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EXHIBIT (10)(vi)
Material Contracts --
Employment Agreement
between Xxxxxxx Gordman
1/2 Price Stores, Inc. and
Xxxxxxx X. Xxxxxxx, dated
February 1, 1997.
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of February 1,
1997, between XXXXXXX GORDMAN 1/2 PRICE STORES, INC., a Delaware corporation
("Company") and Xxxxxxx X. Xxxxxxx ("Executive").
RECITALS:
Executive is currently the President and Chief Executive Officer for
Company. Company and Executive desire that Executive continue in this position
for Company upon the terms and conditions stated in this Agreement.
IT IS AGREED:
1. Position and Duties. Company hereby employs Executive in the capacity
of President and Chief Executive Officer. Executive shall perform the duties
as are reasonably associated with this position as Company may determine from
time to time. Executive shall have the authority to enable him to carry out
his duties.
2. Term. The term of this Agreement shall commence as of the date hereof
and continue for a term of three (3) years. On each anniversary of the
execution of this Agreement, the term shall automatically be extended for
another year unless either party gives notice of nonextension to the other
prior to such anniversary date.
3. Compensation. Company shall pay Executive a base salary of Two Hundred
Twenty-Five Thousand Dollars ($225,000) per year (the "Base Salary"), payable
biweekly in accordance with Company's normal payroll practices and subject to
normal withholding, including without limitation withholding for FICA and other
taxes. The Base Salary shall be subject to such annual increases as Company's
Compensation Committee shall determine are appropriate, provided that the Base
Salary shall not be less than $225,000. Any such annual increases shall become
effective at the beginning of each fiscal year of Company during the term of
this Agreement. Notwithstanding the foregoing, Executive shall be eligible to
be considered for a performance bonus from time to time or to be considered for
a mid-year increase in Base Salary, in each case at the sole discretion of
Company, as recommended by Company's Compensation Committee.
4. Benefits.
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a. General. Executive also shall be entitled to the following
benefits (the "Benefits"):
(1) Payment by Company of premiums for short term disability
insurance (100% of salary for up to six months) and director and
officer liability insurance for Executive, and a bi-weekly benefits
allowance determined in accordance with Company's executive
benefits policy currently in place;
(2) Payment by Company of membership dues for executive in
Prairie Life Club;
(3) Contribution by Company to 401(k) plans of Executive on terms
applicable to other senior management participants in such 401(k)
plans; and
(4) All other then current executive benefits offered by Company
and not otherwise specified above.
Any amounts payable to Executive under any benefit plans in respect of
any calendar year during which Executive is employed by Company for less
than the entire such year shall, unless otherwise required by government
regulation of the applicable plan, be prorated in accordance with the
number of days in such calendar year during which he is so employed.
b. Vacations. Executive shall be entitled to the number of paid
vacation days in each calendar year determined in accordance with
Company's vacation plan, but in no event less than twenty (20) working
days (four weeks) per calendar year. Executive shall also be entitled to
all paid holidays generally given by Company to its executives.
c. Services Furnished. Company shall furnish Executive in Omaha,
Nebraska with office space, secretarial assistance and such other
facilities and services as shall be suitable to Executive's position and
adequate for the performance of Executive's duties.
5. Reimbursement of Business Expenses. Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred in performing
services for Company, including reasonable entertainment expenses and
reasonable travel and living expenses while away from home in the performance
of services for Company, provided that such expenses are incurred and accounted
for in accordance with Company's policies and procedures in effect from time to
time.
6. Termination. For purposes of this Agreement, "Termination Date" shall
mean the last day of Executive's employment hereunder. This Agreement and
Executive's employment hereunder may be terminated as follows:
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a. Death. This Agreement shall terminate without notice
automatically upon the Executive's death. In such case, the Termination Date
shall be the date of death.
b. Total Disability. Company may terminate this Agreement following
Executive's total and continuous disability for a period of 180
consecutive days if the Board of Directors determines in good faith that
the disability prevents the Executive from carrying out his duties;
provided that such termination must be exercised by Notice of Termination
delivered to Executive prior to substantial cure of such disability. In
such case, the Termination Date shall be the date of delivery of the
Notice of Termination, or such later date as may be specified in the
Notice of Termination.
c. Cause. Company may terminate this Agreement for Cause provided
the conditions of this Section 6(c) are met. For purposes of this
Agreement, "Cause" shall mean (i) willful dishonesty which materially
damages Company or (ii) willful failure to substantially perform duties
if such performance is not commenced within five (5) business days after
written notice is delivered to Executive specifically identifying the
failure. Company shall initiate termination for Cause by delivering a
Notice of Termination to Executive. Upon delivery of the Notice of
Termination under clause (i) above, Executive shall be immediately
suspended, with pay, from his duties. Executive shall not be suspended
in connection with a Notice of Termination given under clause (ii) above.
Company shall give Executive at least 15 days written notice of and an
opportunity to be heard at a Board of Directors meeting at which the
Board shall decide whether to rescind the Notice of Termination. If the
Notice of Termination is not rescinded, the Termination Date shall be the
date of the Board of Directors meeting, or such later date as may be
specified by the Board.
d. Without Cause. Company may terminate this Agreement at any time
without Cause upon 30 days' Notice of Termination delivered to Executive.
In the event Company materially changes Executive's duties or authority
as provided in this Agreement, at Executive's option exercised at any
time following such event, Executive may deem such conditions to be
notice of termination by Company without Cause.
e. By Executive. Executive may terminate his employment hereunder
at any time with or without cause upon at least thirty (30) days' written
notice of termination.
"Notice of Termination", as used in this section, means a written notice
delivered to Executive by Company which states the specific termination
provision in this Agreement relied upon; sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so stated; and states the proposed
termination date in accordance with this Agreement.
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7. Severance Compensation. Upon termination of this Agreement, Executive
shall be entitled to the following severance compensation:
(a) Termination Without Cause. Upon termination by Company
without Cause, Executive shall be entitled to his then current Base
Salary and benefits under Section 4 hereof for the remainder of
the term hereof. The payment shall be paid within ninety (90) days
after the Termination Date in a lump sum equal to the present value
of the balance of such payments, such present value to be
calculated based on a discount factor equal to the then-current
general prime interest rate quoted for the fifth business day
preceding the payment in the Wall Street Journal or if the Wall
Street Journal is no longer being published, in a similar national
financial publication.
(b) Termination for Nonperformance. Upon termination of
Executive under 6(c)(ii) of this Agreement, Executive shall be
entitled to his then current Base Salary and benefits under Section
4 hereof for the lesser of 12 months or the remaining term of this
Agreement. The payment shall be paid on a bi-weekly basis,
pursuant to the provisions of Section 3 hereof. At Company's
option, the present value of any such remaining payments made be
made in a lump sum, such present value to be determined in
accordance with Section 7(a) above.
(c) Termination for Dishonesty, Resignation. Upon termination
of Executive under Section 6(c)(i) of this Agreement or if
Executive resigns, he shall be entitled only to Base Salary and
benefits under Section 3 of this Agreement through the Termination
Date.
8. Beneficiary Designation. Executive may by written notice delivered to
Company during his lifetime designate which person(s), including primary and
contingent beneficiaries, in the event of his death during the term of this
Agreement, he elects to have receive any payments which would otherwise be due
him under this Agreement. Executive may change his designations from time to
time and the last designation in writing filed with Company before his death
shall control. Failing such designation, the payments shall be made to the
legal representative(s) of Executive's estate. Company shall be fully
protected and absolved from any liability with respect to any payments made by
it hereunder in good faith and reasonably believed by it to be made in
compliance with any designation filed by Executive hereunder or, in the absence
thereof, to any persons reasonably believed by it in good faith to be entitled
to receive the same.
9. Hiring of Employees, Trade Secrets, Etc.
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a. Hiring of Employees. During the term of this Agreement and for a
period of one year thereafter, Executive shall not for any reason
whatsoever, directly or indirectly, induce or attempt to influence any
management employee of Company or any subsidiary of Company to terminate
his or her employment with Company or such subsidiary of Company or to
hire any employee of Company or any subsidiary of Company.
b. Trade Secrets. During the term of this Agreement and at all
times thereafter, Executive shall not use for his personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect
benefit of any person, firm, association or company other than Company or
any subsidiary of Company, any information regarding the business
methods, business policies, procedures, techniques, research or
development projects or results, trade secrets or other knowledge or
processes of a proprietary nature belonging to, or developed by, Company
or any other confidential information relating to or dealing with the
business operations or activities of Company or any subsidiary of
Company, made known to Executive or learned or acquired by Executive
while in the employ of Company.
c. Covenant Against Competition. Solely in the event that
Executive is terminated for Cause in accordance with Section 7(a) or his
employment terminates or is terminated under Section 7(b) above, for the
period of one year Executive shall not compete against Company within 50
miles of Company's corporate offices or any of its stores by, directly or
as an agent or employee of another entity, performing services that are
substantially similar to or are a competitive alternative to Company's
primary business of off-price retailing.
d. Remedies. Executive acknowledges that the restrictions
contained in the foregoing Sections 9(a) and (b) (the "Restrictions"), in
view of the nature of the business in which Company and its subsidiaries
are engaged, are reasonable and necessary in order to protect the
legitimate interests of Company and its subsidiaries, and that any
violation thereof would result in irreparable injury to Company.
Executive therefore further acknowledges that, in the event Executive
violates, or threatens to violate, any Restrictions, Company and its
subsidiaries shall be entitled to obtain from any court of competent
jurisdiction, without the posting of any bond or other security,
preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits and other benefits arising
from such violation, which rights shall be cumulative and in addition to
any other rights or remedies in law or equity to which Company or any
subsidiary of Company may be entitled.
e. Invalid Provisions. If any Restriction, or any part thereof, is
determined in any judicial or administrative proceeding to be invalid or
unenforceable, the remainder of the Restrictions shall not thereby be
affected and shall be given full effect, without regard to the invalid
provisions.
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f. Judicial Reformation. If the period of time or the area
specified in the Restrictions should be adjudged unreasonable in any
judicial or administrative proceeding, then the court or administrative
body shall have the power to reduce the period of time or the area
covered and, in its reduced form, such provisions shall then be
enforceable and shall be enforced.
g. Tolling. If Executive violates any of the Restrictions, the
restrictive period shall not run in favor of Executive from the time of
the commencement of any such violation until such time as such violation
shall be cured by Executive to the satisfaction of Company.
10. Other Investments. Nothing herein shall prohibit investments by the
Executive in other persons and enterprises, provided that such investments
shall not interfere with duties delegated to the Executive.
11. Notices. Any notice under this Agreement shall be deemed given to
Executive when deposited in the U.S. Mail postage prepaid addressed to him at
his last known residence and otherwise when delivered to him personally and to
Company when deposited in the U.S. Mail postage prepaid addressed to Company at
its principal office in Omaha, Nebraska and otherwise when delivered to Company
at such address, or to such other place as either party may direct from time to
time in writing.
12. Miscellaneous. No provision of this Agreement may be modified or
waived unless such waiver or modification is agreed to in writing signed by
Executive and Company. No waiver by either party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
13. Severability. The invalidity or unenforceability of any provision(s)
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14 Successors and Assigns. The rights and obligations of Company under
this Agreement shall be binding upon and shall benefit its successors and
assigns. Company shall not sell substantially all of its assets or undertake a
liquidation or dissolution of Company without providing reasonable assurances
to Executive that this Agreement will be honored by the successor to Company's
business.
15. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto with respect to the subject matter contained herein. This
Agreement supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect thereof.
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16. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nebraska.
17. Survival. The provisions of Sections 6, 7, 8 and 9 of this
Agreement shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXXX GORDMAN 1/2 PRICE STORES, INC.
By /s/ Xxxx X. Xxxx, Xx.
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Title Chairman
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EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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