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EXHIBIT - 10.85
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
XXX X. XXXXX
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TABLE OF CONTENTS
1. Definitions............................................................................................. 1
2. Employment.............................................................................................. 5
3. Term.................................................................................................... 5
4. Position and Duties; Business Time...................................................................... 5
5. Compensation............................................................................................ 6
6. Termination of Employment............................................................................... 10
7. Obligations of the Company Upon Termination............................................................. 11
8. Change of Control....................................................................................... 13
9. Non-exclusivity of Rights............................................................................... 13
10. Full Settlement......................................................................................... 13
11. Arbitration of Disputes................................................................................. 13
12. Confidential Information and Nonsolicitation............................................................ 14
13. Limited Indemnity....................................................................................... 14
14. Successors.............................................................................................. 15
15. Miscellaneous........................................................................................... 15
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), by and between GOODY'S
FAMILY CLOTHING, INC., a Tennessee corporation (the "Company"), and XXX X. XXXXX
(the "Executive"), shall be effective as of the 31st day of July, 2000.
RECITALS:
WHEREAS, the Company plans to hire the Executive as the Executive Vice
President, Merchandising of the Company and Executive desires to accept such
employment, upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Base Salary
through the Date of Termination, (ii) any amounts deferred by the Executive and
not yet paid by the Company pursuant to a valid election to defer the receipt of
all or a portion of such payments made in accordance with any plan of deferred
compensation sponsored by the Company and any earned but unpaid vacation pay for
the current year, (iii) any amounts or benefits owing to the Executive or to the
Executive's beneficiaries under the then applicable employee benefit plans or
policies of the Company and (iv) any amounts owing to the Executive for
reimbursement of expenses properly incurred by the Executive through the Date of
Termination and which are reimbursable in accordance with the reimbursement
policy of the Company described in Section 5(f).
(b) "Base Salary" shall have the meaning set forth in
Section 5(a).
(c) "Board" shall mean the Board of Directors of the
Company.
(d) "Cause" shall mean that the Executive has, in the
judgment of a majority of the Board (i) committed a felony, or committed an act
of fraud, embezzlement or theft in connection with his duties with the Company
or in the course of his employment with the Company; (ii) willfully caused
damage to property of the Company; (iii) been convicted of a criminal offense
(either a misdemeanor involving acts of dishonesty, theft or moral turpitude, or
a felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the
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Executive. The Board shall provide the Executive with an opportunity to meet
with the Board in order to provide the Executive an opportunity to refute or
explain acts or omissions referred to in such written notice. For the purpose of
this Section, no act or omission shall be considered willful unless done or
omitted to be done in bad faith and without reasonable belief that such act or
omission was done in the best interest of the Company.
(e) A "Change of Control" of the Company shall mean and
shall be deemed to have occurred if (i) any person or group (within the meaning
of Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Xxxxxx X.
Xxxxxxxxxx, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Xxxxxx X. Xxxxxxxxxx, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold, or
(iii) the shareholders of the Company shall approve a complete liquidation or
dissolution of the Company.
(f) "Change of Control Date" shall mean (i) the closing
date on which a Change of Control shall have occurred, (ii) in the case of a
sale of all or substantially all of the Company's assets, the closing date on
which a Change of Control shall have occurred after shareholder approval is
obtained, or (iii) in the case of a complete liquidation or dissolution of the
Company, the date on which shareholder approval is obtained.
(g) "Constructive Termination" shall mean a material
breach by the Company of its obligations under Section 4(a) or another material
obligation of the Company under this Agreement which failure has been
communicated to the Company with specificity by written notice, and which has
not been cured within a reasonable period of time, which shall not be less than
ten (10) days, nor more than thirty (30) days, following receipt of such written
notice by the Company.
(h) "Date of Termination" shall have the meaning set
forth in Section 6(f).
(i) "Disability" shall mean disability whereby the
Executive is unable to perform the essential functions of the position provided
for by this Agreement by reason of illness, injury or incapacity (whether
physical, mental, emotional or psychological), which cannot be reasonably
accommodated, for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(j) "Incentive Bonus" shall have the meaning as set forth
in Section 5(b).
(k) "Incentive Plan" shall have the meaning as set forth
in Section 5(b).
(l) "Notice of Termination" shall have the meaning as set
forth in Section 6(e).
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(m) "Qualified Plan" shall mean any retirement plan
maintained by the Company which is intended to meet the requirements of the
Internal Revenue Code of 1986, as amended.
(n) "Subsidiary" shall mean any majority-owned subsidiary
of the Company.
2. Employment. The Company hereby employs the Executive
as Executive Vice President, Merchandising of the Company and the Executive
hereby accepts such employment.
3. Term. The Executive's employment will commence on the
effective date of this Agreement. The Executive shall be considered an at-will
employee and his employment may be terminated by either party subject to the
obligations of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
(a) Position and Duties. The Executive shall serve as
Executive Vice President, Merchandising of the Company or another position which
shall be either of comparable rank or a promotion and shall continue to have
such responsibilities and duties as assigned to him by the Chief Executive
Officer of the Company, the President of the Company, the Chief Operating
Officer of the Company, the President and Special Assistant to the Chairman of
the Company, or the Board from time to time, provided: (i) such assignment of
such responsibilities and duties are those which are customarily associated with
the responsibilities of an executive vice president; (ii) the position in which
the Executive shall serve, if different from the position specified in this
Subsection (a), shall not have materially diminished responsibilities or
authority as compared with those of the position expressly set forth in this
Subsection (a); provided, that the expansion into other store concepts, whether
acquired or developed, and the staffing of such concepts by other employees
shall not be deemed a breach of this provision; and (iii) the Executive shall
not be required to relocate by reason of a change in the location of the
Company's principal executive offices of more than fifty (50) miles from its
then current location.
(b) Business Time. The Executive agrees to devote his
full business time to the business and affairs of the Company and to use his
best efforts to perform faithfully and efficiently the responsibilities assigned
to him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal,
financial and legal affairs and serving on corporate, civic or charitable boards
or committees, in each case only if and to the extent not substantially
interfering with the performance of such responsibilities, and
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(ii) periods of vacation to which he is entitled,
periods of illness and other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees, e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Base Salary. The Executive shall receive a base
salary (the "Base Salary") payable in equal bi-weekly installments (or such
other installments as are provided by the Company for employees generally) at
an annual rate of $310,000. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives
with comparable responsibilities, performance of the Executive and other
pertinent factors, and such adjusted Base Salary shall then constitute the
"Base Salary" for purposes of this Agreement. Notwithstanding anything to the
contrary in this paragraph, the Employee's Base Salary shall also be reviewed
Nine (9) calendar months after the effective date of this Agreement.
(b) Short Term Incentive Plan Bonus;. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 60% of Base Salary and shall be based on
performance and other specific objectives adopted by the Compensation Committee
of the Board (the "Incentive Bonus"). The annual Incentive Bonus shall be
reduced by the amount of any guaranteed annual bonus paid by the Company to the
Executive (as described in Section 5(c)) for each applicable fiscal year.
(c) Guaranteed Bonus. For each fiscal year of the Company
during the term of this Agreement, the Executive shall also be entitled to a
guaranteed annual bonus equal to twenty percent (20%) of the Executive's Base
Salary for each fiscal year payable in full on the last Friday in March for the
most recently completed fiscal year, provided Executive is employed by the
Company on the last Friday in March of the then applicable fiscal year. The
Executive's guaranteed bonus for the Company's fiscal year 2000 (beginning
January 30, 2000 and ending February 3, 2001) shall be based on the Executive's
actual Base Salary earned in
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fiscal year 2000 and shall be calculated and pro-rated based on the number of
days the Executive was employed by the Company during fiscal year 2000.
(d) Incentive and Savings Plans; Retirement and Death
Benefit Programs. The Executive shall be entitled to participate in all
incentive and savings plans and programs, including stock option plans and other
equity-based compensation plans, and in all employee retirement, executive
retirement and executive death benefit plans on a basis no less favorable than
that basis generally available to executives of the Company holding comparable
positions or having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and
their eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
In addition, the Company shall pay for and provide to the Executive the
following additional benefits (provided the Executive is insurable and such
policies can be purchased at standard rates consistent with the rates paid by
the Company for other Company executives):
(i) An individual life insurance policy on the
life of the Executive in the amount of $310,000, the beneficiary or
beneficiaries of which are designated by the Executive, without cost to the
Executive; and
(ii) An individual disability insurance policy or
policies providing a monthly benefit of no less than $10,500 per month, the
annual premium for such policy or policies to be shared between the Company and
the Executive in such proportion as is consistent with the Company's past
practice in respect of individual disability insurance policies provided by the
Company to executives of the Company holding comparable positions or having
comparable responsibilities.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the policies and
procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased (but not decreased) in accordance with Company
policy;
(iii) an automobile shall be provided by the
Company with expenses to be paid in accordance with the Company's policies and
procedures with respect thereto; and
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(iv) an office or offices suitable for an
executive officer with secretarial and other assistance as shall reasonably be
required by the Executive.
(g) Relocation Expenses. The Company will reimburse the
Executive (upon presentation of appropriate vouchers or receipts in accordance
with the Company's expense reimbursement policies) for, or pay directly, the
following costs and expenses relating to his relocation (the "Relocation
Allowance"):
(i) all reasonable expenses of moving the
Executive's possessions from his St. Cloud, Minnesota
residence (the "St. Cloud Residence") to the
Executive's new permanent residence in the Knoxville
(the "Knoxville Residence") metropolitan area;
(ii) all reasonable standard fees, commissions,
closing costs and brokerage fees associated with the
sale of the St. Cloud Residence (including reasonable
attorney's fees); and
(iii) all reasonable standard closing costs
associated with the purchase of the Executive's
Knoxville Residence (including reasonable attorney's
fees), as well as $5,000 for miscellaneous expenses
for the Knoxville Residence.
In the event the actual selling price of the St. Cloud Residence is
less than $367,000, the Company will pay the Executive the difference
(immediately after the sale and closing of the St. Cloud Residence) between the
actual selling price and $367,000, it being understood that the Company shall
have the right on or after the effective date of this Agreement to (a) contact
the third party administrator who executed the residential relocation contract
(the "Relocation Contract") with the Executive to facilitate and manage the sale
of the St. Cloud Residence, and (b) arrange for the sale and closing of the
St. Cloud Residence pursuant to such Relocation Contract or to arrange or
contract with a sale and closing of the St. Cloud Residence with another third
party residential relocation broker designated by the Company. The Executive
shall execute and deliver to the Company any documents requested by the Company
to sell the St. Cloud Residence.
In the event the actual selling price of the St. Cloud Residence
exceeds $367,000, the Executive shall be entitled to retain such excess, less
any fees or expenses (such as mortgage payments, insurance premium payments,
maintenance fees, and utility bills, all such payments, fees and bills being
hereafter collectively referred to as the "St. Cloud Maintenance Fees") incurred
or paid, directly or indirectly, by the Company in arranging or contracting for
the sale and closing of the St. Cloud Residence.
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The maximum amounts to be reimbursed by the Company under this clause
(g) shall be in accordance with its relocation policy (except where otherwise
expressly provided herein). Upon termination of the Executive's employment
during the first three (3) years of Executive's employment with the Company,
either by the Executive's voluntarily termination or by the Company for Cause,
the Executive shall promptly repay to the Company all of the Relocation
Allowance items described in this subsection (g), including the St. Cloud
Maintenance Fees (if any). On each anniversary of the date hereof, the amount of
the Relocation Allowance required to be so repaid shall be reduced by one-third
(1/3).
(h) Equity Opportunity. The Executive shall be granted a
non-qualified stock option under the Company's 1997 Stock Option Plan on the
date of commencement of his employment with the Company to purchase an aggregate
of fifty thousand (50,000) shares of common stock of the Company at an exercise
price equal to the closing sales price of the common stock on the business day
immediately preceding the date of grant, which option shall vest at 40% one (1)
year after the date of the grant and at 20% each at the end of years 2, 3 and 4
from the date of grant and expire ten (10) years from the date of grant, and
shall be upon such other terms and conditions as contained in the Company's
standard form of option agreement annexed hereto.
(i) Sign-on Bonus. As additional compensation, the
Company shall pay the Executive a sign-on bonus of $60,000, payable within five
(5) days after the date his employment with the Company commences.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive.
Notwithstanding anything in this Agreement to the contrary, the Executive may,
upon not less than thirty (30) days' written notice to the Company, voluntarily
terminate employment for any reason (including retirement under the terms of the
Company's retirement plan as in effect from time to time), provided that any
termination by the Executive pursuant to Section 6(d) on account of Constructive
Termination shall not be treated as a voluntary termination under this Section
6(b).
(c) Termination by the Company. The Company at any time
may terminate the Executive's employment for Cause or without Cause.
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(d) Constructive Termination. The Executive may terminate
his employment for Constructive Termination.
(e) Notice of Termination. Any termination by the Company
for Cause or by the Executive for Constructive Termination shall be communicated
by a written Notice of Termination to the other party hereto given in accordance
with Section 15(c). For purposes of this Agreement, a "Notice of Termination"
means a written notice given in the case of a termination for Cause and in the
case of Constructive Termination which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets 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, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty (30) days after the
receipt of such notice).
(f) Date of Termination. For the purpose of this
Agreement, the term "Date of Termination" means (i) in the case of a termination
for which a Notice of Termination is required, the date of receipt of such
Notice of Termination or, if later, the date specified therein, as the case may
be, and (ii) in all other cases, the actual date on which the Executive's
employment terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of death or Disability, he and/or his named beneficiaries,
as the case may be, shall be entitled to the benefits available through the
Company sponsored plans and programs designated for such category of termination
on Schedule A. With regard to the termination of
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the Executive's employment by reason of retirement on or after the attainment of
age sixty-five (65) or Disability, the Company shall pay the premiums (to the
same extent paid prior to the termination of employment) for the continued
participation of the Executive for a period of twelve (12) months after the Date
of Termination in any individual life insurance policy on the same terms as the
Executive and the Company were participating prior to the Date of Termination.
Further, with regard to the termination of the Executive's employment by reason
of the Executive's death, retirement on or after the attainment of age
sixty-five (65) or Disability, the Company shall, for a period of twelve (12)
months after the Executive's Date of Termination, pay the entire COBRA premium
under any Company medical and dental program that the Executive (and his spouse
and eligible dependents) was participating in prior to the termination of
employment. The Company's premium obligations in the preceding two sentences
shall exclude normal employee contributions paid by the Executive prior to the
Date of Termination. In addition to the foregoing, in the event of termination
of the Executive's employment by reason of the death or Disability of the
Executive, all unvested stock options held by the Executive shall become fully
vested, effective on the Date of Termination, and shall thereafter be
exercisable in accordance with the provisions of the applicable Option Plan
(including, without limitation, Sections 5 and 6 thereof) and Option Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive (other than on account of
Constructive Termination), the Company shall pay the Executive the Accrued
Obligations. The Executive shall be paid all such Accrued Obligations in a lump
sum in cash within thirty (30) days of the Date of Termination and the Company
shall have no further obligations to the Executive under this Agreement, unless
otherwise required by a Qualified Plan or specified pursuant to a valid election
to defer the receipt of all or a portion of such payments made in accordance
with any plan of deferred compensation sponsored by the Company.
(c) Other Termination of Employment. If the Company
terminates the Executive's employment other than for Cause, death or Disability,
or the Executive terminates his employment for Constructive Termination, the
Company shall pay and provide to the Executive the following:
(i) Severance Payment. The Company shall pay to
the Executive in a lump sum in cash or certified check within fifteen (15) days
after the Date of Termination a severance payment equal to the sum of the
following amounts (other than amounts payable from the Incentive Plan or
Qualified Plans, non-qualified retirement plans and deferred compensation plans,
which amounts shall be paid in accordance with the terms of such plans):
(A) all Accrued Obligations;
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(B) a cash amount equal to twelve (12)
months of the Executive's Base Salary at the rate in effect as of the date when
the Notice of Termination was given;
(C) subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, a cash
amount equal to a portion of the Incentive Bonus, the product of a fraction, the
numerator of which is the number of days elapsed since the date the Incentive
Plan began for the applicable fiscal year through the date of such Constructive
Termination or termination without Cause, and the denominator of which is the
total number of days of the applicable fiscal year for such Incentive Plan.
(ii) Acceleration of Option Vesting. In the case
of a Constructive Termination, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall be
thereafter exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(d) Release. As a condition precedent to the receipt of
any termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13, 14, and 15
(and then, only to the extent an obligation under any such section arose at or
prior to the Date of Termination and remains unfulfilled), the Company shall
have no further obligations to the Executive under this Agreement in respect of
any termination of employment.
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to eighteen
(18) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive
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under any plan or program of the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
10. Full Settlement. The Executive shall not be obligated
to seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. In the event that the
Executive shall in good faith give a Notice of Termination for Constructive
Termination and it shall thereafter be determined that Constructive Termination
did not take place, the employment of the Executive shall, unless the Company
and the Executive otherwise mutually agree, be deemed to have terminated, at the
date of giving such purported Notice of Termination, by mutual consent of the
Company and the Executive and the Executive shall be entitled to receive only
those payments and benefits which he would have been entitled to receive at such
date had he terminated his employment voluntarily at such date under this
Agreement.
11. Arbitration of Disputes. In the event that a claim
for payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
(a) The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for
any reason, the Executive, for the twelve (12) month period following the Notice
of Termination, shall not, on his own behalf or on behalf of any person or
entity, directly or indirectly solicit or aid in the solicitation of any
employees of the Company to leave their employment. In the event the Executive
violates the terms of Section 12(a) or this Section 12(b), the Employee shall
forfeit
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the right to all salary and benefits that the Executive and/or his family
members were otherwise entitled pursuant to the terms of Section 7. Also, in the
event that this Section 12 is determined to be unenforceable in part, it shall
be construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of
confidentiality and non-solicitation contained in this Section 12 are reasonable
covenants under the circumstances and necessary to protect the business
interests and properties of the Company. The Executive agrees that irreparable
loss and damage will be suffered by the Company should the Executive breach any
of the covenants contained in this Section 12. Accordingly, the Executive agrees
that the Company, in addition to all remedies provided at law or in equity,
shall be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Limited Indemnity. The Executive has represented to
the Company that he may have signed an employment agreement (the "Former
Agreement") with his former employer. The Company agrees to indemnify the
Executive for the legal fees and legal expenses related to any claim, demand or
cause of action asserted against the Executive by his former employer (or its
subsidiaries or affiliates) based on an allegation that the Executive breached
his Former Agreement with his former employer. The Company's indemnity to the
Executive is expressly contingent on the following:
(i) the Executive must notify the Company in
writing within five (5) days of any such claim, demand or cause of action; and
(ii) the Executive agrees that the Company may
direct and fully participate in the defense (including, without limitation, the
right to choose legal counsel to represent the Executive in any such claim,
demand, or cause of action) and settlement of any such claim, demand or cause of
action.
Notwithstanding anything to the contrary, the
Company's maximum aggregate indemnification to the Executive shall be limited
solely to the legal fees and legal expenses incurred directly by the Executive
arising from any claim, demand or cause of action related to the Former
Agreement. Except for the foregoing indemnity for legal fees and legal expenses,
in no event shall the Company be liable to the Executive or any other party for
any claim or damage related to the Executive's Former Agreement.
14. Successors.
(a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
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(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
15. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee, applied
without reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(c) Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party, by overnight delivery or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
000 Xxxxx'x Xxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
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(f) Captions. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company shall have no further
effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxxxxx
Title: Chairman and Chief Executive Officer
ATTEST: Date: September 11, 2000
---------------------------
Title: Assistant Secretary
(CORPORATE SEAL)
EXECUTIVE:
-------------------------------------------
Xxx X. Xxxxx
Address: 0000 Xxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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SCHEDULE A --XXX X. XXXXX
The following is a summary list of benefits available to the
Executive upon termination of the Executive's employment by reason of retirement
on or after the attainment of age sixty-five (65), death or Disability through
Company sponsored plans and programs as of the date of this Agreement. Nothing
herein shall preclude the Company from amending, altering, suspending,
discontinuing or terminating any of such plans and programs in compliance with
applicable law and regulation.
COVERAGE TYPE
Group Life Insurance -- Basic
High Option
Group Disability Insurance -- Basic 2 year
High Option
(benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
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