EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into effective as of December 4,
2000 ("Effective Date"), between Xx Xxxx ("Employee") and XXXXXXXX'X, INC., a
Tennessee corporation with principal offices in Jackson, Tennessee ("Employer").
RECITALS
1. Employee desires employment with Employer as Senior Vice President of
Operations/Director of Stores ("Director") for the Kirkland's retail stores (the
"Stores").
2. The parties have agreed concerning the terms of Employee's
employment.
NOW, THEREFORE, in consideration of the premises and the parties'
mutual covenants, it is agreed:
1. Employment. Employer hereby employs Employee, and Employee accepts
employment as Director in accordance herewith.
2. Scope of Duties. Employee shall serve as Director for the Kirkland's
stores. In such role, Employee shall perform those duties as from time to time
assigned by the President, Chief Executive Officer, and Board of Directors of
Employer. In such capacity, Employee shall report to the President and Executive
Committee of Employer, and shall perform any additional duties with respect to
the Stores as directed by Employer.
3. Term. The term of this Agreement shall commence on the Effective Date
herein provided and continue until termination as herein provided.
4. Compensation. As base compensation for the services rendered
hereunder to Employer, Employee shall be paid an annual base salary of
$175,000.00, paid twice monthly, in arrears. Employee shall also receive a
monthly automobile allowance of $600.00, subject to applicable taxes and
deductions. In addition, upon terms and conditions from time to time established
by Employer's Executive Committee, Employee shall be eligible for an annual
bonus. In 2001, the bonus opportunity is a maximum of $40,250.00 and the 2002
bonus opportunity will be not less than $50,000.00. The bonus criteria and
amount after 2002 shall be determined by Employer, but will generally meet the
standards set for other operations executives in the company (see Exhibit A
attached hereto).
Employee shall receive a "signing bonus" in the amount of $20,000.00, payable
within thirty (30) days of commencing employment. Such bonus will be repaid to
Company within thirty (30) days of Employee's termination if Employees resigns
within one year.
Employee shall also be eligible for "family coverage", subject to applicable
caps on Employer's
contribution to the premium as from time to time established by Employer, under
any group health insurance policy from time to time in force, having such
benefits as from time to time provided by Employer in its absolute discretion,
together with any life insurance coverage available with such policy (up to such
limit as from time to time set by Employer in Employer's absolute discretion).
Employee understands and agrees that it is Employee's responsibility to promptly
fill out and submit any insurance application(s) necessary for such coverage and
that Employer has no control over the assigned effective date of the coverage or
the requirement by the insurer for medical "underwriting". Employer shall have
no liability resulting from denial of coverage by the insurer. Employee is
solely responsible to make valid claims for benefits thereunder. Subject to
insurer approval, Employer shall waive the initial two year higher co-pay
provision generally applicable to new Plan members.
Employee shall have such other benefits as from time to time provided by
Employer in Employer's absolute discretion, including but not limited to (paid)
vacation, in an amount from time to time provided to Employer's employees in
accordance with existing policies, which shall not accrue in the event of
termination. Employee will be given three weeks paid vacation each year
beginning in 2001.
5. Expense Reimbursement.
(a) Moving Expenses. Employer agrees to reimburse Employee for any and
all reasonable moving expenses, as approved in advance by Employer, as well as:
(1) the real estate agent's fee on sale of Employee's home in Maryland, and (2)
closing costs on Employee's new home in Jackson, TN, in an amount up to
$5,000.00; Employer also agrees to reimburse reasonable temporary housing
expenses, (not food) for up to ninety (90) days. With prior approval, Employer
will pay such other miscellaneous relocation costs as Employer might incur.
Employee hereby agrees to repay all such amounts to Employer, if Employee
voluntarily leaves the employ of Employer at any time during the first year of
this agreement.
(b) Course of Business Expense. Employee shall be reimbursed for those
reasonable expenses (as determined by Employer in accordance with then existing
policies) necessarily incurred by Employee in the performance of the duties
herein as are specifically approved by Employer and as verified by vouchers,
receipts, or other evidence of expenditure and business necessity as from time
to time required by Employer.
6. Other Employment; Conduct. Employee agrees to devote all working time
and efforts to performance of the duties required hereunder so as to maximize
the sales volume and proper operation of the Stores. Employee shall not engage
in other employment or become involved in other business ventures requiring
Employee's time, absent the prior written consent of the President of Employer.
Employee shall at all times conduct such duties and Employee's personal affairs
in a manner that is satisfactory to Employer and so as to not in any manner
injure or unfavorably reflect upon the Kirkland's organization or any Store or
element thereof or any member thereof or third persons or entities connected
therewith.
7. Termination. Employee understands and agrees that this Agreement is
an "at will"
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employment agreement and may be terminated without "cause" of any type by either
party upon notice, either written or oral. In the event of termination of
employment by either party, Employee shall be entitled only to base salary,
expense reimbursement, and insurance coverage (as available) up to and including
the last day worked as the entire compensation due and owing to Employee. No
further payments or benefits shall accrue to or be paid or owing to Employee.
Upon termination of employment, Employee will return all property of Employer to
Employer prior to receiving final compensation for wages and expenses.
8. Confidentiality; Restrictive Covenant. Employee understands and
agrees that the information used by Employee in the performance of duties
hereunder is proprietary to Employer and the Stores and represents, in the
specific areas of inventory procurement and management, marketing and sales, and
store operations, highly confidential and valuable information (collectively
"Information"), the loss of which would be economically injurious to Employer
and the Stores. Accordingly, in consideration of this Agreement, and the
training and work experience provided to Employee by reason hereof, Employee
agrees not to divulge in any manner, at any time, for any purpose, for any
consideration, whether financial or otherwise, to any person or entity, any of
the Information. In order to allow Employer to enforce such covenant of
confidentiality, Employee agrees, additionally, that for a period of two years
after termination hereof, Employee will not, directly or indirectly, own,
manage, operate, control, be employed by, participate in, lend money, furnish
services to, be compensated in any matter by, or be connected in any way with
the management, ownership, or control of any business similar to the type of
business conducted by the Employer or as operated by the Stores at the time of
termination of this Agreement. Employee understands and acknowledges that the
type of business conducted by Employer is national in scope, and Employer's
business competition is typically national or regional chain retail operations
specializing in or having a substantial inventory mix involving home
furnishings/decor and "gifts and decorative accessories" and related items. The
foregoing restriction shall not apply to department stores.
During the term of this agreement and for a period of three (3) years following
the termination, for whatever reason, of employment, Employee agrees not to
enter into or engage in any discussion or negotiation, or assist in such actions
to encourage present employees of Employer to disassociate their employment
relationship with Employer and induce such present employees to go into the
employment of an entity engaged in any competing retail business.
Employee understands and agrees that, to enforce the covenants of this
paragraph, injunctive relief, in addition to the other remedies available at law
or in equity, is necessary since the monetary damage to Employer and the Stores
may be difficult or impossible to determine.
9. Waiver of Breach. Any waiver by Employer of a breach of any provision
hereof shall not operate as or constitute a waiver of any of the terms hereof
with regard to any subsequent breach.
10. Assignment. Neither this Agreement nor any rights or obligations
hereunder may be assigned except by Employer to a business entity which is a
successor to Employer by merger, stock exchange, consolidation, or other
reorganization, or to an entity which results from a purchase or sale
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or other transfer or transaction involving third parties, or except to an entity
owned or controlled by the principals of Employer. This Agreement (and all
rights and benefits hereunder) is for Employee's personal services and is,
therefore, not assignable by Employee.
11. Entire Agreement; Modification. This Agreement is the entire
agreement of the parties with regard to Employee's employment and all other
agreements and understandings, whether written or oral, if prior hereto, are
merged herein so that the provisions of any prior agreement(s) are void and of
no further force and effect. This Agreement may not be modified except by a
writing signed by both parties.
12. Applicable Law; Venue. This Agreement shall be construed in
accordance with the laws of the State of Tennessee, even if Employee executed
this Agreement outside Tennessee or Madison County, Tennessee, and Employee's
services are to be rendered without Tennessee. All legal disputes between the
parties shall have a venue in the courts of Madison County, Tennessee.
13. Notices. All notices required to be sent to Employer shall be in
writing and effective upon mailing, postage prepaid, by certified mail, return
receipt requested, to the addresses indicated herein, or as from time to time
modified by notice:
Xxxxxxxx'x, Inc.
ATTN: General Counsel
000 Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
14. Provisions Severable. Any provision hereof adjudged void or voidable
by a court of competent jurisdiction shall be deemed severable such that the
remaining provisions are in full force and effect.
15. Parties Bound. This Agreement shall bind the parties' respective
heirs, legal representatives, successors and assigns.
16. Effective Date. The Effective Date hereof for all purposes shall be
December 4, 2000.
EXECUTED by the parties as provided below.
EMPLOYEE: EMPLOYER:
XXXXXXXX'X, INC.
/s/ Xx Xxxx By /s/ Xxxxxx X. Xxxxxxxx
--------------------------- ----------------------
Xx Xxxx
[Signature Dated 10/24/00] (Title) President
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"EXAMPLE"
EXHIBIT A
PROPOSED ANNUAL BONUS CRITERIA
I. INTRODUCTION
The annual bonus opportunity is intended to reward each management
participant for his or her contributions to the success of Kirkland's.
Criteria shall be set by March 31 of each calendar year, and shall
include potential rewards both for corporate and individual
performance. Final bonus payments shall be determined and paid no later
than March 31 of the following year.
II. MAXIMUM BONUS OPPORTUNITY
Maximum bonus opportunity for calendar 2000 is $40,250.
III. BONUS CRITERIA
A. 50% ($20,125) - CORPORATE PERFORMANCE
Participant is eligible for this portion of the bonus based on the
Company's achievement of its budgeted EBITDA, before management bonus
expense, as approved by the Company's Board of Directors. EBITDA is
defined as consolidated earnings before interest, taxes, depreciation
and amortization as determined in the Company's audited financial
statements.
Bonus will be awarded based on the following table:
Actual EBITDA % of Bonus
As % of Budget Earned
-------------- ------
95% or higher 100%
92.5% - 94.9% 50%
90% - 92.4% 25%
Below 90% 0%
B. 25% ($10,062.50) - INDIVIDUAL GOALS
Participant is eligible for this portion based on achievement of the
following goals:
Criteria (to be determined - EXAMPLE ONLY) Bonus
------------------------------------------ -----
1. Comparable store sales increase of __% or more $ 4,025
2. Total Company sales of $_____ million or more 4,025
3. Total Company gross margin of ___% or more 2,012.50
----------
$10,062.50
4. To be determined
5. To be determined
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C. 25% ($10,062.50) - DISCRETIONARY
Participant is eligible for this portion of the bonus at the discretion
of the Company's CEO, President, and CFO. Criteria for this
discretionary bonus include team leadership, development of operations
personnel, store visits, teamwork with executive officers on special
projects, and other factors.
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