EXHIBIT 10.28
EMPLOYMENT AGREEMENT
--------------------
This AGREEMENT is made this 20th day of November, 1995, between Iron Age
Holdings Corporation, a Delaware corporation ("Holdings"), Iron Age Corporation,
a Delaware corporation and wholly-owned subsidiary of Holdings ("Iron Age"), and
Xxxxxxx X. Xxxxx ("Executive").
RECITALS
--------
WHEREAS, the Executive has been employed for a number of years as Executive
Vice President of Holdings and Iron Age with increasing responsibilities; and
WHEREAS, the Executive, Holdings and Iron Age are mutually desirous that
such satisfactory employment relationship shall continue under the terms and
conditions hereinafter provided; and
WHEREAS, the execution and delivery of this Agreement have been duly
authorized by the Board of Directors of each of Holdings and Iron Age.
AGREEMENT
---------
NOW, THEREFORE, Holdings, Iron Age and the Executive, each intending to be
legally bound, hereby mutually covenant and agree as follows:
1. DEFINITIONS
Terms used and not otherwise defined herein (including without limitation
in any Appendix or Annex hereto) are used herein as defined in the Acquisition
Financing Agreement dated January 29, 1990 and as thereafter amended from time
to time and as in effect on the date hereof (the "Acquisition Financing
Agreement") among Holdings, Iron Age and the
Purchasers named therein. As used herein, the term "Board of Directors" shall
mean the Board of Directors of Holdings.
2. EMPLOYMENT
2.1. Agreement. Holdings and Iron Age hereby agree to employ the
---------
Executive, and the Executive hereby agrees to serve each of Holdings and Iron
Age, in each case on the terms and conditions set forth herein.
2.2. Commencement and Expiration Date. The employment of the Executive by
--------------------------------
Holdings and Iron Age hereunder shall be for the period commencing on November
20, 1995 and expiring on January 30, 1999 (the "Expiration Date"), unless such
employment shall be [sic] have sooner terminated as hereinafter set forth. The
Expiration Date will be extended from year to year following the original
Expiration Date unless either party notifies the other party at least three
months prior to end of any Expiration Date, including any extended Expiration
Date, that he or it does not desire to extend the current Expiration Date for an
additional one year.
3. POSITION AND DUTIES
The Executive shall serve in accordance with the By-laws of Holdings and
Iron Age in the capacity of Executive Vice President of Holdings and Iron Age
and shall be accountable to and shall have such other powers, duties and
responsibilities as may from time to time be prescribed by the Chief Executive
Officer of Holdings and Iron Age.
The Executive shall perform and discharge, faithfully, diligently and
competently, such duties and responsibilities. The Executive shall devote all
his working time (reasonable sick
-2-
leave and incapacity excepted) and best efforts to the business and affairs of
Holdings and Iron Age.
4. COMPENSATION
Subject to the performance by the Executive of his duties and
responsibilities to Holdings and Iron Age:
4.1. Base Salary. (a) Holdings shall, or shall cause Iron Age to, pay the
-----------
Executive during each year of his employment hereunder beginning November 20,
1995, a base Salary at the annual rate of $142,500.
(b) For purposes of this Agreement, "Salary" shall mean the annual rate of
the Executive's base Salary, as adjusted in accordance with paragraph 4.2, as in
effect from time to time.
(c) Salary will be payable in substantially equal bi-monthly installments.
Except as otherwise provided in this Agreement, Salary shall be pro-rated for
any period of service less than a full year or less than a full month.
4.2. Salary Adjustments. (a) The Executive's Salary as in effect from time
------------------
to time on the last day of April of each year shall be adjusted annually on May
1 of each year by the Chief Executive Officer of Holdings; provided, however,
that such adjustment shall not be less than the cost of living adjustment
described in (b) below. The Executive's Salary shall never be reduced below his
base Salary of $142,500 by operation of this paragraph 4.2.
(b) The cost of living adjustment in any Fiscal Year shall be based upon
the annual percentage increase in the Consumer Price Index-All Items ("CPI-U").
The percentage increase shall be based upon the difference between the CPI-U on
December 1 of the prior year
-3-
and December 1 of the year immediately preceding the first day of each Fiscal
Year. The percentage increase shall then be multiplied by the Executive's Salary
as in effect immediately prior to the adjustment.
4.3. Bonus. For the fiscal year ending January 27, 1996 and each fiscal
-----
year thereafter, in each case during the term of the Executive's employment
hereunder, the Executive shall be entitled to receive, and Holdings shall pay,
or cause Iron Age to pay, to the Executive, in addition to Salary, a bonus
payment (the "Bonus") as determined pursuant to the plan adopted and set forth
and more particularly described on Appendix I. The Bonus with respect to each
fiscal year shall be payable promptly after Holdings sends audited financial
statements for such fiscal year to its stockholders, but not in any event later
than the one hundred and twentieth (120th) day following the end of such fiscal
year.
4.4. Expenses. During the term of his employment hereunder, Holdings shall
--------
pay, or shall cause Iron Age to pay, to the Executive prompt reimbursement for
all business expenses reasonably incurred by him on behalf of Holdings, Iron Age
or any of their Subsidiaries (in accordance with any policies and procedures
established by the Board of Directors from time to time for Holdings' senior
executive officers) in performing services hereunder, provided that the
Executive properly accounts therefor in accordance with Holdings' policies and
procedures.
4.5. Fringe Benefits. During the term of his employment hereunder, the
---------------
Executive shall be entitled to participate in or receive, and Holdings shall, or
shall cause Iron Age to provide, the benefits set forth in Appendix II.
-4-
4.6. Vacations. During the term of his employment hereunder, the Executive
---------
shall be entitled to receive the number of vacation days in each calendar year
determined by the Board of Directors of Holdings from time to time for the
Executive (but not in any event fewer than three weeks) and shall also be
entitled to all holidays given by Iron Age to its employees.
5. OFFICES.
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, in one or more additional positions as an officer or
director of Holdings or Iron Age or any of their Subsidiaries.
6. UNAUTHORIZED DISCLOSURE; INVENTIONS.
6.1. Unauthorized Disclosure. The Executive shall not, without the written
-----------------------
consent of the Board of Directors or a person duly authorized thereby, disclose
to any person, other than an employee or adviser of Holdings or Iron Age or any
of their Subsidiaries or Affiliates or other person to whom disclosure is in the
reasonable judgment of the Executive necessary or appropriate in connection with
the performance by the Executive of his duties as an executive officer of
Holdings or Iron Age or any of their Subsidiaries, any confidential or
proprietary information possessed by him; provided, however, that such
information shall not include any information known generally to the public
(other than as a result of unauthorized disclosure by the Executive) or which
becomes available to the Executive on a non-confidential basis from a source
other than Holdings or Iron Age or any of their Subsidiaries or Affiliates prior
to it becoming available to the Executive from Holdings or Iron Age or any of
their Subsidiaries or Affiliates, which source is not bound by a confidentiality
agreement with Holdings; and provided, further, that the Executive's duties
under this paragraph 6.1 shall not extend to any
-5-
disclosure that may be required by law in connection with any judicial or
administrative proceeding or inquiry. The Executive understands and agrees that
this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.
6.2. Proprietary Rights. Any and all inventions, discoveries,
------------------
developments, methods, processes, compositions, works, concepts and ideas
(whether or not patentable or copyrightable) conceived, made, developed, created
or reduced to practice by the Executive (whether at the request or suggestion of
Holdings or Iron Age or otherwise, whether alone or in conjunction with others,
and whether during regular hours of work or otherwise) during the period of his
employment by Holdings or Iron Age or any of their Subsidiaries (including
without limitation the period of his prior employment by Childs Corporation),
which may be directly or indirectly useful in, or relate to, the business,
ventures or other activities of or products manufactured or sold by Holdings or
Iron Age or any of their Subsidiaries or any business or products contemplated
by Holdings or Iron Age or any of their Subsidiaries (and known by the Executive
to be so contemplated) while the Executive is employed by the Holdings or Iron
Age or any of their Subsidiaries (collectively, "Proprietary Rights"), shall be
promptly and fully disclosed by the Executive to an appropriate executive
officer of Holdings and shall be Holdings' exclusive property as against the
Executive and his heirs and personal representatives, and the Executive hereby
assigns to Holdings his entire right, title and interest therein and shall
promptly deliver upon request to an appropriate executive officer of Holdings
all papers, drawings, models, data and other material relating to any of the
foregoing
-6-
Proprietary Rights, conceived, made, developed, created or reduced to
practice by him as aforesaid. All copyrightable Proprietary Rights shall be
considered "works made for hire."
The Executive shall, upon Holdings' request and without any payment
therefor, execute any documents reasonably necessary or advisable in the opinion
of Holdings' counsel to assign, and confirm Holdings' title in, his entire
right, title and interest in the foregoing Proprietary Rights and to direct
issuance of patents or copyrights to Holdings with respect to such Proprietary
Rights as are Holdings' exclusive property as against the Executive and his
heirs and personal representatives under this paragraph or to vest in Holdings
title to such Proprietary Rights as against the Executive and his heirs and
personal representatives, the expense of securing any such patent or copyright,
however, to be borne by Holdings.
7. NON-COMPETITION.
The Executive agrees that during the term of his employment hereunder,
during the period in which the Executive is receiving post Date of Termination
payments based upon Salary under paragraphs 9.2 or 9.4 and for a period of one
year following the later of his Date of Termination and the date of cessation of
such post Date of Termination payments based upon Salary (the "Non Competition
Period End Date"), he will not, directly or indirectly, (A) own, manage,
operate, control or participate in any manner in the ownership, management,
operation or control of, or be connected as an officer, employee, partner,
director, principal, consultant, agent or otherwise with, or have any financial
interest in any company or business entity of any kind (or any direct or
indirect parent or subsidiary thereof) engaged directly or indirectly in the
design, manufacture, distribution or sale (or any other activity related
thereto) of workshoes or workboots, whether or not protective, within or into
the continental United
-7-
States or Puerto Rico; (B) solicit or encourage any customer or supplier of
Holdings or Iron Age or any of their Subsidiaries to terminate or otherwise
alter its relationship with Holdings or Iron Age or any of their Subsidiaries;
or (C) directly or indirectly, recruit or otherwise seek to induce any employee
or agent of Holdings or Iron Age or any of their Subsidiaries to terminate or
otherwise alter his or her employment or agency or violate any agreement with
Holdings, Iron Age or any of their Subsidiaries. Notwithstanding the foregoing,
ownership of not to exceed five percent of the voting stock of any publicly held
corporation shall not, of itself, constitute a violation of this Section 7.
After the Non Competition Period End Date, the taking by the Executive of
any action or actions which, if taken prior to the Non Competition Period End
Date, would have given rise to a breach or violation of this paragraph 7, shall
relieve Holdings and Iron Age from any obligation to make subsequent payments,
or provide subsequent benefits, pursuant to this Agreement in respect of
participation in any group medical, hospital or life insurance plans or
policies.
8. TERMINATION.
8.1. Death. The Executive's employment hereunder shall terminate upon his
-----
death.
8.2. Incapacity. If as a result of the Executive's incapacity due to
----------
physical or mental illness or otherwise, which incapacity has been certified by
a competent physician, the Executive shall for six consecutive months during the
term of this Agreement have been unable to perform satisfactorily all of his
duties hereunder on a full-time basis, Holdings and Iron Age may terminate the
Executive's employment hereunder by written notice to the Executive. The
Executive agrees, upon reasonable request by Holdings or Iron Age from time to
time at its
-8-
expense, promptly to submit to examination by a physician selected by Holdings
or Iron Age for purposes of obtaining the certification required by the
preceding sentence, such examination to be of such scope, and to include without
limitation such follow-up visits for additional examination, testing and so
forth, as such physician in his or her professional judgment shall deem
necessary in order to reach a determination as to whether the Executive is so
incapacitated; provided, however, that the Executive shall not be required to
submit more than two such examinations during any period of twelve consecutive
months.
8.3. Termination by the Executive. The Executive may terminate his
----------------------------
employment hereunder upon thirty days' prior written notice to Holdings and Iron
Age for Good Reason. For purposes of this Agreement, "Good Reason" shall mean
(i) a reduction in the Executive's Salary or Base Amount of Bonus as defined in
Appendix I, (ii) material diminution of any of his positions, authority, duties
or responsibilities so as to be inconsistent with his positions hereunder, (iii)
any material failure or refusal by Holdings or Iron Age to perform and discharge
its obligations hereunder, or (iv) any willful action by Holdings or Iron Age
that is materially inconsistent with the terms of this Agreement.
8.4. Cause. Holdings and Iron Age may terminate the Executive's employment
-----
hereunder for Cause by written notice to the Executive. For the purposes of
this Agreement, Holdings and Iron Age shall have "Cause" to terminate the
Executive's employment hereunder upon the Executive's (i) material failure or
refusal to perform and discharge, or material breach of, his duties and
responsibilities hereunder, (ii) material breach of his fiduciary duties as an
officer or member of the Board of Directors of Holdings, Iron Age or any of
their Subsidiaries, or (iii) conviction of a felony of any other crime involving
the personal
-9-
dishonesty or moral turpitude of the Executive which in either case materially
and adversely reflects on Holdings, Iron Age or any of their Subsidiaries.
8.5. Termination by Holdings and Iron Age Other Than for Cause. Holdings
---------------------------------------------------------
and Iron Age may terminate the Executive's employment hereunder other than for
Cause at any time upon thirty days' prior written notice to the Executive.
8.6. Date of Termination; Term of Employment. The term "Date of
---------------------------------------
Termination" shall mean the earlier of (A) the Expiration Date as it may be
extended from time to time or (B) if the Executive's employment is terminated
(i) by his death, the date of his death, or (ii) for any other reason, the date
on which such termination is to be effective (which date may not be earlier than
the date of the notice of termination) pursuant to the notice of termination
given hereunder by the party terminating the employment relationship. For all
purposes of this Agreement, referenced to the "term" of the Executive's
employment hereunder shall mean the period commencing on November 20, 1995 and
ending on the Date of Termination.
9. COMPENSATION UPON TERMINATION.
9.1. Death. Notwithstanding any other provision of this Agreement, if the
-----
Executive's employment shall be terminated by reason of his death, Holdings
shall pay, or cause Iron Age to pay, to his surviving spouse, or, if he is not
survived by a spouse, to his estate, an amount equal to his full Salary through
the end of the month in which his death occurs at the rate in effect at the time
of his death, plus a pro rata portion (to the date of death) of any Bonus for
the then current fiscal year (to be paid at the time when such Bonus would
normally be paid) and prompt reimbursement of all expenses incurred prior to his
date of death reimbursable under paragraph 4.4 or Appendix II.
-10-
In addition, Holdings shall, or cause Iron Age to, continue to provide the
Executive's surviving spouse, during the period beginning on the Executive's
death and ending on the earlier of the surviving spouse's 65th birthday or the
Expiration Date, coverage under all group medical and hospital plans or policies
maintained by Holdings or Iron Age in which the Executive would have been
entitled to participate under Appendix II had the Executive been employed
hereunder during such period.
9.2. Incapacity. Notwithstanding any other provision of this Agreement, if
----------
the Executive's employment shall be terminated by reason of his incapacity,
Holdings shall pay, or cause Iron Age to pay, the Executive an amount equal to
his full Salary through the end of the month in which the Date of Termination
occurs, at the rate in effect at the time the notice of termination is given as
provided under paragraph 8.2, plus a pro rata portion (to the Date of
Termination) of any Bonus for the then current fiscal year (to be paid at the
time when such Bonus would normally be paid). Holdings shall also pay, or cause
Iron Age to pay, to the Executive prompt reimbursement under paragraph 4.4
hereof and Appendix II. In addition, Holdings shall, or shall cause Iron Age
to, continue to provide the Executive, during the period between his Date of
Termination and the Expiration Date, coverage under all group medical and
hospital plans and policies and, to the extent coverage is available without
additional premiums, under all life insurance plans and policies maintained by
Holdings or Iron Age in which the Executive would have been entitled to
participate under Appendix II had the Executive been employed hereunder during
such period. The obligations of Holdings and Iron Age under this paragraph 9.2
after the Date of Termination to pay or cause to be paid any
-11-
amount, or provide or cause to be provided any benefit, are subject to the
performance by the Executive of his obligations under Sections 6 and 7.
9.3. Cause. Notwithstanding any other provision of this Agreement, if
-----
Holdings or Iron Age shall terminate the Executive's employment for Cause,
neither Holdings nor Iron Age nor any of their Subsidiaries or Affiliates shall
have any further obligations to the Executive under this Agreement; provided,
however, that Holdings shall pay, or cause Iron Age to pay, to the Executive his
full Salary through the Date of Termination at the rate in effect at the time
notice of termination is given and prompt reimbursement of all expenses incurred
prior to the Date of Termination reimbursable under paragraph 4.4 and Appendix
II. The obligations of Holdings and Iron Age under this paragraph 9.3 after the
Date of Termination to pay or cause to be paid any amount, or provide or cause
to be provided any benefit, are subject to the performance by the Executive of
his obligations under Sections 6 and 7.
9.4. Good Reason or Other Termination. If Holdings and Iron Age shall
--------------------------------
terminate the Executive's employment pursuant to paragraph 8.5 or if the
Executive shall terminate his employment for Good Reason in accordance with
paragraph 8.3, then Holdings shall pay, or cause Iron Age to pay, to the
Executive his Salary through the Date of Termination at the rate in effect at
the time notice of termination is given, plus a pro-rata portion (to the Date of
Termination) of any Bonus for the then current fiscal year (to be paid at the
time when such Bonus would normally be paid). Holdings shall also pay, or cause
Iron Age to pay, to the Executive prompt reimbursement of all expenses incurred
prior to the Date of Termination reimbursable under paragraph 4.4 and Appendix
II. Further, Holdings shall, or shall cause Iron Age to, continue to provide
the Executive, during the period between his Date of
-12-
Termination and the first anniversary of his Date of Termination, coverage under
all group medical, hospital and life insurance plans and policies maintained by
Holdings or Iron Age in which the Executive would have been entitled to
participate under Appendix II had the Executive been employed hereunder during
such period. In addition, in lieu of any further payments to the Executive for
periods subsequent to the Date of Termination, Holdings shall, as liquidated
damages, in lieu of any severance pay, pay, or cause Iron Age to pay, to the
Executive, in substantially equal monthly installments, for a period of eighteen
months from the Date of Termination, an amount equal to the annual Salary that
the Executive would have received (at the rate in effect at the time the notice
of termination is given) during such period had the Executive been employed
hereunder during such period. The obligations of the Company under this
paragraph 9.4 after the Date of Termination to pay or cause to be paid any
amount, or provide or cause to be provided any benefit, are subject to the
performance by the Executive, at all times on or prior to the Expiration Date,
of his obligations under Sections 6 and 7.
9.5. Post-Termination Obligations Generally. Neither Holdings nor Iron Age
--------------------------------------
shall have any further obligations to the Executive following expiration of the
term of this Agreement and payment of all amounts due and payable hereunder on
or prior to the expiration of the term of this Agreement. In the event of the
termination of the Executive's employment other than by expiration of the term
of this Agreement, neither Holdings nor Iron Age shall have any obligation to
the Executive nor his surviving spouse except as otherwise specifically provided
in this Section 9, and performance by Holdings and Iron Age thereof shall
constitute full settlement of any claim that the Executive may have against
Holdings, Iron Age or any of
-13-
their directors, officers, agents, Subsidiaries or Affiliates, or against any
Purchaser or any Affiliate of any Purchaser, on account of such termination.
10. WITHHOLDING; PRO-RATIONS.
All payments made by Holdings or Iron Age under this Agreement shall be
reduced by the amount of any tax or other amounts required to be withheld by
Holdings or Iron Age under applicable legal requirements. In the event the
provisions hereof require the pro-ration of any Bonus for any fiscal year, such
pro-ration shall be made by determining the Bonus that would have been payable
had the Executive been employed hereunder throughout such fiscal year and
multiplying such Bonus by a fraction, the numerator of which shall be the number
of days elapsed from the first day of such fiscal year through the date as of
which such pro-ration is to be made and the denominator of which shall be three
hundred and sixty-five.
11. NOTICES.
For all purposes of this Agreement, notices and all other communications to
either party provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed, in the case of Holdings and Iron Age, to them at Xxxxxxxx Xxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Corporate
Secretary, with a copy to Xxxxxx Capital Corporation, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxx Xxxxx, or, in the case of the
Executive, to the Executive at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, or to
such other address as either party shall designate by giving like notice of such
change to the other party.
-14-
12. INDEMNIFICATION.
Holdings and Iron Age shall indemnify, defend and hold the Executive
harmless to the fullest extent permitted by applicable law in connection with
any claim, action, suit, investigation or proceeding arising out of or relating
to performance by the Executive of services for, or action of the Executive as a
Director, officer or employee of Holdings or Iron Age or any of their
Subsidiaries, or of any other company or business organization at the request of
Holdings. Expenses incurred by the Executive in defending a claim, action, suit
or investigation or criminal proceeding shall be paid by Holdings or Iron Age in
advance of the final disposition thereof upon the receipt by Holdings or Iron
Age of an undertaking by or on behalf of the Executive to repay said amount
unless it shall ultimately be determined that the Executive is entitled to be
indemnified hereunder. The foregoing shall be in addition to any
indemnification rights the Executive may have by law, contract, charter, by-law
or otherwise. This Section 12 shall not apply to an action commenced between
Holdings or Iron Age and the Executive.
13. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the heirs
and personal representative of the Executive and the successors of each of
Holdings and Iron Age. Holdings and Iron Age shall each require any successor
(whether direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation, or otherwise) to all or
substantially all their respective assets expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that Holdings
or Iron Age would be required to perform this Agreement if no such succession
had taken place.
-15-
Regardless of whether such agreement is executed, this Agreement shall be
binding upon any successor of each of Holdings and Iron Age in accordance with
the operation of law and such successor shall be deemed to be "Holdings" and
"Iron Age" for purposes of this Agreement without further action of any kind.
14. DISPUTE RESOLUTION.
(a) Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement or the breach thereof (including the arbitrability of any
controversy or claim), shall be settled by arbitration in accordance with the
internal laws of the Commonwealth of Pennsylvania by three arbitrators, one of
whom shall be appointed by the Board of Directors, one by the Executive and the
third of whom shall be appointed by the first two arbitrators. If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the American Arbitration Association.
The arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this paragraph 14(a).
The cost of any arbitration proceeding hereunder shall be borne equally by
Holdings or Iron Age and the Executive. The award of the arbitrators shall be
binding upon the parties. Judgment upon the award (including without limitation
equitable remedies) rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The foregoing arbitration proceedings may be
commenced by any party by notice to the other party. The parties hereby exclude
any right of appeal to any court on the merits of the dispute. Notwithstanding
the foregoing, any party shall have the right to seek preliminary or temporary
equitable relief in
-16-
any court in the Commonwealth of Pennsylvania prior to the outcome of
arbitration proceedings.
(b) Legal Expenses. In the event that it shall be necessary or desirable
--------------
for the Executive to retain legal counsel and/or incur other costs and expenses
in connection with the enforcement of any of his rights under this Agreement
except with respect to or related to Section 7, and provided that the Executive
substantially prevails in the enforcement of such rights, Holdings and Iron Age
shall pay (or the Executive shall be entitled to recover from Holdings and Iron
Age) the Executive's reasonable attorneys' fees not to exceed $5,000 and court
costs in connection with the enforcement of the Executive's rights, including
the enforcement of any arbitration award.
15. NO ASSIGNMENT.
Except as otherwise expressly provided herein, this Agreement is not
assignable by any party and no payment to be made hereunder shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
other charge.
16. EXECUTION IN COUNTERPARTS.
This Agreement may be executed by the parties hereto in two or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart.
-17-
17. JURISDICTION AND GOVERNING LAW.
Subject to paragraph 14(a), jurisdiction over disputes with regard to this
Agreement shall be exclusively in the courts of the Commonwealth of
Pennsylvania, and this Agreement shall be construed and interpreted in
accordance with and governed by the laws of the Commonwealth of Pennsylvania,
other than the conflict of laws provisions of such laws.
18. JOINT AND SEVERAL OBLIGATIONS; SURVIVAL.
Notwithstanding any provision of this Agreement to the contrary, Holdings
and Iron Age shall be jointly and severally liable to the Executive, his
surviving spouse, and Executive's heirs or personal representatives for all
payment obligations under this Agreement, including, without limitation, the
payment obligations under Sections 4, 9, 12 and 14. The provisions of this
Section 18 and Sections 4, 6, 7, 9, 10, 11, 12, 13, 14 and 17 of this Agreement
shall survive the Termination Date of this Agreement to the extent necessary of
appropriate to effectuate the respective purposes of such provisions.
19. SEVERABILITY.
If any provision of this Agreement shall be adjudged by any arbitrator or
court of competent jurisdiction to be invalid or unenforceable for any reason,
such judgment shall not affect, impair or invalidate the remainder of this
Agreement.
In the event that any provision hereof would, under applicable law, be
invalid or unenforceable, such provision shall, to the extent permitted under
applicable law, be construed by modifying or limiting it so as to be valid and
enforceable to the maximum extent possible under applicable law.
-18-
20. MISCELLANEOUS.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is approved by the Board of Directors and
agreed to in writing signed by the Executive and such officer as may be
specifically authorized by the Board of Directors. No waiver by either party
hereto at any time of breach of, or compliance with, any condition or provision
of this Agreement to be performed by the other party hereto shall be deemed a
waiver of the same or similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
The headings in this Agreement are for convenience and reference only and shall
not be construed as part of this Agreement or to limit or otherwise affect the
meaning hereof. The Executive acknowledges and agrees that, because Holdings'
and Iron Age's legal remedies may be inadequate in the event of a breach of, or
other failure to perform, any of the covenants and agreements set forth in
Section 6 or 7 by the Executive, Holdings and Iron Age may, in addition to
obtaining any other remedy or relief available to them (including without
limitation damages at law), enforce the provisions of said Section 6 or 7 by
injunction and other equitable relief without the posting of any bond.
21. ENTIRE AGREEMENT.
This Agreement, including the Appendices hereto, constitutes the entire
agreement between the parties hereto, and supersedes any and all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of the Executive's
-19-
employment on and after the date hereof; provided, however, that this Agreement
shall not modify or otherwise affect the Stockholders Agreement or the
Executive's Stock Options.
IN WITNESS WHEREOF, the parties hereunto set their hands, under seal, as of
the date first above written.
WITNESS: EXECUTIVE:
/s/ J. Xxxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxx
------------------------- -----------------------------
ATTEST: IRON AGE HOLDINGS CORPORATION
By:/s/ J. Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------- --------------------------
Secretary President
ATTEST: IRON AGE CORPORATION
By:/s/ J. Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- --------------------------
Secretary President
-20-
APPENDIX I
----------
BONUS
-----
The Bonus with respect to each of the fiscal years during the Term of the
Employment Agreement shall be calculated and payable as hereinafter set forth.
The Base Amount of the Bonus for each such fiscal year shall be determined in
the sole discretion of the Chief Executive Officer of Holdings and the Board of
Directors; provided, however, that the Base Amount shall not be less than the
greater of (a) the Base Amount in effect for the preceding year or (b) $35,000.
Notwithstanding the foregoing, however, the Executive shall not be entitled to
receive any Bonus hereunder with respect to any fiscal year unless the Iron Age
Stand Alone Net Operating Income for such fiscal year shall equal or exceed an
amount equal to 85% of the Target Amount as defined below.
The Target Amount of Iron Age Stand Alone Net Operating Income for each
fiscal year shall be the amount of such Income as defined and approved by the
Board of Directors for such fiscal year.
In the event that actual Iron Age Stand Alone Net Operating Income for any
fiscal year shall exceed an amount equal to 99% of the Target Amount for such
fiscal year but be less than an amount equal to 101% of the Target Amount for
such fiscal year, the Bonus with respect to such fiscal year shall be equal to
the Base Amount. In the event that actual Iron Age Stand Alone Net Operating
Income for any fiscal year shall equal or exceed an amount equal to 101% of the
Target Amount for such fiscal year, the Bonus with respect to such fiscal year
-21-
shall be equal to the sum of (a) the Base Amount plus (b) 4% of the Base Amount
for each 1% of such Target Amount by which actual Iron Age Stand Alone Net
Operating Income for such fiscal year shall exceed such Target Amount. In the
event that actual Iron Age Stand Alone Net Operating Income for any fiscal year
shall be equal to or less than 99% of the Target Amount for such fiscal year,
the Bonus with respect to such fiscal year shall be equal to the sum of (a) the
Base Amount minus (b) 4% of the Base Amount for each 1% of such Target Amount by
which actual Iron Age Stand Alone Net Operating Income shall be less than such
Target Amount. In no event shall the Bonus with respect to any fiscal year
exceed an amount equal to the Executive's Salary for such fiscal year, nor shall
any Bonus be payable hereunder with respect to any fiscal year unless the Iron
Age Stand Alone Net Operating Income for such fiscal year shall equal or exceed
an amount equal to 85% of the Target Amount for such fiscal year.
Determinations of the amount of Iron Age Stand Alone Net Operating Income
and all other matters in connection with the Bonus shall be made in good faith
by the Board of Directors and such determination, if made in good faith, shall
be conclusive and binding upon all the parties. In the event of any direct or
indirect acquisition by Holdings or any of its Subsidiaries of any business
enterprise (an "Acquired Business"), whether by merger, consolidation, share
exchange, sale or acquisition of stock or assets or similar transaction,
financed in whole or in part, directly or indirectly, from or in anticipation of
any part of the proceeds of any indebtedness directly or indirectly incurred or
to be incurred or any equity or other securities directly or indirectly issued
or to be issued by Holdings or any of its
-22-
Subsidiaries or Affiliates (an "Acquisition Transaction"), the Executive agrees,
if requested by Holdings, to make such amendments and modifications hereto as
may be necessary or appropriate to ensure that the Executive's right to receive
any Bonus hereunder depends upon the results of operations of Holdings and the
Specified Subsidiaries as of immediately prior to such Acquisition Transaction
on a stand alone basis, without any augmentation or reduction by the operating
results of any Acquired Business as a result of such Acquisition Transaction.
-23-
APPENDIX II
-----------
BENEFITS
--------
(a) Clubs: One Country Club membership fees and dues not to exceed an
aggregate for all such fees and dues of $5,000 annually.
(b) Automobiles: Use of a Lincoln Continental or other similar suitable
automobile, plus all fuel, maintenance and insurance costs
thereof.
(c) Insurance: Participation in the Iron Age Corporation Group Benefits
Plan and other arrangements maintained by Holdings or Iron
Age for their respective senior executive officers as the
same may in each case be modified from time to time by the
Board of Directors of Holdings, such arrangements to
initially include the following:
(i) Group disability insurance in accordance with Iron
Age current plan and practice.
(ii) Group term life insurance providing to the
Executive's beneficiaries an aggregate death
benefit of two times Base Salary not to exceed
$300,000 in accordance with Iron Age current plan
and practice.
-24-
(iii) Group 24-hour risk insurance providing an aggregate
benefit to the Executive of $500,000 in accordance
with Iron Age current plan and practice.
(iv) Group medical and hospital insurance covering the
Executive, his spouse and dependents in accordance
with Iron Age current plan and practice.
(d) Profit
Sharing Plan: Participation in the Iron Age Corporation Profit Sharing
Plan in accordance with the terms thereof or in any other
substitute profit sharing arrangements maintained by
Holdings or Iron Age for their respective senior executive
officers as the same may in each case be modified from time
to time by the Board of Directors of Holdings or Iron Age.
-25-
