EXHIBIT 10.47
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") is made
this 1st day of August, 2002, 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 is currently employed as President of Holdings and
Chief Executive Officer and President of Iron Age; 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; and
WHEREAS, this Agreement amends and restates in its entirety that certain
Employment Agreement, dated as of November 20, 1995, between Holdings, Iron Age
and the Executive.
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 Stock
Purchase Agreement dated as
of December 26, 1996 and as thereafter amended from time to time and as in
effect on the date hereof (the "Credit Agreement") among Holdings, Iron Age and
the banks 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 August __,
2002 and expiring on August __, 2005 (the "Expiration Date"), unless such
employment shall be sooner terminated as hereinafter set forth. The Expiration
Date will be extended for one year following the original Expiration Date unless
either party notifies the other party at least three months prior to the
original 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 President of Holdings and Chief Executive Officer
and President of 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 Board of Directors.
The Executive shall perform and discharge, faithfully, diligently and
competently, such duties and responsibilities. The Executive shall devote all
his working time (reasonable sick 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 August , 2002,
a base Salary at the annual rate of $240,000.
(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 Board of Directors; 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
$240,000 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 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 31, 2003 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.
4.6. 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 four weeks) and shall also be entitled to all holidays given by Iron
Age to its employees. The Executive may use up to two weeks of unused vacation
days from a particular calendar year in the immediately following calendar year.
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
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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 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."
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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, (i) any company or business entity of any kind (or any direct or
indirect parent or subsidiary thereof) (a "Potential Employer") primarily
engaged directly or indirectly in the design, manufacture, distribution or sale
(or any other activity related thereto) (collectively, "Sale") of steel-toe
shoes or boots, (ii) any division or other discreet business unit of a Potential
Employer, which division or business unit is primarily engaged in the Sale of
steel-toe shoes or boots, (iii) any Potential Employer engaged directly or
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indirectly in the Sale of steel-toe shoes or boots, if the annual revenues
derived from such Sales in the prior fiscal year exceed 15% of the total annual
revenues for such Potential Employer in such fiscal year, (iv) any Potential
Employer primarily engaged directly or indirectly in the Sale of soft-toe or
uniform work shoes or boots, in each case within or into the continental United
States or Puerto Rico or (v) any Potential Employer that is a wholesale customer
of Iron Age or Holdings; provided, however, that this Section 7 shall not apply
to a Potential Employer that is organized under the laws of a country other than
the United States, does not engage directly or indirectly in the distribution or
sale of steel-toe shoes or boots on a direct distribution basis and has no
intention of engaging directly or indirectly in the distribution or sale of
steel-toe shoes or boots on a direct distribution basis; (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.
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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 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.
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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
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 August , 2002 and
ending on the Date of Termination.
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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.
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
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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 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
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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 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 (i) the Executive's signing a release of
claims in the form of Appendix III (the "Release") within 28 days of the date on
which notice of termination is given and such
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Release remaining in full force and effect thereafter, and (ii) 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 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.
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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 Xx. Xxxxxx Xxxxxxx, Fenway Partners, Inc., 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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.
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.
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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. 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
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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 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.
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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. 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.
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20. CONFIDENTIALITY AND NON-DISPARAGEMENT.
The Executive agrees that he will not disclose the Agreement or any of its
terms or provisions, directly or by implication, except to members of his
immediate family and to his legal and tax advisors, and then only on condition
that they agree not to further disclose the Agreement or any of its terms or
provisions to others. The Executive also agrees that (a) during the period in
which the Executive is receiving post Date of Termination payments under Section
9.2 or 9.4 and thereafter, the Executive will not disparage or criticize
Holdings, Iron Age or their respective businesses, affiliates, management or
products, and (b) the Executive will not otherwise do or say anything that does,
or could be reasonably expected to, disrupt the good morale of the employees, or
harm the business interests or reputation, of Holdings or Iron Age. Holdings and
Iron Age agree that during the period in which the Executive is receiving post
Date of Termination payments under Section 9.2 or 9.4 and thereafter, neither
Holdings nor Iron Age will disparage or criticize the Executive.
21. COOPERATION.
The Executive agrees to cooperate with Holdings and Iron Age hereafter
with respect to all matters arising during or related to his employment,
including, without limitation, all matters in connection with any governmental
investigation, litigation or regulatory or other proceeding which may have
arisen or which may arise following the Date of Termination, provided such
cooperation does not interfere materially with the Executive's post Date of
Termination employment duties. Holdings and Iron Age will reimburse the lost
salary or wages and out-of-
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pocket expenses of the Executive incurred in complying with the requests of
Holdings and Iron Age hereunder, provided such expenses are authorized by
Holding and Iron Age in advance.
22. 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.
23. 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 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.
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IN WITNESS WHEREOF, the parties hereunto set their hands, under seal, as
of the date first above written.
WITNESS: EXECUTIVE:
--------------------------------- ---------------------------------
ATTEST: IRON AGE HOLDINGS CORPORATION
By: By:
------------------------------ -----------------------------
Secretary
ATTEST: IRON AGE CORPORATION
By: By:
--------------------------------- -----------------------------
Secretary
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APPENDIX I
BONUS
The Bonus with respect to each of the fiscal years set forth in the table
below shall be calculated and payable as hereinafter set forth. The "Base
Amount" of the Bonus for each such fiscal year shall be the amount set forth
opposite such fiscal year in the table below, subject to adjustment as
hereinafter set forth; provided, however, that the Executive shall not be
entitled to receive any Bonus hereunder with respect to any fiscal year unless
the Iron Age EBITDA for such fiscal year shall equal or exceed an amount equal
to 90% of the Target Amount as defined below.
Fiscal Year ending on the last
Saturday in January Base Amount
2003 $120,000
2004 $150,000
2005 $175,000
Thereafter To be determined by the Board of
Directors in its sole discretion
The "Target Amount" of Iron Age EBITDA for the fiscal year ending on the
last Saturday in January 2003 shall be $16,800,000 and for each fiscal year
thereafter shall be the amount of Iron Age EBITDA determined by the Board of
Directors for such fiscal year.
In the event that actual Iron Age EBITDA 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
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be equal to the Base Amount. In the event that actual Iron Age EBITDA 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 shall be equal
to the sum of (a) the Base Amount plus (b) 5% of the Base Amount for each 1% of
such Target Amount by which actual Iron Age EBITDA for such fiscal year shall
exceed such Target Amount. In the event that actual Iron Age EBITDA 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) 5% of the Base Amount for each 1% of such
Target Amount by which actual Iron Age EBITDA 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 EBITDA
for such fiscal year shall equal or exceed an amount equal to 90% of the Target
Amount for such fiscal year.
Determinations of the amount of the Base Amount and Iron Age EBITDA 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") for an aggregate purchase price in excess of
$5,000,000, 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
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Holdings or any of its 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 its 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.
For purposes hereof,
(i) "Specified Subsidiaries" shall mean the Subsidiaries of Holdings in
existence as of the date hereof.
(ii) "Iron Age EBITDA" shall mean, for any period, the sum, determined on
a consolidated basis, of (a) net income (or net loss) measured on a first-in,
first-out method of accounting, (b) Interest Expense, (c) income tax expense,
(d) depreciation expense, (e) amortization expense, (f) extraordinary or unusual
losses deducted in calculating net income less extraordinary or unusual gains
added in calculating net income, (g) to the extent deducted in calculating net
income (or net loss), non-cash expenses associated with any variable stock plan,
(h) the management fee paid under the Management Agreement dated February 26,
1997 between Iron Age and Fenway Partners, Inc., (i) fees and expenses incurred
by Holdings and Iron Age in connection with the Acquisition Transactions and (j)
directors fees and similar expenses in excess of $100,000 incurred by Holdings
at the direction of the members of the Board of Directors representing the
majority stockholder of Holdings, in each case determined in accordance with
GAAP.
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(iii) "Interest Expense" means, for any period, the amount by which (i)
interest expense (including the interest component on obligations under
capitalized leases but excluding (1) paid-in-kind interest, (2) commitment fees
paid to lenders and (3) amortization of original issue discount created upon the
issuance of debt), whether paid or accrued, on all debt of Holdings and its
Subsidiaries for such period, including, without limitation and without
duplication, (a) interest expense in respect of debt resulting from advances
under Iron Age's senior credit facility, (b) interest expense in respect of
subordinated debt (other than paid-in-kind interest) and (c) any net payment
payable in connection with currency or interest rate hedge agreements less any
net credits received in connection with such hedge agreements, exceeds (ii)
interest income, whether paid or accrued, of Holdings and its Subsidiaries for
such period.
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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 all group insurance 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, 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.
(iii) Group 24-hour risk insurance providing an
aggregate benefit to the Executive of $1,000,000
in accordance with Iron Age current plan and
practice.
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(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.
(e) Stock Options: Without the consent of the Executive, Holdings shall not
amend or terminate the 2,194.43 vested Series A Options
(as defined in the Stock Option Plan) held by the
Executive on the date hereof and having an exercise
price of $36.36 per share; provided that such options
shall terminate in accordance with the terms thereof
and the terms of Holdings' 1997 Stock Option Plan, as
amended and in effect from time to time (the "Stock
Option Plan"). In the event that the Series B Options
(as defined in the Stock Option Plan) (i) are terminated
during the term of the Executive's employment under the
Agreement or during the period after the Date of
Termination in which the Executive is receiving post
Date of Termination payments under Section 9.2 or 9.4 of
the Agreement and (ii)are replaced by new stock options,
the Executive shall be provided a number of such new
stock options equal to not less than 20% of the total
number of such new stock options initially issued to
employees in replacement of existing Series B Options.
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APPENDIX III
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION OF the special payments and benefits to be
provided in connection with the termination of my employment in accordance with
the terms of the Amended and Restated Employment Agreement dated as of August
, 2002 (as amended and in effect from time to time, the "Employment
Agreement") among Iron Age Holdings Corporation, a Delaware corporation
("Holdings"), Iron Age Corporation, a Delaware corporation ("Iron Age"), and me,
I, on my own behalf and on behalf of my personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees and all others connected with me, hereby release and forever discharge
Holdings, Iron Age and their respective Affiliates (as defined in the Employment
Agreement) and all of their respective past and present officers, directors,
stockholders, controlling persons, employees, agents, representatives,
successors and assigns and all others connected with any of them (all
collectively, the "Released"), both individually and in their official
capacities, from any and all rights, liabilities, claims, demands and causes of
action of any type (collectively, "Claims") which I have had in the past, now
have, or might now have, through the date of my signing of this Release of
Claims, in any way resulting from, arising out of or connected with my
employment or its termination or pursuant to any federal, state, foreign or
local employment law, regulation or other requirement (including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed by Holdings
and/or Iron Age, each as amended from time to time); provided, however, that the
foregoing release shall not apply to (a) any right explicitly set forth in the
Employment Agreement to special payments and benefits to be provided in
connection with the termination of my employment or (b) any right to
indemnification set forth in Section 12 of the Employment Agreement.
In signing this Release of Claims, I acknowledge that I have had at least
21 days from the date of notice of termination of my employment to consider the
terms of this Release of Claims and that such time has been sufficient; that I
have been encouraged by Holdings and Iron Age to seek the advice of an attorney
prior to signing this Release of Claims; and that I am signing this Release of
Claims voluntarily and with a full understanding of its terms.
I understand that I may revoke this Release of Claims at any time within
seven days of the date of my signing by written notice to Holdings and Iron Age
and that this Release of Claims will take effect only upon the expiration of
such seven-day revocation period and only if I have not timely revoked it.
Intending to be legally bound, I have signed this Release of Claims under
seal as of the date first written above.
Signature:
-----------------------------------
Xxxxxxx X. Xxxxx
Date Signed:
-----------------------------------
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