EXHIBIT 10.79
EMPLOYMENT AGREEMENT
THIS AGREEMENT between Brylane, L.P., a Delaware limited partnership
("Brylane" or the "Company"), and _________________ ("Executive"), is dated as
of April 1, 1998.
Executive is a key executive of the Company or a Subsidiary and an integral
part of its management.
The Company desires to employ Executive, and Executive desires to be so
employed by the Company, on the terms and subject to the conditions hereinafter
set forth.
The Company recognizes that the possibility of a change of control of the
Company or Xxxxxxxx'x (as hereinafter defined) may result in the departure or
distraction of management to the detriment of the Company.
The Company wishes to assure Executive of fair severance should his
employment terminate in specified circumstances following a change of control of
the Company or Xxxxxxxx'x and to assure Executive of certain other benefits upon
a change of control.
The Company also wishes to assure Executive of fair severance should his
employment terminate in certain other circumstances.
In consideration of Executive's continued employment with the Company or a
Subsidiary and other good and valuable consideration, the parties agree as
follows:
1. Definitions. The following terms as used in this Agreement shall have the
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following meanings:
a. "Base Salary" shall mean Executive's annual base salary, exclusive of
any bonus or other benefits he may receive.
b. "Cause" shall mean dishonesty, conviction of a felony or gross neglect
by Executive of his duties (other than as a result of Disability, Incapacity or
death), or conflict of interest, which gross neglect or conflict shall continue
for 30 days after the Company gives written notice to Executive requesting the
cessation of such gross neglect or conflict.
In respect of any termination during any Standstill Period, Executive
shall not be deemed to have been terminated for Cause until the later to occur
of (i) the 30th day after notice of termination is given and (ii) the delivery
to Executive of a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the Board of Representatives of the Company at a
meeting called and held for that purpose (after reasonable notice to Executive),
and at which Executive together with his counsel was given an opportunity to be
heard, finding that Executive was guilty of conduct described in the definition
of "Cause" above, and specifying the particulars thereof in detail; provided,
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however, that the Company may suspend Executive and withhold payment of his Base
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Salary from the date that notice of termination is given until the earliest to
occur of (a) termination of Executive for Cause effected in accordance with the
foregoing procedures (in which case Executive shall not be entitled to his Base
Salary for such period), (b) a determination by a majority of the Board of
Representatives of the Company that Executive was not guilty of the conduct
described in the definition of "Cause" above (in which case Executive shall be
reinstated and paid any of his previously unpaid Base Salary for such period),
or (c) one year after notice of termination is given (in which case Executive
shall be reinstated and paid any of his previously unpaid Base Salary for such
period).
c. "Xxxxxxxx'x" shall mean The Xxxxxxxx'x of Boston, Ltd. business
previously owned and operated by The TJX Companies, Inc. ("TJX").
d. "Change of Control" shall have the meaning set forth in Exhibit A.
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e. "Current Title" shall mean Executive's most senior title during the
period 180 days prior to the commencement of a Standstill Period.
f. "Date of Termination" shall mean the date on which Executive's
employment is terminated.
g. "Disability" shall have the meaning given it in the long-term
disability plan previously operated by Xxxxxxxx'x (or any successor plan
operated by Brylane or any of its affiliates, so long as the definition of
"Disability" in any such successor plan is not more restrictive). Executive's
employment shall be deemed to be terminated for Disability on the date on which
Executive is entitled to receive long-term disability compensation pursuant to
such long-term disability plan.
h. "Employment Period" shall mean the period commencing as of the date
of this Agreement and ending on March 31, 2001.
i. "Executive" shall have the meaning set forth in the first paragraph
of this Agreement.
j. "Good Reason" shall mean, with respect to any voluntary termination
of employment by Executive other than during a Standstill Period, the following:
i. the assignment to Executive of any duties materially
inconsistent with his positions, duties, responsibilities, reporting
requirements, and status with the Company (or a Subsidiary) on the later of the
date of this Agreement and 120 days prior to the date of such termination, or a
substantive change in Executive's titles, reporting requirements or offices as
in effect on the later of the date of this Agreement and 120 days prior to the
date of such termination, or any removal of Executive from or any failure to
reelect him to such positions, except in connection with the termination of
Executive's employment by the Company (or a Subsidiary) for Cause or by
Executive other than for Good Reason; or any other action by the Company (or a
Subsidiary) which results in a diminishment in such position, authority, duties
or responsibilities, other than an insubstantial and inadvertent action which is
remedied by the Company or the Subsidiary promptly after receipt of notice
thereof given by Executive; or
ii. if Executive's rate of Base Salary for any fiscal year is less
than 100 percent of the Base Salary paid to Executive in the completed fiscal
year immediately preceding the fiscal year in which Executive voluntarily
terminates his employment, or if Executive's total cash compensation
opportunities, including salary and incentives, for any fiscal year are less
than 100 percent of the total cash compensation opportunities made available to
Executive in the completed fiscal year immediately preceding the fiscal year in
which Executive voluntarily terminates his employment; or
iii. any relocation by Company of Executive's principal place of
employment of more than 50 miles from the place where Executive's principal
residence was located on the date that Executive gives notice of such
termination.
iv. any breach by the Company of any term or provision of this
Agreement.
Notwithstanding the foregoing, a voluntary termination by Executive of his
Employment shall not be deemed to be for "Good Reason" unless such termination
occurs within 120 days after the occurrence of any event described in clauses
(i), (ii), (iii) or (iv) above without Executive's express written consent,
Executive
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gives notice to the Company at least 30 days in advance requesting that the
situation described in such clauses be remedied, and the situation remains
unremedied upon expiration of such 30-day period. In addition, in no event shall
a termination by Executive for "Good Reason" during the Employment Period be
seemed to be a breach by Executive of this Agreement.
k. "Incapacity" shall mean a disability (other than a disability within
the meaning of "Disability" in paragraph g. above) or other impairment of health
that renders Executive unable to perform his duties to the satisfaction of the
Compensation Committee of the Board of Representatives of the Company. If by
reason of Incapacity Executive is unable to perform his duties for at least six
months in any consecutive 12-month period, upon written notice by the Company
the employment of Executive shall be deemed to have terminated by reason of
Incapacity.
l. "Prohibited Period" means a period commencing on the Date of
Termination and ending on the later of the last day of the Employment Period and
the date one year from the Date of Termination.
m. "Qualified Termination" shall mean the termination of Executive's
employment during any Standstill Period (1) by the Company other than for Cause,
(2) by reason of death, Incapacity or Disability, or (3) by Executive
voluntarily in connection with the following events:
i. the assignment to him of any duties materially inconsistent with
his positions, duties, responsibilities, reporting requirements, and status with
the Company (or a Subsidiary) immediately prior to a Change of Control, or a
substantive change in Executive's titles, reporting requirements or offices as
in effect immediately prior to a Change of Control, or any removal of Executive
from or any failure to reelect him to such positions, except in connection with
the termination of Executive's employment by the Company (or a Subsidiary) for
Cause or by Executive other than in connection with an event described in this
clause (3); or any other action by the Company (or a Subsidiary) which results
in a diminishment in such position, authority, duties or responsibilities, other
than an insubstantial and inadvertent action which is remedied by the Company or
the Subsidiary promptly after receipt of notice thereof given by Executive; or
ii. if Executive's rate of Base Salary for any fiscal year is less
than 100 percent of the Base Salary paid to Executive in the completed fiscal
year immediately preceding the Change of Control, or if Executive's total cash
compensation opportunities, including salary and incentives, for any fiscal year
are less than 100 percent of the total cash compensation opportunities made
available to Executive in the completed fiscal year immediately preceding the
Change of Control; or
iii. the failure of the Company (or a Subsidiary) to continue in
effect any benefits or perquisites, or any pension, life insurance, medical
insurance or disability plan in which Executive was participating immediately
prior to a Change of Control unless the Company (or a Subsidiary) provides
Executive with a plan or plans that provide substantially similar benefits in
the aggregate, or the taking of any action by the Company (or a Subsidiary) that
would adversely affect Executive's participation in or materially reduce
Executive's benefits in the aggregate under such plans or deprive Executive of
any material fringe benefit enjoyed by Executive immediately prior to a Change
of Control, unless the elimination or reduction of any such benefit, perquisite
or plan affects all other executives in the same organizational level (it being
the Company's burden to establish this fact); or
iv. any purported termination of Executive's employment by the
Company (or a Subsidiary) for Cause during a Standstill Period which is not
effected in compliance with paragraph b. above; or
v. any relocation by Company of Executive's principal place of
employment of more than 50 miles from the place where Executive's principal
residence was located at the time of the Change of Control; or
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vi. any other breach by the Company of any term or provision of
this Agreement; or
vii. termination by Executive of his employment for Retirement.
Notwithstanding the foregoing, a voluntary termination by Executive of his
Employment shall not be deemed to fall within this clause (m) unless: (A) with
respect to any of the events described in clauses (i), (ii), (iii), (iv), (v) or
(vi) above, such termination occurs within 120 days after the occurrence of any
of such event without Executive's express written consent, Executive gives
notice to the Company at least 30 days in advance requesting that the situation
described in such clauses be remedied, and the situation remains unremedied upon
expiration of such 30-day period; (B) with respect to the event described in
clause (vii) above, such termination occurs within 120 days after the occurrence
of such event without Executive's express written consent and Executive gives
notice to the Company at least 30 days in advance; or (C) with respect to the
event described in clause (vii), Executive gives notice to the Company at least
30 days in advance. In addition, in no event shall a termination by Executive
during the Employment Period that qualifies as a "Qualified Termination" be
deemed to be a breach by Executive of this Agreement.
n. "Retirement" shall mean voluntary termination by Executive of his
employment in accordance with the Company's retirement plan or program generally
applicable to its salaried employees or in accordance with any retirement
arrangement established with Executive's consent with respect to him. Nothing
in this Agreement shall affect any agreement between Executive and the Company
with respect to his retirement.
o. "Standstill Period" shall be the period commencing on the date of a
Change of Control and continuing until the close of business on the last
business day of the 24th calendar month following such Change of Control.
p. "Subsidiary" shall mean any corporation in which the Company owns,
directly or indirectly, 50 percent or more of the total combined voting power of
all classes of stock.
2. Employment. Subject to the other terms and conditions set forth herein,
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the Company hereby employs Executive, and Executive agrees to be employed by the
Company, as ______________________________, for a term commencing as of April 1,
1998 and continuing until the earlier of March 31, 2001 or the date such
employment shall have been terminated in accordance with the terms of this
Agreement. Beginning April 1, 2001, this Agreement shall renew automatically
for an additional one year term until the Corporation gives Executive written
notice at least 14 calendar days prior to the end of a term, of its intention to
terminate this Agreement; provided, however, that this Agreement may terminate
earlier than the end of a term as provided in this Agreement. In his capacity as
_________________________, Executive shall faithfully perform to the best of his
ability all services and acts necessary or advisable as may be assigned to him
by the Board of Representatives of Brylane and consistent with his position as
___________________________. Throughout the term hereof, Executive shall,
except as may from time to time be otherwise agreed in writing by the Company,
devote his full-time working hours to his duties hereunder.
3. Compensation.
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a. For all services to be rendered by Executive hereunder, and for all
rights granted the Company hereunder, Executive shall be paid by the Company a
base salary at the annual rate of $_______ for each 12-month period of the term
hereof, prorated for any portion thereof, payable in substantially equal
bimonthly installments, less required withholdings. This base salary shall be
reviewed for any upward adjustments by the Board of Representatives of Brylane
or, at the Board's option, the Compensation Committee, in March 1999 and every
March thereafter; provided, that any adjustments to Executive's salary shall be
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in the sole discretion of the Board or the Compensation Committee.
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b. Executive shall be entitled to paid vacations, personal and sick days
consistent with the policies of the Company for management employees. Executive
shall receive such other compensation as shall be approved by the Board and
shall participate in all fringe benefits (including, without limitation, group
medical, life, disability and accidental death and dismemberment insurance),
bonus and benefit plans which shall be generally available from time to time to
management employees of the Company. Notwithstanding the foregoing provisions
of this subsection (b), the Company agrees that it shall provide Executive with
a benefits package which is not materially less favorable to Executive in the
aggregate when compared with those coverages and benefits provided or made
available by Xxxxxxxx'x or its affiliates to Executive (and his dependents)
immediately prior to the consummation of the transactions contemplated by that
certain Asset Purchase Agreement dated as of October 18, 1996, by and among TJX,
Xxxxxxxx'x and Brylane (including, but not limited to, LRMIP, SERP, car, life
and other insurance programs, financial planning and medical, in all cases with
appropriate vesting for service). To the extent that a benefit or program can
not be transferred, it will be matched with a replacement program or benefit or,
if it can not be matched with a similar program or benefit, a program or benefit
with equivalent value will be created. In addition, Brylane shall provide a
bonus or incentive compensation plan which provides Executive with the
opportunity to earn the right to be paid additional compensation as set forth on
Exhibit C hereto.
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c. Executive shall be reimbursed in accordance with the policies of the
Company as adopted by the Board from time to time for his reasonable travel,
entertainment, business, meeting and similar expenditures, incurred for the
benefit of the Company and subject to approval of the Chief Executive Officer of
Brylane or the Board. As an additional condition to the reimbursement of such
expenses by the Company to Executive, Executive shall provide the Company with
copies of all available invoices and receipts, and otherwise account to the
Company in sufficient detail and with adequate documentation to allow the
Company to confirm the business nature of the expenses and claim an income tax
deduction for such paid items, if such items are deductible.
4. Benefits Upon a Change of Control.
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a. Benefits Following Termination of Employment. Executive shall be
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entitled to the following benefits upon a Qualified Termination:
i. Within 30 days following the Date of Termination, the Company
shall pay to Executive the following in a lump sum:
(1) an amount equal to two times Executive's Base Salary for one
year at the rate in effect immediately prior to the Date of Termination or the
Change of Control (or if Executive's title was changed to a level below that of
Executive's Current Title, the rate in effect immediately prior to such change),
whichever is highest, plus the accrued and unpaid portion of Executive's Base
Salary through the Date of Termination. Any payments made to Executive under any
long term disability plan of the Company with respect to the two years following
termination of employment shall be offset against such two times Base Salary
payment. Executive shall promptly make reimbursement payments to the Company to
the extent any such disability payments are received after the Base Salary
payment.
(2) if Executive was a participant in the Supplemental Executive
Retirement Plan of TJX or any successor plan operated by Brylane or any of its
affiliates (in either event, "SERP"), immediately prior to the Change of Control
and the number of years Executive has been employed by the Company (or a
Subsidiary) is five or more, including service for TJX and its subsidiaries, an
amount equal to the present value of the payments that Executive would have been
entitled to receive under the TJX SERP as a Category B participant (regardless
of whether he was participating in any SERP on the Date of Termination). The
present value of such payments shall be calculated using the following rules and
assumptions:
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(a) a credit equal to the number of Years of Service (as
that term is defined in the TJX SERP, but which term shall in any event count
years of service with the Company) that Executive has been employed by the
Company and subsidiaries at the Date of Termination, including service for TJX
and its subsidiaries, shall be added to his Years of Service in determining
Executive's total Years of Service. However, the total Years of Service
determined hereunder shall not exceed the lesser of (x) 20 or (y) the Years of
Service that Executive would have had if he had retired at the age of 65;
(b) Executive's Average Compensation (as that term is
defined in the TJX SERP) shall be determined as of the Date of Termination;
(c) Executive's Primary Social Security Benefit (as that
term is defined in the TJX SERP) shall mean the annual primary insurance amount
to which Executive is entitled or would, upon application therefor, become
entitled at age 65 under the provisions of the Federal Social Security Act as in
effect on the Date of Termination assuming that Executive received annual income
at the rate of his Base Salary from the Date of Termination until his 65th birth
date which would be treated as wages for purposes of the Social Security Act;
(d) the monthly benefit under the TJX SERP determined using
the criteria set forth in (A), (B), and (C) above shall be multiplied by 12 to
determine an annual benefit; and
(e) the present value of such annual benefit shall be
determined by multiplying the result in (D) by the appropriate actuarial factor
from the most recently published table 4A (or its equivalent) as published by
the Pension Benefit Guaranty Corporation and which is effective for plan
terminations occurring on the Date of Termination, using Executive's age to the
nearest year determined as of that date. If, as of the Date of Termination,
Executive has previously satisfied the eligibility requirements for Early
Retirement under the TJX Retirement Plan (or any successor plan operated by
Brylane or any of its affiliates), then the appropriate factor shall be that
based on the most recently published "PBGC Actuarial Value of $1.00 Per Year
Deferred to Age 60 And Payable For Life Thereafter -- Healthy Lives," except
that if Executive's age to the nearest year is more than 60, then such higher
age shall be substituted for 60. If, as of the Date of Termination, Executive
has not satisfied the eligibility requirements for Early Retirement under the
TJX Retirement Plan (or any successor plan operated by Brylane or any of its
affiliates), then the appropriate factor shall be based on the most recently
published "PBGC Actuarial Value of $1.00 Per Year Deferred To Age 65 And Payable
For Life Thereafter -- Healthy Lives."
If Executive receives a payment under this subparagraph (2), he shall not
be entitled to any other payments under SERP.
ii. Until the second anniversary of the Date of Termination, the
Company shall maintain in full force and effect for the continued benefit of
Executive and his family all life insurance, medical insurance and disability
plans and programs in which Executive was entitled to participate immediately
prior to the Change of Control (or if Executive's title was changed to a level
below that of Executive's Current Title, all such plans and programs in which
Executive was entitled to participate immediately prior to such change, if the
benefits thereunder are greater), provided that Executive's continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that Executive is ineligible to participate in such
plans or programs, the Company shall arrange upon comparable terms to provide
Executive with benefits substantially similar to those which he is entitled to
receive under such plans and programs. Notwithstanding the foregoing, the
Company's obligations hereunder with respect to life, medical or disability
coverage or benefits shall be deemed satisfied to the extent (but only to the
extent) of any such coverage or benefits provided by another employer.
iii. Until the second anniversary of the Date of Termination, the
Company shall make available to Executive the use of any automobile that was
made available to Executive prior to the Date of Termination, including ordinary
replacement thereof in accordance with the Company's automobile policy in
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effect immediately prior to the Change of Control, or if Executive's title was
changed to a level below that of Executive's Current Title, the Company shall
make available to Executive the use of an automobile of a type comparable to the
automobile that was made available to him immediately prior to such change (or,
in lieu of making such automobile available, the Company may at its option pay
to Executive the present value of its cost of providing such automobile). Within
30 days after the close of each calendar year ending within such two-year
period, the Company shall also pay to Executive an amount to gross up Executive
for the federal and state tax liability of Executive, if any, for the use of
such automobile during the calendar year. If immediately prior to the Date of
Termination, the Company provided Executive with an automobile allowance rather
than with the use of an automobile, the Company shall pay to Executive in a lump
sum within 30 days following the Date of Termination an amount equal to (i) two
times Executive's automobile allowance for one year at the rate in effect
immediately prior to the Date of Termination or the Change of Control (or if
Executive's title was changed to a level below that of Executive's Current
Title, the rate in effect immediately prior to such change), whichever is
highest, including any increase in such rate which would have become effective
during the two-year period following the Date of Termination (had a Qualified
Termination not occurred), in accordance with the Company's automobile policy in
effect immediately prior to the Change of Control, plus (ii) the accrued and
unpaid portion of Executive's automobile allowance through the Date of
Termination, plus (iii) an amount to gross up Executive for the federal and
state tax liability of Executive on such lump sum payment. In addition to either
providing the use of an automobile or paying the amount described in the
preceding sentence, the Company shall also reimburse Executive for reasonable
amounts of cellular telephone expenses incurred by Executive during the two-year
period following the Date of Termination.
Payments under this Section 4(a) and Section 4(b) below, shall be made
without regard to whether the deductibility of such payments (or any other
payments to or for the benefit of Executive) would be limited or precluded by
Internal Revenue Code Section 280G and without regard to whether such payments
(or any other payments) would subject Executive to the federal excise tax levied
on certain "excess parachute payments" under Internal Revenue Code Section 4999;
provided, that if the total of all payments to or for the benefit of Executive,
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after reduction for all federal taxes (including the tax described in Internal
Revenue Code Section 4999, if applicable) with respect to such payments
("Executive's total after-tax payments"), would be increased by the limitation
or elimination of any payment under this Section 4(a) or Section 4(b), amounts
payable under this Section 4(a) and Section 4(b) shall be reduced to the extent,
and only to the extent, necessary to maximize Executive's total after-tax
payments. The determination as to whether and to what extent payments under
this Section 4(a) or Section 4(b) are required to be reduced in accordance with
the preceding sentence shall be made at the Company's expense by Coopers &
Xxxxxxx or by such other certified public accounting firm as the Compensation
Committee of the Company's Board of Representatives may designate prior to a
Change of Control. In the event of any underpayment or overpayment under this
Section 4(a) or Section 4(b), as determined by Coopers & Xxxxxxx (or such other
firm as may have been designated in accordance with the preceding sentence), the
amount of such underpayment or overpayment shall forthwith be paid to Executive
or refunded to the Company, as the case may be, with interest at the applicable
Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code.
b. Other Benefits. Within 30 days following a Change of Control, whether
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or not Executive's employment has been terminated, the Company shall pay to
Executive the following in a lump sum:
i. an amount equal to the "Target Bonus" under the plan referred to
in Exhibit C attached hereto or any successor plan operated by Brylane or any of
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its affiliates and which is applicable to Executive for the fiscal year in which
the Change of Control occurs (in either event, "MIP") (or if Executive's title
was changed to a level below that of Executive's Current Title within 180 days
before the commencement of a Standstill Period, the "Target Bonus" applicable to
Executive for the fiscal year in which such change occurred as if he continued
to hold Executive's Current Title, if higher); and
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ii. if Executive is a participant in the Long Range Management
Incentive Plan of TJX or any successor plan operated by Brylane of any of its
affiliates and in effect at the Change of Control (in either event, "LRMIP")
(but specifically excluding any long-range incentive plan which states that its
sole or primary purpose is retention), an amount with respect to each Award
Period (as that term is defined in LRMIP) for which Executive has been
designated as a participant equal to the product of (A) the maximum award
payable to Executive for such Award Period, as designated by the Company's
Compensation Committee under LRMIP (or, if Executive's title was changed to a
level below that of Executive's Current Title, in the case of an Award Period
which commences after such change, the maximum award payable to Executive for
such Award Period shall be deemed to be the maximum award payable to Executive
for the Award Period which commenced immediately prior to such change, if
higher), and (B) a fraction, the denominator of which is the total number of
fiscal years in the Award Period and the numerator of which is the number of
fiscal years which have elapsed in such Award Period prior to the Change of
Control (for purposes of this fraction, if the Change of Control occurs during
the first quarter of a fiscal year, then one-quarter of the fiscal year shall be
deemed to have elapsed prior to the Change of Control, and if the Change of
Control occurs after the first quarter of the fiscal year, then the full fiscal
year shall be deemed to have elapsed prior to the Change of Control).
5. Nonsolicitation and Noncompetition; Other Severance Payments; No Mitigation
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of Damages; Notice of New Employment; Withholding.
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a. Nonsolicitation and Noncompetition; Trade Secrets.
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i. Upon the termination of Executive's employment for any reason,
Executive shall not during the Prohibited Period under any circumstances (1)
employ, solicit the employment of, or accept unsolicited the services of, any
"protected person" or (2) recommend the employment of any "protected person" to
any other business organization in which Executive has any direct or indirect
interest (other than a less-than-one percent equity interest in an entity), with
which Executive is affiliated or for which Executive renders services. A
"protected person" shall be a person known by Executive to be employed by the
Company or its subsidiaries at or within six months prior to the commencement of
conversations with such person with respect to employment.
As to (1) each "protected person" to whom the foregoing applies,
(2) each subcategory of "protected person" as defined above, (3) each limitation
on (A) employment of, (B) solicitation of, or (C) unsolicited acceptance of
services from, each "protected person" and (4) each month of the period during
which the provisions of this paragraph (i) apply to each of the foregoing, the
provisions set forth in this paragraph (i) are deemed to be separate and
independent agreements and in the event of unenforceability of any such
agreement, such unenforceable agreement shall be deemed automatically deleted
from the provisions hereof and such deletion shall not affect the enforceability
of any other provision of this paragraph (i) or any other term of this
agreement.
ii. During the course of his employment, Executive will have learned
many trade secrets of the Company and its subsidiaries and will have access to
confidential information and business plans of the Company. Therefore, subject
to paragraph (iii) of this Section 5(a), if Executive should terminate his
employment voluntarily at any time other than for Good Reason, but including by
reason of Retirement or Disability, or if the Company should terminate
Executive's employment at any time for Cause, then, during the Prohibited
Period, Executive will not carry on (as an employee, agent, consultant,
independent contractor, stockholder, partner, owner or otherwise, other than as
an investor in a less-than-one percent equity interest in an entity) any trade
or business competing with the then trade or business of Brylane (or its
affiliates) in any state in which Brylane (or its affiliates) is carrying on
such trade or business as of the effective date of such termination. For
purposes of this paragraph, TJX and its subsidiaries shall also be deemed
competitors. Executive agrees that if, at any time, pursuant to action of any
court, administrative or governmental body or other arbitral tribunal, the
operation of any part of this paragraph shall be determined to be unlawful or
otherwise unenforceable, then
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the coverage of this paragraph shall be deemed restricted as to duration,
geographical scope or otherwise, to the extent, and only to the extent,
necessary to make this paragraph lawful and enforceable in the particular
jurisdiction in which such determination is made.
iii. Paragraph (ii) of this Section 5(a) shall not apply if
Executive's employment is terminated either by the Company or by Executive
during a Standstill Period.
b. Other Severance Payments.
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i. If Executive's employment is terminated prior to the last day of
the Employment Period, and such termination is either by Executive for Good
Reason or by the Company for any reason other than for Cause, and such
termination is not a Qualified Termination, no compensation or other benefits
shall be payable to or accrue to Executive hereunder, except as follows:
(1) For the longer of (A) one year after the Date of Termination
or (B) the remainder of the Employment Period, the Company will continue to pay
to Executive his Base Salary at the rate in effect on the Date of Termination.
Base Salary shall be paid for the first twelve months of the period without
reduction for compensation earned from other employment or self-employment, and
shall thereafter be reduced by such compensation.
(2) Until the expiration of Base Salary payments described in (1)
immediately above or until Executive shall commence other employment or self-
employment, whichever shall first occur, the Company will provide medical and
hospital insurance and term life insurance (but not long-term disability
insurance) for Executive and his family, comparable to the insurance provided
for executives generally, as the Company shall determine, and upon the same
terms and conditions as shall be provided for Company executives generally,
provided that Executive's continued participation is possible under the general
terms and provisions of such plans and programs. In the event that Executive is
ineligible to participate in such plans or programs, the Company shall arrange
upon comparable terms to provide Executive with benefits substantially similar
to those which he is entitled to receive under such plans and programs.
(3) For purposes of the MIP, Executive shall be entitled to
payment, if any, pursuant to the terms of the MIP, or, if greater, such amount
as Executive would have earned under MIP if his employment had continued until
the end of the fiscal year (pro-rated for the period of active employment during
the year).
Executive shall also be entitled to payments or benefits under other
plans of the Company to the extent provided therein in the circumstances.
ii. If Executive's employment terminates by reason of death,
Disability or Incapacity, and such termination is not a Qualified Termination,
no compensation or benefits shall be payable to or accrue to Executive
hereunder, except that Executive shall be entitled to payment, if any, pursuant
to the terms of the MIP or, if greater, such amount as Executive would have
earned under the MIP until the end of the fiscal year (pro-rated for the period
of active employment during such year). Executive shall also be entitled to
payments or benefits under other Employer plans, including any long-term
disability plan, to the extent therein provided in the circumstances.
iii. In the event that Executive has any other agreement with the
Company (or a Subsidiary) which entitles Executive to severance payments upon
the termination of his employment with the Company, the amount of any such
severance payments shall be deducted from the payments to be made under this
Agreement. If Executive should violate any of the provisions of Section 5(a)
hereof, all compensation and benefits payable under Section 5(b) shall cease.
9
c. No Duty to Mitigate Damages; Remedies Not Exclusive. Executive's
---------------------------------------------------
benefits under this Agreement shall be considered severance pay in consideration
of his past service (including service with TJX and its subsidiaries) and his
continued service from the date of this Agreement, and his entitlement thereto
shall not be governed by any duty to mitigate his damages by seeking further
employment, nor shall such benefits be offset by any compensation which he may
receive from future employment, except as provided in Section 5(b)(i). In
addition, notwithstanding anything contained in this Agreement to the contrary,
in the event that Executive's termination of employment with the Company, either
for "Good Reason" or in circumstances that constitute a "Qualified Termination",
are based on circumstances involving a breach of the terms and conditions of
this Agreement by a party other than the Executive, then the benefits to be
provided to Executive in connection with such a termination shall be in addition
to, and not in limitation of, any other legal or equitable remedies to which
Executive may otherwise be entitled.
d. Notice of New Employment. If Executive's employment terminates other
------------------------
than in a Qualified Termination, Executive agrees (i) to notify the Company
immediately upon his securing employment or becoming self-employed during any
period when Executive's compensation from the Company shall be subject to
reduction or his benefits provided by the Company shall be subject to
termination under Section 5(b) and (ii) to furnish to the Company written
evidence of his compensation earned from any such employment or self-employment
as the Company shall from time to time request. In addition, upon Executive's
termination of employment for any reason other than the death of Executive,
Executive shall immediately return all written trade secrets, confidential
information and business plans of the Company and its affiliates and shall
execute a certificate certifying that he has returned all such items in his
possession or under his control.
c. Withholding. Anything to the contrary notwithstanding, all payments
-----------
required to be made by the Company hereunder to Executive shall be subject to
the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
6. Anticipatory Termination. Anything in this Agreement to the contrary
------------------------
notwithstanding, if Executive's employment with the Company is terminated prior
to the date on which a Change of Control occurs, and it is reasonably
demonstrated by Executive that such termination (a) was at the request of a
third party who has taken steps reasonably calculated to effect a Change of
Control or (b) otherwise arose in connection with or in anticipation of a
specifically threatened Change of Control, then for all purposes of this
Agreement, a Change of Control shall be deemed to have occurred on the date
immediately prior to the date of such termination.
7. Miscellaneous. In the event the definition of Change of Control in this
-------------
Agreement differs from the definition of "change of control" contained in any
other executive compensation or employee benefit plan (other than a tax-
qualified plan) maintained by the Company in which Executive is a Participant,
the definition of Change of Control contained herein shall control for the
purposes of determining whether a "change of control" has occurred under such
other plan with respect to Executive.
8. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach thereof, shall be settled exclusively by arbitration in
Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Arbitration shall be by a panel of three arbitrators, one each chosen
by Executive and the Company, and the third chosen by mutual agreement of the
arbitrators chosen by Executive and the Company.
9. Legal Fees and Expenses. The Company shall pay all legal fees and
-----------------------
expenses, including but not limited to counsel fees, stenographer fees, printing
costs, etc. reasonably incurred by Executive in obtaining any right or benefit
to which Executive is entitled under this Agreement in the event of a Change of
Control. Any amount
10
payable under this Agreement that is not paid when due shall accrue interest at
the prime rate as from time to time in effect at the First National Bank of
Boston, until paid in full.
10. Notice of Termination. During a Standstill Period, Executive's employment
---------------------
may be terminated by the Company (or a Subsidiary) only upon 30 days' written
notice to Executive.
11. Notices. All notices shall be in writing and shall be deemed given five
-------
days after mailing in the continental United States by registered or certified
mail, or upon personal receipt after delivery, telex, telecopy or telegram, to
the party entitled thereto at the address stated below or to such changed
address as the addressee may have given by a similar notice:
To the Company: Brylane, L.P.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
To Executive: At home address,
as last shown on the
records of the Company
The failure by Executive to set forth in any notice of termination of employment
any fact or circumstance which contributes to a showing of Good Reason or that
such termination is described in clause (3) of Section 1(m) shall not waive any
of Executive's rights hereunder or preclude him from asserting such fact or
circumstance in enforcing his rights hereunder.
12. Severability. In the event that any provision of this Agreement shall be
------------
determined to be invalid or unenforceable, such provision shall be enforceable
in any other jurisdiction in which valid and enforceable and in any event the
remaining provisions shall remain in full force and effect to the fullest extent
permitted by law.
13. General Provisions.
------------------
a. Binding Agreement. This Agreement shall be binding upon and inure to
-----------------
the benefit of the parties and be enforceable by Executive's personal or legal
representatives or successors. If Executive dies while any amounts would still
be payable to him hereunder, benefits would still be provided to his family
hereunder or rights would still be exercisable by him hereunder as if he had
continued to live, such amounts shall be paid to Executive's estate, such
benefits shall be provided to Executive's family and such rights shall remain
exercisable by Executive's estate in accordance with the terms of this
Agreement. This Agreement shall not otherwise be assignable by Executive.
b. Successors. This Agreement shall inure to and be binding upon the
----------
Company's successors. The Company will require any successor to all or
substantially all of the business and/or assets of the Company by sale, merger
(where the Company is not the surviving corporation), lease or otherwise, by
agreement in form and substance satisfactory to Executive, to assume expressly
this Agreement. If the Company shall not obtain such agreement prior to the
effective date of any such succession, Executive shall have all rights resulting
under this Agreement from a termination by Executive described in clause (3) of
Section 1(m). This Agreement shall not otherwise be assignable by the Company,
and, in any event, the Company shall remain obligated to Executive for all
obligations and shall not rely on any suretyship defenses.
c. Amendment or Modification; Waiver. This Agreement may not be amended
---------------------------------
unless agreed to in writing by Executive and the Company. No waiver by either
party of any breach of this Agreement shall be deemed a waiver of a subsequent
breach.
11
d. Titles. No provision of this Agreement is to be construed by
------
reference to the title of any section.
e. Continued Employment. This Agreement shall not give Executive any
--------------------
right of continued employment or any right to compensation or benefits from the
Company or any Subsidiary except the rights specifically stated herein.
f. Prior Agreement. This Agreement shall supersede and replace any prior
---------------
employment, change of control or severance agreement between the Company or any
of its subsidiaries, or any predecessor, and Executive.
g. Remedies. Any material breach or violation by Executive of the terms
--------
of Section 5 of this Agreement, will result in immediate and irreparable injury
and harm to the Company, and will cause damage to the Company in amounts
difficult to ascertain. Accordingly, the Company shall be entitled to, and
Executive hereby consents to the entry of, the remedies or injunction and
specific performance, or either of such remedies, as well as all other remedies
to which the Company may be entitled, at law, in equity or otherwise, with
respect to any such breach or violation.
h. Governing Law. The validity, interpretation, performance and
-------------
enforcement of this Agreement shall be governed by the laws of The Commonwealth
of Massachusetts.
14. Counterparts. This Agreement may be executed in two counterparts, each of
------------
which shall be deemed an original and both of which together shall be deemed one
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
BRYLANE, L.P.
By:______________________________
Name:
Its:
EXECUTIVE:
_____________________________
12
EXHIBIT A
Definition of "Change of Control"
---------------------------------
"Change of Control" shall mean the occurrence of any one of the following
events:
(a) any "person" or "group" (as such terms are used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), other
than Permitted Holders (as defined below), is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have beneficial ownership of all shares that such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total voting power of all classes of Voting Equity Interests (as defined
below) of VP Holding Corporation, a Delaware corporation (the "Corporation"),
Brylane Inc., a Delaware corporation (the "Company"), Brylane (the
"Partnership") or the Partnership's general partner; provided, that no Change of
--------
Control shall be deemed to occur so long as the Permitted Holders have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Representatives or Directors; provided,
--------
further, that unless the Compensation Committee of the Partnership shall
-------
otherwise determine prior to the acquisition of such majority ownership, such
acquisition of ownership shall not constitute a Change of Control if Executive
or an Executive Related Party is the person or a member of a group constituting
the person acquiring such ownership; or
(b) (i) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Representatives or
Directors (together with any new members of the Board of Representatives or
Directors whose election to such Board or whose nomination for election by the
holders of Equity Interests (as defined below) of the Partnership, the
Corporation or the Company was approved by (a) a Permitted Holder or (b) a vote
of at least 66 2/3% of the members of the Board of Representatives or Directors
then still in office who were either members of the Board of Representatives or
Directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of such Board of Representatives or Directors then in office;
(c) (i) the Partnership or its general partner, the Corporation or
the Company consolidates with or merges with or into any person or entity or
conveys, transfers or leases all or substantially all of its assets to any
person or entity, or any corporation or partnership consolidates with or merges
into or with the Partnership or its general partner, the Corporation or the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Equity Interests of the Partnership or its general partner, the
Corporation or the Company are changed into or exchanged for cash, securities or
other property, other than any such transaction where the outstanding Voting
Equity Interests of the Partnership or its general partner, the Corporation or
the Company are not changed or exchanged at all (except to the extent necessary
to reflect a change in the jurisdiction of incorporation of the Partnership or
its general partner, the Corporation or the Company or where (A) the outstanding
Voting Equity Interests of the Partnership or its general partner or the
Corporation or the Company are changed into or exchanged for (x) Voting Equity
Interests of the surviving corporation or entity, or (y) cash, securities and
other property (other than Equity Interests of the surviving corporation or
entity) and (B) no "person" or "group" other than Permitted Holders owns
immediately after such transaction, directly or indirectly, more than the
greater of (i) 50% of the total outstanding Voting Equity Interests of the
surviving corporation or entity and (2) the percentage of the outstanding Voting
Equity Interests of the surviving corporation or partnership or entity owned,
directly or indirectly, by Permitted Holders immediately after such
transaction); or (ii) the sale or other disposition by the Partnership, in one
transaction or a series of related transactions (but not including a disposition
that is part of any sale-and-leaseback or similar financing transactions), of
assets aggregating more than thirty percent (30%) of the assets of the
Partnership's Xxxxxxxx'x of Boston business (taken at the values as stated on
the books of the Partnership determined in accordance with generally accepted
accounting principles consistently applied), or responsible for generating more
than thirty
percent (30%) of the net sales of the Partnership's Xxxxxxxx'x of Boston
business; provided, that unless otherwise determined by the Compensation
--------
Committee of the Partnership, no transaction shall constitute a Change of
Control if, immediately after such transaction, Executive or any Executive
Related Party shall own Equity Interests of any surviving corporation
("Surviving Entity") having a fair value as a percentage of the fair value of
the Equity Interests of such Surviving Entity greater than 125% of the fair
value of the Equity Interests of the Partnership, the Corporation and/or the
Company owned by Executive and any Executive Related Party immediately prior to
such transaction, expressed as a percentage of the fair value of all Equity
Interests of the Partnership, the Corporation and/or the Company immediately
prior to such transaction; provided, further, that for purposes of this
-------- -------
paragraph (c), if such agreement requires as a condition precedent approval by
the equityholders of the Partnership, the Corporation and/or the Company of the
agreement or transaction, a Change of Control shall not be deemed to have taken
place unless such approval is secured and the transaction is consummated.
Notwithstanding anything in this definition to the contrary, a "Change of
Control" shall not be deemed to have occurred as a result of any sale of Equity
Interests in a public offering.
In addition, for purposes of this Exhibit A, the following terms have the
---------
meanings set forth below:
"Equity Interest" in any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents or
interest in (however designated) corporate stock or other equity participations,
including partnership interests, whether general or limited, in such person.
An "Executive Related Party" shall mean any affiliate or associate of
Executive other than the Partnership, the Company or the Corporation, as the
case may be, or an affiliate of the Partnership, the Company or the Corporation,
as the case may be. The terms "affiliate" and "associate" shall have the
meanings ascribed thereto in Rule 12b-2 under the Exchange Act (the term
"registrant" in the definition of "associate" meaning, in this case, the
Partnership, the Company or the Corporation, as the case may be).
"Permitted Holders" means (i) Pinault Printemps-Redoute S.A., a company
organized under the laws of France and any of its affiliates and permitted
assignees, (ii) The TJX Companies, Inc., (iii) VP Holding Corporation (with
respect to the general partner of the partnership); provided, that Brylane, L.P.
--------
and its subsidiaries shall not be deemed affiliates of Pinault Printemps-Redoute
S.A. and Xxxxxxxx'x Inc. for purposes of this definition.
"Person" shall have the meaning used in Section 13(d) of the Exchange Act,
as in effect on July 1, 1996.
"Voting Equity Interests" means Equity Interests of the class or classes
pursuant to which the holders thereof have (i) in respect of a corporation, the
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of a corporation (irrespective
of whether or not at the time Equity Interests of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency) or (ii) in respect of a limited liability company or other entity,
the general voting power under ordinary circumstances to elect the board of
directors or other governing board of such entity.
2
EXHIBIT B
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of __________ __,
1998 and is entered into between Brylane, L.P., a Delaware limited partnership
(the "Partnership") and _____________________ (the "Executive").
R E C I T A L S
---------------
WHEREAS, the Partnership desires to employ the Executive, and the
Executive desires to be so employed by the Partnership, on the terms and subject
to the conditions hereinafter set forth.
A G R E E M E N T
-----------------
NOW, THEREFORE, the parties hereto have agreed, and do hereby mutually
agree, as follows:
1. Employment. Subject to the other terms and conditions set forth
----------
herein, the Partnership hereby employs the Executive, and the Executive agrees
to be employed by the Partnership, as Senior Vice President - Human Resources,
for a term commencing on ___________ __, 1998 and continuing until the earlier
of _______________ __, 2001 or the date such employment shall have been
terminated as provided in Section 3 hereof. Beginning _____________ __, 2001,
this Agreement shall renew automatically for an additional one year term until
the Partnership gives Executive written notice at least 14 calendar days prior
to the end of a term, of its intention to terminate this Agreement; provided,
however, that this Agreement may terminate earlier than the end of a term as
provided in Section 3 hereof. In his capacity as Senior Vice President - Human
Resources, the Executive shall faithfully perform to the best of his ability and
in a satisfactory manner all services and acts necessary or advisable as may be
assigned to him by the Chief Executive Officer. Throughout the term hereof the
Executive shall, except as may from time to time be otherwise agreed in writing
by the Partnership, devote his full-time working hours to his duties hereunder.
2. Compensation.
------------
(a) For all services to be rendered by Executive hereunder, and for
all rights granted the Partnership hereunder, the Executive shall be paid by the
Partnership a base salary at the annual rate of $______________________ for each
12-month period of the term hereof, prorated for any portion thereof, payable in
substantially equal bimonthly installments, less required withholdings. This
base salary shall be reviewed for any adjustments annually by the Board of
Representatives of the Partnership (the "Board") or, at the Board's option, a
compensation committee thereof (the "Committee"), provided that any adjustments
shall be in the sole discretion of the Board or the Committee.
(b) The Executive shall be entitled to paid vacations, personal and
sick days consistent with the policies of the Partnership for management
employees. The Executive shall receive such other compensation as shall be
approved by the Board and shall participate in all fringe benefits (including,
without limitation, group medical, life, disability and accidental death and
dismemberment insurance), bonus and benefit plans which shall be generally
available from time to time to management employees of the Partnership.
(c) The Executive shall be reimbursed in accordance with the policies
of the Partnership as adopted by the Board from time to time for his reasonable
travel, entertainment, business, meeting and similar expenditures, incurred for
the benefit of the Partnership and subject to approval of the Chief Executive
Officer of
the Partnership or the Board. As an additional condition to the reimbursement of
such expenses by the Partnership to the Executive, the Executive shall provide
the Partnership with copies of all available invoices and receipts, and
otherwise account to the Partnership in sufficient detail and with adequate
documentation to allow the Partnership to confirm the business nature of the
expenses and claim an income tax deduction for such paid items, if such items
are deductible.
(d) The Partnership agrees that the Partnership shall provide the
Executive with a benefits package substantially similar (which is not materially
less favorable to the Executive in the aggregate) to those coverages and
benefits provided or made available to the Executive (and his dependents)
immediately prior to the consummation of the transactions contemplated by those
certain Stock Purchase Agreements each dated as of February 19, 1998, among FS
Equity Partners II, L.P., a California limited partnership, FS Equity Partners
III, L.P., a Delaware limited partnership, FS Equity Partners International,
L.P., a Delaware limited partnership and Pinault Printemps-Redoute, S.A., a
company organized under the laws of France ("PPR") and between M&P Distributing
Company, a Nevada corporation and PPR. In addition, the Partnership shall
provide a bonus or incentive compensation plan which provides the Executive with
the opportunity to earn the right to be paid additional compensation as set
forth on Exhibit A hereto. This subsection (d) shall not be implemented so as
---------
to limit any rights or benefits to which the Executive or his dependents may be
entitled under any employee benefit plan maintained by or contributed to by the
Partnership.
3. Termination.
-----------
(a) The employment of the Executive hereunder may be terminated by
the Partnership on at least 30 days' prior written notice if the Board
determines that the Executive has become permanently disabled (as hereinafter
defined). Such written notice shall provide reasonable detail regarding the
basis for such determination. The Executive shall be deemed to be "permanently
disabled," as used in this subsection, if the Executive has been substantially
unable to discharge his duties and obligations hereunder by reason of illness,
accident or disability for a period of 180 days in any twelve-month period.
(b) The employment of the Executive hereunder may be terminated
forthwith by the Partnership for cause (as hereinafter defined) upon written
notice from the Board to the Executive. Such written notice shall provide
reasonable detail regarding the basis for such determination. The Partnership
shall have "cause" to terminate the Executive, as used in this subsection, only
if the Board shall determine that the Executive has, (i) refused or failed
within a reasonable period of time to carry out any reasonable and material
direction from the Chief Executive Officer of the Partnership or the Board
(other than a failure resulting from the Executive's incapacity due to physical
or mental illness), (ii) been guilty of a material and willful breach of the
terms of this Agreement, (iii) demonstrated gross negligence or willful
misconduct in the execution of his assigned duties, (iv) been convicted of a
felony or other serious crime involving moral turpitude, (v) engaged in fraud,
embezzlement or other illegal conduct to the detriment of the Partnership, (vi)
intentionally imparted confidential information relating to the Partnership to a
third party, other than in the course of carrying out the Executive's duties, or
(vii) materially and willfully breached any of his obligations pursuant to the
Management Stock Subscription Agreement dated as of February 26, 1997 between
Brylane Inc., a Delaware corporation and the parent entity of the Partnership,
and the Executive if such breach has not been cured 5 days after receipt of
written notice to the Executive.
(c) The employment of the Executive hereunder shall be automatically
terminated on the date of the Executive's death.
(d) In addition to the circumstances set forth in subsections (a),
(b) and (c) of this Section 3, the Partnership may terminate the Executive's
employment for any reason or no reason and with or without cause upon 30 days'
prior written notice to the Executive.
2
(e) The Executive may terminate his employment hereunder forthwith at
any time for good reason (as hereinafter defined) upon written notice to the
Partnership. For purposes of this subsection, "good reason" shall mean the
occurrence of any of the following: (i) a reduction by the Partnership in the
Executive's base salary herein provided or as the same may be increased from
time to time; (ii) any relocation by the Partnership of Executive's principal
place of employment of more than 50 miles from the place where Executive's
principal residence was located on the date Executive gives notice of such
termination; or (iii) a material and willful breach by the Partnership of any of
its obligations to the Executive hereunder, including, without limitation, the
Partnership's failure to obtain the written assumption agreement described in
Section 10(a) if such agreement is not obtained within 5 days after written
notice that a written assumption agreement required under Section 10(a) has not
been obtained.
(f) In addition to the circumstances described in subsection (e) of this
Section 3, the Executive may terminate his employment hereunder for any reason
or no reason upon 30 days' prior written notice to the Partnership.
(g) If the Executive's employment is terminated pursuant to this Section
3, the Executive shall be entitled to, and the Partnership's obligation
hereunder shall be limited to, (i) the payment of the compensation accrued under
Section 2 hereof to the effective date of such termination and (for any
termination other than pursuant to Section 3(b)) a pro rata portion of any
bonuses or incentive compensation payable with respect to any period commencing
prior to the termination date, and (ii) in the case of termination under
subsections (a), (c), (d) or (e) of this Section 3, the additional compensation
provided in subsection (h) of this Section 3.
(h) (i) if the Executive's employment is terminated by the Partnership
pursuant to subsection (a) of this Section 3 the Executive will get the benefit
of any Partnership disability plans; provided, however, that for a period of 12
consecutive months after the effective date of the termination the Partnership
will pay the Executive the difference (if any) between the level of annualized
salary provided for in Section 2 hereof, less required withholdings, and the
amounts provided under such disability plans; or
(ii) if the Executive's employment is automatically terminated
pursuant to subsection (c) of this Section 3, the Partnership shall continue to
pay to the Executive (or, if applicable, to his executor, administrator or
heirs) the Executive's salary in equal monthly installments at the level of
annualized salary provided for in Section 2 hereof being paid to the Executive
at the time of such termination, less required withholdings, for a period of 12
consecutive months after the effective date of the termination; and
(iii) if the Executive's employment is terminated by the
Partnership pursuant to subsection (d) of this Section 3 or if the Executive
terminates his employment pursuant to subsection (e) of this Section 3, the
Partnership shall continue to pay to the Executive the Executive's salary in
equal monthly installments at the level of annualized salary provided for in
Section 2 hereof being paid to the Executive at the time of such termination,
less required withholdings, for the greater of (A) one year after the effective
date of the termination, and (B) the period after the effective date of the
termination, through and including the April 30th immediately following the
effective date of the termination.
(i) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise;
but the amount of any payment provided for in this Section 3, other than amounts
set forth in subsection (g)(i) of this Section 3, shall be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the effective date of termination of the Executive's employment
by the Partnership.
(j) Nothing in this Agreement shall be deemed a release or waiver of
right to any medical or other employee benefits available to the Executive on or
after the effective date of termination of the
3
executive's employment by the Partnership under federal, state or local law
which provides for the continuation of any medical or other employee benefits
after such termination date.
4. Noncompetition. If the Executive is terminated by the Partnership for
--------------
cause in accordance with Subsection 3(b) hereof, or if the Executive terminates
his employment other than for "good reason" in accordance with Subsection 3(e)
hereof, then except as provided in the next sentence, for a period of 12 months
after such termination, the Executive will not carry on (as an employee, agent,
consultant, independent contractor, stockholder, partner, owner or otherwise)
any trade or business competing with the then trade or business of the
Partnership (or its affiliates) in any state in which the Partnership (or its
affiliates) is carrying on such trade or business as of the effective date of
such termination. The foregoing provisions of this Section 4 notwithstanding,
the Executive may own not more than 5% of the issued and outstanding shares of
any class of securities of an issuer whose securities are listed on a national
securities exchange or registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended.
5. Trade Secrets. During the term of this Agreement and at all times
-------------
thereafter, the Executive shall hold in secrecy all trade secrets and
confidential information relating to the Partnership's (and its affiliates')
business and affairs that may come to his knowledge or have come to his
knowledge while employed by the Partnership or its predecessors (excluding
information that is or becomes publicly known or available for use through no
fault of the Executive), including but not limited to (i) matters of a business
nature, such as information about costs, profits, markets, sales, lists of
customers and other information of a similar nature, (ii) plans or strategies
for development of the business of the Partnership and (iii) matters of a
technical nature. Except as required in the performance of his duties to the
Partnership under this Agreement, the Executive shall not use for his own
benefit or disclose to any person, directly or indirectly, such matters unless
such use or disclosure has been specifically authorized in writing by the
Partnership in advance.
6. Executive's Representation. The Executive shall be, and he represents
--------------------------
that he is, free to enter into this Agreement and not under any contractual
restraint which would prohibit his satisfactorily performing his duties to the
Partnership hereunder.
7. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the internal substantive laws (and not the laws of
conflicts of laws) of the State of Indiana.
8. Costs. If either party brings any legal action against the other to
-----
enforce its rights under this Agreement, the prevailing party in such dispute
shall be entitled to recover from the other party all reasonable fees, costs and
expenses actually incurred in enforcing its rights under this Agreement
including, without limitation, the reasonable fees and expenses of attorneys,
accountants and expert witnesses, which shall include, without limitation, all
fees, costs and expenses of appeals and of enforcement.
9. Entire Agreement. This Agreement constitutes the whole agreement of
----------------
the parties hereto in reference to any employment of the Executive by the
Partnership and in reference to the subject matter hereof, and all prior
agreements, promises, representations and understandings relative thereto are
merged herein.
10. Assignability.
-------------
(a) In the event that the Partnership shall merge or consolidate with
any other corporation, partnership or business entity or all or substantially
all the Partnership's business or assets shall be transferred in any manner to
any other corporation, partnership or business entity, including (without
limitation) any entity that succeeds to the business of the Partnership pursuant
to Article X of that certain Partnership Agreement dated August 30, 1993, as
amended, such successor shall thereupon succeed to, and be subject to, all
rights, interests, duties and obligations of, and shall thereafter be deemed for
all purposes hereof to be, the Partnership hereunder
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and the Partnership shall obtain a written assumption agreement from such
successor prior to completion of any such merger, consolidation or sale of
assets.
(b) This Agreement is personal in nature and neither of the parties
hereto shall, without the written consent of the other party hereto, assign or
transfer this Agreement or any rights or obligations hereunder, except by
operation of law or pursuant to the terms of Section 10(a).
(c) Nothing expressed or implied herein is intended or shall be
construed to confer upon or give to any person, other than the parties hereto,
any right, remedy or claim under or by reason of this Agreement or of any term,
covenant or condition hereof.
11. Remedies. Any material breach, violation or evasion by the Executive
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of the terms of this Agreement, including specifically, but not limited to,
Sections 4 and 5, will result in immediate and irreparable injury and harm to
the Partnership, and will cause damage to the Partnership in amounts difficult
to ascertain. Accordingly, the Partnership shall be entitled to, and Executive
hereby consents to the entry of, the remedies or injunction and specific
performance, or either of such remedies, as well as all other remedies to which
the Partnership may be entitled, at law, in equity or otherwise.
12. Amendments; Waivers. This Agreement may be amended, modified,
-------------------
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
13. Notice. All notices, requests and other communications hereunder
------
shall be in writing and, if given by facsimile, telegram, telecopy or telex,
shall be deemed to have been validly served, given or delivered when sent, if
given by personal delivery, shall be deemed to have been validly served, given
or delivered upon actual delivery and, if mailed or delivered by overnight
courier, shall be deemed to have been validly served, given or delivered when
deposited in the United States mail, as registered or certified mail, with
proper postage prepaid, or when deposited with the courier service, and
addressed to the party or parties to be notified, at the following addresses (or
such other address(es) as a party may designate for itself by like notice):
If to the Partnership:
Brylane, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President-Human Resources
If to the Executive:
_____________________________
_____________________________
_____________________________
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14. Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent that a
restrictive covenant contained herein may, at any time, be more restrictive than
permitted under the laws of any jurisdiction where this Agreement may be subject
to review and interpretation, the terms of such restrictive covenant shall be
those allowed by law and the covenant shall be deemed to have been revised
accordingly. Each and every term of this Agreement shall be enforced to the
fullest extent permitted by law.
15. Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and both of which together shall be
deemed one Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
The "Partnership": BRYLANE, L.P.
By: VGP Corporation
Its: General Partner
By: _____________________________________
Name: Xxxxx X. Xxxxxxx
Title: President
The "Executive":
___________________________________________
Signature
6
EXHIBIT A
Brylane has a semi-annual performance bonus program based upon goals
relating to Brylane's operating profit. Such goals will be established at the
beginning of each six-month season based upon a review by the Board of
management's operating budget for that season. Each participant in such program
may receive a bonus for each semi-annual bonus period equal to a certain
percentage of his or her annual salary. The actual bonus amount will be based
upon the extent to which the operating profit goals for that season are met or
exceeded. Operating profit shall exclude any charge resulting from the
formation of the Partnership, such as the write-up of inventory to fair market
value on August 30, 1993 and the amortization of the cost of intangibles
resulting from the purchase accounting relating to the acquisition. Except as
otherwise determined by the Board, or the Committee, in its sole discretion,
operating profit for any given six-month season will also exclude any and all
operating profit that is attributable to transactions entered into by Brylane or
its affiliates during that six-month season. The Executive's individual
participant percentage under such plan will be _____%, subject to any
adjustments by the Board, or the Committee, as it may see fit in its sole
discretion.
EXHIBIT C
Brylane shall provide Executive with management incentive compensation
("MIP") with a ___% target and using a methodology consistent with Xxxxxxxx'x
past practices. The current year's (12-months ending January 30, 1999)
incentive compensation will be calculated as if Executive's new salary and
incentive compensation were in place for the full year.
