AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"), made and
entered into as of April 19, 1999, is by and between Lamonts Apparel, Inc., a
Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxxxx ("Executive").
WHEREAS, this Agreement amends and restates the Employment Agreement, dated
as of April 18, 1995, as amended as of January 31, 1998 (the "Effective Date"),
between Executive and the Company (the "Existing Employment Agreement"), which
amendment was entered into in connection with the Company's Modified and
Restated Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the
"Plan of Reorganization" or "Plan").
NOW, THEREFORE, the parties agree to amend and restate the Existing
Employment Agreement in its entirety as follows:
1. EMPLOYMENT OF EXECUTIVE; TITLE.
(a) EMPLOYMENT. The Company hereby agrees to employ Executive, and
Executive agrees to enter into the employment of the Company, on the terms and
conditions set forth in this Agreement. Executive agrees during the Term (as
defined below) to devote such portion of his business and professional time,
efforts, skills and abilities to the performance of his duties as stated herein
and to the furtherance of the Company's business as the Chairman of the Board of
Directors of the Company (the "Board") may reasonably direct.
(b) TITLE. Executive's job title will be Vice Chairman of the Board
and his duties will be those as are mutually determined by the Chairman and the
Vice Chairman of the Board, consistent with the position of Vice Chairman,
including advising on legal, financial and administrative functions of the
Company.
(c) BOARD MEMBERSHIP. The Company agrees that during the Term it
will use its best efforts to cause Executive to be nominated for election to the
Board at each annual meeting of stockholders of the Company and, if elected, the
Company will appoint Executive to serve as Vice Chairman of the Board.
2. TERM. Unless terminated at an earlier date in accordance with Section
8 hereof or extended in accordance with Section 9 hereof, the term of this
Agreement (the "Term") shall commence as of the Effective Date and continue
until April 1, 2001.
3. COMPENSATION.
(a) BASE SALARY. Subject to Section 8 hereof, as compensation for
Executive's services hereunder, the Company shall pay to Executive a base salary
("Base Salary") of $174,876 per year, payable in equal monthly installments of
$14,573, in arrears at the end of each calendar month during the remainder of
the Term.
(b) INCREASES IN BASE SALARY. Executive's Base Salary shall be
reviewed by the Board or the Compensation Committee of the Board no less
frequently than on each January 31 during the Term. The Base Salary payable to
Executive may be increased on each such date (and at such other times as such
Board or the Compensation Committee of the Board (the "Compensation Committee")
may deem appropriate during the Term) to such amount determined appropriate by
such Board or the Compensation Committee; provided, however, that Executive's
Base Salary shall be increased annually in a minimum amount equal to the cost-
of-living increment as reported in the "Consumer Price Index, Los Angeles,
California, All Items," published by the U.S. Department of Labor (using
January 1, 1995 as the base date for comparison with respect to the increase to
be made on January 31, 1998, and using January 1 of the immediately preceding
year as the base date for comparison with respect to each annual increase to be
made thereafter). Each such new Base Salary shall become the base for each
successive year increase. Any increase in Base Salary or other compensation
shall in no way limit or reduce any other obligations of the Company hereunder
and, once established as an increased specified rate, Executive's Base Salary
shall not be reduced unless Executive otherwise agrees in writing.
4. INTENTIONALLY OMITTED.
5. TAX WITHHOLDING; WAIVER OF BENEFITS. The Company has the right to
deduct from all compensation and amounts payable to Executive under this
Agreement social security (FICA) taxes and all federal, state, municipal or
other such taxes, deductions or charges as may now be in effect or that may
hereafter be enacted or required. During the Term, Executive hereby waives, to
the fullest extent permitted by applicable law, all benefits and executive
perquisites provided to employees of the Company, including, without limitation,
those provided to its senior executives (but excluding 401(k) benefits and
benefits and perquisites provided to directors of the Company, including
(without limitation), directors' and officers' liability insurance).
6. EXPENSES. Executive acknowledges that the performance of his duties
hereunder will require significant travel, primarily to Kirkland, Washington,
and agrees to be present in such other locations at such other times as the
Chairman of the Board may reasonably request. Executive shall be reimbursed by
the Company, in accordance with its reimbursement policy from time to time in
effect, for all reasonable and necessary out-
2
of-pocket expenses incurred by him in performing his duties under this
Agreement, including (without limitation) hotel, rental car, airfare and
other reasonable travel expenses between Executive's home in Los Angeles,
California, and Kirkland, Washington. Executive shall be furnished with a
suitable office and secretarial assistance at the Company's headquarters.
7. CONFIDENTIAL INFORMATION.
(a) CONFIDENTIALITY. Except as permitted or directed by the Board
through written authorization, during the Term and for a period of two years
thereafter, Executive shall not, and shall not permit any of his affiliates or
representatives (collectively, "Representatives") to, divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course of the
business of the Company) any confidential or secret knowledge or information of
the Company which Executive or any of his Representatives has acquired or
becomes acquainted with or will acquire or become acquainted with prior to the
termination of this Agreement, whether developed by itself or by others,
concerning any trade secrets, confidential or secret designs, directly or
indirectly useful in any aspect of the business of the Company, any customer or
supplier lists of the Company, any confidential or secret development or
research work of the Company, or any other confidential information or secret
aspects of the business of the Company. The foregoing obligations of
confidentiality, however, shall not apply to disclosure of any knowledge or
information that is required by any governmental agency or instrumentality to be
disclosed or is now published or which subsequently becomes generally publicly
known in the form in which it was obtained from the Company, other than as a
direct or indirect result of the breach of this Agreement by Executive or any of
his Representatives; provided that, in the case of a governmental agency or
instrumentality seeking disclosure of such confidential material, Executive
agrees to provide the Company with prompt notice, sufficient information and
reasonable assistance so that the Company can seek an appropriate order or other
appropriate remedy or, if the Company wishes, waive Executive's compliance with
this Section 7.
(b) CONFIDENTIAL MATERIALS. Upon termination of this Agreement and
upon written request of the Company, Executive agrees to deliver promptly to the
Company all written confidential or secret knowledge or information of the
Company, including, without limitation, all analyses, compilations, studies or
other documents or records prepared by Executive, his Representatives or any
others, and all copies or other reproductions of any of the aforementioned
items.
8. TERMINATION PRIOR TO A CHANGE IN CONTROL.
(a) BASES FOR TERMINATION. Notwithstanding any other provision
hereof, this Agreement and the relationship created hereunder between the
Company and
3
Executive shall terminate prior to the expiration of the Term only upon the
occurrence of any one of the following events (unless such termination occurs
after the occurrence of a Change in Control in which case Section 9 shall
apply and this Section 8 shall thereafter apply cumulatively with Section 9
hereof except to the extent otherwise provided in Section 9 hereof):
(i) 30 days after delivery to Executive by the Company of
written notice of the Company's voluntary and unilateral termination of this
Agreement;
(ii) 30 days after delivery to the Company by Executive of
written notice of Executive's voluntary and unilateral termination of this
Agreement; or
(iii) the date of delivery of written notice from the Company to
the Executive following the disability of Executive that renders him unable to
perform his essential duties under this Agreement, even with reasonable
accommodations that do not cause undue hardship to the Company, for at least 90
days out of any 120 consecutive day period;
(iv) immediately after delivery to Executive by the Company of
written notice of termination for "Cause"; or
(v) the death of Executive; PROVIDED, HOWEVER, that in the
event of the death of Executive, the Company shall pay the estate of Executive
six months of Base Salary commencing with the next regular pay period after the
date of his death.
For purposes of this Agreement, "Cause" shall mean (A) any
dishonest or fraudulent act or course of conduct by Executive, or other act or
course of conduct by Executive constituting a criminal act or that results in
improper gain or personal enrichment of Executive at the expense of the Company,
or the commission by Executive of an act or a course of conduct involving moral
turpitude, or Executive's insubordination to the Board; or (B) the engaging by
Executive in willful misconduct or gross negligence that is injurious to the
Company; or (C) a material breach by Executive of any of the terms or conditions
of this Agreement or of policies reasonably established by the Board, or
Executive's material neglect of his duties or of the Company's business,
PROVIDED THAT, no such termination pursuant to this clause (C) shall be
effective unless the Company shall have given Executive 30 days' prior written
notice specifying the manner in which Executive's conduct or performance fails
to comply with this clause (C) and Executive shall not have cured such non-
complying conduct or performance within such 30-day period. Termination
pursuant to clause (C) shall be effective 30 days after such notice unless such
conduct has been cured in the good faith judgment of the Board.
(b) EFFECT OF TERMINATION. If this Agreement is terminated by the
Company pursuant to Section 8(a)(i), (A) Executive shall be entitled to receive
only the
4
unpaid portion of his Base Salary that would have been payable pursuant to
Section 3(a) during the Termination Period (defined below) had this Agreement
not been so terminated, which shall be paid to Executive in arrears at the
end of each calendar month during such period, plus any unreimbursed expenses
payable pursuant to Section 6, which shall be paid to Executive within ten
business days after the date that Executive submits to the Company reasonable
documentation of such unreimbursed expenses; and (B) all options to purchase
shares of capital stock of the Company held by Executive shall vest in full
upon the date of such termination. At the Company's sole option, the Company
may elect to pay Executive any remaining Base Salary due under this Section
8(b) in one lump sum, equal to the present value of such remaining Base
Salary payments at an effective annual interest rate of 10 percent.
"Termination Period" shall mean the period beginning on the effective date of
termination and ending on the last day of the Term.
If this Agreement is terminated by Executive pursuant to Section 8(a)(ii)
or by the Company pursuant to Section 8(a)(iii) and 8(a)(iv); Executive shall be
entitled to receive only (A) his Base Salary payable pursuant to Section 3(a),
pro-rated through the effective date of such termination, which shall be paid to
Executive on the effective date of such termination, plus (B) any unreimbursed
expenses payable pursuant to Section 6, which shall be paid to Executive within
ten business days after the date that Executive submits to the Company
reasonable documentation of such unreimbursed expenses.
9. TERMINATION FOLLOWING A CHANGE IN CONTROL.
(a) If a Change in Control (as defined below) shall occur on or prior
to the expiration of the Term or the earlier termination of this Agreement
pursuant to Section 8(a), then the Term shall be extended by such number of
months so that the Term shall end on a date that is the second anniversary of
the occurrence of such Change in Control. If a Change in Control shall occur on
or prior to the expiration of the Term or the earlier termination of this
Agreement pursuant to Section 8(a), then if Executive's options have not fully
vested, then upon occurrence of a Change in Control, on or after the Effective
Date, all the Executive options, shall fully vest immediately upon such event.
In the event that a Change in Control occurs, the provisions of this Agreement
shall continue to apply except that (x) termination of Executive's employment by
Executive for "Good Reason" (as defined below) shall be treated in the same
manner as termination of Executive's employment by the Company without Cause;
and (y) if Executive's employment with the Company is terminated without Cause
or for Good Reason following (or is otherwise effected in connection with) a
Change in Control, the Company shall pay Executive in a lump sum within 10 days
of such date of termination, an amount equal to the present value (at an
effective annual interest rate of 10 percent) of the Salary that would have been
payable under this Agreement for the remainder of the Term.
5
(b) As used herein, a "Change in Control" shall be deemed to have
occurred if, subsequent to the date hereof:
(i) any "person" (as such term is defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than (i) Apollo Advisors, L.P., Lion Advisors, L.P., FMR Corp., Fidelity
Management & Research Company, Fidelity Management Trust Company, any other
beneficial owner of more than 10% of the Company's common stock as of
January 31, 1998, or (ii) any investment fund managed by, or firm or group
affiliated with any of the persons specified in clause (i) above, or any of
their respective affiliates, becomes the beneficial owner, directly or
indirectly, of either (A) a majority of the Company's outstanding common stock
or (B) securities of the Company representing a majority of the combined voting
power of the Company's then outstanding voting securities;
(ii) a sale is made to any purchaser unaffiliated with the
Company or any of the persons specified in clause (i) above of all or
substantially all of the assets of the Company;
(iii) a merger or consolidation of the Company is made with
another corporation or other legal person unaffiliated with the Company or any
of the persons specified in clause (i) above and if, immediately after such
merger or consolidation, less than 70% of the combined voting power of the then-
outstanding securities of such corporation or person are held, directly or
indirectly, in the aggregate by the holders immediately prior to such
transaction of the then-outstanding securities of the Company entitled to vote
generally in the election of the Board; or
(iv) if during any two consecutive years individuals who the
beginning of such period constituted the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of the members of the Board;
PROVIDED, HOWEVER, that if the election, or nomination for election by the
Company's stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board; PROVIDED, FURTHER,
HOWEVER, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest.
In no event shall the term "Change in Control" be construed to include any
change of control of the Company or any affiliate of the Company solely as a
result of any
6
exchange of equity for debt securities of the Company or any such affiliate
upon consummation of a plan of reorganization for the Company in the
Bankruptcy Case.
(c) As used in this Agreement, "Good Reason" shall mean the
occurrence (without Executive's express written consent) after or in connection
with any Change in Control, of any of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in clauses (i), (v) or (vi) below, such act or failure to act is
corrected prior to the effective date of Executive's termination:
(i) the assignment to Executive by the Company of any duties
inconsistent with Executive's status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of
Executive's responsibilities from those in effect immediately prior to the
Change in Control;
(ii) a reduction by the Company in Executive's Base Salary as
in effect on the date hereof or as the same may be increased from time to time;
(iii) the relocation of Executive's principal place of
employment to a location more than 25 miles from Executive's principal place of
employment immediately prior to the Change in Control or the Company's requiring
Executive to be based anywhere other than such principal place of employment (or
permitted relocation thereof) except for required travel on the Company's
business to an extent substantially consistent with Executive's business travel
obligations prior to the Change in Control;
(iv) the failure of the Company to pay to Executive any portion
of Executive's current compensation, or to pay to Executive any portion of an
installment of deferred compensation under any deferred compensation program of
the Company, within 7 days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which Executive participates immediately prior to the
Change in Control that is material to Executive's total compensation (e.g.,
stock option, restricted stock, stock appreciation right, incentive
compensation, bonus or other similar plan), unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue Executive's
participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount or timing of payment of
benefits provided and the level of Executive's participation relative to other
participants, as existed immediately prior to the Change in Control; or
(vi) the failure by the Company to continue to provide
Executive with benefits substantially similar to those enjoyed by Executive
under any of the
7
Company's pension, savings, life insurance, medical, health and accident, or
disability plans in which Executive was participating immediately prior to
the Change in Control, the taking of any other action by the Company that
would directly or indirectly materially reduce any of such benefits or
deprive Executive of any material fringe benefit enjoyed by Executive at the
time of the Change in Control, or the failure by the Company to provide
Executive with the number of paid vacation days to which Executive is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect at the time of the Change in
Control.
(d) Executive's right to terminate Executive's employment for Good
Reason shall not be affected by Executive's incapacity due to physical or mental
illness. Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.
(e) For purposes of any determination regarding the existence of Good
Reason, any claim by Executive that Good Reason exists shall be presumed to be
correct unless the Company establishes to the Board by clear and convincing
evidence that Good Reason does not exist.
(f) LIMITATION ON PAYMENTS. In the event that the termination and
other benefits provided for in this Agreement (the "Benefits") or otherwise
payable to the Executive (i) constitute "parachute payments" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
and (ii) but for this Section 9(f) would be subject to the excise tax imposed by
Section 4999 of the Code, then the Benefits under this Section 9 shall be
payable either (A) in full, or (B) as to such lesser amount which would result
in no portion of the Benefits being subject to excise tax under Section 4999 of
the Code, whichever of the foregoing amounts, taking into account the excise tax
imposed by Section 4999, results in the receipt by the Executive on an after-tax
basis, of the greatest amount of the Benefits, notwithstanding that all or some
portion of such Benefits may be taxable under Section 4999 of the Code.
If a reduction in the Benefits is necessary to comply with the
provisions of the preceding paragraph, the Executive shall be entitled to select
which Benefits will be reduced and the manner and method of any such reduction
of such Benefits. Within 30 days after the amount of any required reduction in
Benefits is finally determined in accordance with the provisions of this Section
9(f), the Executive shall notify the Company and the Accounting Firm in writing
regarding which Benefits are to be reduced. If no notification is given by the
Executive, the Company will determine which Benefits to reduce. If, as a result
of any reduction required by this Section 9(f), amounts previously paid to the
Executive exceed the amount to which the Employee is entitled, the Employee will
promptly return the excess amount to the Company.
8
Any determination (the "Determination") with respect to this Section 9(f)
shall be made at the Company's expense by an accounting firm selected by the
Company (the "Accounting Firm"). The Accounting Firm shall provide its
Determination that amounts otherwise payable would be subject to Section 4999,
together with detailed supporting calculations and documentation to the Company
and Executive within 15 days of the effective date of Executive's termination of
employment by the Company if applicable, or such other time as requested by the
Company or by Executive. The Accounting Firm shall provide any other
Determination requested within 10 days.
Within 10 days of the delivery of a Determination to Executive, Executive
shall have the right to dispute the Determination and such dispute shall be
resolved in accordance with Section 17 of this Agreement. Upon the resolution
of a dispute under Section 17, the Company shall promptly pay to Executive or
the Executive shall pay to the Company, any amount required by such resolution
and such resolution shall be binding, final and conclusive upon the Company and
Executive. If there is no dispute, the Determination shall be binding, final
and conclusive upon the Company and Executive. Nothing herein shall limit the
parties' respective rights in the event that an applicable government taxing
authority or a court, in a final, nonappealable order or decision, takes a
position which is inconsistent with a non-disputed Determination or a final and
conclusive resolution of a disputed Determination.
10. GENERAL RELEASE. Acceptance by Executive of any amounts pursuant to
Sections 8 or 9 shall constitute a full and complete release by Executive of any
and all claims Executive may have against the Company, any of its past, present
or future shareholders or any of their respective officers, directors and
affiliates (past, present or future), including, but not limited to, claims he
might have relating to Executive's employment and/or cessation of employment
with the Company, including without limitation, tort, contract and common law
claims and claims under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of
1990, the Washington Law Against Discrimination, or any other similar federal,
state or local statute, rule or regulation; provided that, there shall be
excluded from the scope of such general release the following:
(i) claims that Executive may have against the Company for
reimbursement of reasonable and necessary business expenses incurred by him
during the course of his employment;
(ii) claims that may be made by the Executive for payment of
accrued Base Salary or stock options properly due to him as provided in this
Agreement; and
9
(iii) claims respecting matters for which the Executive is
entitled to be indemnified under the Company's Certificate of Incorporation or
Bylaws or indemnification agreements, respecting third party claims asserted or
third party litigation pending or threatened against the Executive.
A condition to Executive's receipt of any amounts pursuant to Sections 8 or 9
shall be Executive's execution and delivery of a general release as described
above with appropriate provisions as necessary to insure the release is valid
and enforceable under applicable laws, including the Older Workers Benefit
Protection Act. Such payment shall be considered independent consideration made
in exchange for such release. In exchange for such release, the Company shall,
if Executive's employment is terminated without Cause, provide a release to
Executive, but only with respect to claims against Executive that are actually
known to the Company as of the time of such termination.
11. NONSOLICITATION OF EMPLOYEES. For a period of two years after the
termination or cessation of his employment with the Company for any reason
whatsoever, Executive shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation, or other entity, solicit or in
any manner attempt to influence or induce any employee of the Company or its
subsidiaries or affiliates (known by the Executive to be such) to leave the
employment of the Company or its subsidiaries or affiliates, nor shall he use or
disclose to any person, partnership, association, corporation or other entity
any information obtained while an employee of the Company concerning the names
and addresses of the Company's employees.
12. EQUITABLE RELIEF. Executive acknowledges that the restrictions
contained in Sections 7 and 11 are, in view of the nature of the business of the
Company, reasonable and necessary to protect the legitimate interests of the
Company, that the Company would not have entered into this Agreement in the
absence of such restrictions, and that any violation of any provisions of those
sections will result in irreparable injury to the Company. Executive also
acknowledges that the remedy at law for any violation of these restrictions will
be inadequate and that the Company shall be entitled to temporary and permanent
injunctive relief prohibiting any such violation, without the necessity of
proving actual damages or the posting of a bond, and that the Company shall be
further entitled to an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be cumulative of
and in addition to any other rights or remedies to which the Company may be
entitled. In the event of any such violation, the Company shall be entitled to
commence an action for temporary and permanent injunctive relief and other
equitable relief in any court of competent jurisdiction and Executive further
irrevocably submits to the jurisdiction of any federal or state court in the
geographical jurisdiction of Seattle, Washington over any suit, action or
proceeding arising out of or relating to any asserted violation of Section 7
or 11. Executive hereby waives, to the fullest extent permitted by law, any
objection that he may now or hereafter
10
have to the jurisdiction of any federal or state court in the geographical
jurisdiction of Seattle, Washington or to the venue of any such suit, action
or proceeding brought in such a court and any claim that such suit, action or
proceeding has been brought in an inconvenient forum. Effective service of
process may be made upon Executive by mail under the notice provisions
contained in Section 18(h).
13. SEVERABILITY. The parties hereto intend all provisions of this
Agreement, including Sections 7 and 11 hereof, to be enforced to the fullest
extent permitted by law. Accordingly, should a court of competent jurisdiction
determine that the scope of any provision of this Agreement, including Section 7
or 11 hereof, is too broad to be enforced as written, the parties intend that
the court reform the provision to such narrower scope as it determines to be
reasonable and enforceable. In addition, however, Executive agrees that the
nonsolicitation and nondisclosure agreements set forth above each constitute
separate agreements independently supported by good and adequate consideration
and shall be severable from the other provisions of, and shall survive, this
Agreement. The existence of any claim or cause of action of Executive against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants of
Executive contained in the nonsolicitation and nondisclosure agreements. If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during the term hereof, such provision
shall be fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision never constituted a part of
this Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be added as part
of this Agreement, a provision as similar in its terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable.
14. LIABILITY OF EXECUTIVE. Executive assumes no responsibility under
this Agreement, other than to perform the services to be performed hereunder in
good faith and to maintain the confidentiality of any confidential or secret
information of the Company pursuant to Section 7. Executive shall not be
liable to the Company, except by reason of acts constituting bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties.
15. DIRECTOR'S AND OFFICER'S INSURANCE. The Company shall maintain
directors' and officers' insurance policies during the Term and for a period of
twelve months thereafter on substantially the same terms as the Company's
current policies; PROVIDED THAT, if any insurer shall cancel or refuse to renew
any such policy and the Company is unable to obtain a replacement policy on
substantially the same terms reasonably satisfactory to Executive, the Company
shall exercise in a timely manner any
11
and all options thereunder, and pay any and all premiums or other charges
necessary, to extend the period during which claims may be made thereunder;
PROVIDED FURTHER THAT, the Company shall not be required to pay such premiums
or other charges necessary to extend such period if they are substantially in
excess of the premiums in effect on the date hereof. If the Company fails to
maintain directors' and officers' insurance at any time during the Term,
Executive may terminate this Agreement immediately and such termination shall
be treated (A)as a termination under 8(a)(i) hereof if such failure occurs
prior to a Change in Control and (B) as a termination by the Executive for
Good Reason if such failure occurs on or after the occurrence of a Change in
Control.
16. OTHER BUSINESS ACTIVITIES. The Company acknowledges and agrees that
Executive may perform consulting services for other persons; provided that,
Executive may not perform consulting or other services for any retail apparel
chain that is competitive with the Company or its subsidiaries in any
geographical area in which the Company or any of its subsidiaries engages in
business. Subject to the foregoing proviso, nothing in this Agreement shall
restrict or limit the right of Executive, the Company or their respective
affiliates or associates to engage in whatever activities they choose, and none
of them shall, as a result of this Agreement, have any obligation to offer any
interest in such activities to any party hereto.
17. ARBITRATION - EXCLUSIVE REMEDY.
(a) Except as otherwise provided herein, the parties agree that the
exclusive remedy or method of resolving all disputes or questions arising out of
or relating to this Agreement shall be arbitration. Arbitration shall be held
in Seattle, Washington, presided over by one arbitrator. Any arbitration may be
initiated by either party by written notice ("Arbitration Notice") to the other
party specifying the subject of the requested arbitration.
(b) If the parties are unable to mutually select an arbitrator to
hear the matter, then the American Arbitration Association, upon application of
the initiating party, shall provide a panel of arbitrators from which the
parties shall select one to hear the matter.
(c) The arbitration proceeding shall be conducted in accordance with
the Rules for Resolution of Employment Disputes of the American Arbitration
Association. The administrative costs of arbitration (including the expense of
a party in preparing for and presenting the party's case at the arbitration and
of the fees and expenses of legal counsel to a party, all of which shall be
borne by that party), shall be borne by the Company only if Executive receives
substantially the relief sought by him in the arbitration; otherwise, the costs
shall be borne equally between the parties. The arbitration determination or
award shall be final and conclusive on the parties, and
12
judgment upon such award may be entered and enforced in any court of competent
jurisdiction.
18. MISCELLANEOUS.
(a) ASSIGNMENT. The Company shall have the right to assign this
Agreement to its successors or assigns. The terms "successors" and "assigns"
shall include any person, corporation, partnership or other entity that buys all
or substantially all of the Company's assets or all of its stock, or with which
the Company merges or consolidates. The rights, duties and benefits to
Executive hereunder are personal to him, and no such right or benefit may be
assigned by him.
(b) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF WASHINGTON AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE APPLICABLE TO CON TRACTS
MADE AND TO BE PERFORMED WITHIN SAID STATE WITHOUT CONSIDERATION OF ANY
CONFLICTS OF LAW PROVISIONS THEREOF.
(c) ENTIRE AGREEMENT. This Agreement evidences the entire
understanding and agreement of the parties hereto relative to the employment
arrangement between Executive and the Company and the other matters discussed
herein. This Agreement supersedes any and all other agreements and
understandings, whether written or oral, relative to the matters discussed
herein.
(d) SEVERABILITY. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ a
valid, legal, nonvoid and enforceable alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(e) AMENDMENTS/WAIVERS. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or
13
shall constitute a waiver of any other provision hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
(f) HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
(h) NOTICES. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other must be in writing and must be either (i) personally delivered, (ii)
mailed by registered or certified mail, postage prepaid with return receipt
requested, (iii) delivered by overnight express delivery service or same-day
local courier service, or (iv) delivered by telex or facsimile transmission, to
the address set forth below, or to such other address as may be designated by
the parties from time to time in accordance with this Section 18(a):
If to the Company: Lamonts Apparel, Inc.
00000 Xxxxxxx Xxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy (which
shall not constitute
notice) to: Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
If to Executive: Xxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Notices delivered personally or by overnight express delivery service or by
local courier service are deemed given as of actual receipt. Mailed notices are
deemed given three business days after mailing. Notices delivered by telex or
facsimile transmission are
14
deemed given upon receipt by the sender of the answer back (in the case of a
telex) or transmission confirmation (in the case of a facsimile transmission).
(i) NO DUTY TO MITIGATE. Executive shall not be required to mitigate
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by him as a
result of employment by another employer or by retirement benefits after the
termination date, or otherwise.
(j) ESTATE. If Executive dies prior to the expiration of the Term or
during a period when monies are owing to him, any monies that may be due him
from the Company under this Agreement as of the date of his death shall be paid
to his estate when and as otherwise payable.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth in the first paragraph.
LAMONTS APPAREL, INC.
/s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Xxxx Xxxxxxxxxxx,
Chairman of the Board,
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxxx
16
