EXHIBIT 10.55
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is dated as of April 1, 1997 by and between Xxxxxx X.
Xxxxxxxxx (the "Employee") and X. XXXXX, INC., a Massachusetts corporation (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 Chief Financial
Officer 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, and any subsidiary or parent of
the Company, the duties of the Chief Financial Officer, and/or such other 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 ("Base Salary") of not less than $225,000, payable in
equal installments in accordance with the Company's regular pay intervals for
its senior executives.
(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 such amounts, if any, to which the Employee is entitled, as an officer
of the Company, under the Company's Cash Incentive Compensation Plan (the
"Incentive Plan"), as from time to time such plan may
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be amended.
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 four 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.
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 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.
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(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 the mail order catalog sales thereof;
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.
8. Confidential Information. The Employee agrees that he 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,
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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, payable in accordance with the Company's regular pay intervals for its
senior executives 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, payable in
accordance with the Company's regular pay intervals for its senior executives
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 (other than the Employee) 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 to receive any accrued salary and other
amounts under the Incentive Plan accrued with respect to any prior fiscal years.
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(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,
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.
(e) Change of Control.
(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") or (D) by the Employee for
good reason within three (3) years after the employment of any of Messrs. Xxxxx,
Xxxxxxxxx or Xxxxx, respectively, 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
either event occurring in (e)(i) or (e)(ii), the Company shall pay to the
Employee an amount, in cash, (the "Severance Payment") 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. For purposes of this
Agreement "Annual Base Salary" shall mean the Employee's base salary in effect
on the date of this Agreement, as such base salary may be increased from time to
time.
(iii) In the event the Employee's employment is terminated as described
in subparagraph (e)(i) above, the Severance Payment shall be made to the
Employee in a single lump sum cash payment. In the event the Employee's
employment is terminated as described in subparagraph (e)(ii) above, the
Severance Payment shall be made to the Employee in accordance with the Company's
regular pay intervals for its senior executives beginning immediately following
the Employee's termination of employment with the Company.
(iv) Notwithstanding the Employee's rights to receive the payments and
benefits pursuant to this agreement, the Employee shall not be deemed to have
waived any rights the Employee may have at law or equity with respect to the
termination of his employment.
(v) 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
(e), if the Employee voluntarily terminates his employment after the occurrence
of any of the following events, if either the circumstances set forth in
subparagraphs (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
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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).
(f) Severance Payment Limitation Upon Change of Control. If
all or part of the Severance Payment payable to the Employee pursuant to
subparagraph 9(e) hereof, when added to other payments payable to the Employee
as a result of a Change of Control, constitute Parachute Payments, the following
limitation shall apply. If the Parachute Payments, net of the sum of the Excise
Tax, Federal income and employment taxes and state and local income taxes on the
amount of the Parachute Payments in excess of the Threshold Amount, are greater
than the Threshold Amount, the Employee shall be entitled to the full Severance
Payment payable under subparagraph 9(e) of this Agreement. If the Threshold
Amount is greater than the Parachute Payments, net of the sum of the Excise Tax,
Federal income and employment taxes and state and local income taxes on the
amount of the Parachute Payments in excess of the Threshold Amount, then the
Severance Payment payable under subparagraph 9(e) of this Agreement shall be
reduced to the extent necessary so that the maximum Parachute Payments shall not
exceed the Threshold Amount. The Company shall select a firm of independent
certified public accountants to determine which of the foregoing alternative
provisions shall apply. For purposes of determining the amount of the Federal
income and employment taxes, and state and local income taxes on the amount of
the Parachute Payments in excess of the Threshold Amount, the Employee shall be
deemed to pay Federal income taxes at the highest marginal rate of Federal
income taxation applicable to individuals for the calendar year in which the
Severance Payments under subparagraph 9(e) of this Agreement are payable and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of the Employee's residence for the calendar
year in which the Severance Payments under Subparagraph 9(e) of this Agreement
are payable, net of the maximum reduction in Federal income taxes which could be
obtained from deduction of such state and local taxes.
For purposes of this Agreement:
"Parachute Payments" shall mean any payment or provision by the Company
of any amount or benefit to and for the benefit of the Employee, whether paid or
payable or provided or to be provided under the terms of this Agreement or
otherwise, that would be considered "parachute payments" within the meaning of
Section 280G(B)(2)(A) of the Internal Revenue Code and the regulations
promulgated thereunder.
"Threshold Amount" shall mean three times the Employee's "base amount"
within the meaning of Section 280(G)(b)(3) of the Internal Revenue Code and the
regulations promulgated thereunder, less one dollar.
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"Excise Tax" shall mean the excise tax imposed by Section 4999 of the
Internal Revenue Code.
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, in its sole discretion,
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):
(a) If to the Company:
X. Xxxxx, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
(b) If to the Employee:
Xxxxxx X. Xxxxxxxxx
00 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 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.
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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.
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 whether oral or written with respect to such subject matter
between the parties including, without limitation, that certain Severance
Compensation Agreement dated as of November 1, 1995 by and between the Employee
and the Company.
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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 and Chief Executive Officer
/s/ Xxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
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