
(c) for the period from February 1, 1997 through January 31, 1998,
the Base Salary Shall be $175,000.
3.2 Additional Benefits.
(a) In addition to the compensation provided elsewhere in this
Agreement, during the term hereof the Executive shall be enticed to participate
in any pension plan, bonus plan, profit sharing plan, stock option, group
insurance plan, medical plan, hospitalization plan or other employee benefit
plan currently in effect or hereafter adopted by the Company (or any subsidiary
of the Company, if applicable) which is applicable to employees or executive
employees generally. The Company agrees that it will, to the extent reasonably
practicable, cause the underwriter of risks under the Company's hospitalization
and medical plan (including the Company to the extent applicable) to waive any
limitations contained in such plan relating to participation therein by the
Executive based on any waiting period or the absence of any preexisting health
condition.
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(b) During the term of this Agreement, the Executive shall be
entitled to annual vacations of three weeks duration.
(c) During the term of this Agreement, the Executive shall be
entitled to reimbursement for all reasonable travel and other business expenses
incurred in connection with his services to the Company. In addition, during the
period from the date hereof through July 31, 1995, the Executive shall be
entitled to reimbursement of actual costs of housing and car rental in Houston,
Texas and for travel to his residence in Ashtabula, Ohio; provided, however,
that such reimbursement shall not exceed $2,500 per calendar month. The Company
shall reimburse the Executive for all reasonable moving, relocation and directly
related expenses incurred by the Executive in establishing a residence in the
Houston, Texas area.
Section 4. Termination.
4.1 Rights of Termination. This Agreement may, on thirty (30) days'
advance notice given by the terminating party, be terminated as of the end of
such thirty (30) day period (the "Termination Date"):
(a) During the period from the date hereof to June 30, 1995, by
the Executive (an "Executive Rightful Termination");
(b) During the period from the date hereof to June 30, 1995, by
the Company without cause (as such term is hereinafter defined) (a "Company
Rightful Termination"); or
(c) At any time by the Company for cause.
4.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 4.1 herein and
(a) such termination is an Executive Rightful Termination, then
the Executive's compensation for which provision is made in Section 3 herein
shall be continued until the Termination Date, the Executive shall, in addition,
be paid the sum of $25,000 and, except for the provisions of Sections 4, 5, 10
and 11 (the "Surviving Sections") which shall remain in full force and effect,
this Agreement shall terminate as of the Termination Date;
(b) such termination is a Company Rightful Termination, then the
Executive's compensation for which provision is made in Section 3 herein shall
be continued until the Termination Date, the
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Executive shall, in addition, be paid the sum of $50,000 and, except for the
Surviving Sections which shall remain in full force and effect, this Agreement
shall terminate as of the Termination Date; or
(c) such termination is by the Company for cause, then the
Executive's compensation for which provision is made in Section 3 herein shall
be continued until the Termination Date and, except for the Surviving Sections
which shall remain in full force and effect, this Agreement shall terminate as
of the Termination Date.
In the event of an Executive Rightful Termination or a Company Rightful
Termination, except with respect to the Surviving Sections, neither the Company
nor the Executive shall have any claim of whatever nature against the other
based on the termination of this Agreement.
If the Termination Date shall not coincide with the end of a calendar
month, the Executive's compensation for that calendar month shall be prorated to
the Termination Date.
4.3 Procedure for Termination for Cause. Termination by the Company for
"cause" shall only mean termination by action of the Board of Directors of the
Company because of (i) serious willful misconduct or gross negligence by the
Executive in respect to his obligations under this Agreement, including without
limitation the Executive's willful refusal to perform his obligations under this
Agreement (unless such refusal is based on the Executive's reasonable good faith
belief that the requested service or act is unlawful), the commission by the
Executive of a felony, the perpetration by the Executive of a civil or criminal
fraud and the commission by the Executive of an act of commercial bribery, or
(ii) the inability of the Executive to perform his duties by reason of chronic
alcoholism, drug abuse or other directly related conditions. Termination for
"cause" shall be effected by written notice thereof delivered by the Company to
the Executive, stating in detail the grounds therefor, and shall be effective
thirty (30) days following the date of such notice; provided, however, that, if
(i) such termination is because of the Executive's willful refusal to perform
any one or more of his obligations under this Agreement, (ii) such notice is the
first notice of termination delivered by the Company to the Executive hereunder
and (iii) within thirty (30) days following the date of such notice the
Executive has used his best efforts to discharge such obligations, the
termination shall not be effective. The Executive may, by written notice given
to the Board of Directors of the Company within ten (10) days following
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receipt of the notice of termination, cause the manner of the termination of
this Agreement by the Company to be reviewed by the Board of Directors of the
Company prior to the Termination Date at a regular or special meeting of the
Board of Directors. The Executive shall be entitled to be represented by counsel
at such meeting, which shall be conducted according to a procedure deemed
equitable by a majority of the directors. If at such meeting it shall be
determined that there does not exist proper cause to terminate this Agreement,
the Executive shall be reinstated or shall continue his employment, as the case
may be, and all of the provisions of this Agreement shall continue in effect as
if the notice of termination had not been given; the Executive shall be entitled
to receive the compensation and all other benefits provided herein from the date
the notice of termination became effective through the date of the Executive's
reinstatement if the notice of termination became effective prior to the
Executive's reinstatement by the Board of Directors.
4.4 Other Termination Provisions.
(a) If the Executive's employment is terminated by the Company
prior to the expiration of the Initial Term other than pursuant to subsection
(b) or (c) of Section 4.1 and
(i) such termination occurs during the period from
July 1, 1995 through January 31, 1996, then, in lieu of any further payment of
Base Salary or any other compensation for which provision is made in Section 3
herein, the Company shall pay the Executive the sum of $162,500 as liquidated
damages; or
(ii) such termination occurs subsequent to January 31,
1996 and prior to the expiration of the Initial Term, then, in lieu of any
further payment of Base Salary or any other compensation for which provision is
made in Section 3 herein, the Company shall pay the Executive the sum of
$175,000 as liquidated damages.
(b) If the Executive's employment is terminated by the Executive
prior to the expiration of the Initial Term other than pursuant to Section 4.1,
then the Executive shall forfeit all rights to compensation under paragraph 3
hereof which arise after the Termination Date. Except for actions constituting
cause (as defined in Section 4.3 herein) and the Surviving Sections, the Company
shall have no claim of whatever nature against the Executive based upon such
termination of this Agreement.
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(c) If the Executive's employment is terminated by either the
Company or the Executive pursuant to the provisions of this Section 4.4, the
date of notice of such termination given by the Company or the Executive shall
be deemed the Termination Date hereunder and this Agreement shall terminate as
of the Termination Date except for the Surviving Sections which shall remain in
full force and effect.
Section 5. Confidentiality.
The Executive agrees that he will not disclose or use, either during or
subsequent to his employment hereunder, except in pursuance of the business of
the Company and its subsidiaries and affiliates, any knowledge, information or
data about or concerning the Company and its subsidiaries and affiliates which
he may receive or develop during the course of his employment relating to
improvements, inventions, discoveries, formulae, processes, trademarks, trade
secrets, copyrights, literal ideas, creations and properties, accounting
methods, information systems, business or financial plans or reports, customer
lists or any other matters which are of a secret or confidential nature. Any and
all materials in the possession or under the control of the Executive containing
any such secret or confidential information shall be and remain the exclusive
property of the Company and shall promptly be delivered to the Company by the
Executive upon any termination or expiration of his employment hereunder. The
Executive acknowledges that a remedy at law for any breach by him of any of the
provisions of this paragraph 5 will be inadequate and the Executive hereby
agrees that the Company shall be entitled to injunctive relief in that case.
Section 6. Notices.
All notices and other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or 72 hours after being mailed by registered
or certified mail as follows (or to such other or additional addresses as either
party shall designate by notice in writing to the other in accordance herewith):
If to the Company: Weiner's Stores, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Executive Vice President
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If to the Executive: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxx, #000
Xxxxxxx, Xxxxx 00000
Section 7. Amendments and Waivers.
This Agreement may be amended, modified, superseded, cancelled, renewed
or extended only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving a provision hereof. Failure of
either party at any time or times to require performance of any provision hereof
shall in no manner effect the right of such party at a later time to enforce the
same. No waiver by either party of the breach of any term or covenant contained
in this Agreement, whether by conduct or otherwise, shall be deemed to be a
further or continuing waiver of any such breach or a waiver of any other term or
covenant herein.
Section 8. Complete Agreement.
This Agreement is the entire agreement of the parties with respect to
the subject matter hereof, and supersedes all prior agreements, arrangements and
understandings, written or oral, between the parties.
Section 9. Assignability.
This Agreement shall not be assignable, in whole or in part, by either
party, except that this Agreement shall be binding upon, and the Company may
assign this Agreement to, any subsidiary or affiliate of the Company or any
person, firm or corporation with which the Company may be merged or consolidated
or which may acquire all or substantially all of the assets of the Company.
Section 10. Legal Expenses.
In the event of a dispute resulting in litigation in connection with
this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and expenses from the losing party.
Section 11. Arbitration.
Any controversy or claim arising out of or relating to this Agreement
or the breach thereof shall be settled by arbitration in the City of Houston,
Texas in accordance with the rules then obtaining of the American Arbitration
Association and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.
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Section 12. Reformation.
If any court shall hold any provision of this Agreement unenforceable,
it is the intent of the parties that this Agreement be reformed in order to
comply with the requirements of law and be thereafter enforced to its fullest
legal extent.
Section 13. Authority.
The Company and the Executive represent and warrant each to the other
that the execution, delivery and performance of this Agreement by such party
have been authorized by any and all requisite action by or on behalf of such
party and will not violate or cause a default under any contract, agreement or
other instrument to which such party is a part or by which such party is bound.
Section 14. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Texas, without regard to the
application of conflicts of laws principles, and, subject to the provisions of
Section 11 herein, the parties hereto agree to submit to the jurisdiction of the
courts of Texas in connection with any dispute arising out of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
WEINER'S STORES, INC. WEINER'S STORES, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
Xxxx Xxxxxx Xxxx X. Xxxxxx
Chairman of The Board Vice President - Operations
Executive Vice President
By: /s/ Xxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
Xxx X. Xxxxxx XXXXXXX X. XXXXXX
President
Exhibit 10.7 - Page 10
