EXHIBIT 10.3
EXHIBIT 10.3 TO XXXX STORES, INC. THIRD QUARTER 2000 FORM 10-Q
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of August 14, 2000, by
and between Xxxx Stores, Inc. (the "Company") and Xxxxx Xxxxxx (the
"Executive").
1. THE TERM. The employment of the Executive by the Company will
commence as of the date hereof and end on July 31, 2004, unless extended or
terminated in accordance with this Agreement. During March 2003, and during
March every other year thereafter (every two years) for so long as the Executive
is employed by the Company, upon the written request of the Executive, the Board
of Directors of the Company (the "Board") shall consider extending the
Executive's employment with the Company. Such request must be delivered to the
Chairman of the Compensation Committee no later than the February 28th which
precedes the March in which the requested extension will be considered. The
Board shall advise the Executive, in writing, on or before the April 1st
following its consideration of the Executive's written request, whether it
approves of such extension. The failure of the Board to provide such written
advice shall constitute approval of the Executive's request for extension. If
the Executive's request for an extension is approved, this Agreement shall be
extended two additional years.
2. POSITION AND DUTIES. The Executive shall serve as the President
and Chief Operating Officer of the Company with overall responsibility for the
Company's corporate operations and accomplishment of its plans and objectives.
The Executive shall report directly to the Company's Chief Executive Officer and
Vice Chairman of the Board of Directors. During the term of his employment, the
Executive may engage in outside activities provided those activities do not
conflict with his duties and responsibilities hereunder, and provided further
that the Executive gives written notice to the Board of any significant outside
business activity in which he plans to become involved, whether or not such
activity is pursued for profit.
3. PLACE OF PERFORMANCE. The Executive shall be employed at the
Company's principal executive offices in Newark, California, except for required
travel on the Company's business to an extent substantially consistent with
present business travel obligations.
4. COMPENSATION AND RELATED MATTERS.
(a) SALARY. During his employment, the Company shall pay the
Executive a salary of not less than $775,000 per annum. This salary shall be
payable in equal installments in accordance with the Company's normal payroll
practices applicable to senior officers. Subject to the first sentence of this
paragraph, the Executive's salary may be adjusted from time to time by the Board
in accordance with normal business practices of the Company.
(b) CHANGE OF CONTROL. In the event of a Change of Control (as
defined in paragraph 7(f) hereof), (i) the Executive shall immediately become
vested in any shares of restricted stock granted to the Executive by the Company
which had not vested prior to the Change of Control in accordance with the terms
of the applicable stock grant agreements and (ii) the Company shall pay to the
Executive as additional salary an amount equal to $1,500,000
per year during the period commencing on the effective date of the Change of
Control and expiring two years thereafter (the "Remaining Term"), which shall be
payable in equal installments during the then Remaining Term in accordance with
the Company's normal payroll policies applicable for senior officers.
Notwithstanding paragraph 1 hereof to the contrary, the Executive's employment
by the Company under this Agreement shall continue until the later of (a) the
expiration of the Remaining Term and (b) the expiration of any extension
pursuant to Section 1.
(c) BONUS. During his employment, the Company shall pay the
Executive an annual bonus in accordance with the terms of a bonus incentive plan
that covers the Executive (or any replacement plan of substantially equivalent
or greater value that may subsequently be established and in effect at the time
for such action). The foregoing notwithstanding, the Executive shall receive a
guaranteed minimum bonus of $600,000 for fiscal 2000 which shall be paid in
March 2001. Should the Executive voluntarily terminate his employment prior to
the end of Fiscal 2000 or February 3, 2001, the Executive will not receive the
guaranteed minimum bonus. In addition to the bonuses described in the preceding
sentences, the Executive shall be entitled to a signing bonus in the amount of
$3,000,000 payable on the effective date of this agreement. In the event that
the Executive voluntarily terminates his employment within the first twenty-four
(24) months of employment or prior to July 31, 2002, the Executive will be
required to reimburse the Company for the net amount of the signing bonus
described above.
(d) EXPENSES. During his employment, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
him in performing services hereunder, including all reasonable expenses of
travel and living while away from home, provided that such expenses are incurred
and accounted for in accordance with the policies and procedures established by
the Company.
(e) OTHER BENEFITS. The Executive shall be entitled to
participate in all of the Company's employee benefit plans and arrangements in
effect on the date hereof in which other senior executives of the company
participate (including without limitation each pension and retirement plan and
arrangement, supplemental pension and retirement plan, deferred compensation
plan, short-term and long-term incentive plan, stock option plan, life insurance
and health-and-accident plan and arrangement, medical insurance plan, physical
examination program, dental care plan, accidental death and disability plan,
survivor income plan, relocation plan, financial, tax and legal counseling
programs, and vacation plan). The Company shall not make any changes in such
plans or arrangements which would adversely affect the Executive's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all senior executives of the Company and does not result in a proportionately
greater reduction in the rights or benefits of the Executive as compared with
any other senior executive of the Company. The Executive shall be entitled to
participate in, or receive benefits under, any employee benefit plan or
arrangement made available by the Company in the future to its executives and
key management employees, subject to, and on a basis consistent with, the terms,
conditions and overall administration of such plans and arrangements. Except as
otherwise specifically provided herein, nothing paid to the Executive under any
plan or arrangement presently in effect or made available in the future shall be
in lieu of the salary or bonus payable under subparagraphs (a), (b) and (c).
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(f) VACATIONS. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of earned
but unused vacation days, determined in accordance with the Company's vacation
plan. The Executive shall also be entitled to all paid holidays given by the
Company to its executives. Unused vacation days shall not be forfeited once they
have been earned and, if still unused at the time of the Executive's termination
of employment with the Company, shall be promptly paid to the Executive at their
then-current value, based on the Executive's rate of pay at the time of his
termination of employment.
(g) SERVICES FURNISHED. The Company shall furnish the Executive
with office space and such services as are suitable to the Executive's position
and adequate for the performance of his duties during the term of this Agreement
and for a period of six months following the date of any termination, except for
termination as described in paragraphs 7(a) [Death], 7(c) [Illegal or Grossly
Negligent Conduct], or 7(h) [Non-Renewal]. Upon mutual agreement between the
Company and the Executive, the office space furnished during the six month
period following termination may be at a location other than the Company's
principal executive offices.
(h) EXCISE TAX GROSS-UP. If the Executive becomes entitled to one
or more payments (with a "payment" including the vesting of restricted stock, a
stock option, or other non-cash benefit or property), whether pursuant to the
terms of this Agreement or any other plan or agreement with the Company or any
affiliated company (collectively, "Change of Control Payments"), which are or
become subject to the tax ("Excise Tax") imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the
Executive at the time specified below such amount (the "Gross-up Payment") as
may be necessary to place the Executive in the same after-tax position as if no
portion of the Change of Control Payments and any amounts paid to the Executive
pursuant to this paragraph 4(h) had been subject to the Excise Tax. The Gross-up
Payment shall include, without limitation, reimbursement for any penalties and
interest that may accrue in respect of such Excise Tax. For purposes of
determining the amount of the Gross-up Payment, the Executive shall be deemed:
(A) to pay federal income taxes at the highest marginal rate of federal income
taxation for the year in which the Gross-up Payment is to be made; and (B) to
pay any applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year. If the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time the Gross-up Payment is made, the Executive shall repay to
the Company at the time that the amount of such reduction in Excise Tax is
finally determined (but, if previously paid to the taxing authorities, not prior
to the time the amount of such reduction is refunded to the Executive or
otherwise realized as a benefit by the Executive) the portion of the Gross-up
Payment that would not have been paid if such Excise Tax had been used in
initially calculating the Gross-up Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time the Gross-up Payment is made, the Company shall make an
additional Gross-up Payment in respect of such excess (plus any interest and
penalties payable with respect to such excess) at the time that the amount of
such excess is finally determined.
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The Gross-up Payment provided for above shall be paid on the 30th day
(or such earlier date as the Excise Tax becomes due and payable to the taxing
authorities) after it has been determined that the Change of Control Payments
(or any portion thereof) are subject to the Excise Tax; PROVIDED, HOWEVER, that
if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined by counsel or auditors selected by the Company
and reasonably acceptable to the Executive, of the minimum amount of such
payments. The Company shall pay to the Executive the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code). The Company
shall have the right to control all proceedings with the Internal Revenue
Service that may arise in connection with the determination and assessment of
any Excise Tax and, at its sole option, the Company may pursue or forego any and
all administrative appeals, proceedings, hearings, and conferences with any
taxing authority in respect of such Excise Tax (including any interest or
penalties thereon); PROVIDED, HOWEVER, that the Company's control over any such
proceedings shall be limited to issues with respect to which a Gross-up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest any other issue raised by the Internal Revenue Service or any other
taxing authority. The Executive shall cooperate with the Company in any
proceedings relating to the determination and assessment of any Excise Tax and
shall not take any position or action that would materially increase the amount
of any Gross-up Payment hereunder.
5. OFFICES. Executive agrees to serve, if elected or appointed
thereto, in one or more executive offices of any of the Company's subsidiaries,
provided that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is currently provided by the
Company's by-laws and applicable state law.
6. CONFIDENTIAL INFORMATION.
(a) The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by the
Company, or not engaged to render services to the Company, any confidential
information obtained while in the employ of the Company, including, without
limitation, any of the Company's inventions, processes, methods of distribution
or customers or trade secrets; PROVIDED, HOWEVER, that this provision shall not
preclude the Executive from use or disclosure of information known generally to
the public or from disclosure required by law or court order.
(b) The Executive agrees that upon leaving the Company's employ
he will make himself reasonably available to answer questions from Company
officers regarding his former duties and responsibilities and the knowledge he
obtained in connection therewith. In addition, he will not take with him,
without the prior written consent of any officer authorized to act in the matter
by the Board, any study, memoranda, drawing, blueprint, specification or other
document of the Company, its subsidiaries, affiliates and divisions, which is of
a confidential nature relating to the Company, its subsidiaries, affiliates and
divisions.
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7. TERMINATION. The Executive's employment may be terminated during
the term of this Agreement only as follows:
(a) DEATH. The Executive's employment shall terminate upon his
death.
(b) DISABILITY. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for the entire period of six consecutive
months, and within thirty days after written notice of termination is given by
the Company or the Executive (which may occur before or after the end of such
six-month period), the Executive shall not have returned to the performance of
his duties hereunder on full-time basis, the Executive's employment shall
terminate. A termination of employment pursuant to this paragraph 7(b) shall be
deemed an involuntary termination for purposes of this Agreement or any plan or
practice of the Company.
(c) FOR CAUSE. Company may terminate the Executive's employment
for Cause. The Company shall have "Cause" to terminate the Executive's
employment if the Executive either (i) continuously fails to substantially
perform his duties hereunder (unless such failure is a result of a disability as
defined in paragraph (b)) or (ii) intentionally engages in illegal or grossly
negligent conduct which is materially injurious to the Company monetarily or
otherwise. A termination for Cause shall not take effect unless: (1) the
Executive is given written notice by the Company of its intention to terminate
him for Cause; (2) the notice specifically identifies the particular act or acts
or failure or failures to act which are the basis for such termination; (3) the
notice is given within 90 days of the Company's learning of such act or acts or
failure or failures to act; and (4) the Executive fails to substantially cure
such conduct, to the extent such cure is possible, within 60 days after the date
that such written notice is given to him.
(d) WITHOUT CAUSE. The Company may terminate the Executive's
employment at any time Without Cause. A termination "Without Cause" is a
termination of the Executive's employment by the Company for any reasons other
than those set forth in subsections (a) [Death], (b) [Disability] or (c) [For
Cause] of this paragraph.
(e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
may terminate his employment with the Company for Good Reason, which shall be
deemed to occur if he terminates his employment within six months after (i)
written notice of a failure by the Company to comply with any material provision
of this Agreement which failure has not been cured within ten days after such
written notice of noncompliance has been given by the Executive to the Company,
or (ii) a significant diminishment in the nature or scope of the authority,
power, function or duty attached to the position which the Executive currently
maintains without the express written consent of the Executive, or (iii) the
Executive is relocated more than 40 miles from the Company's principal executive
offices in Newark, California without his prior written consent.
(f) TERMINATION FOLLOWING CHANGE OF CONTROL. The Executive may
terminate his employment with the Company for Good Reason within one year after
a Change of Control. A Change in Control shall be deemed to have occurred if:
(i) any person or group (within the meaning of Rule 13d-3 of the rules and
regulations promulgated under the Securities Exchange
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Act of 1934, as amended) shall acquire, in one or a series of transactions,
whether through sale of stock or merger, ownership of stock of the Company that
possesses more than 30 percent of the total fair market value or total voting
power of the stock of the Company or any successor to the Company; (ii) a merger
in which the Company is a party after which merger the stockholders of the
Company do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the surviving company, or (iii) the
sale, exchange, or transfer of all or substantially all of the Company's assets
(other than a sale, exchange, or transfer to one or more corporations where the
stockholders of the Company before and after such sale, exchange, or transfer,
directly or indirectly, are the beneficial owners of at least a majority of the
voting stock of the corporation(s) to which the assets were transferred).
(g) VOLUNTARY TERMINATION. The Executive may voluntarily
terminate his employment with the Company at any time. A termination of
employment by the Executive pursuant to paragraph 7(e) [For Good Reason] shall
not be deemed a voluntary termination by the Executive for purposes of this
Agreement or any plan or practice of the Company but shall be deemed an
involuntary termination.
(h) NON-RENEWAL. If the Executive fails to request an extension
of this Agreement in accordance with paragraph 1 or if the Board fails to
approve such request, this Agreement shall automatically expire at the end of
its term. Such expiration shall not entitle the Executive to any compensation or
benefits except as earned by the Executive through the date of expiration of
this Agreement and set forth in paragraph 9(e). The parties hereto shall have no
further obligations to each other thereafter except as set forth in paragraphs 6
and 13.
8. NOTICE AND EFFECTIVE DATE OF TERMINATION.
(a) NOTICE. Any termination of the Executive's employment by the
Company or by the Executive during the term if this Agreement (other than as a
result of death) shall be communicated by written notice of termination to the
other party hereto. Such notice shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under that provision.
(b) DATE OF TERMINATION. The date of termination shall be:
(i) if the Executive's employment is terminated by his
death, the date of his death;
(ii) if the Executive's employment is terminated pursuant
to paragraph 7(b) [Disability], the date of termination shall be the 31st day
following delivery of the notice of termination;
(iii) if the Executive's employment is terminated for any
other reason by either party, the date on which a notice of termination is
delivered to the other party; and
(iv) if the Agreement expires pursuant to paragraph 7(h)
[Non-Renewal], the parties' employment relationship shall terminate on the last
day of the term of this Agreement without any notice.
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9. COMPENSATION AND BENEFITS UPON TERMINATION.
(a) DISABILITY, WITHOUT CAUSE OR FOR GOOD REASON. If the
Executive's employment terminates pursuant to paragraphs 7(b) [Disability], (d)
[Without Cause], or (e) [For Good Reason], the Executive shall be entitled to
the following:
(i) SALARY. The Company shall continue to pay the
Executive his then-current salary through the remaining term of this Agreement
as defined in paragraph 1.
(ii) BONUS. The Company shall continue to pay the Executive
an annual bonus(es) throughout such remaining term. Each such bonus shall be
equal to the greater of (A) the Executive's bonus during the year prior to his
termination or (B) the bonus that the Executive would have earned under the
Company's bonus plan in the year that he was terminated had he remained in its
employment; PROVIDED, HOWEVER, that such post-termination bonuses shall not
exceed the lesser of 100% of the targeted amounts for those bonuses in the prior
year and 100% of such targeted amounts for the then-current year. Such bonuses
shall not be paid until due under the Company's present bonus plan.
(iii) STOCK OPTIONS. With respect to any stock options
granted to the Executive by the Company, the Executive shall immediately become
vested in any unvested stock options upon such termination.
(iv) RESTRICTED STOCK. With respect to any restricted stock
granted to the Executive by the Company which has not become vested as of such
termination, the Executive shall immediately become vested in a pro rata portion
of such unvested stock in accordance with the terms of the applicable stock
grant agreements.
The Company shall have no further obligations to the Executive as a result of
such termination except as set forth in paragraph 13.
(b) FOR CAUSE. If the Executive's employment is terminated for
Cause (as defined in paragraph 7(c), he shall receive only the post-termination
compensation and benefits described in paragraph 9(d) [Compensation and benefits
upon Termination-Death or Voluntary Termination].
(c) CHANGE OF CONTROL. If the Executive's employment is
terminated either by the Company Without Cause (as defined in paragraph 7(d)) or
by the Executive for Good Reason (as defined in paragraph 7(a)) within one year
of a Change of Control (as defined in paragraph 7(f)), the Executive shall be
entitled to the following (in addition to any other payments or benefits
provided for in paragraphs 4(b) and (h)):
(i) LUMP SUM PAYMENT. The Company shall pay to the
Executive (or his designee or estate), immediately upon such termination, a lump
sum amount equal to: (A) the sum of the Executive's then current salary
(excluding any payments under paragraph 4(b)) and the greater of the most recent
bonus paid to the Executive under the Management Incentive Plan or the target
bonus for the fiscal year of the Company in which such termination occurs; times
(B) the greater of two or the number of years (including partial years computed
on a per day basis) remaining in the term of the Agreement under paragraph 1.
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(ii) STOCK OPTIONS. Upon such termination, the Executive
shall immediately become vested in any unvested stock options granted to the
Executive by the Company.
(iii) RESTRICTED STOCK. Upon a Change of Control, the
Executive shall become vested in any shares of restricted stock granted to the
Executive in accordance with paragraph 4(b) hereof.
(d) DEATH OR VOLUNTARY TERMINATION. If the Executive's employment
terminates pursuant to paragraphs 7(a) [Death] or 7(g) [Voluntary Termination],
he (or his designee or his estate) shall be paid his salary through his
termination date and not thereafter. He (or his designee or his estate) shall
not be entitled to any bonus payments which were not fully earned prior to his
termination date, and he (or his designee or his estate) shall not be entitled
to any pro-rated bonus payment for the year in which his employment terminates.
Any stock options granted to the Executive by the Company shall continue to vest
only through the date on which his employment terminates and any restricted
stock that was granted to the Executive by the Company that is unvested as of
the date on which his employment terminates shall automatically be reacquired by
the Company and the Executive (or his designee or his estate) shall have no
further rights with respect to such restricted stock. The Company shall have no
further obligations to the Executive as a result of the termination of his
employment pursuant to paragraphs 7(a) or 7(g).
(e) NON-RENEWAL. If the Agreement expires as set forth in
paragraph 7(h) [Non-Renewal], the Company shall have no further obligations to
the Executive except as set forth in paragraph 13; except that with respect to
any restricted stock granted to the Executive by the Company which has not
become vested as of such expiration date, the Executive shall immediately become
vested in a pro rata portion of such unvested stock in accordance with the terms
of the applicable stock grant agreements; and provided further, the Executive
shall be entitled to a pro rata portion of any bonus that Executive would have
received pursuant to paragraph 4(c) had the Executive remained employed through
the end of the fiscal year in which such expiration occurs. Any such pro rata
portion shall be payable as of the applicable bonus payment date for such fiscal
year.
10. EMPLOYMENT RESTRICTION.
(a) NON-COMPETE. The Company and the Executive acknowledge that
the Company has a special interest in and derives significant benefit from the
unique skills and experience of the Executive. In addition, the Executive will
use and have access to some of the Company's proprietary and valuable
Confidential Information during the course of the Executive's employment.
Accordingly, except as hereafter noted, during the term of the Executive's
employment with the Company and in the event that the Executive voluntarily
terminates his employment with the Company prior to July 31, 2004, the Executive
agrees that for a period of 36 months following his voluntary termination
pursuant to paragraph 7(g) [Voluntary Termination], he shall not provide any
labor, work, services or assistance to (whether as an officer, director,
employee, partner, agent, owner, independent contractor, stockholder or
otherwise) Burlington Coat Factory Warehouse Corporation, Xxxxxxx Department
Stores, Inc., Filene's Basement Corp., The Federated Stores, The May Department
Stores Company, The TJX
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Companies, Inc. and Value City Department Stores, Inc., as well as all
subsidiaries, divisions and/or the surviving entity of any of the above that do
business in the retail industry in the case of a merger or acquisition. However,
this subparagraph shall not prohibit the Executive from making any investment of
1% or less of the equity securities of any publicly-traded corporation or
limited partnership that is engaged in any business of the type or character
engaged in by the Company. The foregoing restrictions shall have no force or
effect in the event that: (i) the Executive's employment with the Company is
terminated either by the Company pursuant to paragraphs 7(c) [with Cause] or
7(d) [Without Cause] or by the Executive pursuant or paragraphs 7(e)
[Termination by the Executive for Good Reason] or 7(f) [Termination Following
Change of Control]; or (ii) the Company fails to approve or grant an extension
of this Agreement in accordance with paragraph 1 hereof.
(b) NON-SOLICITATION OF EMPLOYEES. During the term of the
Executive's employment with the Company and for a period of 36 months following
the termination of that employment for any reason, the Executive shall not
directly or indirectly solicit any other employee of the Company to terminate
his or her employment with the Company.
11. EXERCISE OF STOCK OPTIONS FOLLOWING TERMINATION. If the
Executive's employment terminates pursuant to paragraphs 7(a) [Death] or (b)
[Disability], he (or his estate) may exercise his right to purchase any vested
stock under the stock options granted to him by the Company for up to one year
following the date of his termination, but not later than the termination date
of such options. In all other instances, he may exercise that right for up to
three months following the date of his termination, but not later than the
termination date of such options. All such purchases must be made by the
Executive in accordance with the applicable stock option plans and agreements
between the parties.
12. SUCCESSORS; BINDING AGREEMENT. This Agreement and all rights of
the Executive hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts would still be payable to him hereunder, all such amounts
shall be paid in accordance with the terms of this Agreement to the Executive's
written designee or, if there be no such designee, to the Executive's estate.
13. INSURANCE AND INDEMNITY. The Company shall, to the extent
permitted by law, include the Executive during the term of this agreement under
any directors and officers liability insurance policy maintained for its
directors and officers, with coverage at least as favorable to the Executive in
amount and each other material respect as the coverage of other directors and
officers covered thereby. This obligation to provide insurance and indemnify the
Executive shall survive expiration or termination of this Agreement with respect
to proceedings or threatened proceedings based on acts or omissions of the
Executive occurring during the Executive's employment with the Company or with
any affiliated company. Such obligations shall be binding upon the Company's
successors and assigns and shall inure to the benefit of the Executive's heirs
and personal representatives.
14. NOTICE. For purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have
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been duly given when delivered or (unless otherwise specified) mailed by United
States registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: Xxxxx Xxxxxx
c/o Ross Stores, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Company: Xxxx Stores, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. MODIFICATION OR WAIVER; ENTIRE AGREEMENT. No provision of this
Agreement may be modified or waived except in a document signed by the Executive
and the chairman of the Compensation Committee of the Board or such other person
as may be designated by the Board. This Agreement, along with any stock option
or restricted stock agreements between the parties, constitute the entire
agreement between the parties regarding their employment relationship. To the
extent that this Agreement is in any way inconsistent with any prior or
contemporaneous restricted stock or stock option agreements between the parties,
this Agreement shall control. No agreements or representations, oral or
otherwise, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
16. GOVERNING LAW-SEVERABILITY. The validity, interpretation,
construction, performance, and enforcement of this Agreement shall be governed
by the laws of the State of California without reference to California choice of
law rules. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
17. MITIGATION NOT REQUIRED. In the event the Executive's employment
with the Company is terminated for any reason, the Executive shall not be
obligated to seek other employment following such termination; provided,
however, that the amount of salary and bonus to which the Executive will be
entitled under paragraph 9 hereof shall be reduced by the amount of salary
and/or bonus earned by the Executive for services performed for another employer
during the period that the Executive is entitled to receive continued salary or
bonus payments under paragraph 9 hereof.
18. WITHHOLDING. All payments required to be made by the Company
hereunder to the Executive or his estate or beneficiaries shall be subject to
the withholding of such amounts as the Company may reasonably determine it
should withhold pursuant to any applicable law. To the extent permitted, the
Executive may provide all or any part of any necessary withholding by
contributing Company stock with value, determined on the date such withholding
is due, equal to the number of shares contributed multiplied by the closing
NASDAQ price on the date preceding the date the withholding is determined.
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19. ARBITRATION. In the event of any dispute or claim relating to or
arising out of the parties' employment relationship or this Agreement
(including, but not limited to, any claims of breach of contract, wrongful
termination, or age, race, sex, disability or other discrimination), all such
disputes shall be fully, finally and exclusively resolved by binding arbitration
conducted by the American Arbitration Association in San Francisco, California
by an arbitrator mutually agreed upon by the parties hereto or, in the absence
of such agreement, by an arbitrator selected in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, PROVIDED, HOWEVER,
that this arbitration provision shall not apply to any disputes or claims
relating to or arising out of the misuse or misappropriation of the Company's
trade secrets or proprietary information. Notwithstanding the foregoing, if
either the Company or the Executive shall request, such arbitration shall be
conducted by a panel of three arbitrators, one selected by the Company, one
selected by the Executive, and the third selected by agreement of the first two,
or, in the absence of such agreement, in accordance with such Rules.
20. ATTORNEY'S FEES. Each party shall bear its own attorney's fees and
costs incurred in any action or dispute arising out of this Agreement.
21. MISCELLANEOUS. No right or interest to, or in, any payments shall
be assignable by the Executive; PROVIDED, HOWEVER, that this provision shall not
preclude Executive from designating in writing one or more beneficiaries to
receive any amount that may be payable after Executive's death and shall not
preclude the legal representative of Executive's estate from assigning any right
hereunder to the person or persons entitled thereto. This Agreement shall be
binding upon and shall inure to the benefit of the Executive, his heirs and
legal representatives and the Company and its successors.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
effective as of the date and year first above written.
XXXX STORES, INC.
By: /s/Xxxxxxx Xxxxxxx /s/Xxxxx Xxxxxx
Its: Vice Chairman & Chief Executive Officer Xxxxx Xxxxxx
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