1
EXHIBIT 10.1
April 25, 1995
Xxxx X. Xxxx, Esq.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxx:
This letter will confirm the agreement between Xxxx Corporation ("Zale") and
you concerning certain of the terms of your employment with Zale. As we
discussed, your job title will be Senior Vice President, General Counsel and
Corporate Secretary of Zale, as well as a member of the Management Executive
Committee. Your duties will be consistent with these positions.
Your salary will be $275,000 for the first year and will be reviewed annually
by Zale. You are also eligible for annual bonuses pursuant to Zale's Executive
Bonus Plan. You will receive all executive perquisites and fringe benefits
consistent with those provided to other top executives under Zale's Key
Executive Program, including a Company-provided automobile or automobile
expense reimbursement.
On the date your employment with Zale begins (your "Employment Date"), Zale
will grant you stock options to purchase 15,000 shares of common stock of Zale
in accordance with the existing Omnibus Stock Incentive Plan of Zale at an
exercise price equal to the fair market value of such common stock as of your
Employment Date. To the extent permitted by law, these will be incentive stock
options. These options will vest 25% on each anniversary of your Employment
Date such that all such options will be fully vested no later than the fourth
anniversary of your Employment Date, subject to earlier vesting as discussed
later. Furthermore, as a member of the Management Executive Committee, you will
participate in the stock grant or stock bonus plan currently before Zale's
Board of Directors for approval. If this plan is not approved, you will be
given other benefits or compensation consistent with such benefits provided to
other senior officers of Zale.
You have agreed to relocate you and your family to the Dallas area, and Zale
will reimburse you for all normal moving costs involved in moving your family's
belongings and assets to the Dallas area. Zale will also reimburse you for any
costs incurred in terminating the lease you have on the house where your family
is currently residing. In connection with your purchase of a house in the
Dallas area, Zale will reimburse you for all of your legal fees, and other
customary closing costs and other costs you incur in retitling and registering
your automobiles and other assets in Texas. Until your move is complete, Zale
will pay for reasonable travel expenses incurred by you and your family in
traveling to and from your current resident (up to three trips) to locate and
close on a house, plan your move, and for other personal traveling and related
2
expenses incurred until this move is complete. Zale will also pay for your
travel expenses and temporary living costs incurred by you after your
Employment Date until your house is purchased and your family is moved to
Dallas. Also, Zale understands that you are entitled to certain payments from
your previous employer and will reimburse you for those payments (up to a
maximum of $77,000) if they are not made by your previous employer, provided
that you use your best reasonable efforts to secure such amounts from such
employer. We confirm that Zale's current policy is to gross up payments such as
those set forth above for any federal, state or local taxes which you may have
to pay because of such reimbursements.
Zale recognizes the major change you have agreed to make in your personal life
and professional career, and agrees that, in the event your employment is
terminated by Zale or its successors for any reason other then for "Cause" (as
defined below) from the Employment Date through the fourth anniversary of the
Employment Date, Zale will pay you the following:
(a) Your then-current base salary will be continued at regular
pay intervals for a one year period from the date of
termination of your employment (the "Termination Date");
(b) The maximum cash bonus, stock options, stock grants and other
compensation of any kind that you would have been entitled to
receive for the fiscal year in which the Termination Date
occurs (the "Termination Year") will be paid to you at the
time such compensation and other items normally would have
been paid had your employment not been terminated. For
purposes of this paragraph (b), any non- cash compensation
(such as stock options or grants) shall be deemed due to you
in an amount equal to 75% of the average of such compensation
received by you in respect of the two fiscal years prior to
your Termination Date (or 75% of the previous year's award if
the Termination Date occurs prior to the determination of two
years' awards to you).
(c) all other full personal and family health, medical, dental,
life, disability and similar insurance benefits you received
in the Termination Year will be continued at not cost to you
until the earlier of the first anniversary of your
Termination Date or the date you and your family are covered
by substantially similar insurance coverage from another
employer;
(d) effective immediately upon the Termination Date, Zale will
take the necessary actions to ensure that, to the greatest
extent permitted by law, all vesting, holding period or other
limitations, periods of restrictions on any stock options
(incentive, non-qualified and otherwise), stock bonus grants
or other equity rights which you owned, held or would have
been entitled to are immediately waived, satisfied or removed
to the extent necessary to place you in the same position as
if your Termination Date occurred (and for purposes of this
paragraph (d) it shall be deemed to occur) on the fourth
anniversary of the Employment Date; and
(e) for a period of up to one year after the Termination Date,
Zale will promptly
3
reimburse your expenses incurred in moving or relocating you
and your family, including normal travel expenses, moving
costs, real estate commissions, legal fees and closing costs,
up to an aggregate of $50,000.00.
For purposes hereof, the term "Cause" shall mean: (i) any dishonest or
fraudulent act or course of conduct by you, or other act or course of conduct
by you constituting a criminal act or which results in gain or personal
enrichment of you at the expense of Zale, or the commission by you of an act or
a course of conduct involving moral turpitude; or (ii) your insubordination to
the CEO or Board or willful violation of this Agreement or of policies
established by the Board, provided, however, that no such termination pursuant
to this clause (ii) shall be effective unless Zale shall have given you ten
days' prior written notice of any insubordination or willful violation of this
agreement or such policies which, if not discontinued or corrected, would lead
to your termination for Cause. You will have the opportunity to cure such
non-complying conduct or performance within such ten-day period. Termination
pursuant to this clause (ii) shall be effective with respect to matters
referred to herein ten days after such notice unless such conduct has been
cured in the good faith judgment of the Board or CEO.
If the foregoing terms are acceptable to you, please sign and return one of the
two enclosed signed counterparts of this letter.
We look forward to your joining the Zale family.
Very truly yours,
/s/ XXXXXX X. XXXXXXXX
--------------------------------------
Xxxxxx X. XxXxxxxx, as
Chairman of the Board and
Chief Executive Officer
/s/ XXXXX XXXXXXXXX
--------------------------------------
Xxxxx Xxxxxxxxx, as
Chairman of the Compensation Committee
of the Board of Directors
of Xxxx Corporation
Accepted and agreed to this 8th day of May, 1995.
/s/ XXXX X. XXXX
--------------------------------------
Xxxx X. Xxxx
