EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made
and entered into as of January 12, 1998, by and between EDISON
BROTHERS STORES, INC., a Delaware corporation (the "Company"),
and Xxxxxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company believes that it would benefit
from the application of the Executive's skill, experience and
background to the management and operation of the Company, and
that the Executive will make major contributions to the short-
and long-term profitability, growth and financial strength of the
Company; and
WHEREAS, the Company desires to employ the Executive
and the Executive desires to be employed by the Company; and
WHEREAS, the Company and the Executive desire to set
forth in a written agreement the terms and conditions of the
Executive's employment with the Company;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants herein contained, it is agreed as follows:
1. Employment. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to be employed by
the Company upon the terms and conditions set forth herein.
2. Term. The Executive's employment shall be for a
term commencing on January 12, 1998 (the "Commencement Date")
and, subject to termination under Section 8, expiring on February
1, 2001 (the "Initial Termination Date").
3. Duties of the Executive. The Executive shall
serve as the Chief Executive Officer, President and Chairman of
the Board of the Company, and as such shall have primary
responsibility for the oversight, management and general
operation of all of the operations of the Company. The Executive
shall report solely to the Company's Board of Directors (the
"Board") and shall be assigned only those executive policy and
management duties that are consistent with the Executive's
position as Chief Executive Officer, President and Chairman of
the Board of the Company. The Executive shall devote
substantially all of his normal working time and his best
efforts, full attention and energies to the business of the
Company, the responsibilities provided for the Chief Executive
Officer, President and Chairman of the Board in the Company's
Bylaws, and such other related duties and responsibilities as may
from time to time be reasonably prescribed by the Board. The
Company shall use its best efforts to cause the Executive to be
elected as a member of its Board throughout the term of this
Agreement and shall include him in the management slate for
election as a director at every stockholders' meeting at which
his term as a director would otherwise expire.
4. Compensation.
(a) Base Salary. During the term of this Agreement,
the Company shall pay to the Executive a base salary of not less
than $700,000 per annum, which base salary may be increased (but
not decreased) from time to time by the Board in its sole
discretion, payable at the times and in the manner consistent
with the Company's general policies regarding compensation of
executive employees. Such base salary shall be reviewed by the
Board during fiscal 1999 following completion of the Board of
Director's review of the Company's financial performance for the
prior fiscal year, and annually thereafter at such time (each, an
"Annual Review") for the remainder of the term of this Agreement
for purposes of evaluating an increase in the Executive's base
salary in light of, among other things, the financial performance
of the Company, the Executive's individual performance, and
competitive market data. Such base salary shall include any
salary reduction contributions to (i) any Company-sponsored plan
that includes a cash-or-deferred arrangement under Section 401(k)
of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) any other plan of deferred compensation sponsored by the
Company, or (iii) any Company-sponsored welfare plans and
programs. The Board may from time to time authorize such
additional compensation to the Executive, in cash or in property,
as the Board may determine in its sole discretion to be
appropriate.
(b) Cash Incentive Compensation. If the Board
authorizes cash incentive compensation under the Company's
executive incentive compensation plan or such other management
incentive program or arrangement approved by the Board, the
Executive shall be eligible to participate in such plan, program
or arrangement on the most favorable terms and conditions
available to senior executive and management employees; provided,
however, that the Executive shall have the opportunity to earn an
uncapped cash incentive bonus for fiscal 1998, which cash
incentive bonus shall be paid when incentive compensation is
customarily paid to the Company's senior executives. Pursuant to
the Company's applicable incentive or bonus plan as in effect
from time to time, the Executive's cash incentive compensation
for fiscal 1998 and succeeding fiscal years during the term of
this Agreement may be determined according to criteria intended
to qualify under Section 162(m) of the Code.
(c) Stock Options. The Executive shall be granted
three stock options (individually, "Option A," "Option B" and
"Option C") to purchase an aggregate of 400,000 shares of Common
Stock of the Company, par value $.01 per share ("Common Stock")
pursuant to the Company's 1997 Stock Option Plan (the "1997
Plan") or the 1998 Equity Incentive Plan (the "1998 Plan") to be
submitted to the Company's stockholders for approval, and related
rules (each of the 1997 Plan and the 1998 Plan, and applicable
rules and agreements pursuant to which such options shall be
granted being hereinafter referred to as the "Plan") in
accordance with, and subject to, the following:
(i) Option A. Option A shall constitute a non-qualified
stock option to purchase 100,000 shares of Common Stock, subject
to the terms and conditions hereof and of the 1997 Plan. The
exercise price of Option A shall be equal to the fair market
value (determined in accordance with the applicable provisions of
the 1997 Plan) of the Common Stock on the date of grant, which
date shall be the date of this Agreement. Such right shall vest
in increments of 1/3rd of the shares subject to Option A on each
anniversary of the date of grant, commencing January 12, 1999
(assuming the Executive continues to be employed through such
vesting dates). Subject to earlier termination in accordance
with the terms of the applicable Plan, Option A shall expire ten
years following the date of grant.
(ii) Option B. The terms and provisions of Option B shall
be identical to the terms and provisions of Option A in all
respects except that: (A) pursuant to Option B, the Executive
shall have the right to purchase 188,000 shares of Common Stock,
subject to the terms and conditions hereof and of the 1997 Plan,
and (B) Option B shall vest 100% on January 12, 2001, with
accelerated vesting for the following portions of Option B upon
the market price of the Common Stock reaching the applicable
target prices set forth in the table below.
100,000 $13.50
88,000 $18.00
The market price of the shares shall be deemed to reach the
foregoing target prices only when the closing price of Common
Stock on the NASDAQ System (as reported in the Wall Street
Journal) shall have reached the specified target price and
remained at or above such level for a minimum of 20 trading days
within any period of 30 consecutive trading days.
(iii) Option C. The terms and provisions of Option C
shall be identical to the terms and provisions of Option A in all
respects except that: (A) Option C shall be granted pursuant to
the 1998 Plan, (B) pursuant to Option C the Executive shall have
the right to purchase 112,000 shares of Common Stock, subject to
the terms and conditions hereof and of the 1998 Plan, and
(C) Option C shall vest 100% on January 12, 2001, with
accelerated vesting of 100% of the shares of Common Stock subject
to Option C upon the market price of the Common Stock reaching
$18.00 per share. The market price of the shares shall be deemed
to reach the foregoing price as determined under the terms of
Option B.
(d) Restricted Stock. The Executive shall, subject to
approval of the Company's stockholders of the 1998 Plan as herein
provided, be granted 50,000 shares of restricted stock pursuant
to the Plan and related rules (the "Restricted Stock"). The
Restricted Stock shall vest 50% on January 12, 1999, and 25% on
each of January 12, 2000 and January 12, 2001 (assuming the
Executive continues to be employed by the Company through such
vesting dates).
(e) Additional Options. On or before January 12, 2001
(assuming the Executive continues to be employed by the Company
through such date), the Company shall, subject to approval of the
Company's stockholders of the 1998 Plan as herein provided, grant
to the Executive a non-qualified stock option ("Option D") to
acquire 100,000 shares of Common Stock. In addition, on or
before January 12, 2003 (assuming the Executive continues to be
employed by the Company through such date), the Company shall,
subject to approval of the Company's stockholders of the 1998
Plan as herein provided, grant to the Executive a non-qualified
stock option ("Option E") to acquire 100,000 shares of Common
Stock. The terms and provisions of Options D and E shall be
identical to the terms and provisions of Option A except that (A)
the option exercise price therefor shall be equal to the fair
market value of the Common Stock on the date of grant of such
Options, and (B) such Options shall vest 1/3 on each anniversary
of the date of grant of such Options. Notwithstanding the
foregoing, if, during the term of this Agreement, a Change in
Control (as defined in the 1998 Plan) occurs (a "Triggering
Event"), the Company shall, subject to approval of the Company's
stockholders of the 1998 Plan as herein provided, (a) in the case
of a Triggering Event occurring prior to January 12, 2001, grant
to the Executive in lieu of Option D a non-qualified option to
purchase 100,000 shares of Common Stock ("Option F"), and (b) in
the case of a triggering event occurring prior to January 12,
2003, grant to the Executive, in lieu of Option E, a non-
qualified stock option to purchase 100,000 shares of Common Stock
("Option G"). The terms and provisions of Options F and G
(collectively, the "Triggering Event Options") shall be identical
to the terms and provisions of Option A except that (X) the date
of grant of the Triggering Event Options shall be the date of the
Change of Control, (Y) the option exercise price therefor shall
be equal to the fair market value of the Common Stock on the date
of grant of such Options, and (Z) such Options shall be fully
vested on the date of grant.
(f) Plan Approval Conditions. The Company and the
Executive acknowledge that, in order to implement the provisions
of Sections 4(c)(iii), (d) and (e), the 1998 Plan authorizing
Options C, D and E and any Triggering Event Options and the
Restricted Stock must be adopted and approved by the Company's
stockholders in accordance with Section 162(m) of the Code. The
Company will adopt the 1998 Plan, subject, however to receipt by
the Company of such stockholder approval. Accordingly, all of the
provisions of Sections 4(c)(iii), (d) and (e) shall be subject to
receipt by the Company of such stockholder approval, and in the
event such stockholder approval shall not have been obtained
within 12 months from the date hereof or the Executive's
employment shall have been terminated prior to receipt by the
Company of such approval, the Executive shall have no rights to
any such Options or Restricted Stock.
(g) Hiring Bonus. No later than three business days
following the execution and delivery of the Agreement by the
Company, the Company shall pay to the Executive $600,000 (less
applicable withholding pursuant to Section 18) by certified or
bank check as additional compensation to the Executive under this
Agreement (the "Hiring Bonus").
5. Executive Benefits.
(a) General. In addition to the compensation described in
Section 4, the Company shall make available to the Executive, on
the most favorable terms and conditions available to executive
and management employees of the Company and subject to the terms
and conditions of the applicable plans, including without
limitation the eligibility rules, (i) all Company-sponsored
employee benefit plans or arrangements and such other usual and
customary benefits now or hereafter generally available to
employees of the Company, and (ii) such benefits and perquisites
as may be made available to senior executives of the Company as a
group, including, without limitation, equity and cash incentive
programs, vacations, and retirement, deferred compensation and
welfare plans.
(b) Relocation.
(i) No later than April 12, 1998, the Executive shall
relocate to a residence within 25 miles of the Company's
principal executive offices, currently located in St. Louis,
Missouri.
(ii) The Company shall reimburse the Executive for the
reasonable and documented costs and expenses of moving the
Executive's principal household to St. Louis, Missouri and
temporary housing in the St. Louis, Missouri area for up to three
months from the Executive's first day of work pursuant to this
Agreement and shall also provide the Executive with a moving
allowance of $60,000.
(c) Attorneys' Fees. The Company shall pay or
reimburse the Executive for reasonable attorneys' fees and
disbursements incurred by the Executive in connection with the
negotiation and execution of this Agreement; provided, however,
that such fees and disbursements shall not exceed $10,000.
6. Expenses. The Company shall also pay or reimburse
the Executive for reasonable and necessary expenses incurred by
the Executive in connection with his duties on behalf of the
Company in accordance with the expense policy of the Company
applicable to members of senior management of the Company.
7. Place of Performance. In connection with his
employment by the Company, unless otherwise agreed by the
Executive, the Executive shall be based at the principal
executive offices of the Company, which as of the date of this
Agreement, are located in St. Louis, Missouri, except for travel
reasonably required for Company business. If the Company
relocates its principal executive offices, the Executive shall
relocate to a residence within 25 miles of such relocated
executive offices, subject, however, to reimbursement of the
Executive's relocation expenses on terms no less favorable than
those set forth in Section 5(b) of this Agreement.
8. Termination.
(a) Termination By the Company. The Executive's
employment hereunder may be terminated by the Company for any
reason by written notice as provided in Section 20. The
Executive's Disability (as defined herein) during the term of the
Agreement shall be deemed to constitute termination of employment
by the Company hereunder. In addition to the foregoing, the
Executive will be treated for purposes of this Agreement as
having been terminated by the Company if the Executive terminates
his employment with the Company under the following
circumstances: (i) the Company breaches any material provision
of Sections 4, 5 or 7 of this Agreement and within 30 calendar
days after notice thereof from the Executive, the Company fails
to cure such breach; or (ii) a material reduction in the
Executive's authority, functions, duties or responsibilities as
provided in Section 3 and within 30 calendar days after notice
thereof from the Executive, the Company fails to restore to the
Executive such authority, functions, duties or responsibilities.
(b) Termination By the Executive. The Executive may
voluntarily terminate his employment and this Agreement at any
time by notice to the Company as provided in Section 20. The
Executive's death during the term of this Agreement shall
constitute a voluntary termination of employment for purposes of
eligibility for termination payments and benefits as provided in
Section 9.
(c) Benefits Period. Subject to Section 9 and any
benefit continuation requirements of applicable laws, in the
event the Executive's employment hereunder is voluntarily or
involuntarily terminated for any reason whatsoever, the
compensation and benefits obligations of the Company under
Sections 4 and 5 shall cease as of the effective date of such
termination, except for any compensation and benefits earned or
accrued but unpaid through such date.
9. Termination Payments, Benefits and Obligations.
If the Executive's employment is terminated by the Company for
Cause (as defined below), or by the Executive during the term of
this Agreement for any reason other than those specified in
subsections (i) or (ii) of Section 8(a), death or Disability,
Executive shall repay to the Company the following portions of
the Hiring Bonus no later than ten (10 ) days following the
effective date of such termination: (i) if such termination
occurs on or before January 12, 1999, the entire Hiring Bonus,
(ii) if such termination occurs on or before January 12, 2000,
$400,000 of the Hiring Bonus, or (iii) if such termination occurs
on or before January 12, 2001, $200,000 of the Hiring Bonus.
After January 12, 2001 Executive shall be under no obligation to
repay to the Company any portion of the Hiring Bonus. If the
Executive's employment hereunder is terminated by the Company for
any reason other than for Cause (as defined herein) during the
term of this Agreement, the Company shall be obligated to pay to
the Executive the following termination payments and make
available the following benefits during the Payment Period (as
hereinafter defined):
(a) Salary Continuation. Payments of the Executive's
monthly base salary shall continue to be made for the greater of
the number of months (and fractions thereof) remaining in the
term of the Agreement or 12 months following the Executive's
termination of employment (the "Payment Period"). Subject to
Section 9(g), payments of base salary made pursuant to this
Section 9(a) shall be based upon the Executive's monthly base
salary at the highest rate in effect at any time between the
Commencement Date and the date of the Executive's termination
(the "Termination Payment").
(b) Bonus Entitlement. Subject to Section 9(g), the
Executive shall be entitled to such annual cash incentive
compensation, if any, to which he would otherwise have been
entitled had he continued his employment with the Company through
the end of the fiscal year in which termination occurs in
accordance with the then existing terms of such cash incentive
compensation (the "Termination Bonus"). The Termination Bonus
shall not be payable until the Company's independent auditors
shall have issued their audit report with respect to such fiscal
year, and the achievement of budgeted amounts and/or financial
targets has been established.
(c) Method of Payment. Termination Payments shall not
commence until such time as the Termination Payments will not be
subject to Section 162(m) of the Code, and shall be payable in
accordance with the Company's regular payroll schedule for the
duration of the Payment Period described in Section 9(a). If
the Executive should die while any amounts are still payable to
him hereunder, all such amounts, unless otherwise provided
herein, shall be paid to the Executive's estate, in the form of a
lump sum cash payment equal to the present value of remaining
Termination Payments (discounted at 8%) calculated on the basis
of the number of months (and fractions thereof) included in the
Payment Period.
(d) Welfare Benefits. (i) During the Payment Period, the
Company shall maintain in full force and effect for the
continued benefit of the Executive all employee welfare benefit
plans in which the Executive was entitled to participate
immediately prior to the Executive's termination or shall arrange
to make available to the Executive benefits substantially similar
to those which the Executive would otherwise have been entitled
to receive if his employment had not been terminated. Such
welfare benefits shall be provided to the Executive on the same
terms and conditions (including employee contributions toward the
premium payments) under which the Executive was entitled to
participate immediately prior to his termination. The Company
does not guarantee a favorable tax consequence to the Executive
for continued coverage and benefits under the Company-sponsored
plans nor will it indemnify the Executive for such results.
(ii) Notwithstanding the foregoing, with respect to the
Executive's continued coverage under the Company's medical and
dental plan, or a successor plan, pursuant to this provision, the
Executive's "qualifying event" for purposes of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") shall be the
day immediately after the end of the Payment Period.
(iii) Any termination payments hereunder (including the
Termination Bonus) shall not be taken into account for purposes
of any retirement plan or other benefit plan sponsored by the
Company, except as otherwise expressly required by such plans or
applicable law. Notwithstanding anything to the contrary herein,
no termination of the Executive's employment with the Company
shall in any manner whatsoever result in any termination,
curtailment, reduction or cessation of any vested benefits or
other entitlements to which the Executive is entitled under the
terms of any benefit plan or program of the Company in respect of
which the Executive is a participant as of the effective date of
termination.
(e) Termination for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure by the Executive
substantially to perform his duties hereunder (other than any
such failure resulting from the Executive's Disability), which
failure is not or cannot be cured within 5 business days after
the Company has given written notice thereof to the Executive
specifying in detail the particulars of the acts or omissions
deemed to constitute such failure,
(ii) the engaging by the Executive in willful
misconduct which is materially injurious to the Company,
monetarily or otherwise,
(iii) the Executive's conviction of, or entry of a
plea of nolo contendre with respect to, any felony, or
(iv) the breach of any material provision of this
Agreement, including the confidentiality agreement set forth in
Section 11, if, within 30 days of such demand, the Executive
fails to cure such breach.
For purposes of this definition, no act, or failure to act, on
the Executive's part shall be considered "willful" unless done,
or omitted to be done, by the Executive in bad faith and without
reasonable belief that the Executive's action or omission was in
the best interests of the Company. The Executive shall not be
deemed to have been terminated for Cause unless and until the
Board finds that the Executive's termination for Cause is
justified and has given the Executive written notice of
termination, specifying in detail the particulars of the
Executive's conduct found by the Board to justify such
termination for Cause.
(f) Disability Defined. "Disability" shall mean the
Executive's inability to perform the duties of his position with
the Company by reason of a medically determined physical or
mental impairment which has existed for a continuous period of at
least 26 weeks and which, in the judgment of a physician who
certifies to such judgment, is expected to be of indefinite
duration or to result in imminent death.
(g) Effect of Long-Term Disability. If the Executive also
becomes entitled to receive benefits under an insured long-term
disability insurance plan ("LTD Plan") now or hereafter paid for
by the Company, then the Executive's termination benefits under
this Agreement (calculated on a monthly basis) shall be reduced
by the amount of the benefits paid under such LTD Plan. No such
reduction shall be made for benefits paid to the Executive under
a personal disability income plan or such other disability income
plan paid for by the Executive, whether or not the plan was
obtained through a group-sponsored or Company-related program.
(h) No Obligation to Mitigate. The Executive is under no
obligation to mitigate damages or the amount of any payment
provided for hereunder by seeking other employment or otherwise;
provided, however, that the Executive's coverage under the
Company's welfare benefit plans will terminate when the Executive
becomes covered under any employee benefit plan made available by
another employer and covering the same type of benefits. The
Executive shall notify the Company within ten (10) days after the
commencement of any such benefits.
(i) Forfeiture. Notwithstanding the foregoing, any right
of the Executive to receive termination payments and benefits
hereunder shall be forfeited to the extent of any amounts payable
after any breach of Section 11, 12 or 13 by the Executive.
10. Certain Tax Matters.
Notwithstanding any provision of this Agreement to the
contrary, if any amount or benefit to be paid or provided under
this Agreement would be an "Excess Parachute Payment," within the
meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision thereto, but for
the application of this sentence, then the payments and benefits
to be paid or provided under this Agreement shall be reduced to
the minimum extent necessary (but in no event to less than zero)
so that no portion of any such payment or benefit, as so reduced,
constitutes an Excess Parachute Payment. The determination of
whether any reduction in such payments or benefits to be provided
under this Agreement or otherwise is required pursuant to the
preceding sentence shall be made at the expense of the Company,
if requested by the Executive or the Company, by the Company's
independent accountants. The fact that the Executive's right to
payments or benefits may be reduced by reason of the limitations
contained in this Section 10 shall not of itself limit or
otherwise affect any other rights of the Executive other than
pursuant to this Agreement. In the event that any payment or
benefit intended to be provided under this Agreement or otherwise
is required to be reduced pursuant to this Section 10, the
Executive shall be entitled to designate the payments and/or
benefits to be so reduced in order to give effect to this
Section 10. The Company shall provide the Executive with all
information reasonably requested by the Executive to permit the
Executive to make such designation. In the event that the
Executive fails to make such designation within 10 business days
of the effective date of the Executive's termination of
employment, the Company may effect such reduction in any manner
it deems appropriate.
11. Confidentiality Agreement.
(a) The Executive acknowledges that, in the course of
his employment by the Company, he will or may have access to and
become informed of confidential or proprietary information which
is a competitive asset of the Company ("Confidential
Information"), including, without limitation, (i) the terms of
any agreement between the Company and any employee, customer or
supplier, (ii) pricing strategy, (iii) merchandising and
marketing methods, (iv) product development ideas and strategies,
(v) personnel training and development programs, (vi) financial
results, (vii) strategic plans and demographic analyses, (viii)
proprietary computer and systems software, and (ix) any
non-public information concerning the Company, its employees,
suppliers or customers. The Executive agrees that he will keep
all Confidential Information in strict confidence during the term
of his employment by the Company and thereafter, and will never
directly or indirectly make known, divulge, reveal, furnish, make
available, or use any Confidential Information (except in the
course of his regular authorized duties on behalf of the
Company). The Executive agrees that the obligations of
confidentiality hereunder shall be in effect at all times during
the term of this Agreement and shall survive termination of his
employment at the Company regardless of any actual or alleged
breach by the Company of this Agreement, unless and until any
such Confidential Information shall have become, through no fault
of the Executive, generally known to the public or the Executive
is required by law to make disclosure (after giving the Company
notice and an opportunity to contest such requirement). The
Executive's obligations under this Section 11 are in addition to,
and not in limitation of or preemption of, all other obligations
of confidentiality which the Executive may have to the Company
under general legal or equitable principles.
(b) Except in the ordinary course of the Company's
business, the Executive may not make or cause to be made, any
copies, pictures, duplicates, facsimiles or other reproductions
or recordings or any abstracts or summaries including or
reflecting Confidential Information. All such documents and
other property furnished to the Executive by the Company or
otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the
Executive's employment with the Company, the Executive will
return to the Company any such documents or other property of the
Company which are in the possession, custody or control of the
Executive.
(c) Without the prior written consent of the Company
(which may be withheld for any reason or no reason), except in
the ordinary course of the Company's business, the Executive
shall not at any time following the date of this Agreement use
for the benefit or purposes of the Executive or for the benefit
or purposes of any other person, firm, partnership, association,
trust, venture, corporation or business organization, entity or
enterprise or disclose in any manner to any person, firm,
partnership, association, trust, venture, corporation or business
organization, entity or enterprise any Confidential Information.
12. Post-termination Assistance. The Executive agrees
that after his employment with the Company has terminated he will
provide, upon reasonable notice, such information and assistance
to the Company as may reasonably be requested by the Company in
connection with any litigation in which it or any of its
affiliates is or may become a party; provided, however, that the
Company shall reimburse the Executive for any related expenses,
including travel expenses.
13. Covenant Not to Compete.
(a) For the Applicable Period (as hereinafter
defined), if (x) the Executive has received or is receiving
benefits under Section 9, (y) the Executive terminates his
employment before the end of the term of this Agreement for any
reason other than those specified in subsections (i) or (ii) of
Section 8(a), or (z) the Company terminates the Executive's
employment for Cause (as defined in Section 9(e)), the Executive
shall not, directly or indirectly, individually or on behalf of
any other person or entity, (i) engage or be interested in
(whether as owner, stockholder, partner, lender, consultant,
employee, agent or otherwise) any business, activity or
enterprise which is then competitive with the business of any
division or operation of the Company or the Company's
subsidiaries (collectively, the "Company Group") in any region of
the United States in which such business is then being conducted,
it being understood that the Company Group currently is engaged
primarily in the business of operating retail specialty apparel
stores and specialty footwear stores, or (ii) hire or employ any
person who has been an employee, representative or agent of any
member of the Company Group at any time during the Executive's
employment or solicit, aid or induce such person to leave his or
her employment with any member of the Company Group to accept
employment with any other person or entity. The Executive's
ownership of less than 1% of any class of stock in a publicly-
traded corporation or his membership on any board of directors
that the Board has approved in writing shall not be deemed a
breach of this Section 13. The Executive shall not accept an
appointment to a board of directors for an organization outside
the Company Group that would be inconsistent with his performing
his obligations to the Company, and he shall obtain the consent
of the Board of any and all of his memberships on boards of
directors of any entity other than the Company. The "Applicable
Period" shall mean, (A) where the Executive has received or is
receiving benefits under Section 9, the period during which the
Executive is receiving such benefits, provided, however, that the
Executive may limit the Applicable Period under this clause (A)
to 12 months (or such greater period of time) from the effective
date of termination of the Executive's employment (the "Reduced
Period") by giving notice to the Company that he is electing to
forfeit and have the Company cease paying and providing all
amounts and benefits arising under Section 9 following expiration
of the Reduced Period; and (B) where the Executive terminates his
employment pursuant to clause (y) of this Section 13(a) or the
Company terminates the Executive's employment for Cause, the
greater of (Y) a period of 12 months from the effective date of
such termination or (Z) the remaining term of this Agreement.
(b) The Executive acknowledges and agrees that a
violation of Section 11 and the foregoing provisions of this
Section 13 (referred to collectively as the Confidentiality and
Noncompetition Agreement) would cause irreparable harm to the
Company, and that the Company's remedy at law for any such
violation would be inadequate. In recognition of the foregoing,
the Executive agrees that, in addition to any other relief
afforded by law or this Agreement, including damages sustained by
a breach of this Agreement and any forfeitures under Section 9,
and without the necessity or proof of actual damages, the Company
shall have the right to enforce this Agreement by specific
remedies, which shall include, among other things, temporary and
permanent injunctions, it being the understanding of the
undersigned parties hereto that damages, the forfeitures
described above and injunctions shall all be proper modes of
relief and are not to be considered as alternative remedies.
14. Prohibition on Certain Outside Compensation. The
Executive shall not, without the Company's prior written consent,
accept any compensation or gift from any person, firm or
corporation (other than the Company) where such compensation or
gift is, or may appear to be, in consideration of his acting in a
preferential manner in relation to the business of such person,
firm or corporation.
15. Arbitration. Any dispute between the parties
under this Agreement shall be resolved (except as provided below)
through arbitration by an arbitrator selected under the rules of
the American Arbitration Association (located in Chicago,
Illinois) and the arbitration shall be conducted in the city in
which the Company's principal executive offices are then located
under the rules of said Association. Each party shall each be
entitled to present evidence and arguments to the arbitrator.
The arbitrator shall have the right only to interpret and apply
the provisions of this Agreement and may not change any of its
provisions. The arbitrator shall permit reasonable pre-hearing
discovery of facts, to the extent necessary to establish a claim
or a defense to a claim, subject to supervision by the
arbitrator. The determination of the arbitrator shall be
conclusive and binding upon the parties and judgment upon the
same may be entered in any court having jurisdiction thereof.
The arbitrator shall give written notice to the parties stating
his or her determination, and shall furnish to each party a
signed copy of such determination. The expenses of arbitration
shall be borne equally by the Executive and the Company or as the
arbitrator shall otherwise determine. Notwithstanding the
foregoing, the Company shall not be required to seek or
participate in arbitration regarding any breach of the
Executive's Confidentiality and Noncompetition Agreement
contained in Sections 11 and 13, but may pursue its remedies for
such breach in a court of competent jurisdiction, including,
without limitation, in a court in the city in which the Company's
principal executive offices are then located. Any arbitration or
action pursuant to this Section 15 will be governed by and
construed in accordance with the substantive laws of the State of
Missouri, without giving effect to the principles of conflict of
laws of such State.
16. Key Man Insurance. The Company shall have the
right to secure, in its own name or otherwise, and at its own
expense, life, disability, accident or other insurance covering
the Executive and the Executive shall have no right, title or
interest to such insurance. The Executive shall assist the
Company in procuring such insurance by submitting to reasonable
examinations and signing such applications and other instruments
as may be required by the insurance carriers to which application
is made for any such insurance.
17. Agreement. This Agreement supersedes any and all
prior and/or contemporaneous agreements, either oral or in
writing, between the parties hereto, with respect to the subject
matter hereof. Each party to this Agreement acknowledges that no
representations, inducements, promises, or other agreements,
orally or otherwise, have been made by any party, or anyone
acting on behalf of any party, pertaining to the subject matter
hereof, which are not embodied herein, and that no prior and/or
contemporaneous agreement, statement or promise pertaining to the
subject matter hereof that is not contained in this Agreement
shall be valid or binding on either party.
18. Withholding of Taxes. The Company may withhold
from any amounts payable under this Agreement all federal, state,
city or other taxes as the Company is required to withhold
pursuant to any law or government regulation or ruling.
19. Successors and Binding Agreement.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and
substance satisfactory to the Executive, expressly to assume and
agree to perform this Agreement in the same manner and to the
same extent the Company would be required to perform if no such
succession had taken place. This Agreement will be binding upon
and inure to the benefit of the Company and any successor to the
Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business
or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Company" for the purposes of this
Agreement), but will not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
(c) This Agreement is personal in nature and neither
of the parties hereto shall, without the consent of the other,
assign, transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections
19(a) and 19(b). Without limiting the generality or effect of
the foregoing, the Executive's right to receive payments
hereunder will not be assignable, transferable or delegable,
whether by pledge, creation of a security interest, or otherwise,
other than by a transfer by the Executive's will or by the laws
of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 19(c), the
Company shall have no liability to pay any amount so attempted to
be assigned, transferred or delegated.
20. Notices. For all purposes of this Agreement, all
communications, including without limitation notices, consents,
requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly
given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five business
days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or
three business days after having been sent by a nationally
recognized overnight courier service such as Federal Express,
UPS, or Purolator, addressed to the Company (to the attention of
the Secretary of the Company) at its principal executive offices
and to the Executive at his principal residence, or to such other
address as either party may have furnished to the other in
writing and in accordance herewith, except that notices of
changes of address shall be effective only upon receipt.
21. Governing Law. The validity, interpretation,
construction and performance of this Agreement will be governed
by and construed in accordance with the substantive laws of the
State of Missouri, without giving effect to the principles of
conflict of laws of such State.
22. Validity. If any provision of this Agreement or
the application of any provision hereof to any person or
circumstances is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of
such provision to any other person or circumstances will not be
affected, and the provision so held to be invalid, unenforceable
or otherwise illegal will be reformed to the extent (and only to
the extent) necessary to make it enforceable, valid or legal.
23. Survival of Provisions. Notwithstanding any other
provision of this Agreement, the parties' respective rights and
obligations under Sections 9 through 26, inclusive, will survive
any termination or expiration of this Agreement or the
termination of the Executive's employment for any reason
whatsoever.
24. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is in writing and signed by the party
against whom such modification, waiver or discharge is sought to
be enforced. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition
or provision of this Agreement to be performed by such other
party will be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.
Unless otherwise noted, references to "Sections" are to sections
of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for
the purpose of interpreting any provision of this Agreement.
25. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same agreement.
26. Results of Executive Services. To the extent
permitted by applicable law, the Company shall own, and the
Executive hereby expressly grants to the Company, exclusively and
in perpetuity, all rights in and to all results and proceeds of
the Executive's services in the normal course of his employment
to the extent that same are protectable under the laws of
intellectual property, including without limitation, all
suggestions, ideas, techniques, forms, pamphlets and other
contributions and materials originated or developed by the
Executive in the normal course of his employment, and in and to
all earnings derived by reason of the Executive's services in the
normal course of his employment. To the extent permitted by
applicable law, the Executive hereby waives any and all right,
title or interest he might otherwise have therein or thereto, or
in or to the results or proceeds derived by the Company or others
from the use of any thereof. Without limiting the generality of
the foregoing, as the Executive is to render his services
exclusively hereunder, it is expressly understood and agreed
that, to the extent permitted by applicable law, any and all
materials created by the Executive in the normal course of his
employment which are protectable under the law of intellectual
properties are created in the normal course of such employment,
and, accordingly, all of same are "works for hire" and the
Company shall be the author and owner thereof for all purposes,
including, without limitation, for purposes of copyright. To the
extent, under applicable law, such materials may not be
considered a work made for hire, the Executive hereby transfers
and conveys to the Company, to the maximum extent permitted by
applicable law, all of the Executive's right, title and interest
in all copyrightable matter created by the Executive during the
term hereof.
IN WITNESS WHEREOF, with the Company signatory listed
below having been duly authorized by the Company to enter into
this Agreement by the Company, the parties hereto have executed
this Agreement as of the day and year first written.
/s/Xxxxxxxx X. Xxxxx
EDISON BROTHERS STORES, INC.
/s/H. Xxxxxxx Xxxxx
Director
/s/Xxxx X. Xxxxx
Executive Vice President, General
Counsel and Secretary
