EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the
8th day of July 1996, by and between Xxxxxxxx'x, Inc. ("Company"), and
Xxxxxx X. Xxxx ("Executive"), and will become effective at the
"Effective Time" as that term is used in the Agreement and Plan of
Merger between the Company and Parisian, Inc.
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Chief
Executive Officer and President of Parisian or in such other capacity
with Company and its subsidiaries as Company's Board of Directors shall
designate.
2. Duties. During his employment, Executive shall devote a
substantial amount of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $427,000 per year. In
addition, the Board of Directors of Company shall, in good faith,
consider granting increases in such Base Salary based upon such factors
as Executive's performance and the growth and/or profitability of
Company. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of payroll
taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 50% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors.
4. Insurance and Benefits. During his employment, Company shall
allow Executive to participate in each employee benefit plan and to
receive each executive benefit that Company provides for senior
executives at the level of Executive's position.
5. Term. The term of this Agreement shall be for four (4) years,
beginning at the Effective Time, provided, however, that, beginning one
year after the Effective Time, Company or Executive may terminate
Executive's Employment under this Agreement at any time upon thirty (30)
days' prior written notice -- at which time this Agreement shall
terminate except for Section 8, which shall continue in effect as set
forth in Section 8, and Executive's right to receive his Base Salary (at
the rate in effect at the time of termination of employment) through the
end of the term of this Agreement, as well as Executive's benefits to
the extent not prohibited by law or Company's benefits plans; provided,
however, that Executive's compensation after termination of employment
shall not exceed the maximum amount that can be paid without imposition
of an excise tax under the Internal Revenue Code for "parachute"
payments. Such Base Salary shall be paid thereafter in regular payroll
installments.
In the event of Executive's disability or death, Company shall
continue to pay Executive's Base Salary to Executive or his estate
through the end of the term of this Agreement.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; or (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects negatively on Company, provided that Executive shall
first be provided with written notice of the claim and with an
opportunity to contest said claim before the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is
employed under this Agreement, and for a period of two years thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
the department store business conducted at the date hereof by Company or
any subsidiary or affiliate at any time during the term of this
Agreement (the "business");
(ii) shall not solicit, in competition with Company, any
person who is a customer of the business; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of two years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 8:
(i) the covenants contained in paragraph (i) and (ii) of
Section 8(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 8, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 8, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 8 shall
survive the conclusion of Executive's employment by Company.
9. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 9 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Xxxxxx Xxxx
c/o Parisian
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
If to Company: Xxxxxxxx'x, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxx, XX 00000
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of options
or other forms of incentive compensation evidenced by a written
instrument, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
XXXXXXXX'X, INC.
BY: ____________________________
R. Xxxx Xxxxxx
Chairman and CEO
____________________________
Xxxxxx X. Xxxx
Executive
