STATE OF NORTH CAROLINA
EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT, made and entered into effective the 1st day of September
1996, by and between FAMILY DOLLAR STORES, INC., a Delaware corporation
(hereinafter referred to as the "Company"); and Xxxx X. Xxxxx (hereinafter
referred to as the "Employee");
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Employee agree as follows:
1. DEFINITIONS. When used in this Agreement, these words shall be
defined as follows:
1.01 "Affiliate" - Any corporation directly or indirectly
controlling, controlled by or under the common control of or with the Company.
1.02. "Group" - The Company and all Affiliates.
1.03. "Confidential Information" - Any information (including,
without limitation, any method of operation, source of supply, organizational
details, personnel information, information regarding real estate activities,
including landlords, prospective landlords and lease data, business secret, or
any formula, pattern, patent, device, plan, process or compilation of
information) which (a) is, or is designed to be, used in the business of any
member of the Group, (b) is private or confidential in that it is not
generally known or available to the public, and (c) gives any member of the
Group an opportunity to obtain an advantage over competitors who do not know
or use it.
1.04. "Present Territory" - All counties, towns and cities in
North Carolina, Virginia, Georgia, South Carolina, West Virginia, Maryland,
Pennsylvania, Kentucky, Tennessee, Mississippi, Alabama, Florida, Louisiana,
Arkansas, Ohio, Texas, Delaware, Indiana, New Jersey, Missouri, Oklahoma,
Illinois, Michigan, Kansas, Iowa, New York, Wisconsin, Massachusetts,
Connecticut, Rhode Island, Vermont, New Hampshire, Minnesota, Nebraska, New
Mexico and Maine.
1.05. "Future Territory" - All counties, towns and cities in
States other than those listed in the definition of Present Territory in which
the Company does business while the Employee is employed by the Company.
1.06. "Competitive Company" - A corporation, partnership,
proprietorship or any other legal entity operating discount retail stores in
the Present Territory or the Future Territory, the majority of which stores
each have 50,000 square feet or less of total space, including non-selling
areas, and that sell or offer for sale merchandise similar or identical to the
merchandise sold by the Group.
1.07. "Cause" -
(a) Willful failure of the Employee to comply with
reasonable written directives of the Chairman of the Board or Executive
Committee or Board of Directors of the Company.
(b) Chronic absenteeism not resulting from Medical
Disability.
(c) Willful misconduct or gross negligence.
(d) Willful violation of substantive Company policies,
practices or procedures.
(e) Indictment of or conviction of the Employee of a crime
involving an act of moral turpitude.
(f) Should the Employee become an alcoholic or become
addicted to habit-forming drugs.
1.08. "Medical Disability" - An illness or medical condition
preventing the Employee from being able to actively and regularly perform his
duties and responsibilities under this Agreement for period of ninety (90)
work days or longer during any fiscal year of the Company.
2. EMPLOYMENT. The Employee shall be employed by the Company and any
Affiliate in the capacity provided for in Paragraph 3 for the period com-
mencing September 1, 1996, (the "Commencement Date"), and ending on August 31,
1997, or upon the termination of this Agreement as provided in Paragraph 6.
3. DUTIES AND RESPONSIBILITIES. The Employee shall be employed as
President and Chief Operating Officer of the Company and shall perform such
reasonable duties and responsibilities as the Chairman of the Board of the
Company or Board of Directors of the Company or the Executive Committee of the
Board of Directors of the Company may, from time to time, assign to the
Employee. The Employee agrees to accept this employment and to devote his
full time and attention and his best efforts, ability and fidelity to the
performance of the duties attaching to such employment. In addition, the
Employee shall serve as a director and officer of the Company and any
corporation in the Group, if appropriately elected. During the period of his
employment, the Employee shall not, for remuneration or profit, directly or
indirectly, render any service to, or undertake any employment for, any other
person, firm or corporation, whether in an advisory or consulting capacity or
otherwise, without first obtaining the written consent of the Company.
4. COVENANT NOT TO COMPETE AND DISCLOSE CONFIDENTIAL INFORMATION.
4.01. The Employee will not, directly or indirectly, for a period
of one (1) year from the date of the termination of his employment with the
Company, whether such termination is voluntary or involuntary or due to the
expiration of the term of this Agreement, (a) engage in competition with the
Company, any Affiliates, or their successors or assigns, for or on behalf of
any Competitive Company, or (b) provide information to, or travel, canvass,
advertise, solicit or sell for, or acquire an interest in, become employed by,
act as agent for, or in any manner assist, any Competitive Company; provided
that the Employee may become employed by or act as agent or consultant for, in
any capacity, a Competitive Company when his duties and responsibilities with
the Competitive Company do not, directly or indirectly, involve any business
activity in the Present Territory or the FutureTerritory; or (c) directly or
indirectly approach, solicit, offer employment to or in any manner induce or
seek to induce any employee of the Group to become employed by a Competitive
Company or to otherwise interfere with the Company's relationship with any
employee in the Group.
The foregoing provisions, however, shall not prohibit the
Employee from making investments in any securities listed on the New York or
American Stock Exchanges or actively traded in the over-the-counter market in
amounts not exceeding 1% of any single class of such securities outstanding,
nor prohibit the Employee from making investments of any nature in any
securities of the Company.
4.02. The Employee acknowledges that the signing of this Agreement
is a condition of employment and understands that in the performance of his
services hereunder, he may have access to and obtain knowledge of Confidential
Information (as hereinbefore defined) relating to the business and activities
of the Group. The Employee shall not, without the written consent of the
Company, either during the period of his employment or thereafter (a) use or
disclose any Confidential Information outside the Group, (b) publish any
article with respect thereto, or (c) except in the performance of his services
hereunder, remove or aid in the removal from the premises of the members of
the Group any such Confidential Information or any property or material which
relates thereto.
5. COMPENSATION.
5.01. In consideration of the services to be rendered by the
Employee pursuant to this Agreement, the Company shall pay, or cause to be
paid, to the Employee a weekly base salary from the Commencement Date to
August 31, 1997 of $6,250.00 ($325,000.00 per annum).
The salary shall be payable at such intervals in conformity
with the Company's prevailing practice as such practice shall be established
or modified from time to time.
5.02. In addition, the Employee shall be entitled to:
(a) Participate in the Company's Target Bonus Plan, as it
may be amended or modified in any respect, including achievement of
established goals, as President, for the fiscal year commencing September 1,
1996. The Target Bonus Plan generally will give the Employee the opportunity
to earn a bonus of up to fifty (50%) percent of the Employee's base salary
actually received for said fiscal year, subject to the Company's achievement
of certain financial goals to be established, the Employee's performance, and
all terms and conditions of the Target Bonus Plan as in effect for said fiscal
year; provided that the amount of bonus paid may not be increased by the
annual individual performance rating of the Employee by the Chairman of the
Board. The Employee acknowledges that he has received a copy of the form of
the Target Bonus Plan and Bonus Conditions for prior years and is familiar
with the terms and conditions thereof. Nothing contained herein shall limit
the Company's right to alter, amend or terminate the Target Bonus Plan at any
time for any reason. The Employee further acknowledges that, as provided in
the Target Bonus Plan, in the event the Employee is not employed by the
Company, for whatever reason, at the time the bonus for the fiscal year is
customarily paid in December or January following the end of the fiscal year,
the Employee will not be entitled to receive the bonus.
(b) Take fifteen days (exclusive of Saturdays, Sundays and
paid Company holidays) of vacation during the twelve month period commencing
May 1, 1996. Vacation time already taken since May 1, 1996, will be charged
against the fifteen days due for the year commencing May 1, 1996. Vacation
time cannot be accumulated from year to year. For the period from May 1,
1997, through the end of the term of this Agreement on August 31, 1997, five
days of vacation may be taken.
(c) Additional benefits and/or compensation in such form
and in such manner and at such times as the Board of Directors of the Company,
in the exercise of its absolute discretion, shall determine. It is understood
and agreed that any additional salary, benefits and compensation shall only be
paid by the Company upon the approval of the Board of Directors and not by any
officer or any other person acting on behalf of the Company.
(d) All insurance and other fringe benefits afforded to the
Company employees pursuant to any plan adopted by the Company in accordance
with the terms of the plan and his position in the Company.
6. TERMINATION.
6.01. It is agreed that either party may terminate this Agreement
for any reason at any time upon three (3) days' prior written notice to the
other party, whereupon (except as provided in Paragraph 4), this Agreement
shall no longer be of any force and effect (the expiration date of this notice
period is herein called the "Termination Date"). If either party terminates
this Agreement, the Company may relieve the Employee of all duties and
responsibilities effective on the date of the notice. The Company may also
terminate this Agreement should the Employee experience a Medical Disability,
which termination shall be effective upon the Company's giving written notice
to the Employee following the expiration of the Medical Disability period.
Upon the death of the Employee, the Company shall pay to his widow or his
estate if his widow predeceases him only such amount as was due and payable to
the Employee at the time of his death. The Company may terminate this
Agreement at any time, without notice, for Cause.
6.02. Upon termination of this Agreement by the Company, other
than for Cause, except for the provisions of Paragraph 4, the Employee's
employment under the terms of this Agreement and all other agreements and
contracts between the Employee, the Company and the Company's Affiliate and
subsidiary corporations, shall be terminated effective on the Termination
Date. Should the Company terminate this Agreement prior to the end of the
term of this Agreement, for reasons other than for Cause or Medical
Disability, it shall pay to the Employee, sixty (60) days of the base salary
set forth in Paragraph 5.01 above in effect on the date of the notice (which
shall constitute payment in full of the compensation due to the Employee
hereunder). Any such payments shall be made in two (2) equal monthly
installments with the first such installment due and payable not later than
thirty (30) days after the Termination Date. Such payments made by the
Company to the Employee are herein called "Termination Compensation." In the
event the Employee accepts or begins other employment as an employee,
consultant or in any other capacity prior to the date on which the second
monthly installment of Termination Compensation is due and payable, the
monthly payments of any unpaid balance of the Termination Compensation as of
the date of such new employment shall be (i) eliminated if the monthly base
salary and all other monthly remuneration and compensation from the new
employment exceeds the monthly base salary of the Employee in effect on the
date of the notice, or (ii) reduced to the amount by which the monthly base
salary of the Employee in effect on the date of the notice exceeds the monthly
base salary and all other monthly remuneration and compensation from the new
employment. The Employee agrees to pursue reasonable, good faith efforts to
obtain other employment in a position suitable to his background and
experience.
6.03. On the Termination Date and at the end of the term of this
Agreement, the Employee agrees that the Company, its Affiliates, and their
officers, directors, members of the Executive Committee, and employees, and
their successors, heirs and assigns, shall be fully released and discharged
from any and all expenses, claims, considerations, liabilities, obligations
and causes of action of every kind and nature arising out of or in any manner
related to this Agreement, and any and all previous agreements, contracts and
other rights, claims and obligations between the parties, to the Employee's
employment with the Company, its Affiliate and subsidiary corporations, and to
the Employee's association or relationship with the Company and its
Affiliates, including but not limited to, all compensations, salaries, bonuses
(including Target Bonus Plan bonuses and guarantees of bonuses thereunder),
director's pay, vacation pay, stock options, stockholder's claims or suits,
loans and other similar liabilities or related claims; provided, that nothing
herein contained shall qualify or in any manner restrict the right of the
Employee to realize his Termination Compensation, if any, and his interests in
any of the fringe benefits (such as insurance, 401(k) plan and stock options)
of the Company to which he has become legally entitled.
6.04. On the Termination Date or at the end of the term of this
Agreement, the Employee agrees that he will resign as an officer, director and
member of the Executive Committee of the Company, its Affiliate and subsidiary
corporations (if and when elected), and from any other positions, which
resignations shall become effective on the Termination Date.
6.05. After the Termination Date or the end of the term of this
Agreement, the Employee covenants to render further advice and assistance to
the Company as may be required from time to time, and to provide all
information available to him on matters handled by and through him while
employed by the Company or of which he has personal knowledge, and by making
available to the Company at reasonable times and circumstances, upon request
by the Company, information pertinent to its operations in his possession;
and, to the extent that it is necessary, to cooperate with and assist the
Company to conclude any matters that are pending and which may require his
assistance; provided, that he shall be paid reasonable compensation by the
Company in the event he is required to expend time in the performance of such
services; and provided further, that the Employee may perform such services in
a manner that does not unreasonably interfere with other employment obtained
by the Employee. The Employee shall be reimbursed for any expenses incurred
by him in the performance of the covenants herein set forth in this Section
6.05.
6.06. After the Termination Date or the end of the term of this
Agreement, the Employee agrees that he will not discuss his employment and
resignation or termination or Termination Compensation, if any, with any
representatives of the media, either directly or indirectly, without the
written consent and approval of the Company.
7. SPECIAL PROVISIONS. This Agreement shall inure to the benefit of
any successor to or assignee of the Company, and the Employee specifically
agrees on demand to execute any and all necessary documents in connection with
the performance of this Agreement. No waiver by either party of any breach by
the other of any provision hereof shall be deemed to be a waiver of any later
or other breach thereof or as a waiver of any such or other provision of this
Agreement. If any provision of this Agreement shall be declared invalid or
unenforceable as a matter of law, such invalidity or unenforceability shall
not affect the validity or enforceability of any other provision of this
Agreement or of the remainder of this Agreement as a whole.
This Agreement sets forth all of the terms of the understanding
between the parties with reference to the subject matter set forth herein and
may not be waived, changed, discharged or terminated orally or by any course
of dealing between the parties, but only by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.
8. NORTH CAROLINA LAW APPLIES. This Agreement shall be governed by
and construed in accordance with the laws of the State of North Carolina.
9. NOTICES. Any notice or other communications to be given hereunder
shall be deemed to have been given or delivered when delivered by hand to the
individuals named below or when deposited in United States mail, registered or
certified, with proper postage and registration or certification fees prepaid,
addressed to the parties as follows (or to such other address as one party
shall give the other in the manner provided herein):
Family Dollar Stores, Inc. Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxx Xxxxxx
With copy to: Xxxxxx X. Xxxxxxx, Xx.
Family Dollar Stores, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, XX 00000-0000
Xxxx X. Xxxxx: Family Dollar Stores, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
triplicate, all as of the day and year first above written.
FAMILY DOLLAR STORES, INC.
Attest:
By XXXX XXXXXX
XXXX XXXXXX
Chairman of the Board
XXXXXX X. XXXXXXX, XX.
XXXXXX X. XXXXXXX, XX.
Secretary
(Corporate Seal)
XXXX X. XXXXX (SEAL)
XXXX X. XXXXX
Witness:
XXXXX X. BARRIER
XXXXX X. BARRIER
