AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
made and entered into as of January 31, 1998, is by and between Lamonts
Apparel, Inc., a Delaware corporation (the "Company"), and Xxxx Xxxxxxxxxxx
("Executive").
WHEREAS, this Agreement, which amends and restates the Employment
Agreement, dated as of April 18, 1995 (the "Existing Employment Agreement"),
between Executive and the Company, is being entered into in connection with
the Company's Modified and Restated Plan of Reorganization under Chapter 11
of the Bankruptcy Code (the "Plan of Reorganization" or "Plan");
WHEREAS, the Plan of Reorganization provides, among other things, for
the continued employment of Executive after confirmation of the Plan of
Reorganization and dismissal of the Company's Chapter 11 case (the
"Bankruptcy Case") under Chapter 11 of title 11 of the United States Code
(the "Bankruptcy Code");
WHEREAS, the Plan was confirmed by order entered on December 18,
1997 by the United States Bankruptcy Court for the Western District of
Washington at Seattle (the "Bankruptcy Court") and the Bankruptcy Case has
been dismissed; and
WHEREAS, the Plan included provision for employment of the
Executive pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and of
the mutual covenants set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree to amend and restate the Existing Employment Agreement as
follows:
1. EMPLOYMENT OF EXECUTIVE; TITLE.
(a) EMPLOYMENT. Executive agrees to be employed by the
Company, and the Company agrees to employ Executive, on the terms and
conditions set forth in this Agreement. Executive agrees during the term of
his employment to devote substantially all of his business time, efforts,
skills and abilities to the performance of his duties as stated in this
Agreement and to the furtherance of the Company's business.
(b) TITLE. Executive's job title will be Chief Executive
Officer and his duties will be those as are designated by the Board of
Directors of the Company ("Board"), consistent with the position of Chief
Executive Officer. Executive further agrees to serve, without additional
compensation, as a director of the Company, and as an officer or director, or
both, of any subsidiary, division or affiliate of the Company or any other
entity in which the Company holds an equity interest; PROVIDED, however, that
the Company shall indemnify Executive from liabilities in connection with
serving in any such position to the same extent as his indemnification rights
pursuant to the Company's Certificate of Incorporation, By-Laws and
applicable Delaware law.
2. COMPENSATION.
(a) BASE SALARY. Executive's base salary shall be composed
of the following:
i) SALARY. During the term of Executive's employment
with the Company pursuant to this Agreement, the Company shall pay to
Executive as compensation for his services an annual salary of $450,000
payable semi-monthly ("Salary"). Executive's Salary will be payable in
arrears in accordance with the Company's normal payroll procedures and will
be reviewed annually and subject to upward adjustment as provided in
paragraph 3(a)(iii) below.
ii) GUARANTEED PERFORMANCE BONUS. In addition to his
Salary, the Executive shall be paid a guaranteed annual bonus in the sum of
$100,000 per year ("Minimum Bonus"), payable at the end of each calendar
year. In the event the Executive resigns or the Executive's employment is
terminated during the year, the guaranteed annual bonus shall be prorated and
paid upon termination.
iii) INCREASES IN BASE SALARY. Beginning on January 31,
1998, the Executive's Salary and Minimum Bonus shall be reviewed by the
Board or the Compensation Committee thereof no less frequently than on each
January 31 during the Term. The Salary and Minimum Bonus payable to
Executive may be increased on each such date (and at such other times as such
Board or the Compensation Committee may deem appropriate during the Term) to
such amount determined appropriate by such Board or the Compensation
Committee; PROVIDED, HOWEVER, that Executive's Salary and Minimum Bonus shall
be increased annually in a minimum amount equal to the cost-of-living
increment as reported in the "Consumer Price Index, Seattle, Washington, All
Items," published by the U.S. Department of Labor (using January 1, 1995 as
the base date for comparison with respect to the increase to be made on
January 31, 1998, and
2
using January 1 of the immediately preceding year as the base date for
comparison with respect to each annual increase to be made thereafter). Each
such new Salary and Minimum Bonus shall become the base for each successive
year increase. Any increase in Salary, Minimum Bonus or other compensation
shall in no way limit or reduce any other obligations of the Company
hereunder and, once established as an increased specified rate, Executive's
Salary and Minimum Bonus shall not be reduced unless Executive otherwise
agrees in writing.
(b) BONUS COMPENSATION.
i) REORGANIZATION BONUS. Upon the Effective Date, the
Company became obligated to pay to the Executive, a bonus (the
"Reorganization Bonus") in an amount equal to $400,000. The Reorganization
Bonus shall be payable within 10 days after the Effective Date. If Executive
shall cease to be employed by the Company prior to the one year anniversary
of the Effective Date as a result of Executive's voluntary termination of
this Agreement in accordance with Section 7 hereof, Executive shall repay to
the Company on such date Executive ceases to be so employed, one-half of the
amount of the Reorganization Bonus received by Executive hereunder. The
Reorganization Bonus shall be an Expense of Administration obligation of the
Company.
ii) EXTENSION BONUS. The Company shall pay to Executive
an extension bonus of $175,000 payable on February 2, 1998, PROVIDED THAT,
Executive is employed by the Company on such date.
(c) RETENTION OF PRIOR BENEFITS. The Executive shall retain
all monies and other benefits previously paid to him by reason of the
Existing Employment Agreement.
(d) EXECUTIVE PERQUISITES. Executive shall be entitled to
receive such executive perquisites and fringe benefits as have been
customarily provided to senior executives of the Company.
(e) MISCELLANEOUS BUSINESS EXPENSES. Executive shall be
entitled to receive an allowance of $1,500 per month, payable monthly in
advance, for unreimbursed business-related expenses including the use of one
personal vehicle.
(f) STOCK OPTIONS. On the Effective Date, the Company shall
issue to Executive (i) options to purchase 600,000 shares of Class A Common
Stock, par
3
value $.01 per share (the "Common Stock"), of the Company, which options
shall be exercisable at a price of $1.00 per share; (ii) to prevent dilution
upon exercise of the New Class A Warrants and the New Class B Warrants (as
each such term is defined in the Plan of Reorganization), (x) options to
purchase 146,888 shares of Common Stock, which options shall be exercisable
at a price of $.01 per share on the first date on which the Aggregate Equity
Trading Value (as such term is defined in the Plan of Reorganization) equals
or exceeds $20 million and (y) options to purchase 53,349 shares of Common
Stock, which options shall become exercisable at a price of $.01 per share on
the first date on which the Aggregate Equity Trading Value equals or exceeds
$25 million; PROVIDED THAT, the aggregate number of options described in
clauses (ii)(x) and (y) above which may be exercised by Executive shall bear
the same proportion (based on the total number of such options granted to
Executive) to the number of options described in clause (i) above that have
been exercised by Executive (based on the total number of such options
granted to Executive); and (iii) to prevent dilution upon the exercise of the
New Class C Warrants (as defined in the Plan), 15,243 New Class C Warrants,
exercisable in accordance with the terms thereof.
The options described in clauses (i) and (ii) above and the New
Class C Warrants issued to Executive shall vest (x) 50% upon the Effective
Date, (y) 25% on the first anniversary of the Effective Date and (z) 25% on
the second anniversary of the Effective Date; PROVIDED THAT, such options and
New Class C Warrants shall vest in full upon a Change in Control (as defined
in Section 6 hereof).
(g) TAX WITHHOLDING. The Company has the right to deduct from
any compensation payable to Executive under this Agreement social security
(FICA) taxes and all federal, state, municipal or other such taxes or charges
as may now be in effect or that may hereafter be enacted or required.
(h) BOARD MEMBERSHIP. The Company agrees that it will use its
best efforts to cause Executive to be nominated to the Board and to serve as
Chairman of the Board at each annual meeting of stockholders of the Company
during the term of this Agreement.
(i) LIFE INSURANCE. In addition to any other insurance which
the Company may choose to maintain on the life of the Executive, the Company
shall provide, to the extent it is reasonably able to do so, a term life
insurance policy in the face amount of two million dollars ($2,000,000)
payable to such beneficiary as the Executive may designate; provided,
however, that in no event shall the Company be
4
required to pay premiums on such term life insurance policy in excess of
$15,000 per annum.
(j) DIRECTOR'S AND OFFICER'S INSURANCE. The Company shall
maintain directors' and officers' insurance policies during the term of
Executive's employment hereunder and for a period of twelve months thereafter
on substantially the same terms as the Company's current policies; PROVIDED
THAT, if any insurer shall cancel or refuse to renew any such policy and the
Company is unable to obtain a replacement policy on substantially the same
terms reasonably satisfactory to Executive, the Company will timely exercise
any and all options thereunder, and pay any and all premiums or other charges
necessary, to extend the period during which claims may be made thereunder;
further PROVIDED THAT, the Company shall not be required to pay such premiums
or other charges necessary to extend such period if they are substantially in
excess of the premiums in effect on the date hereof. If the Company does not
maintain directors' and officers' insurance at any time during the term of
Executive's employment hereunder, Executive may terminate this Agreement
immediately and such termination shall be treated as a termination without
Cause hereunder.
3. DURATION OF EMPLOYMENT.
(a) TERM. Unless otherwise terminated at an earlier date in
accordance with Section 4 or 6 hereof, the term of Executive's employment
under this Agreement shall be for a period commencing on the effective date
of the Plan of Reorganization (the "Effective Date") and ending on January
31, 2002 (the "Term").
(b) EARLY TERMINATION. Notwithstanding the foregoing, this
Agreement (other than Sections 5 through 14 hereof) will terminate upon the
earliest to occur of: (a) the date the Company terminates Executive's
employment, (b) the date Executive resigns from the Company, (c) notice from
the Company following the disability of Executive that renders him unable to
perform his essential duties under this Agreement, even with reasonable
accommodation that does not cause undue hardship to the Company, for at least
90 days out of any 120 consecutive day period, or (d) the death of Executive,
provided, however, that in the event of the death of Executive, the Company
shall pay to the estate of Executive six months of Salary commencing with the
next regular pay period after the date of his death ("Death Benefit"). Any
Death Benefit otherwise payable by the Company shall be offset by proceeds
from any life insurance furnished by the Company for payment of the Death
Benefit under this Section 3(b).
5
4. TERMINATION BY THE COMPANY; DEFINITION OF CAUSE. Executive's
employment under this Agreement (and his right to receive the compensation
set forth in Section 2 hereof) may be terminated by the Company at any time
for "Cause," or (subject to the rights of Executive pursuant to Section 5
hereof) without "Cause." As used herein, "Cause" shall mean:
(a) Any dishonest or fraudulent act or course of conduct by
Executive, or other act or course of conduct by Executive constituting a
criminal act or which results in improper gain or personal enrichment of
Executive at the expense of the Company, or the commission by Executive of an
act or a course of conduct involving moral turpitude, or Executive's
insubordination to the Board.
(b) Executive's material breach of any of the terms or
conditions of this Agreement or of policies established by the Board, or
Executive's material neglect of his duties or of the Company's business,
provided, however, that no such termination pursuant to this clause (b) shall
be effective unless the Company shall have given Executive ten days' prior
written notice of any such conduct which, if not discontinued or corrected,
would lead to his termination for Cause. Executive will have the opportunity
to cure such non-complying conduct or performance within such 10-day period.
Termination pursuant to this clause (b) shall be effective with respect to
matters referred to in this clause (b) ten days after such notice unless such
conduct has been cured in the good faith judgment of the Board, subject to
the provisions of clause (c) below.
(c) In the event that the Executive disputes the grounds for a
claim of misconduct under clause (b) above, the Bankruptcy Court, prior to
the Effective Date, shall have jurisdiction to determine whether the alleged
misconduct constitutes reasonable grounds for termination for cause. In such
event the determination of the Bankruptcy Court shall be binding upon the
parties.
5. SEVERANCE PAYMENT ON TERMINATION WITHOUT CAUSE.
(a) TERMINATION WITHOUT CAUSE. If Executive's employment is
terminated by the Company without Cause during the term of this Agreement,
the Company shall be obligated to continue to pay Executive his Salary for a
period of two years or for the remainder of the term of this Agreement,
whichever period is shorter, subject to the provisions in Section 6
pertaining to Change in Control; PROVIDED THAT, such payments are subject to
reduction in accordance with the provisions of Section
6
5(b) hereof. At the Company's sole option, the Company may elect to pay
Executive any remaining Salary due under this 5(a) in a lump sum, equal to
the present value of such remaining Salary payments at an effective annual
interest rate of 10 percent.
(b) OFFSET. If Executive's employment with the Company is
terminated pursuant to Section 5(a), this clause (b) shall apply. The
payments which would have been due and payable in accordance with Section
5(a) hereof shall be reduced by an amount equal to any amounts that Executive
receives in connection with any other employment, or engagement as a
consultant and/or independent contractor, during the period such payments
pursuant to Section 5(a) would have been due and payable. For purposes of
this Section 5(b), any fringe benefits received by Executive in connection
with any other employment that are reasonably comparable, but not necessarily
as beneficial, to Executive as the fringe benefits then being provided by the
Company pursuant to Section 5(a) hereof, shall be deemed to be the equivalent
of, and shall terminate the Company's responsibility to continue providing,
the fringe benefits then being provided by the Company if Executive's
employment with the Company is terminated pursuant to Section 5(a). Executive
shall have no duty to mitigate his damages and, specifically, Executive shall
have no obligation to seek any employment or engagement which would generate
payments or benefits that would constitute an offset hereunder.
(c) GENERAL RELEASE. Acceptance by Executive of any amounts
pursuant to this Section 5 shall constitute a full and complete release by
Executive of any and all claims Executive may have against the Company, any
of its past, present or future shareholders or any of their respective
officers, directors and affiliates (past, present or future), including, but
not limited to, claims he might have relating to Executive's cessation of
employment with the Company, or with respect to claims under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
the Americans with Disabilities Act of 1990, or any other similar federal,
state or local statute, rule or regulation; PROVIDED THAT, there shall be
properly excluded from the scope of such general release the following:
i) claims that Executive may have against the Company for
reimbursement of ordinary and necessary business expenses incurred by him
during the course of his employment;
ii) claims that may be made by the Executive for payment
of Salary, Minimum Bonus, fringe benefits, stock, or stock options properly
due to him; and
7
iii) claims respecting matters for which the Executive is
entitled to be indemnified under the Company's Certificate of Incorporation
or Bylaws or indemnification agreements, respecting third party claims
asserted or third party litigation pending or threatened against the
Executive.
A condition to Executive's receipt of any amounts pursuant to this Section 5
shall be Executive's execution and delivery of a general release as described
above. Such payment shall be considered independent consideration made in
exchange for such release. In exchange for such release, the Company shall,
if Executive's employment is terminated without Cause, provide a release to
Executive, but only with respect to claims against Executive which are
actually known to the Company as of the time of such termination.
6. EFFECT OF CHANGE IN CONTROL.
(a) If a Change in Control (as hereinafter defined) shall
occur on or prior to the date specified in Section 3(a) hereof as the end of
the Term, then (i) if the remaining portion of the Term is less than two
years, the Term shall be automatically extended to a date which is 2 years
from the date on which such Change in Control is consummated ("Extended
Term"), and, (ii) if Executive's options, including warrants, have not fully
vested, then upon consummation of a Change in Control on or after the
Effective Date, all Executive options, including warrants, shall vest
immediately upon such event. In the event that Executive is terminated
during the Extended Term the provisions of Section 5 shall apply.
(b) As used herein, a "Change in Control" shall be deemed to
have occurred if, subsequent to the date hereof:
i) any "person" (as such term is defined in Section 13(d)
of the Securities Exchange Act of 1934), other than (i) Apollo Advisors,
L.P., Lion Advisors, L.P., FMR Corp., Fidelity Management & Research Company,
Fidelity Management Trust Company, any other beneficial owner of the
Company's common stock as of the Effective Date, or (ii) any investment fund
managed by, or firm or group affiliated with any of the persons specified in
clause (i) above, or any of their respective affiliates, becomes the
beneficial owner, directly or indirectly, of either (A) a majority of the
Company's outstanding common stock or (B) securities of the Company
representing a majority of the combined voting power of the Company's then
outstanding voting securities;
8
ii) a sale is made to any purchaser unaffiliated with the
Company or any of the persons specified in clause (i) above of all or
substantially all of the assets of the Company; or
iii) a merger or consolidation of the Company is made
with another corporation or other legal person unaffiliated with the Company
or any of the persons specified in clause (i) above if, immediately after
such merger or consolidation, less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person are
held, directly or indirectly, in the aggregate by the holders immediately
prior to such transaction of the then-outstanding securities of the Company
entitled to vote generally in the election of the Board.
In no event shall the term "Change in Control" be construed to
include any change of control of the Company or any affiliate of the Company
solely as a result of any exchange of equity for debt securities of the
Company or any such affiliate upon consummation of a plan of reorganization
for the Company in the Bankruptcy Case.
(c) Notwithstanding any other provision of this Agreement, if
the aggregate present value of the "parachute payments" to the Executive,
determined under Section 280G(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), is at least three times the "base amount" determined
under such Section 280G, then the Salary otherwise payable under this
Agreement and any other amount payable hereunder or any other severance plan,
program, policy or obligation of the Company or any other affiliate thereof
shall be reduced so that the aggregate present value of the "parachute
payments" to the Executive, determined under Section 280G, does not exceed
2.99 times the base amount. In no event, however, shall any benefit provided
hereunder be reduced to the extent such benefit is specifically excluded by
Section 280G of the Code as a "parachute payment" or as an "excess parachute
payment." Any decisions regarding the requirement or implementation of such
reductions shall be made by such tax counsel as may be selected by the
Company and acceptable to Executive.
7. VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate
this Agreement for any reason by giving the Company at least 180 days'
written notice of termination. The Company shall have no obligation to
provide any severance compensation under Section 5 in the event of
Executive's voluntary termination of this Agreement.
8. NONSOLICITATION OF EMPLOYEES. For a period of two years after
the termination or cessation of his employment with the Company for any reason
9
whatsoever, Executive shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation, or other entity, solicit or in
any manner attempt to influence or induce any employee of the Company or its
subsidiaries or affiliates (known by the Executive to be such) to leave the
employment of the Company or its subsidiaries or affiliates, nor shall he use
or disclose to any person, partnership, association, corporation or other
entity any information obtained while an employee of the Company concerning
the names and addresses of the Company's employees.
9. NONDISCLOSURE OF TRADE SECRETS. During the term of this
Agreement, Executive will have access to and become familiar with various
trade secrets and proprietary and confidential information of the Company,
its subsidiaries and affiliates, including, but not limited to, processes,
computer programs, compilations of information, records, sales procedures,
customer and supplier requirements, pricing techniques, customer and supplier
lists, methods of doing business and other confidential information
(collectively referred to as "Trade Secrets") which are owned by the Company,
its subsidiaries and/or affiliates and regularly used in the operation of its
business, and as to which the Company, its subsidiaries and/or affiliates
take precautions to prevent dissemination to persons other than certain
directors, officers and employees. Executive acknowledges and agrees that
the Trade Secrets (1) are secret and not known in the industry; (2) give the
Company or its subsidiaries or affiliates an advantage over competitors who
do not know or use the Trade Secrets; (3) are of such value and nature as to
make it reasonable and necessary to protect and preserve the confidentiality
and secrecy of the Trade Secrets; and (4) are valuable, special and unique
assets of the Company or its subsidiaries or affiliates, the disclosure of
which could cause substantial injury and loss of profits and goodwill to the
Company or its subsidiaries or affiliates. Executive may not use in any way
or disclose any of the Trade Secrets, directly or indirectly, either during
the term of this Agreement or at any time thereafter, except as required in
the course of his employment under this Agreement, if required in connection
with a judicial or administrative proceeding, or if the information becomes
public knowledge other than as a result of an unauthorized disclosure by the
Executive. All files, records, documents, information, data and similar
items relating to the business of the Company, whether prepared by Executive
or otherwise coming into his possession, will remain the exclusive property
of the Company and may not be removed from the premises of the company under
any circumstances without the prior written consent of the Board (except in
the ordinary course of business during the Executive's period of active
employment under this Agreement), and in any event must be promptly delivered
to the Company upon termination of Executive's employment with the Company.
Executive agrees that upon his receipt of any subpoena, process or other
request to produce or divulge, directly or indirectly, any Trade Secrets to
any entity,
10
agency, tribunal or person, Executive shall timely notify and promptly hand
deliver a copy of the subpoena, process or other request to the Board. For
this purpose, Executive appoints the Company (including any attorney retained
by the Company), as his true and lawful attorney-in-fact, to act in
Executive's name, place and stead to perform any act that Executive might
perform to defend and protect against any disclosure of any Trade Secrets.
10. EQUITABLE RELIEF. Executive acknowledges that the restrictions
contained in Sections 8 and 9 are, in view of the nature of the business of
the Company, reasonable and necessary to protect the legitimate interests of
the Company, that the company would not have entered into this Agreement in
the absence of such restrictions, and that any violation of any provisions of
those sections will result in irreparable injury to the Company. Executive
also acknowledges that the remedy at law for any violation of these
restrictions will be inadequate and that the Company shall be entitled to
temporary and permanent injunctive relief prohibiting any such violation,
without the necessity of proving actual damages or the posting of a bond, and
that the Company shall be further entitled to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative of and in addition to any other rights or remedies
to which the Company may be entitled. In the event of any such violation,
the Company shall be entitled to commence an action for temporary and
permanent injunctive relief and other equitable relief in any court of
competent jurisdiction and Executive further irrevocably submits to the
jurisdiction of any federal or state court in the geographical jurisdiction
of Seattle, Washington over any suit, action or proceeding arising out of or
relating to any asserted violation of Section 8 and/or 9. Executive hereby
waives, to the fullest extent permitted by law, any objection that he may now
or hereafter have to the jurisdiction of any federal or state court in the
geographical jurisdiction of Seattle, Washington or to the venue of any such
suit, action or proceeding brought in such a court and any claim that such
suit, action or proceeding has been brought in an inconvenient forum.
Effective service of process may be made upon Executive by mail under the
notice provisions contained in Section 14(a).
11. SEVERABILITY. The parties hereto intend all provisions of
Sections 8 and 9 hereof to be enforced to the fullest extent permitted by
law. Accordingly, should a court of competent jurisdiction determine that
the scope of any provision of Section 8 or 9 hereof is too broad to be
enforced as written, the parties intend that the court reform the provision
to such narrower scope as it determines to be reasonable and enforceable. In
addition, however, Executive agrees that the noncompetition, nonsolicitation
and nondisclosure agreements set forth above each constitute separate
11
agreements independently supported by good and adequate consideration and
shall be severable from the other provisions of, and shall survive, this
Agreement. The existence of any claim or cause of action of 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
of Executive contained in the noncompetition, nonsolicitation and
nondisclosure agreements. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never constituted a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be added as part of this Agreement, a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
12. LEGAL EXPENSES; EXECUTIVE'S WARRANTY.
(a) The Company agrees to reimburse Executive for reasonable
attorneys' fees and disbursements incurred and to be incurred by Executive
(net of amounts previously advanced) in the making of this agreement, in
seeking approval of the Bankruptcy Court thereof in the Bankruptcy Case, and
in obtaining such other services as may be required by the Executive in
connection with the effect of the Bankruptcy Case on his employment by the
Company. In the event that the parties do not agree on the amount of such
attorneys' fees the Bankruptcy Court shall be requested to make such
determination; provided, however, that in no event shall the Company be
required to pay attorneys' fees and disbursements in excess of $10,000 after
the date of the commencement of the Bankruptcy Case.
(b) Executive affirms that his employment is not contrary to
or in breach of any lawful agreement or other obligation Executive has to The
May Department Stores Company, and that based upon information known to him
as of the date of this Agreement regarding the business of the Company, he
does not know or possess any trade secrets or proprietary information of The
May Department Stores Company, or any of its affiliates (including its
parent) which would provide the Company with an unfair advantage over such
entities in the retail apparel business, and, in any event, will not, and
does not have any intent to convey any trade secrets or proprietary
information to the Company.
12
13. ARBITRATION - EXCLUSIVE REMEDY.
(a) Except as otherwise provided herein, the parties agree
that the exclusive remedy or method of resolving all disputes or questions
arising out of or relating to this Agreement shall be arbitration.
Arbitration shall be held in Seattle, Washington, presided over by one
arbitrator. Any arbitration may be initiated by either party by written
notice ("Arbitration Notice") to the other party specifying the subject of
the requested arbitration.
(b) If the parties are unable to mutually select an arbitrator
to hear the matter, then the American Arbitration Association, upon
application of the initiating party, shall provide a panel of arbitrators
from which the parties shall select one to hear the matter.
(c) The arbitration proceeding shall be conducted in
accordance with the Rules for Resolution of Employment Disputes of the
American Arbitration Association. The administrative costs of arbitration
(including the expense of a party in preparing for and presenting the
party's case at the arbitration and of the fees and expenses of legal counsel
to a party, all of which shall be borne by that party), shall be borne by the
Company only if Executive receives substantially the relief sought by him in
the arbitration; otherwise, the costs shall be borne equally between the
parties. The arbitration determination or award shall be final and
conclusive on the parties, and judgment upon such award may be entered and
enforced in any court of competent jurisdiction.
14. MISCELLANEOUS.
(a) NOTICES. Any notices, consents, demands, requests,
approvals and other communications to be given under this Agreement by either
party to the other must be in writing and must be either (i) personally
delivered, (ii) mailed by registered or certified mail, postage prepaid with
return receipt requested, (iii) delivered by overnight express delivery
service or same-day local courier service, or (iv) delivered by telex or
facsimile transmission, to the address set forth below, or to such other
address as may be designated by the parties from time to time in accordance
with this Section 14(a):
13
If to the Company: Lamonts Apparel, Inc.
00000 Xxxxxxx Xxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy (which
shall not constitute
notice) to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
If to Executive: Xxxx Xxxxxxxxxxx
Lamonts Apparel, Inc.
00000 Xxxxxxx Xxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy (which
shall not constitute
notice) to: Xxxxxxxx X. Xxxxxxxx
Xxxxx and Xxxxxxxx
000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Notices delivered personally or by overnight express delivery
service or by local courier service are deemed given as of actual receipt.
Mailed notices are deemed given three business days after mailing. Notices
delivered by telex or facsimile transmission are deemed given upon receipt by
the sender of the answer back (in the case of a telex) or transmission
confirmation (in the case of a facsimile transmission).
(b) ENTIRE AGREEMENT. This Agreement supersedes any and all
other agreements, either oral or written, between the parties with respect to
the subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect to the subject matter of this
Agreement.
14
(c) MODIFICATION. No change or modification of this Agreement
is valid or binding upon the parties, nor will any waiver of any term or
condition in the future be so binding, unless the change or modification or
waiver is in writing and signed by the parties to this Agreement.
(d) GOVERNING LAW. THE PARTIES ACKNOWLEDGE AND AGREE THAT
THIS AGREEMENT AND THE OBLIGATIONS AND UNDERTAKINGS OF THE PARTIES UNDER THIS
AGREEMENT WILL BE PERFORMED IN SEATTLE, WASHINGTON. THIS AGREEMENT IS
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
WASHINGTON, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.
(e) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which constitutes an original, but all of which
constitute one document.
(f) ESTATE. If Executive dies prior to the expiration of the
term of employment or during a period when monies are owing to him, any
monies that may be due him from the Company under this Agreement as of the
date of his death shall be paid to his estate when and as otherwise payable.
(g) ASSIGNMENT. The Company shall have the right to assign
this Agreement to its successors or assigns. The terms "successors" and
"assigns" shall include any person, corporation, partnership or other entity
that buys all or substantially all of the Company's assets or a control block
of stock of the Company, or with which the Company merges or consolidates.
The rights, duties and benefits to Executive hereunder are personal to him,
and no such right or benefit may be assigned by him. The provisions of this
clause (g) are all subject to the provisions of Section 6.
(h) BINDING EFFECT. This Agreement is binding upon the
parties hereto, together with their respective executors, administrators,
successors, personal representatives, heirs and permitted assigns, and upon
any Trustee appointed in the Bankruptcy Case whether in the pending Chapter
11 case, in any converted Chapter 7 case, or otherwise.
15
(i) WAIVER OF BREACH. The waiver by the Company or Executive
of a breach of any provision of this Agreement by Executive or the Company
may not operate or be construed as a waiver of any subsequent breach.
(j) COURT APPROVAL. This Employment Agreement is subject to
approval of the Bankruptcy Court in the Bankruptcy Case.
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date set forth in the first paragraph.
LAMONTS APPAREL, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice Chairman of the Board
/s/ XXXX XXXXXXXXXXX
---------------------------------------
XXXX XXXXXXXXXXX
17
