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Exhibit 10.5
AMENDED AND RESTATED
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EMPLOYMENT AGREEMENT
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This Agreement ("Agreement") is made by and between XXXXXXX X.
XXXXXX-XXXXXX ("Employee") and ABERCROMBIE & FITCH CO., a Delaware corporation
(the "Company") (hereinafter collectively "the parties").
WHEREAS, Employee has been employed by the Company as Vice
President - General Merchandising Manager, Women's;
WHEREAS, the parties entered into a written employment
agreement on December 5, 1997 ("1997 Employment Agreement") which the parties
wish to amend and, in place of which, substitute this Agreement which shall for
all purposes supercede and replace the 1997 Employment Agreement;
WHEREAS, the parties acknowledge it is in their individual and
mutual best interests for Employee to immediately resign from her current
position as an officer of the Company, and continue her employment with Company
on a special assignment basis through February 21, 2000, and thereafter resign
from her employment with the Company; and
WHEREAS, the parties wish to redefine their relationship and
obligations, and amicably resolve all past and potential future disputes
relating thereto;
NOW, THEREFORE, in exchange for and in consideration of the
following mutual covenants and promises, the undersigned parties, intending to
be legally bound, hereby agree as follows:
1. Amendment, Restatement and Replacement of Prior 1997
Employment Agreement. The parties' 1997 Employment Agreement is hereby amended,
replaced and superceded by the terms of this Agreement. Except to the extent of
the terms, rights and
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conditions restated in this Agreement, the parties waive and discharge each
other from all obligations, duties, and rights under the 1997 Employment
Agreement. The change in employment position and responsibilities of Employee
and events leading to this Agreement shall not be asserted as, or form the basis
for, any claim by either party against the other under the terms of the 1997
Employment Agreement. A copy of the 1997 Employment Agreement is attached hereto
as Appendix A, for reference purposes only.
2. Change in Employment Position and Responsibilities.
Employee hereby resigns from her current position as an officer of the Company
effective August 16, 1999. Commencing immediately thereafter, Employee shall
continue employment with the Company until February 21, 2000, in a non-officer
capacity and shall perform such services as may reasonably be assigned to her by
the Company's Chief Executive Officer, provided that no such assignments shall
be required to be performed at any particular place of business, except as
agreed upon by Employee. Employee shall, while employed by the Company: (a)
devote her full business time and attention to the business and affairs of the
Company; (b) fully discharge her legal duty of loyalty to the Company; and (c)
not accept employment with any other entity absent prior approval in writing
from the Company's Chief Executive Officer; provided, however, that nothing in
this Agreement shall preclude Employee from serving on corporate, civic or
charitable boards or committees or managing personal investments, so long as
such activities do not interfere with the performance of Employee's duties
hereunder.
3. Compensation and Benefits in New Position. Employee shall
continue to be compensated at her base salary in effect on August 16, 1999
("Current Base Salary"), and shall continue to be eligible to participate in all
current employee benefit programs, including all group life, health and
retirement plans (including, without limitation, The Abercrombie & Fitch
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Savings and Retirement Plan, The Abercrombie & Fitch Co. Supplemental Retirement
Plan, and the Abercrombie & Fitch Co. Deferred Compensation Plan), on the same
basis that such programs are offered to other employees of the Company;
provided, however, Employee shall not be eligible to participate in any
incentive compensation or bonus plan of the Company after August 16, 1999.
Employee shall retain all rights to vest in and exercise currently held Company
stock options and/or vest in and/or dispose of currently held Company restricted
shares until February 21, 2000, to the extent and in accordance with all terms
and restrictions imposed by applicable plans and agreements under which such
options and/or restricted share rights were granted, as such plans are written
and implemented on the date of this Agreement.
4. Resignation from Employment. Employee hereby offers and
Company accepts Employee's resignation from employment effective February 21,
2000 ("Resignation Date"). On the Resignation Date, Employee's employment with
the Company and all further compensation, remuneration, and eligibility of
Employee under Company benefit plans shall terminate, except as otherwise
provided in this Agreement or by applicable law.
5. Termination of Employment Prior to Resignation Date.
Employee's employment may be terminated prior to the Resignation Date only under
the following circumstances: (a) Upon Employee's death or; (b) by Company or by
Employee upon material breach of the terms of this Agreement by the other party,
which breach is not cured and resolved within two weeks following written notice
sent by regular and certified mail by the party claiming breach to the other
party.
6. Compensation Following Termination of Employment Prior to
Resignation Date. In the event Employee terminates her employment prior to the
Resignation Date in accordance with the provisions of Paragraph 5(b), Company
shall pay Employee all
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accrued base salary and benefits to the date of employment termination plus an
amount equal to her Current Base Salary for the period from the termination date
through the date one (1) year following the date Employee signs this Agreement
("Anniversary Date"), in equal weekly installments, subject to ordinary and
necessary withholding taxes. In addition, the Employee's cost of continuation of
medical and dental insurance coverage, if any, shall be paid by Company to the
Anniversary Date for the Employee and, if applicable, her dependents. In the
event Employee dies or the Company terminates Employee's employment prior to the
Resignation Date in accordance with the provisions of Paragraph 5(b), Company
shall pay to Employee all accrued base salary and benefits to the date of
termination and shall not be obligated to pay any further amounts or benefits
whatsoever to Employee.
7. Compensation/Severance Following Resignation Date. In the
event Employee remains employed until the Resignation Date, the Company agrees
to pay to Employee an amount equal to her Current Base Salary for the period
from her Resignation Date to the Anniversary Date of this Agreement in equal
weekly installments subject to ordinary and necessary withholding taxes.
Furthermore, for the period of such installment payments, the Company further
agrees to reimburse the Employee's cost of continuing medical and dental
insurance benefits for Employee and Employee's eligible dependents under the
Comprehensive Budget Reconciliation Act of 1986 ("COBRA") for so long as
Employee is eligible for and elects such continuation of benefits under COBRA.
All payments and benefits under this Paragraph shall cease upon the death of
Employee.
8. Employee Covenants.
(a) Unauthorized Disclosure. The Employee shall not, during
her employment with the Company and thereafter, make any Unauthorized
Disclosure. For purposes
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of this Agreement, "Unauthorized Disclosure" shall mean disclosure by the
Employee without the prior written consent of the Company's Chief Executive
Officer to any person, other than an employee of the Company or a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by the Employee of duties as an employee of the Company or as may be
legally required, of any information relating to the business or prospects of
the Company (including, but not limited to, any confidential information with
respect to any of the Company's customers, products, methods of distribution,
strategies, business and marketing plans, business policies and practices, and
plans for new business concepts); provided, however, that such term shall not
include the use or disclosure by the Employee, without consent, of any
information known generally to the public (other than as a result of disclosure
by the Employee in violation of this Paragraph 8(a)). This confidentiality
covenant has no temporal, geographical or territorial restriction.
(b) Non-Competition. During the Non-Competition Period
described below, the Employee shall not, directly or indirectly, without the
prior written consent of the Company, own, manage, operate, join, control, be
employed by, consult with or participate in the ownership, management, operation
or control of, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other entity that
competes, directly or indirectly, with the Company or any division, subsidiary
or affiliate of the Company ("Competing Entity"); provided, however, that the
"beneficial ownership" by the Employee after termination of employment with the
Company, either individually or as a member of a "group", as such terms are used
in Rule 13d of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of not more than two percent (2%)
of
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the voting stock of any publicly held corporation shall not be a violation of
Paragraph 8 of this Agreement.
For purposes of this Agreement, Competing Entity includes: (1)
any entity listed on Appendix B attached to this Agreement; (2) any entity
which, in the future, shall plan, attempt or engage in any activities with the
object, goal or purpose of competing with the Company or any of the other
entities listed on Appendix B. Employee shall provide advance written notice to
Company of any proposed or contemplated employment, consulting or other
activities for remuneration during the Non-Competition Period, and shall furnish
reasonable detail to the Company upon request, concerning the specific functions
and responsibilities contemplated in any such employment, consulting, or similar
activities.
The "Non-Competition Period" means the period the Employee is
employed by the Company plus an additional period of time from the date of
termination of Employee's employment for any reason to the Anniversary Date of
this Agreement.
(c) Non-Solicitation. During the No-Raid Period described
below, the Employee shall not, either directly or indirectly, alone, or in
conjunction with another party, interfere with or harm, or attempt to interfere
with or harm, the relationship of the Company, its subsidiaries and/or
affiliates, with any person who at any time was an employee, customer or
supplier of the Company, its subsidiaries and/or affiliates or otherwise had a
business relationship with the Company, its subsidiaries and/or affiliates, nor
shall Employee hire or cause to be hired any person who is or was employed by
Company.
The "No-Raid Period" means the period the Employee is employed
by the Company plus an additional period of time from the date of termination of
Employee's employment for any reason to the Anniversary Date of this Agreement.
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(d) Remedies. The Employee agrees that any breach of the terms
of this Paragraph 8 would result in irreparable injury and damage to the Company
for which the Company would have no adequate remedy at law; the Employee
therefore also agrees that in the event of said breach or any threat of breach,
the Company shall be entitled to immediately cease further payments under this
Agreement and shall further be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Employee and/or any and all persons and/or entities
acting for and/or with the Employee, without having to prove damages, and to all
costs and expenses, including reasonable attorneys' fees and costs, in addition
to any other remedies to which the Company may be entitled at law or in equity.
The terms of this subparagraph shall not prevent the Company from pursuing any
other available remedies for any breach or threatened breach hereof including
but not limited to the recovery of damages from the Employee. The Employee and
the Company further agree that the provisions of the covenants not to compete
and solicit are reasonable and that the Company would not have entered into this
Agreement but for the inclusion of such covenants herein. Should a court or
arbitrator determine, however, that any provision of the covenants is
unreasonable, either in period of time, geographical area, or otherwise, the
parties hereto agree that the covenant should be interpreted and enforced to the
maximum extent which such court or arbitrator deems reasonable.
9. Confidentiality. Employee agrees not to at any time talk
about, write about, or otherwise publicize or disclose to any third party the
terms of this Agreement or any fact concerning its negotiation, execution or
implementation, except with (1) an attorney, accountant, or other advisor
engaged by Employee to advise her; (2) the Internal Revenue Service or other
governmental agency upon proper request; and (3) her immediate family,
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providing that all such persons agree in advance to keep said information
confidential and not to disclose it to others. Nothing in this paragraph shall
be construed to prohibit Employee from disclosing to potential employers the
existence of Paragraph 8 of this Agreement.
10. Release of All Claims.
(a) Release of Company by Employee. In consideration of the
receipt of the sums and covenants stated herein, Employee does hereby, on behalf
of herself, her heirs, administrators, executors, agents, and assigns, forever
release, requite, and discharge the Company and its agents, parents,
subsidiaries, affiliates, divisions, officers, directors, employees,
predecessors, successors, and assigns ("Released Parties"), from any and all
charges, claims, demands, judgments, actions, causes of action, damages,
expenses, costs, attorneys' fees, and liabilities of any kind whatsoever,
whether known or unknown, vested or contingent, in law, equity or otherwise,
which Employee has ever had, now has, or may hereafter have against said
Released Parties for or on account of any matter, cause or thing whatsoever
which has occurred prior to the date of this Agreement. This release of claims
includes, without limitation of the generality of the foregoing, any and all
claims which are related to Employee's employment with the Company and her
resignation from her officer position and her resignation from employment on
February 21, 2000; and any and all rights which Employee has or may have had
under the 1997 Employment Agreement, Title VII of the Civil Rights Act of 1964,
as amended by the Equal Employment Opportunity Act of 1972, the Civil Rights Act
of 1991, the Employee Retirement Income Security Act, 29 U.S.C. ss.1001 et seq.,
the Americans With Disabilities Act; the Age Discrimination in Employment Act;
Ohio Revised Code Section 4112.01 et seq., and all other federal, state, and
local statutes and regulations, as well as the laws of contract, torts, and all
other subjects; provided, however, that nothing herein shall be deemed to affect
any rights of
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Employee under this Agreement or to vested pension, employee welfare benefits,
stock options, or restricted shares, and provided further that nothing herein
shall be deemed to affect any rights of Employee to indemnity for liabilities
incurred for acts taken in good faith in the course and scope of employment with
the Company which acts are otherwise covered under the terms and conditions of
Directors and Officers liability insurance maintained by Company during the
employment of Employee.
(b) Release of Employee by Company. In consideration of the
receipt of the terms and covenants stated herein, Company does hereby, on behalf
of itself, and the Released Parties, forever release, requite, and discharge the
Employee from any and all charges, claims, demands, judgments, actions, causes
of action, damages, expenses, costs, attorneys' fees, and liabilities of any
kind whatsoever, whether known or unknown, vested or contingent, in law, equity
or otherwise, which Company has ever had, now has, or may hereafter have against
Employee for or on account of any matter, cause or thing whatsoever which has
occurred prior to the date of this Agreement; provided, however, that nothing
herein shall affect any rights of Company under this Agreement.
11. Complete and Absolute Defense. This Agreement constitutes,
among other things, a full and complete release of any and all claims released
by either party, and it is the intention of the parties hereto that this
Agreement is and shall be a complete and absolute defense to anything released
hereunder. The parties expressly and knowingly waive their respective rights to
assert any claims against the other which are released hereunder, and covenant
not to xxx the other party or Released Parties based upon any claims released
hereunder. The parties further represent and warrant that no charges, claims or
suits of any kind have been filed by either against the other as of the date of
this Agreement.
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12. Non-Admission. It is understood that this Agreement is,
among other things, an accommodation of the desires of each party, and the
above-mentioned payments and covenants are not, and should not be construed as,
an admission or acknowledgment by either party of any liability whatsoever to
the other party or any other person or entity.
13. Return of Property. Employee agrees that in connection
with her resignation from employment on the Resignation Date (or in the event of
earlier termination of her employment for any reason), she shall promptly return
to the Company all Company documents and property in her possession or control
including, but not limited to, Personal Computer(s) and all Software, Security
Keys and Badges, Price Lists, Supplier and Customer Lists, Files, Reports, all
correspondence both internal and external (memos, letters, quotes, etc.),
Business Plans, Budgets, Designs, and any and all other property of the Company,
except this Agreement and any prior employment agreements, and any documents
relating to negotiation or implementation or enforcement of this Agreement or
prior employment agreements, and all stock plans or other benefit plans
applicable to Employee.
14. Letter of Recommendation/Reference Responses. Following
Employee's termination from employment with Company, the Company's Chief
Executive Officer ("CEO") will furnish to Employee, at her request, a letter of
reference in the form attached hereto as Appendix C, and the Company's senior
officers, including its CEO and Chief Financial Officer, will respond to all
reference inquiries from prospective employers of Employee following the
Resignation Date with only such information as is contained in Appendix C, or
such other and further truthful information as may be specifically authorized by
Employee in writing.
15. Knowing and Voluntary Execution. Each of the parties
hereto further states and represents that she or it has carefully read the
foregoing Agreement, consisting of
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eleven (11) pages, and knows the contents thereof, and that she or it has
executed the same as her or its own free act and deed. Employee further
acknowledges that she has been and is hereby advised to consult with an attorney
concerning this Agreement and that she had the opportunity to seek the advice of
legal counsel in connection with the negotiation and execution of this
Agreement. Employee also acknowledges that she has had the opportunity to ask
questions about each and every provision of this Agreement and that she fully
understands the effect of the provisions contained herein upon her legal rights.
16. Executed Counterparts. This Agreement may be executed in
one or more counterparts, and any executed copy of this Agreement shall be valid
and have the same force and effect as the originally-executed Agreement.
17. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Ohio.
18. Arbitration. Except with respect to the remedies set forth
in Paragraph 8(d) hereof, if in the event of any controversy or claim between
the Company or any of its affiliates and the Employee arising out of relating to
this Agreement, either party delivers to the other party a written demand for
arbitration of a controversy or claim then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered
by the American Arbitration Association under its Commercial Arbitration Rules.
The arbitration shall take place in Columbus, Ohio. Each of the Company and the
Employee shall appoint one person to act as an arbitrator, and a third
arbitrator shall be chosen by the first two arbitrators (such three arbitrators,
the "Panel"). The Panel shall have no authority to award punitive damages
against the Company or the Employee. The arbitrator shall have no authority to
add to, alter, amend or refuse to enforce any portion of the disputed
agreements. The
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Company and the Employee each waive any right to a jury trial or to petition for
stay in any action or proceeding of any kind arising out of or relating to this
Agreement.
19. Modification. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Employee and the Company.
20. Assignability. Employee's obligations and agreements under
this Agreement shall be binding on the Employee's heirs, executors, legal
representatives and assigns and shall inure to the benefit of any successors and
assigns of the Company. The Company may, at any time, assign this Agreement or
any of its rights or obligations arising hereunder to any party.
21. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto in respect of the subject matter hereof and
this Agreement supersedes all prior and contemporaneous agreements between the
parties hereto in connection with the subject matter hereof.
22. Non-Waiver; Severability. The failure of any party hereto
to enforce at any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of any party thereof
to enforce each and every such provision. No waiver or any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach. The
provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
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IN WITNESS WHEREOF, the undersigned has hereto set her hand
this 11th day of October, 1999.
WITNESSED:
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxxxxx X. Xxxxxx-Xxxxxx
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XXXXXXX X. XXXXXX-XXXXXX
/s/ Xxxxxx X. O'Sheasey [Notary Seal of
----------------------------------- Xxxxx X. Xxxxxxxxxx]
IN WITNESS WHEREOF, the undersigned has hereto set its hand
this 18th day of November, 1999.
WITNESSED: ABERCROMBIE & FITCH CO.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxx
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/s/ Xxxxxx X. Benz Its:VP/CFO
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APPENDIX A
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 5, 1997, by and
between Abercrombie & Fitch, Co., a Delaware company (the "Company"), and
Xxxxxxx X. Xxxxxx-Xxxxxx (the "Executive") (hereinafter collectively referred to
as "the parties").
WHEREAS, the Executive has heretofore been employed as Vice
President-General Merchandising Manager, Women's of the Company, and is
experienced in all phases of its business and possesses an intimate knowledge of
the business and affairs of the Company and its policies, procedures, methods
and personnel; and
WHEREAS, the Company has determined that it is essential and
in its best interests to retain the services of key management personnel and to
ensure their continued dedication and efforts; and
WHEREAS, the Compensation Committee of the Board of Directors
of the Company (the "Board") has determined that it is in the best interest of
the Company to secure the continued services and employment of the Executive and
the Executive is willing to render such services on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
respective agreements of the parties contained herein, the parties hereby agree
as follows:
1. Term. The initial term of employment under this Agreement
shall be for the period commencing on the date hereof (the "Commencement Date")
and ending on the sixth anniversary of the Commencement Date (the "Initial
Term"); provided, however, that upon the expiration of the Initial Term, this
Agreement shall be automatically extended for a period of one year, unless
either the Company or the Executive shall have given written notice to the other
at least ninety (90) days prior thereto that the term of this Agreement shall
not be so extended.
2. Employment.
(a) Position. The Executive shall be employed as the Vice
President-General Merchandising Manager, Womens of the Company, or such other
position of reasonably comparable or greater status and responsibilities as may
be determined by the Board with any division, subsidiary or affiliate of the
Company. The Executive shall perform the duties, undertake the responsibilities
and exercise the authority customarily performed, undertaken and exercised by
persons employed in a similar executive capacity. The Executive shall report to
the President and Chief Executive Officer of the Company, or other designee as
appointed by the Chairman.
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(b) Obligations. The Executive agrees to devote her full
business time and attention to the business and affairs of the Company. The
foregoing, however, shall not preclude the Executive from serving on corporate,
civil or charitable boards or committees or managing personal investments, so
long as such activities do not interfere with the performance of the Executive's
responsibilities hereunder.
3. Base Salary. The Company agrees to pay or cause to be paid
to the Executive during the term of this Agreement a base salary at the rate of
$325,000. This base salary will be subject to annual review and may be increased
from time to time by the Board considering factors such as the executive's
responsibilities, compensation of similar executives within the company and in
other companies, performance of the executive and other pertinent factors
(hereinafter referred to as the "Base Salary"). Such Base Salary shall be
payable in accordance with the Company's customary practices applicable to its
executives.
4. Equity Compensation. The Company shall grant to the
Executive rights to acquire 75,000 shares of the Company's common stock pursuant
to the terms of the agreements attached hereto as Exhibit A.
5. Employee Benefits. The Executive shall be entitled to
participate in all employee benefit plans, practices and programs maintained by
the Company and made available to senior executives generally and as may be in
effect from time to time. The Executive's participation in such plans, practices
and programs shall be on the same basis and terms as are applicable to senior
executives of the Company generally.
6. Bonus. The Executive shall be entitled to participate in
the Company's applicable incentive compensation plan on such terms and
conditions as may be determined from time to time by the Board.
7. Other Benefits.
(a) Life Insurance. During the term of this Agreement, the
Company shall be entitled to maintain a "key person" term life insurance policy
on the life of the Executive, the proceeds of which shall be payable to the
Company or its designees. The Executive agrees to undergo any reasonable
physical examination and other procedures as may be necessary to maintain such
policy.
(b) Expenses. Subject to applicable Company policies, the
Executive shall be entitled to receive prompt reimbursement of all expenses
reasonably incurred by her in connection with the performance of her duties
hereunder or for promoting, pursuing or otherwise furthering the business or
interests of the Company.
(c) Office and Facilities. The Executive shall be provided
with an appropriate office and with such secretarial and other support
facilities as are commensurate with the Executive's status with the Company and
adequate for the performance of those duties hereunder.
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8. Vacation. The Executive shall be entitled to annual
vacation in accordance with the policies as periodically established by the
Board for similarly situated executives of the Company.
9. Termination. The Executive's employment hereunder may be
terminated under the following circumstances:
(a) Disability. The Company shall be entitled to terminate
the Executive's employment after having established the Executive's Disability.
For purposes of this Agreement, "Disability" means a physical or mental
infirmity which impairs the Executive's ability to substantially perform those
duties under this Agreement for a period of at least six (6) months in any 12
month calendar period as determined in accordance with the The Limited, Inc.
Long-Term Disability Plan.
(b) Cause. The Company shall be entitled to terminate the
Executive's employment for "Cause" without prior written notice. For purposes of
this Agreement, "Cause" shall mean that the Executive (1) willfully failed to
perform those duties with the Company (other than a failure resulting from the
Executive's incapacity due to physical or mental illness); or (2) has plead
"guilty" or "no contest" to or has been convicted of an act which is defined as
a felony under federal or state law; or (3) engaged in willful misconduct in bad
faith which could reasonably be expected to materially harm the Company's
business or its reputation.
The Executive shall be given written notice by the Board of
termination for Cause, such notice to state in detail the particular act or acts
or failure or failures to act that constitute the grounds on which the proposed
termination for Cause is based. The Executive shall be entitled to a hearing
before the Board or a committee thereof established for such purpose and to be
accompanied by legal counsel. Such hearing shall be held within 15 days of
notice to the Company by the Executive, provided the Executive requests such
hearing within 30 days of time written notice from the Board of the termination
for Cause.
(c) Termination by the Executive. The Executive may
terminate employment hereunder for "Good Reason" by delivering to the Company
(1) a Preliminary Notice of Good Reason (as defined below), and (2) not earlier
than thirty (30) days from the delivery of such Preliminary Notice, a Notice of
Termination. For purposes of this Agreement, "Good Reason" means (i) the failure
to continue the Executive as Vice President - General Merchandising Manager,
Women's of the Company or such other capacity as contemplated by Section 2
hereof; (ii) the assignment to the Executive of any duties materially
inconsistent with the Executive's positions, duties, authority, responsibilities
and reporting requirements as set forth in Section 2 hereof; (iii) a reduction
in or a material delay in payment of the Executive's total cash compensation and
benefits from those required to be provided in accordance with the provisions of
this Agreement; (iv) the Company, the Board or any person controlling the
Company requires the Executive to be based outside of the United States, other
than on travel reasonably required to carry out the Executive's obligations
under the Agreement or (v) the failure of the Company to obtain the assumption
in writing of its obligation to perform this
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Agreement by any successor to all or substantially all of the assets of the
Company within 15 days after a merger, consolidation, sale or similar
transaction; provided, however, that "Good Reason" shall not include (A) acts
not taken in bad faith which are cured by the Company in all respects not later
than thirty (30) days from thc date of receipt by the Company of a written
notice from the Executive identifying in reasonable detail the act or acts
constituting "Good Reason" (a "Preliminary Notice of Good Reason") or (B) acts
taken by the Company by reason of the Executive's physical or mental infirmity
which impairs the Executive's ability to substantially perform the duties under
this Agreement. A Preliminary Notice of Good Reason shall not, by itself,
constitute a Notice of Termination.
(d) Notice of Termination. Subject to Section 9(b), any
purported termination by the Company or by the Executive shall be communicated
by a written Notice of Termination to the other two weeks prior to the
Termination Date (as defined below). For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of employment shall be effective
without such Notice of Termination.
(e) Termination Date, Etc. "Termination Date" shall mean in
the case of the Executive's death, the date of death, or in all other cases, the
date specified in the Notice of Termination; provided, however, that if the
Executive's employment is terminated by the Company due to Disability, the date
specified in the Notice of Termination shall be at least thirty (30) days from
the date the Notice of Termination is given to the Executive.
10. Compensation Upon Termination.
(a) If during the term of this Agreement (including any
extensions thereof), the Executive's employment is terminated by the Company for
Cause, by reason of the Executive's death or if the Executive gives written
notice not to extend the term of this Agreement, the Company's sole obligation
hereunder shall be to pay the Executive the following amounts earned hereunder
but not paid as of the Termination Date: (i) Base Salary, (ii) reimbursement for
any and all monies advanced or expenses incurred pursuant to Section 7(b)
through the Termination Date, and (iii) any earned compensation which the
Executive had previously deferred (including any interest earned or credited
thereon) (collectively, "Accrued Compensation"). The Executive's entitlement to
any other benefits shall be determined in accordance with the Company's employee
benefit plans then in effect.
(b) If the Executive's employment is terminated by the
Company other than for Cause or by the Executive for Good Reason, the Company's
sole obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the
Accrued Compensation;
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(ii) the Company shall continue to pay the
Executive the Base Salary for a period of one (1) year
following the Termination Date.
(c) If the Executive's employment is terminated by the
Company by reason of the Executive's Disability, the Company's sole obligation
hereunder shall be as follows:
(i) the Company shall pay the Executive the
Accrued Compensation;
(ii) the Company shall continue to pay the
Executive 100% of the Base Salary for the first twelve months
following the Termination Date, 80% of the Base Salary for the
second twelve months following the Termination Date, and 60%
of the Base Salary for the third twelve months following the
Termination Date; provided, however, that such Base Salary
shall be reduced by the amount of any benefits the Executive
receives by reason of her Disability under the Company's
relevant disability plan or plans; and
(iii) if the Executive is disabled beyond
thirty-six (36) months, the Company shall continue to pay the
Executive 60% of Base Salary up to a maximum of $250,000 per
year for the period of the Executive's Disability, as defined
in the Company's relevant disability plans; provided, however,
that such payments shall be reduced by the amount of any
benefits the Executive receives by reason of her Disability
under the Company's relevant disability plan or plans.
(d) If the Executive's employment is terminated by reason of
the Company's written notice to the Executive of its decision not to extend the
term of this Agreement as contemplated in Section 1 hereof, the Company's sole
obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the
Accrued Compensation; and
(ii) the Company shall continue to pay the
Executive the Base Salary for a period of one (1) year
following the expiration of such term.
(e) During the period the Executive is receiving salary
continuation pursuant to Section 10(b)(ii), 10(c)(ii) or 10(d)(ii) hereof, the
Company shall, at its expense, provide to the Executive and the Executive's
beneficiaries medical and dental benefits substantially similar in the aggregate
to those provided to the Executive immediately prior to the date of the
Executive's termination of employment; provided, however, that the Company's
obligation with respect to the foregoing benefits shall be reduced to the extent
that the Executive or the Executive's beneficiaries obtains any such benefits
pursuant to a subsequent employer's benefit plans.
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(f) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation provided to the Executive in any subsequent employment.
11. Employee Covenants.
(a) Unauthorized Disclosure. The Executive shall not, during
the term of this Agreement and thereafter, make any Unauthorized Disclosure. For
purposes of this Agreement, "Unauthorized Disclosure" shall mean disclosure by
the Executive without the prior written consent of the Board to any person,
other than an employee of the Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Company or as may be legally
required, of any information relating to the business or prospects of the
Company (including, but not limited to, any confidential information with
respect to any of the Company's customers, products, methods of distribution,
strategies, business and marketing plans and business policies and practices);
provided, however, that such term shall not include the use or disclosure by the
Executive, without consent, or any information known generally to the public
(other than as a result of disclosure by the Executive in violation of this
Section 11(a)). This confidentiality covenant has no temporal, geographical or
territorial restriction.
(b) Non-Competition. During the Non-Competition Period
described below, the Executive shall not, directly or indirectly, without the
prior written consent of the Company, own, manage, operate, join, control, be
employed by, consult with or participate in the ownership, management, operation
or control of, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other entity that
competes, directly or indirectly, with the Company or any division, subsidiary
or affiliate of the Company; provided, however, that the "beneficial ownership"
by the Executive after termination of employment with the Company, either
individually or as a member of a "group," as such terms are used in Rule 13d of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of not more than two percent (2%) of the voting
stock of any publicly held corporation shall not be a violation of Section 11 of
this Agreement.
The "Non-Competition Period"' means the period the Executive
is employed by the Company plus one (1) year from the Termination Date if the
Executive's employment is terminated (i) by the Company for any reason, (ii) by
the Executive for any reason, or (iii) by reason of either the Company's or the
Executive's decision not to extend the term of this Agreement as contemplated by
Section 1 hereof.
(c) Non-Solicitation. During the No-Raid Period described
below, the Executive shall not, either directly or indirectly, alone or in
conjunction with another party, interfere with or harm, or attempt to interfere
with or harm, the relationship of the Company, its subsidiaries and/or
affiliates, with any person who at any time was an employee, customer or
supplier of the Company, its subsidiaries and/or affiliates or otherwise had a
business relationship with the Company, its subsidiaries and/or affiliates.
6
20
The "No-Raid Period" means the period the Executive is
employed by the Company plus one (1) year from the Termination Date if the
Executive's employment is terminated (i) by the Company for any reason except by
reason of the Executive's Disability, (ii) by the Executive for any reason, or
(iii) by reason of either the Company's or the Executive's decision not to
extend the term of this Agreement as contemplated by Section 1 hereof.
(d) Remedies. The Executive agrees that any breach of the
terms of this Section 11 would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the
Executive therefore also agrees that in the event of said breach or any threat
of breach, the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Executive and/or any and all persons and/or entities
acting for and/or with the Executive, without having to prove damages, and to
all costs and expenses, including reasonable attorneys' fees and costs, in
addition to any other remedies to which the Company may be entitled at law or in
equity. The terms of this paragraph shall not prevent the Company from pursuing
any other available remedies for any breach or threatened breach hereof,
including but not limited to the recovery of damages from the Executive. The
Executive and the Company further agree that the provisions of the covenants not
to compete and solicit are reasonable and that the Company would not have
entered into this Agreement but for the inclusion of such covenants herein.
Should a court determine, however, that any provision of thc covenants is
unreasonable, either in period of time, geographical area, or otherwise, the
parties hereto agree that the covenant should be interpreted and enforced to the
maximum extent which such court or arbitrator deems reasonable.
The provisions of this Section 11 shall survive any
termination of this Agreement, and the existence of any claim or cause of action
by the Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 11; provided, however, that this
paragraph shall not, in and of itself, preclude the Executive from defending
herself against the enforceability of the covenants and agreements of this
Section 11.
12. Limitation of Payments.
(a) Gross-Up Payment. In the event it shall be determined
that any payment or distribution of any type to or for the benefit of the
Executive, by the Company, any of its affiliates, any Person who acquires
ownership or effective control of the Company or ownership of a substantial
portion of the Company's assets (within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder) or any affiliate of such Person, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Total Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes
7
21
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Total Payments (not including any Gross-Up Payment).
13. Employee Representation. The Executive expressly
represents and warrants to the Company that the Executive is not a party to any
contract or agreement and is not otherwise obligated in any way, and is not
subject to any rules or regulations, whether governmentally imposed or
otherwise, which will or may restrict in any way the Executive's ability to
fully perform the Executive's duties and responsibilities under this Agreement.
14. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, its successors and assigns and the Company shall
require any successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. The
term "the Company" as used herein shall include any such successors and assigns
to the Company's business and/or assets. The term "successors and assigns" as
used herein shall mean a corporation or other entity acquiring or otherwise
succeeding to, directly or indirectly, all or substantially all the assets and
business of the Company (including this Agreement) whether by operation of law
or otherwise.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, the Executive's
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
15. Arbitration. Except with respect to the remedies set forth
in Section 11(d) hereof, if in the event of any controversy or claim between the
Company or any of its affiliates and the Executive arising out of or relating to
this Agreement, either party delivers to the other party a written demand for
arbitration of a controversy or claim then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered
by the American Arbitration Association under its Commercial Arbitration Rules.
The arbitration shall take place in Columbus, Ohio. Each of the Company and the
Executive shall appoint one person to act as an arbitrator, and a third
arbitrator shall be chosen by the first two arbitrators (such three arbitrators,
the "Panel"). The Panel shall have no authority to award punitive damages
against the Company or the Executive. The arbitrator shall have no authority to
add to, alter, amend or refuse to enforce any portion of the disputed
agreements. The Company and the Executive each waive any right to a jury trial
or to petition for stay in any action or proceeding of any kind arising out of
or relating to this Agreement.
16. Notice. For the purposes of this Agreement, notices and
all other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by
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registered or certified mail, return receipt requested, postage prepaid, or upon
receipt if overnight delivery service or facsimile is used, addressed as
follows:
To the Executive:
-----------------
Xxxxxxx X. Xxxxxx-Xxxxxx
0000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
To the Company:
---------------
Abercrombie & Fitch, Co.
Four Limited Parkway
Xxxxxxxxxxxx, Xxxx 00000
Attn: Secretary
With a Copy to:
---------------
The Limited, Inc.
0 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Secretary
17. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
18. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
19. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Ohio without
giving effect to the conflict of law principles thereof.
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20. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
22. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, if any, understandings and arrangements,
oral or written, between the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
ABERCROMBIE & FITCH, CO.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board
/s/ Xxxxxxx X. Xxxxxx-Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx-Xxxxxx
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--------------------------------------------------------------------------------
Abercrombie & Fitch
S T O C K A W A R D
STOCK OPTION AGREEMENT
ACKNOWLEDGEMENT OF RECEIPT
This Stock Option Agreement is entered into by and between Abercrombie & Fitch
(the "Company"), and the associate of of the Company whose name appears below
(the "Associate") in order to set forth the terms and conditions of Options
granted to the Associate under The Abercrombie & Fitch 1996 Stock Option and
Performance Incentive Plan (1997 Restatement) (the "Plan").
Associate's Name: XXXXXXX XXXXXX-XXXXXX
Division: ABERCROMBIE & FITCH
Social Security #: XXXXXXXXXXXX
Address: 0000 X. XXXXXXXX XXXXXX
XXX XXXXXX, XX 00000
Date Expiration Number of Option Exercise Schedule
Plan Name of Grant Date Shares Price Date Shares
--------- -------- ---- ------ ----- ---- ------
1996 NQ PLAN (97 RESTATEMENT) 12/05/97 12/05/07 75,000 $30.6250 12/05/98 7,500
12/05/99 7,500
12/05/00 7,500
12/05/01 11,250
12/05/02 15,000
12/05/03 26,250
Subject to the attached Terms and Conditions and the terms of the Plan, which
are incorporated herein by reference, the Company hereby grants to the Associate
Options to purchase shares of Common Stock of the Company, as outlined above.
The Company and the Associate have executed this Agreement as of the Date of
Grant set forth above.
ABERCROMBIE & FITCH ASSOCIATE
By: /s/ Xxxxxx X. Xxxxxx
---------------------------- ----------------------------
Xxxxxx X. Xxxxxx, Chairman
--------------------------------------------------------------------------------
Please return one signed copy of this
agreement to
Xxxx Xxxx The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, XX 00000
000-000-0000
00
Xxxxxxxx X
Xxxxxx XX Xxxx, Inc.
American Eagle Levi's
Xxx Xxxxxx Limited (all divisions)
Armani (all divisions) Limited Too
Billabong Lucky
Xxxxxx Brothers May Co.
Casual Corner Group, Inc. Xxxxxx'x Outpost
Childrens Place Retail Stores Nautica
Xxxxxx Xxxxx (all divisions) Neiman Xxxxxx
Xxxxx'x Nike
Club Monaco Nordstroms
Columbia X'Xxxxx
Contempo Casuals Xxxxx Xxxxxxx
Xxxxxx Xxxxxx Pacific Sunwear
Delia's Patagonia
Diesel Polo/Xxxxx Lauren (all divisions)
Dillards Prada/Xxx Xxx
DKNY Quicksilver/Xxxx
Xxxxx Xxxxx Rampage
Esprit Replay
Xxxx Xxxxx
Federated Saks Fifth Ave./Profitts
French Connection Stone Island
Gadzooks Stussy
Gap (all divisions) Talbots
Guess The Buckle
Gymboree Corp. The North Face
Hanover Direct Inc. Theory
Xxxxxx Xxxx Xxxxx Xxxxxxxx (all divisions)
Intimate Brands Urban Outfitter/Anthropologie
J. Crew Versace
JNCO Volcom
Xxxxxxxx Xxxxx Wet Seal, Inc.
Xxxxxxx Xxxx
Land's End
Laundry
26
APPENDIX C
[Intentionally Omitted]
