EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 5, 1997, by and between
Abercrombie & Fitch, Co., a Delaware company (the "Company"), and Xxxx X.
Xxxxxxx (the "Executive") (hereinafter collectively referred to as "the
parties").
WHEREAS, the Executive has heretofore been employed as Vice President
and Chief Financial Officer of the Company, and is experienced in all phases of
its business and possesses an intimate knowledge of the business and affairs of
the Company and its policies, procedures, methods and personnel; and
WHEREAS, the Company has determined that it is essential and in its
best interests to retain the services of key management personnel and to ensure
their continued dedication and efforts; and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the "Board") has determined that it is in the best interest of the
Company to secure the continued services and employment of the Executive and the
Executive is willing to render such services on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
agreements of the parties contained herein, the parties hereby agree as follows:
1. Term. The initial term of employment under this Agreement shall
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be for the period commencing on the date hereof (the "Commencement Date") and
ending on the sixth anniversary of the Commencement Date (the "Initial Term");
provided, however, that upon the expiration of the Initial Term, this Agreement
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shall be automatically extended for a period of one year, unless either the
Company or the Executive shall have given written notice to the other at least
ninety (90) days prior thereto that the term of this Agreement shall not be so
extended.
2. Employment.
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(a) Position. The Executive shall be employed as the Vice President
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and Chief Financial Officer of the Company, or such other position of reasonably
comparable or greater status and responsibilities as may be determined by the
Board with any division, subsidiary or affiliate of the Company. The Executive
shall perform the duties, undertake the responsibilities and exercise the
authority customarily performed, undertaken and exercised by persons employed in
a similar executive capacity. The Executive shall report to the President and
Chief Executive Officer of the Company, or other designee as appointed by the
Chairman.
(b) Obligations. The Executive agrees to devote his full business
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time and attention to the business and affairs of the Company. The foregoing,
however, shall not preclude the Executive from serving on corporate, civil or
charitable boards or committees or
managing personal investments, so long as such activities do not interfere with
the performance of the Executive's responsibilities hereunder.
3. Base Salary. The Company agrees to pay or cause to be paid to the
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Executive during the term of this Agreement a base salary at the rate of
$265,000. This base salary will be subject to annual review and may be
increased from time to time by the Board considering factors such as the
executive's responsibilities, compensation of similar executives within the
company and in other companies, performance of the executive and other pertinent
factors (hereinafter referred to as the "Base Salary"). Such Base Salary shall
be payable in accordance with the Company's customary practices applicable to
its executives.
4. Equity Compensation. The Company shall grant to the Executive
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rights to acquire 75,000 shares of the Company's common stock pursuant to the
terms of the agreements attached hereto as Exhibit A.
5. Employee Benefits. The Executive shall be entitled to participate
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in all employee benefit plans, practices and programs maintained by the Company
and made available to senior executives generally and as may be in effect from
time to time. The Executive's participation in such plans, practices and
programs shall be on the same basis and terms as are applicable to senior
executives of the Company generally.
6. Bonus. The Executive shall be entitled to participate in the
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Company's applicable incentive compensation plan on such terms and conditions as
may be determined from time to time by the Board.
7. Other Benefits.
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(a) Life Insurance. During the term of this Agreement, the Company
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shall be entitled to maintain a "key person" term life insurance policy on the
life of the Executive, the proceeds of which shall be payable to the Company or
its designees. The Executive agrees to undergo any reasonable physical
examination and other procedures as may be necessary to maintain such policy.
(b) Expenses. Subject to applicable Company policies, the Executive
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shall be entitled to receive prompt reimbursement of all expenses reasonably
incurred by him in connection with the performance of his duties hereunder or
for promoting, pursuing or otherwise furthering the business or interests of the
Company.
(c) Office and Facilities. The Executive shall be provided with an
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appropriate office and with such secretarial and other support facilities as are
commensurate with the Executive's status with the Company and adequate for the
performance of those duties hereunder.
8. Vacation. The Executive shall be entitled to annual vacation in
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accordance with the policies as periodically established by the Board for
similarly situated executives of the Company.
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9. Termination. The Executive's employment hereunder may be
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terminated under the following circumstances:
(a) Disability. The Company shall be entitled to terminate the
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Executive's employment after having established the Executive's Disability. For
purposes of this Agreement, "Disability" means a physical or mental infirmity
which impairs the Executive's ability to substantially perform those duties
under this Agreement for a period of at least six (6) months in any 12 month
calendar period as determined in accordance with the The Limited, Inc. Long-Term
Disability Plan.
(b) Cause. The Company shall be entitled to terminate the Executive's
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employment for "Cause" without prior written notice. For purposes of this
Agreement, "Cause" shall mean that the Executive (1) willfully failed to perform
those duties with the Company (other than a failure resulting from the
Executive's incapacity due to physical or mental illness); or (2) has plead
"guilty" or "no contest" to or has been convicted of an act which is defined as
a felony under federal or state law; or (3) engaged in willful misconduct in bad
faith which could reasonably be expected to materially harm the Company's
business or its reputation.
The Executive shall be given written notice by the Board of
termination for Cause, such notice to state in detail the particular act or acts
or failure or failures to act that constitute the grounds on which the proposed
termination for Cause is based. The Executive shall be entitled to a hearing
before the Board or a committee thereof established for such purpose and to be
accompanied by legal counsel. Such hearing shall be held within 15 days of
notice to the Company by the Executive, provided the Executive requests such
hearing within 30 days of the written notice from the Board of the termination
for Cause.
(c) Termination by the Executive. The Executive may terminate
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employment hereunder for "Good Reason" by delivering to the Company (1) a
Preliminary Notice of Good Reason (as defined below), and (2) not earlier than
thirty (30) days from the delivery of such Preliminary Notice, a Notice of
Termination. For purposes of this Agreement, "Good Reason" means (i) the
failure to continue the Executive as Vice President and Chief Financial Officer
of the Company or such other capacity as contemplated by Section 2 hereof; (ii)
the assignment to the Executive of any duties materially inconsistent with the
Executive's positions, duties, authority, responsibilities and reporting
requirements as set forth in Section 2 hereof; (iii) a reduction in or a
material delay in payment of the Executive's total cash compensation and
benefits from those required to be provided in accordance with the provisions of
this Agreement; (iv) the Company, the Board or any person controlling the
Company requires the Executive to be based outside of the United States, other
than on travel reasonably required to carry out the Executive's obligations
under the Agreement or (v) the failure of the Company to obtain the assumption
in writing of its obligation to perform this Agreement by any successor to all
or substantially all of the assets of the Company within 15 days after a merger,
consolidation, sale or similar transaction; provided, however, that "Good
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Reason" shall not include (A) acts not taken in bad faith which are cured by the
Company in all respects not later than thirty (30) days from the date of receipt
by the Company of a written notice from the Executive identifying in reasonable
detail the act or acts constituting "Good
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Reason" (a "Preliminary Notice of Good Reason") or (B) acts taken by the Company
by reason of the Executive's physical or mental infirmity which impairs the
Executive's ability to substantially perform the duties under this Agreement. A
Preliminary Notice of Good Reason shall not, by itself, constitute a Notice of
Termination.
(d) Notice of Termination. Subject to Section 9(b), any purported
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termination by the Company or by the Executive shall be communicated by a
written Notice of Termination to the other two weeks prior to the Termination
Date (as defined below). For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination of employment shall be effective
without such Notice of Termination.
(e) Termination Date, Etc. "Termination Date" shall mean in the case
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of the Executive's death, the date of death, or in all other cases, the date
specified in the Notice of Termination; provided, however, that if the
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Executive's employment is terminated by the Company due to Disability, the date
specified in the Notice of Termination shall be at least thirty (30) days from
the date the Notice of Termination is given to the Executive.
10. Compensation Upon Termination.
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(a) If during the term of this Agreement (including any extensions
thereof), the Executive's employment is terminated by the Company for Cause, by
reason of the Executive's death or if the Executive gives written notice not to
extend the term of this Agreement, the Company's sole obligation hereunder shall
be to pay the Executive the following amounts earned hereunder but not paid as
of the Termination Date: (i) Base Salary, (ii) reimbursement for any and all
monies advanced or expenses incurred pursuant to Section 7(b) through the
Termination Date, and (iii) any earned compensation which the Executive had
previously deferred (including any interest earned or credited thereon)
(collectively, "Accrued Compensation"). The Executive's entitlement to any
other benefits shall be determined in accordance with the Company's employee
benefit plans then in effect.
(b) If the Executive's employment is terminated by the Company other
than for Cause or by the Executive for Good Reason, the Company's sole
obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) the Company shall continue to pay the Executive the Base
Salary for a period of one (1) year following the Termination Date.
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(c) If the Executive's employment is terminated by the Company by
reason of the Executive's Disability, the Company's sole obligation hereunder
shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) the Company shall continue to pay the Executive 100% of
the Base Salary for the first twelve months following the Termination
Date, 80% of the Base Salary for the second twelve months following the
Termination Date, and 60% of the Base Salary for the third twelve
months following the Termination Date; provided, however, that such
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Base Salary shall be reduced by the amount of any benefits the
Executive receives by reason of his Disability under the Company's
relevant disability plan or plans; and
(iii) if the Executive is disabled beyond thirty-six (36)
months, the Company shall continue to pay the Executive 60% of Base
Salary up to a maximum of $250,000 per year for the period of the
Executive's Disability, as defined in the Company's relevant disability
plans; provided, however, that such payments shall be reduced by the
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amount of any benefits the Executive receives by reason of his
Disability under the Company's relevant disability plan or plans.
(d) If the Executive's employment is terminated by reason of the
Company's written notice to the Executive of its decision not to extend the term
of this Agreement as contemplated in Section 1 hereof, the Company's sole
obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation; and
(ii) the Company shall continue to pay the Executive the Base
Salary for a period of one (1) year following the expiration of such
term.
(e) During the period the Executive is receiving salary continuation
pursuant to Section 10(b)(ii), 10(c)(ii) or 10(d)(ii) hereof, the Company shall,
at its expense, provide to the Executive and the Executive's beneficiaries
medical and dental benefits substantially similar in the aggregate to those
provided to the Executive immediately prior to the date of the Executive's
termination of employment; provided, however, that the Company's obligation with
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respect to the foregoing benefits shall be reduced to the extent that the
Executive or the Executive's beneficiaries obtains any such benefits pursuant to
a subsequent employer's benefit plans.
(f) The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and no such
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payment shall be offset or reduced by the amount of any compensation provided to
the Executive in any subsequent employment.
11. Employee Covenants.
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(a) Unauthorized Disclosure. The Executive shall not, during the term
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of this Agreement and thereafter, make any Unauthorized Disclosure. For
purposes of this Agreement, "Unauthorized Disclosure" shall mean disclosure by
the Executive without the prior written consent of the Board to any person,
other than an employee of the Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Company or as may be legally
required, of any information relating to the business or prospects of the
Company (including, but not limited to, any confidential information with
respect to any of the Company's customers, products, methods of distribution,
strategies, business and marketing plans and business policies and practices);
provided, however, that such term shall not include the use or disclosure by the
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Executive, without consent, of any information known generally to the public
(other than as a result of disclosure by the Executive in violation of this
Section 11(a)). This confidentiality covenant has no temporal, geographical or
territorial restriction.
(b) Non-Competition. During the Non-Competition Period described
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below, the Executive shall not, directly or indirectly, without the prior
written consent of the Company, own, manage, operate, join, control, be employed
by, consult with or participate in the ownership, management, operation or
control of, or be connected with (as a stockholder, partner, or otherwise), any
business, individual, partner, firm, corporation, or other entity that competes,
directly or indirectly, with the Company or any division, subsidiary or
affiliate of the Company; provided, however, that the "beneficial ownership" by
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the Executive after termination of employment with the Company, either
individually or as a member of a "group," as such terms are used in Rule 13d of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of not more than two percent (2%) of the voting
stock of any publicly held corporation shall not be a violation of Section 11 of
this Agreement.
The "Non-Competition Period" means the period the Executive is
employed by the Company plus one (1) year from the Termination Date if the
Executive's employment is terminated (i) by the Company for any reason, (ii) by
the Executive for any reason, or (iii) by reason of either the Company's or the
Executive's decision not to extend the term of this Agreement as contemplated by
Section 1 hereof.
(c) Non-Solicitation. During the No-Raid Period described below, the
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Executive shall not, either directly or indirectly, alone or in conjunction with
another party, interfere with or harm, or attempt to interfere with or harm, the
relationship of the Company, its subsidiaries and/or affiliates, with any person
who at any time was an employee, customer or supplier of the Company, its
subsidiaries and/or affiliates or otherwise had a business relationship with the
Company, its subsidiaries and/or affiliates.
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The "No-Raid Period" means the period the Executive is employed by the
Company plus one (1) year from the Termination Date if the Executive's
employment is terminated (i) by the Company for any reason except by reason of
the Executive's Disability, (ii) by the Executive for any reason, or (iii) by
reason of either the Company's or the Executive's decision not to extend the
term of this Agreement as contemplated by Section 1 hereof.
(d) Remedies. The Executive agrees that any breach of the terms of
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this Section 11 would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law; the Executive therefore
also agrees that in the event of said breach or any threat of breach, the
Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the
Executive and/or any and all persons and/or entities acting for and/or with the
Executive, without having to prove damages, and to all costs and expenses,
including reasonable attorneys' fees and costs, in addition to any other
remedies to which the Company may be entitled at law or in equity. The terms of
this paragraph shall not prevent the Company from pursuing any other available
remedies for any breach or threatened breach hereof, including but not limited
to the recovery of damages from the Executive. The Executive and the Company
further agree that the provisions of the covenants not to compete and solicit
are reasonable and that the Company would not have entered into this Agreement
but for the inclusion of such covenants herein. Should a court determine,
however, that any provision of the covenants is unreasonable, either in period
of time, geographical area, or otherwise, the parties hereto agree that the
covenant should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable.
The provisions of this Section 11 shall survive any termination of
this Agreement, and the existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 11; provided, however, that this
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paragraph shall not, in and of itself, preclude the Executive from defending
himself against the enforceability of the covenants and agreements of this
Section 11.
12. Limitation of Payments.
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(a) Gross-Up Payment. In the event it shall be determined that any
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payment or distribution of any type to or for the benefit of the Executive, by
the Company, any of its affiliates, any Person who acquires ownership or
effective control of the Company or ownership of a substantial portion of the
Company's assets (within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations thereunder) or any
affiliate of such Person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the "Total
Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
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by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Total Payments (not including any Gross-Up Payment).
13. Employee Representation. The Executive expressly represents and
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warrants to the Company that the Executive is not a party to any contract or
agreement and is not otherwise obligated in any way, and is not subject to any
rules or regulations, whether governmentally imposed or otherwise, which will or
may restrict in any way the Executive's ability to fully perform the Executive's
duties and responsibilities under this Agreement.
14. Successors and Assigns.
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(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the Company shall require
any successor or assign to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. The term "the
Company" as used herein shall include any such successors and assigns to the
Company's business and/or assets. The term "successors and assigns" as used
herein shall mean a corporation or other entity acquiring or otherwise
succeeding to, directly or indirectly, all or substantially all the assets and
business of the Company (including this Agreement) whether by operation of law
or otherwise.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, the Executive's beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.
15. Arbitration. Except with respect to the remedies set forth in
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Section 11(d) hereof, if in the event of any controversy or claim between the
Company or any of its affiliates and the Executive arising out of or relating to
this Agreement, either party delivers to the other party a written demand for
arbitration of a controversy or claim then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered
by the American Arbitration Association under its Commercial Arbitration Rules.
The arbitration shall take place in Columbus, Ohio. Each of the Company and the
Executive shall appoint one person to act as an arbitrator, and a third
arbitrator shall be chosen by the first two arbitrators (such three arbitrators,
the "Panel"). The Panel shall have no authority to award punitive damages
against the Company or the Executive. The arbitrator shall have no authority to
add to, alter, amend or refuse to enforce any portion of the disputed
agreements. The Company and the Executive each waive any right to a jury trial
or to petition for stay in any action or proceeding of any kind arising out of
or relating to this Agreement.
16. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by
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registered or certified mail, return receipt requested, postage prepaid, or upon
receipt if overnight delivery service or facsimile is used, addressed as
follows:
To the Executive:
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Xxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
To the Company:
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Abercrombie & Fitch,Co.
Four Limited Parkway
Xxxxxxxxxxxx, Xxxx 00000
Attn: Secretary
With a Copy to:
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The Limited, Inc.
0 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Secretary
17. Settlement of Claims. The Company's obligation to make the
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payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
18. Miscellaneous. No provision of this Agreement may be modified,
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waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
19. Governing Law. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of Ohio without giving
effect to the conflict of law principles thereof.
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20. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
22. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, if any, understandings and arrangements, oral
or written, between the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
ABERCROMBIE & FITCH, CO.
By: /s/ Xxxxxx X. Xxxxxx
___________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board
/s/ Xxxx X. Xxxxxxx
____________________________
Xxxx X. Xxxxxxx
170474.02
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