AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of September 19,
1997, effective as of March 31, 1994, between XXXXXXX X. XXXXXX ("Executive")
and XXX. A. BANK CLOTHIERS, INC. ("Employer").
WHEREAS, the parties hereto are parties to a Management Agreement, dated as
of May 10, 1991, as amended from time to time (the "Previous Agreement")
pursuant to which Executive is currently serving as the Chief Executive Officer
of Employer.
WHEREAS, the parties wish by this Employment Agreement to provide for the
terms of the continued employment of Executive and to terminate the Previous
Agreement, except with respect to Section 6 thereof which was the subject of an
amendment to the previous Agreement, dated as of January 29, 1994, ("Section 6
of the Previous Agreement, as amended").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto hereby agree as follows:
1. EMPLOYMENT OF EXECUTIVE; TERMINATION OF PREVIOUS AGREEMENT
Employer hereby agrees to employ Executive, and Executive hereby agrees to
be and remain in the employ of Employer, upon the terms and conditions
hereinafter set forth. Employer and Executive hereby agree that upon the
execution hereof, the Previous Agreement shall be deemed terminated except with
respect to Section 6 of the Previous Agreement, as amended, which shall continue
in full force and effect and be deemed a part of this Agreement. This Agreement
is a contract for personal services of Executive and services pursuant hereto
may only be performed by Executive. This Agreement is an amendment and
restatement of that certain Employment Agreement, dated as of February 5, 1996,
between Executive and Employer, which Employment Agreement is hereby superseded
in its entirety.
2. EMPLOYMENT PERIOD
The term of Executive's employment under this Agreement (the "Employment
Period") shall commence March 31, 1994 and shall, subject to earlier termination
as provided in Section 5, continue for a period of five years after commencement
and be automatically renewed thereafter for successive one-year periods unless,
at least 180 days before the end of the initial five-year period or any
subsequent one-year period, either party gives notice to the other of his or its
desire to terminate the Employment Period, in which case the Employment Period
shall terminate as of the end of such period.
3. DUTIES AND RESPONSIBILITIES
3.1 General. During the Employment Period, Executive (i) shall have the
title of Chairman and Chief Executive Officer and (ii) shall devote
substantially all of his business time and expend his best efforts, energies and
skills to the business of the Company. The preceding sentence shall not be
construed to prohibit Executive from continuing to devote more than an
insignificant amount of time, in accordance with his past practice, to
management of his investments, serving on boards of directors, serving as Chief
Executive Officer of The Xxxxxx Group and participation in civic and
philanthropic activities.
Executive shall perform such duties, consistent with his status as Chairman
and Chief Executive Officer of Employer, as he may be assigned from time to time
by Employer's Board of Directors (the "Board of Directors"). Executive shall
have such authority, discretion, power and responsibility, and shall be entitled
to a office, secretarial and administrative (at least one secretary and/or
administrative assistant of his selection) and other facilities and conditions
of employment, as are customary or appropriate to his position and those
currently exercised by or afforded to him. Without limitation of the generality
of the foregoing, Executive, within the general guidelines adopted from time to
time by the Board of Directors, shall have the power, without further approval
of the Board of Directors, to hire, fire and establish the terms of employment
(including all compensation and bonus arrangements) of all employees of and
consultants and other advisers to the Company (other than the President).
Executive shall also serve without additional compensation as a director of the
Company and, if he should so desire, any of its subsidiaries. For all purposes
of this Agreement, the term "Company" means Employer and all corporation,
associations, companies, partnerships, firms and other enterprises controlled by
or under common control with Employer.
3.2 Location of Executive Offices. The Company will maintain its principal
executive offices at a location in the Baltimore, Maryland metropolitan area.
Executive shall not be required to perform services for the Company at any other
location, except for services rendered in connection with required travel on the
Company's business to an extent not substantially in excess of Executive's past
travel commitments for the Company.
4. COMPENSATION AND RELATED MATTERS
4.1 Base Salary. Employer shall pay to Executive during the Employment
Period an annual base salary (the "Base Salary") of $435,000, subject to such
raises as the Compensation Committee of the Board of Directors (the "Committee")
or the Board of Directors may from time to time determine in their sole
discretion. Commencing January 1, 1995, and on each January 1 thereafter during
the Employment Period, the Base Salary shall be increased (but never decreased)
by a percentage equal to the annual percentage increase, if any, in the Consumer
Price Index for Urban Wage Earners and Clerical Workers, Washington-Baltimore
DC-MD-VA-WV, All Items (November 1996 = 100) (the "Index"), published by the
Bureau of Labor Statistics of the United States Department of Labor. Any portion
of increased Base Salary which is retroactively due to Executive hereunder shall
be payable within 15 days after the computation thereof has been made.
Appropriate adjustment shall be promptly made following receipt of notice from
Executive in the event there is a published amendment of the Index figures upon
which the computation is based. If publication of the Index is discontinued, the
parties shall accept comparable statistics on the cost of living for the
Baltimore, Maryland area as computed and published by any recognized authority
acceptable to the parties. The Base Salary for each calendar year shall be
payable in installments in accordance with the Company's policy on payment of
executives in effect from time to time.
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4.2 Annual Bonus. For fiscal year 1994 (ending January 28, 1995) and for
each fiscal year that begins during the Employment Period (each such fiscal
year, a "Bonus Year"), Executive shall be entitled to receive a bonus of 75% of
Base Salary (each, a "Performance Bonus") conditioned upon the satisfaction of
(a) Company performance goals established by the Committee for such Bonus Year
and (b) personal performance goals submitted by the Executive to, and approved
by, the Company and the Committee for such Bonus Year. Company and personal
performance goals are herein referred to collectively as the "Performance
Goals". In the event the Performance Goals for any Bonus Year are not fully
satisfied, the Committee shall have the right, but not the obligation, to grant
a partial Performance Bonus for such Bonus Year. The Performance Goals for each
Bonus Year shall be established as soon as possible following the beginning of
such Bonus Year. In addition, the Committee may grant a discretionary bonus of
up to 25% of Base Salary for each Bonus Year (each, a "Discretionary Bonus") in
the event the Committee, acting in its sole discretion, determines that payment
thereof is warranted by extraordinary performance by Executive. The Performance
Bonus and the Discretionary Bonus are herein referred to collectively as the
"Bonus". The Bonus earned for any Bonus Year shall be payable promptly following
the determination thereof, but in no event later than 90 days following the end
of each Bonus Year. If (a) the Employment Period shall expire or terminate and
(b) Employee is entitled to payment of a bonus pursuant to Section 6 hereof, the
Bonus payable for the Bonus Year in which the Employment Period terminates or
expires shall equal the Bonus that would have been paid had the Employment
Period not so terminated or expired, multiplied by a fraction, the numerator of
which shall be the number of days of the Employment Period within the Bonus Year
and the denominator of which shall be 365. For the purposes of determining the
amount of Bonus payable pursuant to the immediately preceding sentence, it shall
be assumed that all conditions to payment based upon performance by the
Executive (e.g. personal performance goals) have been satisfied; provided that
nothing herein shall be deemed to require payment of a Discretionary Bonus.
Notwithstanding anything to the contrary contained herein or in the Employer's
Bonus Plan, in the event (y) the Employment Period shall end for any reason
whatsoever on a day prior to payment to Executive of a Bonus for the last full
Bonus Year contained within the Employment Period, and (z) Executive would have
been entitled to receive a Bonus for such last full Bonus Year had the
Employment Period not ended - then, Employer shall pay to Executive the Bonus
for such last full Bonus Year as and when such Bonus would have been paid had
the Employment Period not ended.
4.3 Life Insurance. Employer shall maintain in effect at all times during
the Employment Period, at Employer's expense, a policy of term life insurance,
or such other type of policy as Executive shall request provided that the cost
to Employer thereof is approximately the same as the cost of such term policy,
on the life of Executive in the amount of not less than $2,000,000 naming such
person as Executive shall designate from time to time as the owner and
beneficiary thereof. Executive agrees that Employer shall have the right to
obtain other life insurance on Executive's life, at Employer's sole expense and
with Employer or an affiliate thereof as the sole beneficiary thereof. Executive
shall (i) cooperate fully with Employer in obtaining all such insurance, (ii)
sign any necessary consents, applications and other related forms or documents,
and (iii) take any required medical examinations.
4.4 Automobile. Throughout the Employment Period, Employer shall provide to
Executive, at Employer's expense, a top-of-the-line Cadillac, Lincoln, Lexus or
comparable luxury automobile selected by Executive on a biannual basis and
equipped to Executive's satisfaction. Employer shall also be responsible for all
expenses of use and operation thereof.
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4.5 Other Benefits. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such fringe benefits as are, or are from time to time
hereafter, generally provided by Employer to Employer's senior management
employee or other employees (other than those provided under or pursuant to
separately negotiated individual employment agreements or arrangements) under
any pension or retirement plan, disability plan or insurance, group life
insurance, medical and dental insurance, travel accident insurance, stock
option, phantom stock or other similar plan or program of Employer. Executive's
Base Salary shall (where applicable) constitute the compensation on the basis of
which the amount of Executive's benefits under any such plan or program shall be
fixed and determined. If, during the Employment Period, any plan or program in
which Executive participates (including those in which Executive currently
participates) shall be amended so as to result in overall reduction of
Executive's benefits, or shall be terminated without being replaced by a new
plan or program providing for benefits equivalent overall to those provided for
Executive prior thereto, the Company shall make arrangements, in addition any
such amended or terminated plan or program, for Executive to participate in a
plan or program so as to provide benefits to Executive at least equivalent
overall to those provided to Executive prior to such amendment or termination,
such benefits to be provided through a plan or program of insurance if
commercially available.
4.6 Expense Reimbursement. Employer shall reimburse Executive for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement and consistent with past practice upon his presentation,
not less frequently than monthly, of signed, itemized accounts of such
expenditures, all in accordance with Employer's procedures and policies as
adopted and in effect from time to time and applicable to its senior management
employees.
4.7 Vacations. Executive shall be entitled to 20 days of vacation during
each calendar year, which shall accrue in accordance with the Company's vacation
policy in effect from time to time for its senior executive officers, with
reasonable carry-over allowances, which vacations shall be taken at such time or
times as shall not unreasonably interfere with Executive's performance of his
duties under this Agreement. Upon termination of Executive's employment pursuant
to Section 5 herein or non-renewal of the Employment Period as provided for
under Section 2 herein, for any reason whatsoever, Employer shall pay Executive,
in addition to any termination compensation provided for under Section 6 herein,
an amount equivalent to Executive's per diem compensation at the then-current
Base Salary rate multiplied by the number of unused vacation days, including any
carry-over, accrued by Executive as of the date of termination.
4.8 Tax Gross-up. In the event that any payments made by Employer to or on
behalf of Executive pursuant to the provisions of Section 4.3 through 4.6 hereof
result in the payment of additional federal, state or local income taxes by
Executive, Employer shall pay to Executive the amount of such additional taxes
plus such additional amount as shall be necessary to hold harmless Executive, as
nearly as can be, from the obligation to pay such taxes in respect of amounts
payable pursuant to this Section 4.8.
4.9. Initiation Fee Loan. The Company shall loan to Executive the sum of
approximately $40,000 (the "Initiation Fee Loan"), as evidenced by two, $20,000
Promissory Notes in form and substance mutually satisfactory to the Company and
Executive. One half of the Initiation Fee Loan
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shall be unsecured and made upon terms and conditions more fully set forth in
Promissory Note A. The other half of the Initiation Fee Loan shall be secured by
the "equity portion" of the initiation fee paid by Executive for membership at
Caves Valley Country Club ("Caves Valley"), all as more fully set forth in
Promissory Note B. For the purposes of this Section 4.9, the "equity portion" of
the initiation fee shall mean that portion thereof refunded upon resignation by
Executive of his membership at Caves Valley. Executive hereby assigns to the
Company, as collateral security for repayment of that portion of the Initiation
Fee Loan evidenced by Promissory Note B, the equity portion of Executive's
initiation fee at Caves Valley. Executive acknowledges receipt of the sum of
$40,200 on or about July 2, 1997, which sum shall be deemed the Initiation Fee
Loan, and agrees to repay such sum as set forth above.
5. TERMINATION OF EMPLOYMENT PERIOD
5.1 Termination Without Cause. Employer or Executive may, by delivery of
not less than 60 days' notice to the other at any time during the Employment
Period, terminate the Employment Period without cause.
5.2 By Employer for Cause. Employer may terminate the Employment Period in
accordance with this Section 5.2 at any time for cause. For the purpose of this
Section 5.2, "cause" shall mean any of the following:
a) the conviction of Executive in a court of competent
jurisdiction of a felony involving money or property of
the Company or moral turpitude;
b) the willful commission of an act not approved of or
ratified by the Board of Directors involving a series of
material conflicts of interest or self-dealings relating
to any material aspect of the Company;
c) the willful commission of any act of fraud or
misrepresentation (including the omission of material
facts) relating to the business of the Company and
materially and negatively impacting upon the Company and
its business; or
d) at any time prior to a change in control of the Company,
the willful and material failure of Executive to comply
with the lawful orders of the Board of Directors, provided
such orders are consistent with Executive's duties,
responsibilities and/or authority as Chief Executive
Officer of the Company.
In the event Employer shall elect to pursue a termination for cause, the
Board of Directors shall deliver to Executive a written notice setting forth
with reasonable particularity the grounds upon which the Board of Directors has
found cause for termination. In the event such grounds are predicated upon acts
or omissions as set forth in paragraphs (b), (c) or (d) above, Executive shall
have thirty (30) days, or such longer period as may be necessary provided
Executive has commenced and is diligently proceeding, to cure or eliminate the
cause for termination. In the event Executive has failed to timely cure or
eliminate the cause for termination as set forth in the immediately preceding
sentence,
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Executive and Executive's counsel (if Executive shall so elect) shall be granted
the opportunity to be heard before the Board of Directors upon not less than ten
days notice. The Employment Period shall terminate for cause if the Board of
Directors shall adopt at such hearing (or, in the event of cause predicated on a
criminal conviction as set forth in paragraph (a) above, at any meeting
following such conviction) a resolution concurred in by not less than a majority
of the Board of Directors, including at least two-thirds of all of the directors
who are not officers of Employer, that Executive was guilty of conduct
constituting "cause" hereunder, which conduct has not been timely cured (if
applicable), and specifying the particulars thereof in reasonable detail.
5.3 By Executive for Good Reason. Executive may, at any time during the
Employment Period by notice to Employer, terminate the Employment Period under
this Agreement for "good reason" effective immediately. For the purposes hereof,
"good reason" means (i) any material breach by Employer of any provision of this
Agreement which, if susceptible of being cured, is not cured within 30 days of
delivery of notice thereof to Employer by Executive; it being agreed, however,
that the foregoing 30 day cure period shall not be applicable to any failure
timely to pay (or any reduction in) compensation or benefits paid or payable to
Executive pursuant to the provisions of Section 4 hereof or (ii) the occurrence
of a change in control (as hereinafter defined) of Employer provided that not
more than 90 days shall have elapsed subsequent to Executive's becoming aware of
the occurrence of the change in control. Without limitation of the generality of
the foregoing, each of the following shall be deemed to be a material breach of
this Agreement by Employer: (x) any failure timely to pay (or any reduction in)
compensation (including benefits) paid or payable to Executive pursuant to the
provisions of Section 4 hereof; (y) any reduction in the duties,
responsibilities or perquisites of Executive as provided in Section 3.1 hereof
and (z) any transfer of the Company's principal executive offices outside the
geographic area described in Section 3.2 hereof or requirement that Executive
principally perform his duties outside such geographic area.
For purposes of this Agreement, a "change in control" of the Company shall
be deemed to have occurred if, as a result of a single transaction or a series
of transactions, (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company ( including any nominee corporation that holds
shares of the Company on behalf of the beneficial owners of such corporation),
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the Company's then
outstanding securities; or (B) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under any employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company
(including any nominee corporation that holds shares of the Company on behalf of
the beneficial owners of such corporation), in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities and there are
at least a majority of directors serving on the Board of Directors who were not
serving in such capacity as of the date hereof or who were not elected with the
consent of the Executive; or (C) the shareholders of the Company approve a
merger or consolidation of the Company with any other
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corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 70% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets; provided, however, the change in ownership of the
Company's securities resulting from the initial public offering thereof shall
not be deemed a "change in control" for purposes of this Agreement.
5.4 Disability. During the Employment Period, if, as a result of physical
or mental incapacity or infirmity (including alcoholism or drug addiction),
Executive shall be unable to perform his material duties under this Agreement
for (i) a continuous period of at least 180 days, or (ii) periods aggregating at
least 270 days during any period of 12 consecutive months (each a "Disability
Period"), and at the end of the Disability Period there is no reasonable
probability that Executive can promptly resume his material duties hereunder
pursuant hereto, Executive shall be deemed disabled ("the Disability") and
Employer, by notice to Executive, shall have the right to terminate the
Employment Period for Disability at, as of or after the end of the Disability
Period. The existence of the Disability shall be determined by a reputable,
licensed physician mutually selected by Employer and Executive, whose
determination shall be final and binding on the parties, provided, that if
Employer and Executive cannot agree upon such physician, such physician shall be
designated by the then acting President of the Baltimore City Medical Society,
and if for any reason such President shall fail or refuse to designate such
physician, such physician shall, at the request of either party, be designated
by the American Arbitration Association. Executive shall cooperate in all
reasonable respects to enable an examination to be made by such physician.
5.5 Death. The Employment Period shall end on the date of Executive's
death.
6. TERMINATION COMPENSATION; NON-COMPETE
6.1 Termination Without Cause by Employer or for Good Reason by Executive.
If the Employment Period is terminated by Employer pursuant to the provisions of
Section 5.1 hereof or by Executive pursuant to the provisions of Section 5.3
hereof, Employer will pay to Executive (a) Base Salary for a period of thirty
(30) months following the date of termination (calculated at the applicable Base
Salary rate which would have been in effect for each year during the balance of
Employment Period, assuming no termination) payable in equal installments at the
times Base Salary would have been paid had the Employment Period not been
terminated; (b) on the date due pursuant to the provisions of Section 4.2
hereof, the Bonus for the then current Bonus Year prorated as provided in
Section 4.2 and (c) if applicable, the Bonus for the last full Bonus Year
pursuant to Section 4.2. All other benefits provided for in Sections 4.3, 4.4,
4.5 and 4.8 shall be continued at the expense of Employer for the period that
payments are required to be made pursuant to the preceding provisions of this
Section 6.1. Without limiting the generality of the immediately preceding
sentence, Employer agrees that (x) the health benefits to be continued on behalf
of the Executive (at Company expense) during the severance period shall not be
part of Executive's optional COBRA period; (y) Executive shall have the right
and option to continue health coverage at Executive's expense after the
severance period to the greatest extent required to be offered by the Company
pursuant to applicable law; and (z)
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Executive shall be entitled to continue contributions into the Company's 401k
Plan during the severance period and the Company shall match a share of such
contributions in accordance with the Company's general policy applicable to
active employees. Notwithstanding termination of the Employment Period,
Executive shall continue to be entitled to discounts on purchases of products
from the Company in accordance with the discount program in effect from time to
time for active employees of the Company.
6.2 Certain Other Terminations. If the Employment Period is terminated by
Employer pursuant to the provisions of Section 5.2, by Executive pursuant to
Section 5.1 or as a result of the death of Executive as set forth in Section
5.5, Employer shall pay to Executive (a) Base Salary (calculated at its then
current rate per year) through the date of termination, (b) in the case of
termination as a result of the death of Executive as set forth in Section 5.5,
when due pursuant to provisions of Section 4.2 the Bonus for the Bonus Year in
which the date of termination occurred prorated as provided in said Section 4.2
and (c) if applicable, the Bonus for the last full Bonus Year pursuant to
Section 4.2. Employer shall have no obligation to continue any other benefits
provided for in Section 4 past the date of termination.
6.3 Termination for Disability. If the Employment Period is terminated by
Employer pursuant to the provisions of Section 5.4, Employer shall make all
payments and continue all benefits provided for in Section 6.1 for the balance
of the Employment Period (assuming no termination), provided, however, that such
payments shall be reduced by any amounts actually paid to Executive pursuant to
any disability insurance or other such similar program maintained by Employer.
6.4 Expiration at Election of Employer. In the event the Employment Period
expires because of an election by Employer to allow the Employment Period to
expire at the end of its then stated term as provided in Section 2 hereof,
Employer shall pay to Executive (a) Base Salary for the thirty (30) month period
following the date of termination (calculated at its then current rate per
year), payable in equal installments at the times Base Salary would have been
paid had the Employment Period not been terminated, (b) when due pursuant to the
provisions of Section 4.2, the Bonus for the Bonus Year in which the Employment
Period expired prorated as provided in said Section 4.2 and (c) if applicable,
the Bonus for the last full Bonus Year pursuant to Section 4.2. Employer shall
have no obligation to continue any other benefits provided for in Section 4 past
the date of termination.
6.5 Tax Grossup. In the event that any amounts paid to Executive pursuant
to the provisions of this Section 6 (including benefits continued and payments
deemed received by reason of changes in stock options provided for therein, all
such amounts, collectively, the "Severance Payments") shall be deemed to be
subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Excise Tax"), an additional amount (the "Grossup Amount") shall
be paid by Employer to Executive such that the net amount retained by Executive,
after deduction of any Excise Tax on the Severance Payments and any federal,
state and local income tax and Excise Tax upon the payment provided for by this
sentence, shall be equal to the Severance Payments. The provisions of this
Section 6.5 shall survive the expiration of the Employment Period and shall
continue in effect until expiration of the statute of limitations for tax
returns filed that include the period in which any Severance Payments are made
or, if earlier, final determination of tax liability relating thereto. Payment
of the Grossup Amount shall be made in accordance with the computation thereof
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by the accountant to Executive in connection with preparation of Executive's tax
return for the relevant tax year, and shall be adjusted upon final determination
of tax liability, with any increase therein being paid by the Employer to
Executive or decrease therein being paid by Executive to Employer within 30 days
following the date of final determination of tax liability.
6.6 No Other Termination Compensation. Executive shall not, except as set
forth in this Section 6 and in Section 4.7, be entitled to any compensation
following termination of the Employment Period, except as otherwise provided in
any stock options granted by Employer to Executive.
6.7 Mitigation. Executive shall not be required to mitigate the amount of
any payments or benefits provided for hereunder upon termination of the
Employment Period by seeking employment with any other person, or otherwise, nor
shall the amount of any such payments or benefits be reduced by any
compensation, benefit or other amount earned by, accrued for or paid to
Executive as the result of Executive's employment by or consultancy or other
association with any other person, provided, that any medical, dental or
hospitalization insurance or benefits provided to Executive with his employment
by or consultancy with an unaffiliated person during such period shall be
primary to the benefits to be provided to Executive pursuant to this Agreement
for the purposes of coordination of benefits.
6.8 Non-Compete. For the 6 month period following the termination or
expiration of the Employment Period for any reason whatsoever (other than a
termination by Executive pursuant to Section 5.1, in which case the applicable
period shall be one year), and for so long as Employer is making and the
Executive is accepting the payments required to be made to Executive pursuant to
either Section 6.1 or 6.4 hereof, Executive shall not, directly or indirectly,
(i) engage in any activities that are in competition with the Company in any
geographic area where the Company is engaged in business, (ii) solicit any
customer of the Company or (iii) solicit any person who is then employed by the
Company or was employed by the Company within one year of such solicitation to
(a) terminate his or her employment with the Company, (b) accept employment with
anyone other than the Company, or (c) in any manner interfere with the business
of the Company; provided, however, in the event Executive violates any of the
provisions of the foregoing at any time after the expiration of 6 months (one
year, in the case of a termination by Executive pursuant to Section 5.1)
following the termination of the Employment Period, Employer's sole remedy under
this Agreement shall be the right to terminate any and all severance payments
required under Sections 6.1 or 6.4 hereof. Executive acknowledges and agrees
that in the event of any violation or threatened violation by Executive of his
obligations under the preceding sentence during the six month (or, in the case
of a termination pursuant to Section 5.1, the one year) period following the
termination of the Employment Period, Employer shall be entitled to injunctive
relief without any necessity to post bond.
7. INDEMNIFICATION
The Company shall indemnify and hold Executive harmless from and against
any expenses (including attorneys' fees of the attorneys selected by Executive
to represent him, which shall be advanced as incurred), judgements, fines and
amounts paid in settlement incurred by him by reason of his being made a party
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of any act
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or omission to act by Executive during or before the Employment Period or
otherwise by reason of the fact that he is or was a director or officer of
Employer or any subsidiary or affiliate included as a part of the Company, to
the fullest extent and in the manner set forth and permitted by the General
Corporation Law of the State of Delaware and any other applicable law as from
time to time in effect. The provisions of this Section 7 shall survive any
termination of the Employment Period or any deemed termination of this
Agreement.
8. MISCELLANEOUS
8.1 Notices. Any notice, consent or authorization required or permitted to
be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, be
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally or by facsimile transmission (deemed given upon
receipt), or at such other address as either party shall designate by notice
given to the other in the manner provided herein.
If to Employer: Xxx. A. Bank Clothiers, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Secretary
With copy to: Xxxxx X. Xxxxxxxxx, Esq.
Kronish, Lieb, Weiner & Xxxxxxx
1114 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
If to Executive: Xx. Xxxxxxx X. Xxxxxx
Xxx. A. Bank Clothiers, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
8.2 Legal Fees. From and after any change in control of the Company,
Employer shall, upon demand by Executive, pay directly or reimburse Executive
for all costs and expenses, including but not limited to attorneys' fees and
court costs, incurred by Executive (a) in the event of any breach or threatened
breach by Employer of any of the terms and conditions of this Agreement, (b) in
the event of any dispute under this Agreement between Employer and Executive,
(c) in connection with the enforcement of any right or remedy reserved to
Executive under this Agreement, (d) in connection with the defense of any claim
by Employer of a breach by Executive under this Agreement (regardless of whether
such claim is proven) or (e) in connection with any modification of or amendment
to this Agreement. Neither the institution of any lawsuit nor the rendering of
any particular judgement therein shall constitute a condition precedent to
Executive's rights under the immediately preceding sentence.
8.3 Taxes. Employer is authorized to withhold (from any compensation or
benefits payable hereunder to Executive) such amounts for income tax, social
security, unemployment compensation and other taxes as shall be necessary or
appropriate in the reasonable judgement of Employer to comply with applicable
laws and regulations.
10
8.4 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed therein.
8.5 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Baltimore,
Maryland in accordance with the rules of the American Arbitration Association
then in effect. Judgement may be entered on the arbitration award in any court
having jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of his right to be paid until expiration of the Employment
Period during the pendency of any arbitration.
8.6 Headings. All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.
8.7 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
8.8 Severability. If any provision of this Agreement, or any part thereof,
is held to be unenforceable, the remainder of such provision and this Agreement,
as the case may be, shall nevertheless remain in full force and effect.
8.9 Entire Agreement and Representation. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. No representations or warranties of any kind or nature
relating to the Company or its several businesses, or relating to the Company's
assets, liabilities, operations, future plans or prospects have been made by or
on behalf of Employer to Executive. This Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof.
8.10 Successor and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors,
heirs (in the case of Executive) and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXX. A. BANK CLOTHIERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
_____________________________
Name: Xxxxxxx X. Xxxxxxx
_____________________________
Title: SVP/General Counsel
_____________________________
/s/ Xxxxxxx X. Xxxxxx
_____________________________
XXXXXXX X. XXXXXX
