EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 26th day
of May, 1999 by and between JUST FOR FEET, INC., a Delaware corporation (the
"Company"), and XXXXXX X. OYSTER (the "Executive"), an individual.
For and in consideration of the mutual covenants described below, the
parties hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive, and Executive
agrees to accept such employment, upon the following terms and conditions.
2. DUTIES. Executive shall assume the responsibilities and perform the
duties of President of the Super Store Division of the Company (the "Super Store
Division") with the following duties: (i) oversee the Super Store Division's
day-to-day operations including merchandising, advertising, sales and store
operations, (ii) prepare and update strategic and operations plans for approval
by the President and the Board of Directors, and (iii) execute approved
strategic and operations plans for the Superstore Division,. Such
responsibilities and duties may be revised from time to time at the sole
discretion of the Board of Directors of the Company, and Executive shall assume
such responsibilities and perform such duties as the Company may direct from
time to time subject to Executive's right of termination for Good Reason (as
that term is defined in Section 12.5 (iii)). Executive agrees to devote his
full time and energy to the furtherance of the business of the Company and shall
be loyal to the Company and use his best efforts to further its interests, and
shall not during the term hereof, without the prior written consent of the
Company, work or perform services in any advisory or other capacity for any
individual, firm, company, or corporation other than for the Company.
Notwithstanding the foregoing, the Executive shall not be precluded from
devoting such time to his personal or financial affairs or to community,
charitable, trade and professional activities as shall not interfere with his
duties to the Company in the reasonable judgment of the Board of Directors.
3. COMPENSATION.
3.1 Base Salary. The Company shall pay Executive as compensation for all
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the services to be rendered by Executive hereunder a base salary equal to a rate
of $250,000 per year ("Base Salary") for the first year during the Initial Term
hereof (as hereinafter defined) and supplemental salary at the rate of $12,500
per year for each of the years during the Initial Term hereof. After the
initial year of this Agreement the Executive's Base Salary shall be reviewed by
the Company on each successive anniversary of this Agreement and the rate
thereof shall be increased as of such review date by an amount equal to the
greater of (i) five (5%) or (ii) the percentage increase in the "Consumer Price
Index" for the preceding twelve (12) month period. For purposes of this
provision, the "Consumer Price Index" shall mean and refer to that table in the
Consumer Price Index published by the U.S. Department of Labor, Bureau of Labor
Statistics, now known as the "Consumer Price Index for All Urban Consumers: U.S.
City Average--(CPI-U) All Items (1982-84=100)." If the Consumer price Index
referenced above is changed, and such change affects the calculations described
above, the Consumer Price Index shall be converted in accordance with the
conversion factor published by the U.S. Department of Labor, Bureau of
Statistics. If the Consumer Price Index is discontinued or revised during the
term of this
Agreement, such other government index or computation with which it is replaced
shall be used in order to obtain substantially the same result as would have
been obtained in the Consumer Price Index had not been discontinued or revised.
If the Consumer Price Index is discontinued and there is no substituted
government index or computation, the most closely comparable statistics on the
purchasing power of the consumer dollar of urban consumers, as published by a
responsible financial authority and selected by the Company shall be utilized in
lieu of such index. Thereafter, if this Agreement is extended pursuant to
Section 4(a) below, Executive's base salary shall be subject to review and
increase in the discretion of the Board of Directors. Executive's salary shall
be payable beginning with the period starting June 14, 1999 in equal monthly
installments and shall be prorated on a daily basis for the years in which
Executive commences and terminates his employment pursuant to this Agreement.
The Company's obligation to pay Executive any compensation shall cease upon
termination of Executive's employment with the Company; provided, however, if
Executive's employment is terminated due to his death, Company shall pay as a
lump sum payment to the estate of Executive his Base Salary for one year.
3.3 Bonus.
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Executive shall be eligible to receive a performance and merit-based bonus
during the fiscal year of his employment hereunder beginning with the Company's
fiscal year starting January 1, 1999 equal in an amount up to fifty percent
(50%) of Executive's Base Salary for such fiscal year. Fifty percent (50%) of
such bonus shall be based upon the achievement by the Company of certain
quantitative revenue and profit margin numbers, and fifty percent (50%) of such
bonus shall be based upon the achievement by the Company of certain other
quantitative and/or qualitative goals, in each case, as may be determined by the
Board of Directors of the Company for the relevant fiscal year.
3.4 Stock Options. Subject to Executive's execution of and compliance with
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the terms of that certain Just For Feet, Inc. Incentive Stock Option Agreement
substantially in the form attached hereto as Exhibit A, Company grants to
Executive options to acquire 250,000 shares of the common stock of Just For
Feet, Inc. at the Fair Market Value per share on the date of the grant.
3.5 Other Benefits. Executive shall be entitled to receive health and
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dental insurance benefits, vacation benefits and other benefits substantially
similar to those provided to other executives of the Company. Company shall
have the right to change said benefit program at any time or times.
3.6 Reimbursement of Expenses. In addition to the compensation described
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in this Agreement, Executive shall be entitled to reimbursement by Company for
all actual, reasonable and direct expenses incurred by him in the performance of
his duties hereunder, provided such expenses are properly characterized as being
business expenses that are properly tax deductible for Company, and further
provided that such expenses were incurred only in accordance with the policies
and procedures established by the Board of Directors from time to time.
Executive shall provide Company with written documentation of such expenses in
form complying with the records required of Company by the Internal Revenue
Service and appropriate state authorities for tax deductibility purposes in such
cases, and reimbursement for each item of approved expense shall be made within
a reasonable time after receipt by Company of the written documentation thereof.
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3.7 Vacation. The Executive shall be entitled to three (3) weeks annual
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paid vacation and such holidays as the Board of Directors may approve. In the
event of any termination of employment, Executive shall not be entitled to
receive payment for any unused vacation time.
3.8 Withholdings. All amounts payable to Executive pursuant to this
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Agreement shall be subject to all applicable withholdings as required by all
laws.
4. TERM AND TERMINATION.
4.1 Term. This Agreement shall be effective upon the date first set forth
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above and, unless earlier terminated as provided herein, shall remain in full
force and effect for an initial period which ends on June 15, 2004 (the "Initial
Term"). This Agreement may be renewed on the same terms and conditions for
additional successive periods of one (1) year upon the execution of a written
agreement by the parties hereto.
4.2 Termination. Notwithstanding anything contained herein to the
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contrary, the Company may terminate Executive's employment immediately for
cause. For purposes of this Agreement, "for cause" shall mean the occurrence of
the following: (i) the commission of any act of fraud, dishonesty materially
harmful to the Company, misappropriation or moral turpitude on the part of the
Executive, (ii) a material breach by the Executive of his duties and obligations
hereunder, (iii) continued neglect by Executive in fulfilling his duties as an
executive officer of the Company as a result of alcoholism, addiction to illegal
substances, or excessive unauthorized absenteeism, after written notification
from the Board of Directors of such neglect, setting forth in detail the matters
involved and Executive's failure to cure the problem resulting in such neglect
within a reasonable time thereafter, (iv) the Executive becomes Completely
Disabled (as hereinafter defined), or (v) the death of Executive. For purposes
of this Agreement, "Completely Disabled" shall mean Executive's inability, due
to illness, accident or any other physical or mental incapacity, to perform the
duties provided for herein for an aggregate of 91 days during any period of 180
consecutive days during the term hereof. In addition, termination of
Executive's employment upon the occurrence of any act specified in (i) through
(iii) above shall result, to the extent not otherwise prohibited by law, in
Executive's loss of any benefits provided by the Company.
4.3 Return of Property. Upon termination of employment for any reason,
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Executive shall return immediately to the Company all documents, property, and
other records of the Company, and all copies thereof, within Executive's
possession, custody or control, including but not limited to any materials
containing any Trade Secrets or Confidential Information (each as defined below)
or any portion thereof.
5. RELOCATION EXPENSES.
The Company agrees to reimburse Executive for the following expenses
incurred with respect to Executive's relocation from Columbus, Ohio to
Birmingham, Alabama: (i) reasonable expenses incurred for the movement of normal
household goods provided Executive obtains bids from three (3) moving companies
and takes the lowest bid, (ii) actual closing costs and real estate commissions
paid with respect to the sale by Executive of his home in Columbus, Ohio up to a
maximum of six percent (6%)
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of the sales price, (iii) the costs of temporary living quarters for Executive
in Birmingham, Alabama, not to exceed $1,500.00 per month until the earlier of:
(i) the date Executive sells his home in Columbus, Ohio or (ii) six (6) months
from the date hereof; and (iii) the reasonable costs of four (4) trips for
Executive and his spouse to Birmingham, Alabama to search for a new residence.
To the extent that the amounts payable to Executive pursuant to this Section
5 are taxable to Executive, Company shall pay to Executive an amount equal to
the federal and state income tax payable by Executive on said amounts (grossed
up for taxes).
6. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
6.1 Confidentiality. The Company may disclose to Executive certain Trade
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Secrets and Confidential Information (each as defined below). Executive
acknowledges and agrees that the Trade Secrets and Confidential Information are
the sole and exclusive property of the Company (or a third party providing such
information to the Company) and that the Company or such third party owns all
worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property rights laws. Executive acknowledges and agrees
that the disclosure of the Trade Secrets and Confidential Information to
Executive does not confer upon Executive any license, interest or rights of any
kind in or to the Trade Secrets or Confidential Information. Executive may use
the Trade Secrets and Confidential Information solely for the benefit of the
Company while Executive is employed or retained by the Company. Except in the
performance of services for the Company, Executive will hold in confidence and
not reproduce, distribute, transmit, reverse engineer, decompile, disassemble,
or transfer, directly or indirectly, in any form, by any means, or for any
purpose, the Trade Secrets or the Confidential Information or any portion
thereof. Executive agrees to return to the Company, upon request by the
Company, the Trade Secrets and Confidential Information and all materials
relating thereto. Notwithstanding the above, Executive may disclose any Trade
Secrets or Confidential Information compelled by summons or service of process,
or as otherwise required by law. Executive agrees, to the extent reasonably
possible, to provide advance notice to the Company of any such request for
information.
6.2 Duration. Executive's obligations under this Agreement with regard to
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the Trade Secrets shall remain in effect for as long as such information shall
remain a trade secret under applicable law. Executive acknowledges that its
obligations with regard to the Confidential Information shall remain in effect
while Executive is employed or retained by the Company and for five (5) years
thereafter. As used herein, "Trade Secrets" means information of the Company,
its licensors, suppliers, customers, or prospective licensors or customers,
including, but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or a list of actual
or potential customers or suppliers, which (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. As used herein,
"Confidential Information" means information, other than Trade Secrets, that is
of value to its owner and is treated as confidential, including, but not limited
to, future business plans, financial information, marketing strategies and
advertising campaigns, information regarding Company's executives and employees,
and the terms and conditions of this Agreement. For purposes of this
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Agreement, "Confidential Information" and "Trade Secrets" shall not include the
following: (i) anything or any information that was or becomes generally
available to the public other than as a result of a disclosure by the Executive,
(ii) was available to the Executive on a nonconfidential basis prior to its
disclosure to the Executive by the Company, (iii) becomes available to the
Executive on a nonconfidential basis from a source other than the Company,
provided that such source is not prohibited from disclosing such information by
a contractual or legal obligation to the Company of such information, or (iv)
that the Executive can conclusively show by documentary evidence was
independently developed by the Executive without use of any information
disclosed to Executive by the Company. Executive and the Company acknowledge
that the intent of this Section 5 is not to restrict Executive's employment
following his tenure with the Company, but rather it is to protect the rights
that the Company has in its Trade Secrets and Confidential Information.
7. COVENANT NOT TO COMPETE. In consideration of his employment hereunder,
Executive agrees as follows.
7.1 Term. Executive will not, during the term of his employment with the
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Company and for a period of two (2) years after termination for any reason of
his employment with the Company, directly or indirectly, engage in or carry on
(i) within a fifty (50) mile radius of any of the Company's retail outlets
existing upon the date of termination of such employment (the "Territory"), any
business, like or similar to the retail sale of athletic shoes, sporting goods
or athletic wear whether through retail outlets or by means of the Internet or
other similar medium of electronic commerce or any other business the Company
may actually be engaged in at the time of termination of Executive's employment
with the Company, either individually or as a stockholder, director, officer,
consultant, independent contractor, Executive, agent, member or otherwise of or
through any corporation, partnership, association, joint venture, firm,
individual or otherwise, or in any other capacity: The above two (2) year
period shall be extended by any period of time during which Executive is in
default of the covenants contained in this Agreement. Nothing contained in this
Section 7.1 shall prohibit Executive from owning up to five percent (5%) of any
class of securities of a company that are traded on a regularly recognized stock
exchange or over the counter market.
7.2 Remedies. In the event of a breach or threatened breach by Executive
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of all or any part of the provisions of Section 7.1, the Company shall be
entitled to an injunction restraining Executive from such breach without
limiting any other rights or remedies available to the Company for such breach
or threatened breach.
7.3 Exclusions. Notwithstanding any provision to the contrary herein
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contained, Section 7.1 shall not apply upon the termination of the Executive's
employment by the Company other than for cause within one (1) year following a
Sale of the Company.
7.4 Sale of Company.
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(a) In the event of a Sale of the Company following the execution of this
Agreement, Executive expressly agrees that the terms and conditions set forth in
this Section 7 shall be binding upon Executive and shall be fully enforceable by
the successor to the Company.
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(b) For purposes of this Agreement, "Sale of the Company" shall mean (i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (a "Person"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either the
then outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), or (ii) consummation by the Company of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Company; unless, following such
acquisition of beneficial ownership or transaction (A) more than 60% of the then
outstanding shares of common stock of the Person resulting from such
reorganization, merger or consolidation, or (B) more than 60% of the then
outstanding shares of common stock of the Person acquiring such beneficial
ownership or assets, and the combined voting power of the then outstanding
voting securities of such Person entitled to vote generally in the election of
directors of such Person, is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such acquisition or transaction, in
substantially the same proportion as their ownership of Outstanding Common Stock
and Outstanding Voting Securities prior to such event.
8. CUSTOMER NON-SOLICITATION. Executive agrees that for a period of
eighteen (18) months immediately following termination of Executive's employment
with the Company for any reason, including, without limitation, voluntary
resignation from employment by Executive (the "Non-Solicitation Period"),
Executive shall not, on Executive's own behalf or on behalf of any person, firm,
partnership, association, corporation or business organization, entity or
enterprise, solicit, contact, call upon, communicate with or attempt to
communicate with any customer or prospect of the Company, or any representative
of any customer or prospect of the Company, with a view to selling or providing
any product or service competitive or potentially competitive with any product
or service sold or provided or under development by the Company during the time
of two (2) years immediately preceding cessation of Executive's employment with
the Company, provided that the restrictions set forth in this paragraph shall
apply only to customers or prospects of the Company, or representatives of
customers or prospects of the Company, with which Executive had contact during
such two-year period. Executive acknowledges that the Company provides products
and services to customers throughout the Territory.
9. EMPLOYEE NON-SOLICITATION. Executive agrees that Executive shall not
call upon, solicit, recruit, or assist others in calling upon, recruiting or
soliciting any person who is or was an Employee of the Company within the Non-
Solicitation Period, for the purpose of having such person work in any other
corporation, association, entity, or business engaged in providing products or
services of the same or similar kind as offered by the Company.
10. EQUITABLE RELIEF. The parties to this Agreement acknowledge that a
breach by Executive of any of the terms or conditions of this Agreement will
result in irrevocable harm to the Company and that the remedies at law for such
breach may not adequately compensate the Company for damages suffered.
Accordingly, Executive agrees that in the event of such breach, the Company
shall be entitled to injunctive relief or such other equitable remedy as a court
of competent jurisdiction
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may provide. Nothing contained herein will be construed to limit the Company's
right to any remedies at law, including the recovery of damages for breach of
this Agreement.
11. ARBITRATION. Any difference, claim or matter in dispute arising
between the parties out of this Agreement or connected therewith (other than
requests by the Company for injunctive relief to enforce the provisions of
Sections 7 through 10 hereof) shall be submitted by them to arbitration by a
panel of three arbitrators appointed by and in accordance with the rules of the
American Arbitration Association. The determination or decision rendered by the
arbitrators shall be final and absolute. The arbitrators shall apply Alabama
law and the arbitration shall take place in Birmingham, Alabama. The decision
of the arbitrators may be entered as a judgment in any court of the State of
Alabama or elsewhere.
12. CHANGE IN CONTROL OF THE COMPANY.
12.1 Subject to Section 12.2 hereof, the Company shall pay the Executive the
payments described in this Section 12.1 (the "Change of Control Payments") upon
the termination of the Executive's employment following a Change in Control and
during the term of this Agreement, including voluntary termination by the
Executive for Good Reason (as defined in Section 12.5 (iii)), in addition to any
of the then unpaid compensation and benefits previously required to be paid to
Executive through the date of termination, unless such termination is (i) by the
Company for cause, or (ii) by reason of death, becoming Completely Disabled (as
defined in Section 4.2) or voluntary resignation without Good Reason or
retirement of Executive. The Change of Control Payments shall be as follows:
(a) In lieu of any further salary payments to the Executive for periods
subsequent to the date of termination and in lieu of any severance benefit
otherwise payable to the Executive, the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to two (2) times the Executive's
annual Base Salary in effect immediately prior to the occurrence of the event or
circumstance upon which the notice of termination is based;
(b) The Company shall pay to the Executive a lump sum amount, in cash, equal
to the sum of (i) any annual and quarterly performance or discretionary bonuses
which have been allocated or awarded to the Executive for a completed calendar
year preceding the date of termination but has not yet been paid (pursuant to
Section 3.3 hereof or otherwise), (ii) a pro rata portion of any annual and
quarterly performance or discretionary bonuses for the calendar year in which
the date of termination occurs, determined by multiplying the Executive's
bonuses awarded or paid for the most recently completed calendar year by a
fraction, the numerator of which shall be the number of full days the Executive
was employed by the Company during the fiscal year in which the Executive's date
of termination occurred and the denominator of which shall be three hundred and
sixty-five (365) days; and
(c) For a twelve (12) month period after the date of termination, the
Company shall arrange to provide the Executive with life, disability, accident
and health insurance benefits substantially similar to those which the Executive
is receiving immediately prior to the notice of termination. Benefits otherwise
receivable by the Executive pursuant to this Section 12.1(c) shall be reduced to
the extent comparable benefits are actually received by or made available to the
Executive without cost during the
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twelve (12) month period following the Executive's termination of employment
(and any such benefits actually received by the Executive shall be reported to
the Company by the Executive). If the benefits provided to the Executive under
this Section 12.1.(c) shall result in a decrease, pursuant to Section 12.2, in
the Change of Control Payments and these Section 12.1(c) benefits are thereafter
reduced pursuant to the immediately preceding sentence because of the receipt of
comparable benefits, the Company shall, at the time of such reduction, pay to
the Executive the lesser of (a) the amount of the decrease made in the Change of
Control Payments pursuant to Section 12.2, or (b) the maximum amount which can
be paid to the Executive without being, or causing any other payment to be,
nondeductible by the Company by reason of section 280G of the Code.
12.2 Notwithstanding any other provisions of this Agreement, in the event
that any payment or benefit received or to be received by the Executive in
connection with and contingent on a Change in Control or the termination of the
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person whose actions
result in a Change in Control or any person affiliated with the Company or such
person) (all such payments and benefits, including the Change of Control
Payments, being hereinafter called "Total Payments") would not be deductible (in
whole or part), by the Company, an affiliate or person making such payment or
providing such benefit, as a result of section 280G of the Code, then, to the
extent necessary to make the remaining portion of the Total Payments deductible
(and after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or
agreement), (A) the cash Change of Control Payments and/or other cash payments
provided for hereunder, in each case, to the extent still unpaid, shall first be
reduced (if necessary, to zero), and (B) all other noncash Change of Control
Payments and/or other noncash benefits provided for hereunder, in each case, to
the extent still unfurnished, shall next be reduced (if necessary, to zero), and
(C) the Executive shall have no right to receive hereunder, and neither the
Company, any person whose actions result in a Change in Control or any person
affiliated with the Company or such person shall be obligated to make, pay or
furnish to the Executive hereunder any payment or benefit in excess of those
payments or benefits provided hereunder as reduced, if applicable, pursuant to
clause (A) or clause (B) above. For purposes of this limitation (i) no portion
of the Total Payments the receipt or enjoyment of which the Executive shall have
effectively waived in writing prior to the date of termination shall be taken
into account, (ii) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Company's independent
auditors and reasonably acceptable to the Executive does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the Code,
including by reason of section 280G(b)(4)(A) of the Code, (iii) the Change of
Control Payments shall be reduced only to the extent necessary so that the Total
Payments (other than those referred to in clauses (i) or (ii)) in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of section 280G(b)(4)(B) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the tax counsel referred to in
clause (ii); and (iv) the value of any noncash benefit or any deferred payment
or benefit included in the Total Payments shall be determined by the Company's
independent auditors in accordance with the principles of sections 280G(d)(3)
and (4) of the Code.
If it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Section 12.2, the
aggregate "parachute payments" paid to or for the Executive's benefit are in an
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amount that would result in any portion of such "parachute payments" not being
deductible by reason of section 280G of the Code, then the Executive shall have
an obligation to pay the Company upon demand an amount equal to the sum of (i)
the excess of the aggregate "parachute payments" paid to or for the Executive's
benefit over the aggregate "parachute payments" that could have been paid to or
for the Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at the rate provided in section
1274(b)(2)(B) of the Code from the date of the Executive's receipt of such
excess until the date of such payment.
12.3 The payments and other items provided for in Section 12.1 (other than
Section 12.1(c)) hereof shall be made not later than the fifteenth (15th) day
following the date of termination or the date of exercise by Executive of any of
Executive's rights hereunder; provided, however, that if the amounts of such
payments, and the limitation on such payments set forth in Section 12.2 hereof,
cannot be finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the Company,
of the minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the thirtieth (30th) day
after the date of termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive, payable on the
fifth (5th) business day after demand by the Company (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code). At the time that
payments are made under this Section 12.3, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from outside
counsel, auditors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement).
12.4 The Company also shall pay to the Executive all legal and accounting
fees and expenses incurred by the Executive as a result of a termination which
entitles the Executive to the Change of Control Payments (including all such
fees and expenses, if any, incurred in disputing any such termination or in
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder). Such payments shall be made within fifteen (15)
business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.
12.5 For purposes of this Agreement, the following terms shall have the
meanings indicated below:
(i) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) any "person" (as such term is used in Section 13(d) and 14(d)
of the Exchange Act, other than Xxxxxx Xxxxxxxxxx or any affiliate of Xxxxxx
Xxxxxxxxxx, the Company, a subsidiary of the Company or any Company
Executive benefit plan
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(including its trustee), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly of securities of
the Company representing 50.01 percent or more of the combined voting power
of the Company's then outstanding securities;
(II) during any period of two consecutive years (not including any
period prior to the execution of this Agreement) the individuals who, at the
beginning of such period, constitute the Board cease, for any reason other
than death, to constitute at least a majority thereof, unless each director
who was not a director at the beginning of such period was elected by, or on
the recommendation of, at least two-thirds of the directors at the beginning
of such period; or
(III) the occurrence of a transaction requiring stockholder
approval for the acquisition of the Company by an entity other than the
Company or a subsidiary of the Company through purchase of assets, or by
merger, or otherwise.
(ii) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(iii) "Good Reason" for termination, by the Executive, of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, of any one of the
following acts by the Company, or failures by the Company to act:
(I) the assignment to the Executive of any duties inconsistent
with the Executive's status as an executive officer of the Company or a
substantial adverse alteration in the nature or status of the Executive's
responsibilities from those in effect pursuant to this Agreement;
(II) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased from
time to time;
(III) the relocation of the Company's principal executive offices
to a location outside a forty (40) mile radius from the city limits of
Birmingham, Alabama or the Company's requiring the Executive to be based
anywhere other than the Birmingham, Alabama metropolitan area except for
required travel on the Company's business to an extent substantially
consistent with the Executive's present business travel obligations;
(IV) the failure by the Company, without the Executive's consent,
to pay to the Executive any portion of the Executive's current compensation
or to pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company, within
seven (7) days of the date such compensation is due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates which is material to
the Executive's total
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compensation, including but not limited to the Company's stock option,
incentive compensation, bonus and other plans or any substitute plans
adopted prior to the Change in Control, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms of the amount
of benefits provided and the level of the Executive's participation relative
to other participants, as existed on the date of this Agreement; or
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical,
dental, health and accident, or disability plans in which the Executive was
participating at the time of the Change in Control, the taking of any action
by the Company which would directly or indirectly materially reduce any of
such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the
failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled pursuant to this Agreement.
(VII) the Executive not reporting directly to Xxxxxx Xxxxxxxxxx
for so long as he is Chairman of the Company, or not reporting to the
Chairman or Vice Chairman of the Company thereafter;
provided, that, the Executive's right to terminate Executive's employment for
--------------
Good Reason shall not be affected by the Executive's incapacity due to physical
or mental illness and the Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(iv) "person" shall mean legal person, whether an individual or an
entity, as the context may require.
13. SEVERABILITY. If any provision or part of any provision of this
Agreement is held invalid or unenforceable by a court of competent jurisdiction,
such holding shall not affect the enforceability of any other provisions or
parts thereof, and all other provisions and parts thereof shall continue in full
force and effect.
14. MISCELLANEOUS. This Agreement shall not be amended or modified except
by a writing executed by both parties. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns. Due to the
personal nature of this Agreement, neither Executive or the Company shall not
have the right to assign Executive's rights or obligations under this Agreement
without the prior written consent of the other, except subject to the provisions
of this Agreement that the Company may assign all of its rights and obligations
hereunder to any entity that succeeds to the business of Company. This
Agreement shall be governed by the laws of the State of Alabama without regard
to its rules governing conflicts of law. This Agreement and any attached
exhibits represent the entire understanding of the parties concerning the
subject matter hereof and
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supersede all prior communications, agreements and understandings, whether oral
or written, relating to the subject matter hereof. All communications required
or otherwise provided under this Agreement shall be in writing and shall be
deemed given when delivered to the address provided below such party's signature
(as may be amended by notice from time to time), by hand, by courier or express
mail, or by registered or certified United States mail, return receipt
requested, postage prepaid. Exhibit A attached hereto is incorporated herein by
this reference.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal effective as of the date first above written.
JUST FOR FEET, INC.
By: /s/ X.X. Xxxxxx
-----------------------------------------
Title: Pres./CEO
--------------------------------------
[CORPORATE SEAL]
Address:
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
EXECUTIVE:
/s/ Xxxxxx X. Oyster (SEAL)
-------------------------------------
Xxxxxx X. Oyster
Address:
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
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