1
Exhibit 10.23
EXECUTIVE RETIREMENT AGREEMENT
Agreement made on JUNE 10, 1998, between Gadzooks, Inc., a Texas
corporation (the "Company"), and XXXXX X. XXXXXXXXX ("Executive").
RECITALS
A. Executive is currently employed by the Company.
B. The Company and Executive desire to enter into certain agreements
providing for certain events upon the Executive's retirement from the Company.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Eligibility. The Executive or his estate, devisees or heirs, as the
case may be, shall be eligible to receive the benefits provided for in this
Agreement so long as he is an officer of the Company at or above the level of
vice president (an "Executive Officer") on the termination date of the
Executive's employment with the Company as a result of either (i) the
Executive's death, (ii) the Company's termination, without Cause (as defined
herein), of the Executive's employment with the Company or (iii) the Executive's
retirement from employment with the Company (each, the "Retirement Date"). The
Executive shall cease to be eligible for the benefits provided for in this
Agreement if his employment with the Company is terminated by the Company for
Cause, and this Agreement shall automatically terminate and be of no further
force or effect upon the date of such termination. The Company shall have the
right to terminate the Executive's employment at any time for any of the
following reasons, each of which is referred to herein as "Cause": (i) any act
of fraud or dishonesty with respect to any aspect of the Company's or any
affiliate's business; (ii) continued use of illegal drugs; (iii) as a result of
the Executive's gross negligence or willful misconduct, the Executive shall
violate, or cause the Company to violate, any applicable federal or state
securities or banking law or regulation and as a result of such violation, shall
become, or shall cause the Company or any affiliate to become the subject of any
legal action or administrative proceeding seeking an injunction from further
violations or a suspension of any right or privilege; (iv) as a result of the
Executive's gross negligence or willful misconduct, the Executive shall commit
any act that causes, or shall knowingly fail to take reasonable and appropriate
action to prevent, any material injury to the financial condition or business
reputation of the Company or any affiliate; (v) substantial failure of
performance, repeated or continued after written notice of such failure and
explanation of such failure of performance, which is reasonably determined by
the Board of Directors to be materially injurious to the business or interests
of the Company or any affiliate; or (vi) conviction of a felony or of a crime
involving moral turpitude.
2. Stock Options - Acceleration of Vesting. Immediately after the
Retirement Date and notwithstanding the provisions of any applicable stock
option agreements, all of the Executive's unexpired Company stock options
granted pursuant to any Company stock option plan shall become vested in full
and may be exercised by the Executive (or by the Executive's personal
representative, heir or legatee, in the event of death) at any time within the
earlier of (i) 36 months following the Retirement Date and (ii) the expiration
of the stock option's term.
2
3. Insurance Coverage. After the Retirement Date and until the death of
the Executive or the Executive's spouse, whichever is later, the Company will
continue to provide to the Executive (and the Executive's spouse, if applicable)
all medical, dental and life insurance coverage provided to the Executive (and
the Executive's spouse, if applicable) by the Company on the Retirement Date
(the "Insurance Coverage"); provided, however, once the Executive or his spouse
becomes eligible for Medicare coverage, the Insurance Coverage will
automatically be reduced with respect to such person by the amount of Medicare
coverage, irrespective of whether the Executive or his spouse actually obtains
such coverage, and thereafter the Insurance Coverage with respect to such person
will only be supplemental to Medicare coverage. The Insurance Coverage may be
modified by the Company at any time subsequent to the Retirement Date as long as
such modifications are pursuant to and to the same extent as any modifications
to the Company's insurance coverage provided to the Executive Officers in office
on the date of such modifications and such modifications do not result in a
substantial reduction in benefits under the Insurance Coverage.
4. Transitional Consultancy. During the eighteen (18) months
immediately following the Retirement Date (the "Consulting Period"), at the sole
discretion of the Company's Board of Directors, the Company may elect to retain
the services of the Executive to facilitate an orderly transition of the
Executive's duties and responsibilities to the Executive's successor(s) (the
"Services"). If the Company's Board of Directors so elects, the Company and the
Executive will negotiate in good faith to enter into a mutually acceptable
consulting relationship under which the Executive would be an independent
contractor.
5. Pro Rated Bonus Payment. On the date that the Executive Officers are
paid their bonuses for the fiscal year that includes the Retirement Date, the
Company will pay to the Executive or his estate, devisees, or heirs, as the case
may be, an amount equal to (i) the bonus that the Executive would have received
if he was still an Executive Officer on such date multiplied by (ii) a fraction,
the numerator of which is equal to the number of days from the first day of the
fiscal year that includes the Retirement Date to the Retirement Date, and the
denominator of which is equal to 365.
6. Not a Contract of Employment. This Agreement shall not be deemed to
constitute an express or implied obligation of the Company to continue to employ
the Executive.
7. Successors. The provisions of this Agreement shall be binding upon
the Company and its successors and assigns.
8. Governing Law. This Agreement will be construed and enforced
according to the laws of the State of Texas.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.
GADZOOKS, INC.
By: Xxxxxx X. Xxxxxxxxxxx
Name: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Title: Chairman of the Board and
Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
2
