EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
AGREEMENT is entered into, effective upon execution by the parties, by and
between Limited Brands, Inc. and The Limited Service Corporation (the
“Company”), and Xxxxxx Xxxxxxxx (the “Executive”) (hereinafter collectively
referred to as “the parties”).
WHEREAS,
this Agreement supersedes the Employment Agreement that the parties entered into
as of January 17, 2005; provided, however nothing in this Employment Agreement
shall cancel or modify any previous grant of stock options or restrictive stock
which was previously granted to the Executive or any rights to repurchase shares
represented by such grants
(a) Position. The
Executive shall be employed as a Executive Vice President – Chief Administrative
Officer or such other position of reasonably comparable or greater status and
responsibilities, as may be determined by the Board of Directors. 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 Chairman and
Chief Executive Officer of Limited Brands. The Executive’s office shall be
located in Columbus, Ohio.
3. The
Company agrees to pay or cause to be paid to the Executive an annual base salary
at the rate of One Million Forty Thousand Dollars ($1,040,000), less applicable
withholding. 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.
recommend
to the Compensation Committee that the Executive’s grant will be targeted to
award a value equal to 1.5 times the Executive’s Base Salary.
The
Executive shall be entitled to participate in the Company’s applicable incentive
compensation plan at a target level of One Hundred Thirty Percent (130%) of the
Executive’s Base Salary on such terms and conditions as determined from time to
time by the Board.
The
Executive shall be given prompt 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 the written notice from the Board of the termination for
Cause.
(a) If
during the term of the Agreement (including any extensions thereof), whether or
not following a Change in Control (as defined below), the Executive’s employment
is terminated by the Company for Cause or 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 obligations 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, in each case other than during the 24-month
period immediately following a Change in Control, the Company’s sole obligations
hereunder shall be as follows:
(i) the
Company shall pay the Executive the Accrued Compensation;
(ii) the
Company shall continue to pay the Executive the Base Salary for a period of one
(1) year following the Termination Date;
(iii) in
consideration of the Executive signing a General Release, the Company shall (A)
pay the Executive any incentive compensation under the plan described in Section
6 that the Executive would have received if he had remained employed with the
Company for a period of one (1) year after the Termination Date; (B) pay the
Executive his Base Salary for one additional year after payments have ended
under Section 1O(b)(ii); (D)with respect to all performance shares of the
Company’s restricted stock that have been granted to the Executive, if the
applicable performance goals are achieved, the Executive shall be entitled to
pro rata vesting of said shares and in addition, the Executive shall also be
entitled to pro rata vesting of all shares of the Company’s restricted stock
that has been granted to the Executive. Pro rata vesting of said shares shall be
based on the number of months employed during the period of vesting;
and
(iv) provided,
however, that in the event Executive becomes entitled to any payments under
Section 10(g), the Company’s obligations to Executive under Section 10 shall
thereafter be determined solely under Section 10 (g).
(c) If
the Executive’s employment is terminated by the Company by reason of the
Executive’s Disability, the Company’s sole obligations hereunder shall be as
follows:
(i) the
Company shall pay the Executive the Accrued Compensation;
(ii) the
Executive shall be entitled to receive the applicable Base Salary continuation
rights described in the Executive’s Offer Letter, plus any disability benefits
available under the Company’s Executive Long Term Disability Plan as also
described in the Executive’s Offer Letter.
(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 Employment Agreement
pursuant to Section 1 hereof, 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 the Base Salary for a period of one
(1) year following the expiration of such term; and
(iii) in
consideration of the Executive signing a General Release, the Company shall (A)
pay the Executive any incentive compensation under the plan described in Section
6 that the Executive would have received if he had remained employed with the
Company for a period of one (1) year after the Termination Date; and (B) pay the
Executive his Base Salary for one additional year after payments have ended
under Section 10(d)(ii); and
(e) For
up to eighteen (18) months during the period the Executive is receiving salary
continuation pursuant to Section 10(b), 10(c) or 10(d) 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 the those provided to the Executive immediately prior to the date of the
Executive’s termination of employment; provided, however, that the Company’s
obligation to provide such benefits shall cease upon the earlier of the
Executive being eligible for medical and dental benefits through another
employer or eighteen months Further, the Executive agrees if the Executive is
terminated for Good Reason pursuant to Section 9(c)(v) that the Company is
released from its obligations under Section 10(b) upon the Executive’s first day
of employment that is comparable to the compensation the Executive received from
the Company and to the positions and/or responsibilities that the Executive held
and/or performed for the Company with another employer. The Company agrees
providing consulting services and/or that serving on the board of any entity
does not constitute employment by another employer.
(f) Executive
shall not be required to mitigate the amount of any payment provided for in this
Section 10 by seeking other employment or otherwise and no such payment or
benefit shall be eliminated,
offset or
reduced by the amount of any compensation provided to the Executive in any
subsequent employment, except as provided in Section 10(e).
(g) In
the event that (x) the Company enters into a binding agreement that, if
consummated, would constitute a Change in Control, (y) Executive’s employment is
terminated under the circumstances set forth in Section 10(b) and (z) within six
months after the execution of such agreement a Change in Control of the Company
occurs involving one or more of the other parties to such agreement, then the
Company’s sole obligations hereunder shall be as follows:
(i) the
Company shall pay to Executive a lump sum payment in cash no later than 10
business days after the Change in Control an amount equal to the sum of (A) and
(B), where (A) is the difference between (x) the Severance Amount (as defined in
Section 14(a)(ii)) and (y) the sum of the payments made to the Executive prior
to the change in Control pursuant to Section 10(b)(ii) and (B) is the difference
between (x) the Bonus Amount (as defined in the Section 14(a)(iii)) and (y) the
payments, if any, made to Executive prior to the Change in Control pursuant to
Section 10(b)(iii)(A);
(ii) the
Company shall reimburse Executive for any documented legal fees and expenses to
the extent set forth in Section 14(a)(iv);
(iii) The
Company shall make available to Executive and Executive’s beneficiaries medical
and dental benefits to the extent provided in Section 14(a)(v); and
(iv) each
of the Company and Executive shall have and be subject to, the rights, duties,
and obligations set forth in Sections 14(a) and (b).
(a) For
the purposes of this Section 11, the term “Company shall include Limited Brands,
Inc. and all of its subsidiaries and affiliates thereof.
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, or (ii) by the
Executive for any reason.
Notwithstanding
anything in this Agreement to the contrary, the Executive after his Termination
Date shall be allowed to serve on the board of any specialty retailer that does
not engage or plans to engage in any business activity that accounts for a
material portion of the Company’s annual sales.
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, or (ii) by the Executive for any
reason.
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 himself against the enforceability
of the covenants and agreements of this Section 11.
restrict
in any way the Executive’s ability to fully perform the Executive’s duties and
responsibilities under this Agreement.
(a) For
purposes of this Section 13, “Company” shall mean Limited Brands, Inc., a
Delaware corporation.
(b) For
purposes of this Agreement “Change in Control” means, and shall be deemed to
have occurred upon the first to occur of any of the following
events:
(i) Any
Person (other than an Excluded Person) becomes, together with all “affiliates”
and “associates” (each as defined under Rule 12b-2 of the Exchange Act),
“beneficial owner” (as defined under Rule 13d-3 of the Exchange Act)of
securities representing 33% or more of the combined voting power of the Voting
Stock then outstanding, unless such Person becomes “beneficial owner” of 33% or
more of the combined voting power of the Voting Stock then outstanding solely as
a result of an acquisition of Voting Stock by the Company which, by reducing the
Voting Stock outstanding, increases the proportionate Voting Stock beneficially
owned by such Person (together with all “affiliates” and “associates” of such
Person) to 33% or more of the combined voting power of the Voting Stock then
outstanding; provided, that if a Person shall become the “beneficial owner” of
33% or more of the combined voting power of the Voting Stock then outstanding by
reason of such Voting Stock acquisition by the Company and shall thereafter
become the “beneficial owner” of any additional Voting Stock which causes the
proportionate voting power of Voting Stock beneficially owned by such Person to
increase to 33% or more of the combined voting power of the Voting Stock then
outstanding, such Person shall, upon becoming the “beneficial owner” of such
additional Voting Stock, be deemed to have become the “beneficial owner” of 33%
or more of the combined voting power of the Voting Stock then outstanding other
than solely as a result of such Voting Stock acquisition by the
Company;
(ii) During
any period of 24 consecutive months individuals who at the beginning of such
period constitute the Board (and any new Director, whose election by the Board
or nomination for election by the Company’s stockholders was approved by a vote
of at least two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination for
election was so approved), cease for any reason to constitute a majority of
Directors then constituting the Board;
(iii) A
reorganization, merger or consolidation of the Company is consummated, in each
case, unless, immediately following such reorganization, merger or
consolidation, (i) more than 50% of, respectively, the then outstanding shares
of common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the “beneficial
owners” of the Voting Stock outstanding immediately prior to such
reorganization, merger or consolidation, (ii) no Person (but excluding for this
purpose any Excluded Person and any Person beneficially owning, immediately
prior to such reorganization, merger or consolidation, directly or indirectly,
33% or more of the voting power of the outstanding Voting Stock) beneficially
owns, directly or indirectly, 33% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Board at the time of the execution of the
initial agreement providing for such reorganization, merger or
consolidation;
(iv) The
consummation of (i) a complete liquidation or dissolution of the Company or (ii)
the sale or other disposition of all or substantially all of the assets of the
Company, other than to any corporation with respect to which, immediately
following such sale or other disposition, (A) more than 50% of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the “beneficial owners” of the Voting Stock outstanding
immediately prior to such sale or other disposition of assets, (B) no Person
(but excluding for this purpose any Excluded Person and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, 33% or more of the voting power of the
outstanding
Voting Stock) beneficially owns, directly or indirectly, 33% or more of,
respectively, the then outstanding shares of common stock of such corporation or
the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of such corporation
were members of the Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition of assets of
the Company; or
(v) The
occurrence of any transaction or event that the Board, in its sole discretion,
designates a “Change in Control”.
Notwithstanding
the foregoing, in no event shall a “Change in Control” be deemed to have
occurred (i) as a result of the formation of a Holding Company, or (ii) with
respect to an Executive, if Executive is part of a “group,” within the meaning
of Section 13(d)(3) of the Exchange Act as in effect on the Effective Date,
which consummates the Change in Control transaction. In addition, for purposes
of the definition of “Change in Control” a Person engaged in business as an
underwriter of securities shall not be deemed to be the “beneficial owner” of,
or to “beneficially own,” any securities acquired through such Person’s
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition. “Excluded Person”
shall mean (i) the Company; (ii) any of the Company’s Subsidiaries; (iii) any
Holding Company; (iv) any employee benefit plan of the Company, any of its
Subsidiaries or a Holding Company; or (v) any Person organized, appointed or
established by the Company, any of its Subsidiaries or a Holding Company for or
pursuant to the terms of any plan described in clause (iv). “Person” shall mean
any individual composition, partnership, limited liability company,
associations, trust or other entity or organization. “Holding Company” shall
mean an entity that becomes a holding company for the Company or its businesses
as a part of any reorganization, merger, consolidation or other transaction,
provided that the outstanding shares of common stock of such entity and the
combined voting power of the then outstanding voting securities of such entity
entitled to vote generally in the election of directors is, immediately after
such reorganization, merger, consolidation or other transaction, beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the “beneficial owners”, respectively, of the Voting Stock
outstanding immediately prior to such reorganization, merger, consolidation or
other transaction in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger, consolidation or other
transaction, of such outstanding Voting Stock. “Voting Stock” shall mean
securities of the Company entitled to vote generally in the election of members
of the Company’s Board of Directors.
(a) If
the Executive’s employment is terminated by the Company other than for Cause or
by the Executive for Good Reason, in each case during the 24 consecutive month
period immediately following a Change in Control, the Company’s sole obligations
hereunder subject to the Executive’s execution of a General Release, shall be as
follows:
(i) the
Company shall pay the Executive the Accrued Compensation;
(ii) the
Company shall pay the Executive a lump sum payment in cash no later than ten
business days after the Termination Date an amount equal to two times
Executive’s Base Salary (the “Severance Amount”);
(iii) the
Company shall pay the Executive a lump sum payment in cash no later than ten
(10) business days after the date of termination an amount equal to the sum of
the last four (4) bonus payments the Executive received under the Company’s
incentive compensation plan described in Section 6 and a pro-rata amount for the
season in which the Executive’s employment is terminated based on the average of
the prior four (4) bonus payments and the number of days the Executive is
employed during such season (the “Bonus Amount”);
(iv) the
Company shall reimburse the Executive for all documented legal fees and expenses
reasonably incurred by the Executive in seeking to obtain or enforce any right
or benefit provided by this Section 14; and
(v) the
Company shall provide the Executive and Executive’s beneficiaries medical and
dental benefits substantially similar to those which the Executive was receiving
immediately prior to the date of termination for a period of eighteen (18)
months after the Termination Date; provided however, that the Company’s
obligation with respect to the foregoing medical and dental benefits shall cease
in the event Executive becomes employed.
(b) Except
as provided in Section 14(a)(v), the Executive shall not be required to mitigate
the amount of any payment provided for in this Section 14 by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Section 14 be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the Company, or
otherwise.
(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 Executives
legal personal representative.
To the
Executive:
Xxxxxx
Xxxxxxxx
c/o Xxxxx
Xxxx
Best &
Xxxxxxxx LLP
000 Xxxxx
Xxxxx Xxxxxx #0000
Xxxxxxxxxxx,
Xxxxxxxxx 00000
To the
Company:
Limited
Brands, Inc.
Three
Limited Parkway
Xxxxxxxx,
Xxxx 00000
Attn:
Secretary
including,
without limitation, any set-off, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or others.
20. 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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LIMITED
BRANDS, INC.
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By:
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/s/
Xxxxxx Xxxxxx
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6/2/2008
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Name:
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Xxxxxx
Xxxxxx
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Date
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Title:
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Chairman
of the Board
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/s/
Xxxxxx Xxxxxxxx
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5/23/2008
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Xxxxxx
Xxxxxxxx
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Date
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