EXHIBIT 10.01
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is dated as of April 1, 1997 by and between Xxxxx X. Xxx
(the "Employee") and X. XXXXX, INC., a Massachusetts corporation together with
any subsidiaries of the Company (the "Company").
WHEREAS, the Employee and the Company desire to set forth in writing
the terms and conditions of the Employee's employment agreement with the Company
from the date hereof;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Employment. Under and subject to the terms and conditions set forth
herein, the Company hereby agrees to employ the Employee during the Term (as
defined in Section 6 hereof) as its Executive Vice President and President of
its Licensed Discount Footwear division and/or in such other senior executive
management position(s) with the Company, or any parent or subsidiary of the
Company, as the Board of Directors of the Company (the "Board") may determine
from time to time, and the Employee hereby accepts such employment.
2. Duties. The Employee agrees, during the Term and any extension of
the Term, faithfully to perform for the Company, such duties as may be assigned
to him from time to time by the Company. The Employee further agrees to devote
his entire business time, attention and energies exclusively to such employment
and to conform to the rules, regulations, instructions, personnel practices and
policies of the Company and its subsidiaries, as existing and amended from time
to time. The Employee may be required to relocate his principal residence only
to an area in which the Company or a subsidiary of the Company has or determines
to have significant operations.
3. Compensation.
(a) Base Salary. The Company shall pay the Employee during
the Term an annual base salary of not less than $275,000, payable no less often
than monthly, in equal installments.
(b) Cash Incentive Compensation. In addition to his annual base salary
as determined pursuant to Section 3(a), the Company shall pay to the Employee a
one time bonus payment equal to $65,000 on December 31, 1998 provided the
Employee is still employed by the Company on such date. During the Term, the
Employee shall also be paid such amounts, if any, to which the Employee is
entitled, as an officer of the Company, under the Company's Cash Incentive Plan
(the "Incentive Plan"), as from time to time such Incentive Plan may be
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amended, participating at award opportunity level C, with a "target" level of
incentive compensation of forty percent (40%) of base salary.
4. Other Benefits.
(a) Fringe Benefits. The Employee shall be entitled to
participate in all benefit programs that the Company establishes and makes
available to management generally and in any event shall be entitled to receive
benefits at least substantially comparable to those provided pursuant to the
present practices of the Company and its subsidiaries.
(b) Paid Vacations. The Employee shall be entitled to an
annual paid vacation of three weeks in each calendar year, to be taken at such
time or times as the Employee and the Company shall mutually agree, provided,
however, that no more than two weeks shall be taken during any three month
period unless otherwise agreed upon by the Company's Chief Executive Officer.
5. Expenses. The Company shall reimburse the Employee for all
reasonable travel, entertainment and other business expenses incurred or paid by
the Employee in performing his duties under this Agreement upon presentation by
the Employee of expense statements or vouchers and such other supporting
information as the Company may from time to time request, provided, however,
that the amount available for such expenses may be fixed in advance by the Board
after consultation with the Employee. The Company shall also pay or reimburse
the reasonable relocation expenses of the Employee (consistent with the present
policies of the Company) in connection with a relocation of the Employee's
principal residence outside of the greater Boston area required by the Company
pursuant to Section 2 hereof.
6. Effective Date and Term. This Agreement shall become effective as of
the date hereof and the Employee's employment under this Agreement shall
commence on such date and, unless sooner terminated as provided herein or
extended, shall continue for a term (the "Term") ending on April 1, 1999. The
Employee and the Company have obligations hereunder extending past the Term.
7. Noncompetition.
(a) During the Employee's employment under this Agreement or
otherwise and for a period of two years after the date of termination of such
employment (the "Termination Date"), the Employee will not, without the express
written consent of the Company, anywhere in the United States or any territory
or possession thereof or in any foreign country in which the Company was active
as of the Termination Date: (i) compete with the Company or any other entity
directly or indirectly controlled by the Company (each an "Affiliate"), in the
Company's Business (as defined in Section 7(c) hereof); or (ii) otherwise
interfere with, disrupt or attempt
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to interfere with or disrupt the relationship between the Company or an
Affiliate and any person or business that was a customer, supplier, lessor,
licensor, manufacturer, contractor, designer or employee of the Company or such
Affiliate on the Termination Date or within two years prior to the Termination
Date.
(b) The term "compete" as used in this Section 7 means
directly or indirectly, or by association with any entity or business, either as
a proprietor, partner, employee, agent, consultant, director, officer,
shareholder (provided that the Employee may make passive investments in
competitive enterprises the shares of which are listed on a national securities
exchange if the Employee at no time owns directly or indirectly more than 2% of
the outstanding equity ownership of such enterprise) or in any other capacity or
manner (i) to solicit, hire, purchase from, sell to, rent from, or otherwise
conduct business related to the Company's Business with any party that is a
customer or supplier of the Company or an Affiliate or (ii) operate any retail
store or leased footwear department ("Leased Department") which sells products
related to the Company's Business (as defined in Section 7(c) hereof).
(c) The term "Company's Business" as used in this Section 7
means the operation of any of the following specialty retail businesses, as a
principal business unit, either alone or in combination: (i) Leased Departments
in discount or mass merchandising department stores; (ii) retail stores offering
casual clothing for "Big and Tall" men; or (iii) retail stores offering
primarily work related clothing and uniforms for medical and laboratory purposes
or the mail order catalog sales thereof. The term shall also include any
additional specialty retail businesses which the Company may acquire subsequent
to the date hereof and which are operated as principal business units of the
Company on the Termination Date.
(d) The term "supplier" as used in this Section 7 shall mean
any party or affiliate of a party from which, on the Termination Date or within
two years prior to the Termination Date, the Company or an Affiliate purchased
products sold by the Company or an Affiliate or was in contact or actively
planning to contact in connection with the purchase of products sold by the
Company or an Affiliate on or before the Termination Date or which the Company
or an Affiliate was contemplating the sale of at some time after the Termination
Date.
(e) The term "customer" as used in this Section 7 shall mean
any party or affiliate of a party, that on the Termination Date or within two
years prior to the Termination Date, was a wholesale vendee or prospective
wholesale vendee of the Company or an Affiliate or in connection with whose
business the Company or an Affiliate operated a Leased Department, a retail
store for the sale of casual clothing for "Big and Tall" men, work related
clothing and uniforms for medical and laboratory purposes or any other specialty
retail business which the Company operated as a principal business unit on the
Termination Date, had contacted in connection with the potential operation of
such businesses within two years prior to the Termination Date or which the
Company or an Affiliate was actively planning to contact in connection with the
potential operation of any such businesses on the Termination Date.
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8. Confidential Information. The Employee will never use for his own
advantage or disclose any proprietary or confidential information relating to
the business operations or properties of the Company, any Affiliate or any of
their respective customers, suppliers, landlords, licensors or licensees. Upon
termination of the Employee's employment, the Employee will surrender and
deliver to the Company all documents and information of every kind relating to
or connected with the Company and Affiliates and their respective businesses,
customers, suppliers, landlords, licensors and licensees.
9. Termination.
(a) Death. In any event of the death of the Employee during
the Term, his employment shall terminate and the Company shall pay to the
Employee's surviving spouse, or to the Employee's estate if their is no
surviving spouse, (i) the Employee's base salary for one year from the date of
death, and (ii) amounts under the Incentive Plan, if any, payable with respect
to the fiscal year in which his death occurs which otherwise would have been
paid to the Employee on the basis of the results for such fiscal year, prorated
to the date of his death. Upon the death of the Employee, the rights of the
Employee's surviving spouse or estate hereunder, as the case may be, shall be
limited solely to the benefits set forth in this Section 9(a).
(b) Disability. In the event that the Employee shall become
disabled (as hereinafter defined) during the Term, the Company shall have the
right to terminate the Employee's employment upon written notice, provided,
however, that in such event the Company shall (i) continue to pay the Employee's
base salary for one year from the date such termination occurs, and (ii) pay to
the Employee amounts under the Incentive Plan, if any, which otherwise would
have been paid to the Employee on the basis of the results for the fiscal year
in which such termination occurs, prorated to the date of such termination. For
purposes of this Agreement, the Employee shall be considered disabled on the
date when any physical or mental illness or other incapacity shall, in the
judgment of a majority of the members of the Board, after consulting with or
being advised by one or more physicians (it being understood that one of such
physicians may be the Employee's physician but that the Board shall not be bound
by his views), have prevented the performance in a manner reasonably
satisfactory to the Company of the Employees duties under this Agreement for a
period of six consecutive months.
(c) For Cause. The Company may by notice terminate the
Employee's employment at any time for cause, which shall mean (i) failure by the
Employee to cure a material breach of this Agreement within 15 days after
written notice thereof by the Company, (ii) the continuation after notice by the
Company of willful misconduct by the Employee in the performance of the
Employee's duties hereunder or (iii) the commission by the Employee of an act
constituting a felony. In such event all obligations of the Company hereunder
shall thereupon terminate, including the obligation to pay any amounts under the
Incentive Plan with respect to the fiscal year in which such termination occurs,
but the Employee shall be entitled
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to receive any accrued salary and other amounts under the Incentive Plan accrued
with respect to any prior fiscal years.
(d) Without Cause. During the Term hereof and prior to any Change of
Control of the Company, the Company may terminate this Agreement at any time
without cause. In such event, the Company shall pay to the Employee, in
accordance with the Company's regular pay intervals for its senior executives,
(A) an amount equal to the greater of (i) the amount of Base Salary the Employee
would have received through the last day of the Term or (ii) one (1) year of
Base Salary, and (B) the amount, if any, of the bonus payment described in
Section 3(b) hereof, if such amount shall not have been paid as of the date of
the Employee's termination and (C) the amount of incentive compensation, if any,
which shall be subject to award to the Employee pursuant to the terms of the
Incentive Plan for a completed full fiscal year but which shall not have been
paid to the Employee as of the date of the Employee's termination.
(e) Change of Control/Change of Management. (i) In the event the
Employee's employment with the Company is terminated (A) by the Company or (B)
by the Employee for "good reason" within three (3) years after a Change in
Control of the Company occurring during the Term hereof (regardless of whether
such Employee's termination occurs after the expiration of the Term), or (ii) in
the event the Employee's employment is terminated (C) by the Company (except if
such termination is for "cause" as defined in subparagraph 9(c) hereof) or (D)
by the Employee for "good reason" within three (3) years after the employment of
Xx. Xxxxxxxxx with the Company has terminated during the Term hereof for any
reason including, without limitation, dismissal, resignation, retirement, death
or termination for any other reason, then, in such event, the Company shall pay
to the Employee an amount, in cash, (the "Severance Payment") equal to (A) the
greater of (i) the amount of Base Salary the Employee would have received
through the last day of the Term or (ii) one (1) year of Base Salary, (B) the
amount, if any, of the bonus payment described in Section 3(b) hereof, if such
amount shall not have been paid as of the date of the Employee's termination.
In the event the Employee's employment with the Company is terminated
as a result of the Company's decision, during the Term hereof, (regardless of
whether such Employee's termination occurs after the expiration of the Term) to
either sell the Licensed Discount Division in its entirety as a going concern,
or to discontinue operation of the Licensed Discount Division and to liquidate
the Division's licenses, inventory and fixed assets, then, in such event, the
Company shall pay to the Employee a single lump sum payment equal to (A) the
greater of (i) the amount of Base Salary the Employee would have received
through the last day of the Term or (ii) two (2) years Base Salary, and (B) the
amount, if any, of the bonus payment described in Section 3(b) hereof, if such
amount shall not have been paid as of the date of the Employee's termination and
(C) the amount of incentive compensation, if any, which shall be subject to
award to the Employee pursuant to the terms of the Incentive Plan for a
completed full fiscal year but which shall not have been paid to the Employee as
of the date of the Employee's termination.
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A termination for "good reason" shall be deemed to have occurred, and
the Employee shall be entitled to the benefits set forth in this paragraph 9, if
the Employee voluntarily terminates his employment after the occurrence of any
of the following events, if either the circumstances set forth in paragraphs
(e)(i) or (e)(ii) has occurred: (i) the assignment to the Employee of any duties
inconsistent with the highest position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities attained by the
Employee during the period of his employment by the Company; (ii) a relocation
of the Employee outside the metropolitan Boston area; or (iii) a decrease in the
Employee's compensation (including base salary, bonus or fringe benefits). For
purposes hereof, "Change of Control of the Company" shall have the meaning set
forth in the Company's 1994 Equity Incentive Plan, as approved by the
Stockholders of the Company on June 7, 1994 (and without regard to any
subsequent amendments thereto).
For purposes of this Agreement "Base Salary" shall mean the Employee's
Base Salary as set forth in subparagraph 3(a) of this Agreement, as such Base
Salary may be increased from time to time. If any of the termination events set
forth in this subparagraph (e) shall occur during the Term hereof or other
applicable time periods, the provisions of paragraph 7 hereof shall be null and
void and have no further force or effect.
10. Approval of Board. The Company represents that this Agreement
has been duly approved by the Board and is in all respects valid and binding
upon the Company.
11. Key Person Insurance. The Employee agrees to take such actions as
may be reasonably required to permit the Company to maintain key person life
insurance on the Employee's life in such amounts and for such periods of time,
if any, as the Company deems appropriate, with all benefits being payable to the
Company. Upon payment by the Employee of the cash surrender value, if any, of
any such policy and any paid but unearned premiums for such policy, the Company
will assign such policy to the Employee upon termination (other than because of
the Employee's death) of the Employee's employment with the Company, provided,
however, that, in the event the Employee's employment is terminated by reason of
the disability of the Employee and the death of the Employee may reasonably be
expected within one year after such termination as a result of such disability,
the Company shall not be required to assign any such policy.
12. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been given
and received when actually delivered, one business day after dispatch by
telegraphic means, two business days after dispatch by recognized overnight
delivery service, or five days after mailing by certified or registered mail
with proper postage affixed, return receipt requested and addressed as follows
(or to such other address as a party entitled to receive notice hereunder may
have designated by notice pursuant to this Section 12):
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(a) If to the Company:
X. Xxxxx, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
(b) If to the Employee:
Xxxxx X. Xxx
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
13. Severability. If any provision of this Agreement or its application
to any person or circumstances is invalid or unenforceable, then the remainder
of this Agreement or the application of such provision to other persons or
circumstances shall not be affected thereby. Further, if any provision or
application hereof is invalid or unenforceable, then a suitable and equitable
provision shall be substituted therefor in order to carry out so far as may be
valid or enforceable the intent and purposes of the invalid and unenforceable
provision.
14. Applicable Law. This Agreement shall be interpreted and
construed in accordance with, and shall be governed by, the laws of the
Commonwealth of Massachusetts without giving effect to the conflict of law
provisions thereof.
15. Assignment. Neither of the parties hereto shall, without the
written consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, provided, however, that in the event that the Company
sells all or substantially all of its assets the Company may assign its rights
and transfer its obligations hereunder to the purchaser of such assets. A merger
of the Company with or into another corporation shall be deemed not to be an
assignment of this Agreement, and, in any such event, this Agreement shall inure
to the benefit of and be binding upon the surviving corporation and the
Employee. Subject to the foregoing, this Agreement shall be binding upon, and
shall inure to the benefit of, the parties and their respective successors,
heirs, administrators, executors, personal representatives and assigns.
16. Headings. This section and paragraph headings contained in
this Agreement are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
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17. Remedies. It is specifically understood and agreed that any breach
of the provisions of Section 7 or 8 of this Agreement is likely to result in
irreparable injury to the Company, that damages at law will be inadequate remedy
for such breach, and that in addition to any other remedy it may have, the
Company shall be entitled to enforce the specific performance of said Sections
and to seek both temporary and permanent injunctive relief therefor without the
necessity of proving actual damages.
18. Waiver of Breach. Any waiver by either the Company or the
Employee of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
19. Amendment of Agreement. This Agreement may be altered,
amended or modified, in whole or in part, only by a writing signed by both the
Employee and the Company.
20. Integration. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter thereof and supersedes
all prior agreements with respect to such subject matter between the parties
including, without limitation, that certain Executive Employment Agreement dated
as of January 26, 1996 as amended by a First Amendment dated November 6, 1995, a
Second Amendment dated September 21, 1996 and a Third Amendment dated March 31,
1997.
Intending to be legally bound, the Company and the Employee have signed
this Agreement as if under seal as of the date set forth at the head of the
first page.
X. XXXXX, INC.
/s/ Xxxx X. Xxxxxxxxx
--------------------------
Xxxx X. Xxxxxxxxx
President
/s/ Xxxxx X. Xxx
--------------------------
Xxxxx X. Xxx
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