EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the Agreement ) dated September 4, 1997
between ______________________, currently residing at
_________________________________ ( Employee ), and Edison Brothers
Stores, Inc., a Delaware corporation (the Company ), replacing and
superseding the Amended and Restated Employment Agreement dated June 21,
1996 between Employee and the Company.
WHEREAS, in November 1995, the Company, along with 65 of its
subsidiaries, filed a petition for reorganization under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court in
Delaware (Case No. 95-1354 (PJW)) and has since been operating its business
as a debtor-in-possession; and
WHEREAS, the Company has filed a plan of reorganization and expects to
emerge from Chapter 11 later this month; and
WHEREAS, in order to assure the continued availability of the services
of Employee after the Company's emergence from Chapter 11, the Company
wishes to extend the term of and otherwise modify the Amended and Restated
Employment Agreement dated June 21, 1996 between Employee and the Company;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Effective Date. This Agreement shall take effect as of the
effective date as that term is defined in the Debtors' Amended Joint Plan
of Reorganization, dated June 30, 1997, as such plan may be amended or
modified, or such alternative plan of reorganization as is ultimately
confirmed by the Bankruptcy Court (the Commencement Date).
2. Employment. Subject to the terms and conditions hereinafter set
forth, the Company hereby agrees to employ Employee, and Employee hereby
agrees to be employed by the Company, during the two-year period (the
Employment Term ) beginning on the Commencement Date. The Employment Term
may be extended by mutual written agreement of the parties or terminated
pursuant to the provisions of Section 5 or Section 6 hereof. In the event
a Change in Control (as hereinafter defined) occurs less than eighteen
months before the end of the Employment Term and at a time when Employee is
still employed hereunder, the Employment Term shall be extended for a
period ending eighteen months after the date of occurrence of the Change in
Control.
3. Duties. Employee shall be employed in the capacity of
______________________________. Employee shall have such duties as may
reasonably be assigned to him by or at the direction of the Board of
Directors of the Company. Employee shall perform such duties diligently
and to the best of his ability, and shall comply with the Company's
Business Conduct Policy and other policies as in effect from time to time.
Employee's duties shall be performed primarily at the Company's home office
in St. Louis, Missouri, with such foreign and domestic travel as the
performance of his duties may require. During the Employment Term,
Employee shall devote his entire working time, attention and energy to the
business of the Company, and shall not be engaged in any other business
activity that conflicts with or interferes with Employee's performance of
his duties hereunder except as authorized by the Board of Directors of the
Company.
4. Compensation and Benefits.
A. Salary. During the Employment Term, the Company shall pay Employee
for his services hereunder a base salary at the rate of $___________,
subject to upward adjustment in accordance with the Company's salary review
practices and procedures in effect from time to time. Such salary shall be
payable semi-monthly on the 15th and last day of each month.
B. Benefits and Perquisites. During the Employment Term, Employee
shall be entitled to participate in, to the extent Employee is eligible
under the terms thereof, the Company's Medical, Dental, Life Insurance,
Disability, Pension and 401(k) Savings Plans and all such other benefit
programs as are generally provided from time to time by the Company to its
executive personnel. Subject to the rights of Employee set forth in
Sections 6 and 7 hereof, nothing herein shall preclude the Company from
terminating or amending any employee benefit plan or program.
C. Vacation. During the Employment Term, Employee shall be entitled
to a vacation of ______ weeks per calendar year to be taken in accordance
with the Company's normal policies.
D. Bonuses, Stock Options and Restricted Stock. In recognition of
Employee's contributions to the Company's restructuring efforts, Employee
shall be entitled to receive a lump sum cash bonus of $__________, payable
on ____________________, or such earlier date following the Commencement
Date as there occurs a Change in Control (the Bonus Date ), provided
that Employee is still in the employ of the Company as of that date.
Notwithstanding the foregoing, if prior to the Bonus Date, Employee's
employment is terminated by the Company Without Cause (as hereinafter
defined) or is terminated by Employee for Good Reason (as hereinafter
defined), then such bonus shall be paid to Employee on the Termination Date
(as hereinafter defined). Employee shall also be eligible for such other
bonus payments and shall be granted such shares of common stock of the
Company and/or options to purchase common stock of the Company on such
terms and in such amounts as the Board of Directors of the Company, or a
duly constituted committee thereof, shall determine in its discretion.
E. Travel and Business Expenses. Upon submission of itemized expense
statements in the manner specified by the Company, Employee shall be
entitled to reimbursement for reasonable travel and other business expenses
incurred by Employee in the performance of his duties hereunder.
F. Payment. Payment of all compensation and benefits to Employee
hereunder shall be made in accordance with the relevant policies of the
Company in effect from time to time and shall be subject to all applicable
employment and withholding taxes.
G. Cessation of Employment. If Employee shall cease to be employed by
the Company for any reason, then Employee's compensation and benefits shall
cease as of the Termination Date, except as otherwise provided herein or in
any applicable employee benefit plan or program.
5. Termination of Employment of Employee by the Company.
(a) Employee's employment may be terminated by the Company for
Cause (as hereinafter defined) upon following the procedures
hereinafter specified. Employee may not be terminated for Cause
unless and until the Board of Directors of the Company finds that
termination of Employee for Cause is justified. Termination of
Employee's employment for Cause shall become effective after such
finding has been made by the Board and upon the giving to Employee of
a written notice of termination, specifying in detail the particulars
of the conduct of Employee found by the Board to justify such
termination for Cause.
(b) Employee's employment may be terminated by the Company
Without Cause at any time, effective upon the giving to Employee of a
written notice of termination specifying that such termination is
Without Cause.
(c) Upon a termination by the Company of Employee's employment
for Cause, Employee shall be entitled to the payments specified in
subparagraph (a) of Section 7 of this Agreement. Upon a termination
by the Company of Employee's employment Without Cause, Employee shall
be entitled to the payments and benefits specified in subparagraphs
(a), (b), (c) and (d) of Section 7 of this Agreement.
(d) Employee's employment may be terminated by the Company for
Disability (as hereinafter defined), effective upon the giving to
Employee of a written notice of termination specifying that such
termination is for Disability. Upon a termination of Employee's
employment for Disability, Employee shall be entitled to the payments
specified in subparagraph (a) of Section 7 of this Agreement. During
any period that Employee fails to perform Employee's duties hereunder
s a result of incapacity due to physical or mental impairment (a
Disability Period ), Employee shall continue to receive the
compensation and benefits provided for in Section 4 hereof unless and
until Employee's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by
Employee during the Disability Period shall be reduced by the
aggregate amounts, if any, payable to Employee under disability
benefit plans and programs of the Company or under the Social Security
disability insurance program.
6. Termination of Employment by Employee. Employee shall be entitled
to terminate his employment with the Company at any time. If such
termination is for other than Good Reason, Employee shall be entitled to
the payments specified in subparagraph (a) of Section 7. If such
termination is for Good Reason, Employee shall be entitled to the payments
and benefits specified in subparagraphs (a), (b), (c) and (d) of Section 7.
Employee shall give the Company written notice of any such voluntary
termination of employment, which notice need specify only Employee's desire
to terminate his employment and, if such termination is for Good Reason,
set forth in reasonable detail the facts and circumstances claimed by
Employee to constitute Good Reason.
7. Payments and Benefits Upon Termination. To the extent provided in
Sections 5 and 6 hereof, upon termination of his employment, Employee shall
be entitled to receive the following payments and benefits:
(a) The Company shall pay to Employee on the Termination Date
(i) the full base salary earned by Employee through the Termination
Date and unpaid at the Termination Date, plus (ii) credit for any
vacation earned by Employee but not taken at the Termination Date,
plus (iii) all other amounts earned by Employee and unpaid as of the
Termination Date.
(b) The Company shall pay to Employee on the Termination Date a
lump sum cash amount equal to Employee's monthly salary at the highest
rate in effect at any time between the Commencement Date and the
Termination Date multiplied by the greater of (i) twelve or (ii) the
number of months remaining until the Completion Date (as hereinafter
defined), including partial months.
(c) The Company shall pay to Employee on the Termination Date a
lump sum cash amount equal to 1/12 of Employee's target bonus for
the then-current fiscal year under the Company's Executive Performance-
Based Bonus Plan (or any replacement or successor plan then in
effect), multiplied by the greater of (i) twelve or (ii) the number of
months (including partial months) remaining until the Completion Date.
(d) The Company shall maintain in full force and effect for
Employee's continued benefit until the earlier of (i) the Completion
Date or twelve months from the Termination Date, whichever is later,
or (ii) Employee's similar coverage by a new employer, all life
insurance, medical, dental, and disability plans, programs or
arrangements in which Employee was entitled to participate immediately
prior to the Termination Date, provided that Employee's continued
participation is possible under the terms and provisions of such
plans, programs or arrangements. In the event that Employee's
participation in any such plan, program or arrangement is barred by
the terms thereof, the Company shall arrange to provide Employee with
benefits substantially similar to those which Employee would otherwise
be entitled to receive under such plans, programs or arrangements.
Any continuation of benefits under this Section 7(d) shall not be
counted towards the benefits extension period mandated by the
Consolidated Omnibus Budget Reconciliation Act of 1985.
Employee shall not be required to mitigate the amount of any payment
provided for in this Section 7 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 7 be
reduced by any compensation or other amounts paid to or earned by Employee
as the result of employment by another employer after the Termination Date
or otherwise.
8. Tax Indemnity. If any amounts, reimbursements or benefits payable
by the Company to Employee pursuant to this Agreement or any other plan,
agreement or arrangement of the Company (including, without limitation, any
stock options issued to Employee under the Company's 1997 Stock Option Plan
and any restricted stock agreement between the Company and Employee) are
determined to be subject to an excise or similar tax pursuant to
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, or
any successor or other comparable federal, state or local tax laws, the
Company shall pay to Employee such additional sum as is necessary (after
taking into account all federal, state and local income taxes payable by
the Employee as a result of the receipt of such additional sum) to place
Employee in the same after-tax position he would have been in had no such
excise or similar purpose tax been paid or incurred.
9. Employee's Expenses. All costs and expenses (including reasonable
legal and accounting fees) incurred by Employee (a) to defend the validity
of this Agreement, (b) if Employee's employment has been terminated by the
Company for Cause, to contest such termination, (c) to contest any
determinations by the Company concerning the amounts payable by the Company
under this Agreement or (d) to otherwise obtain or enforce any right or
benefit provided to Employee by this Agreement (including, without
limitation, any right or benefit under this Section 9), shall be paid by
the Company unless it is expressly found by a court of competent
jurisdiction that the actions of Employee pursuant to subparts (a), (b),
(c) and/or (d) of this Section 9 (whichever is applicable) were taken in
bad faith or without a reasonable basis.
10. Confidential Information. Employee, during the period of his
employment by the Company and thereafter, irrespective of whether the
termination of his employment is voluntary or involuntary, will not,
directly or indirectly (without the Company's prior written consent), use
for himself, or use for or disclose to any other party, any confidential
information regarding the Company. For purposes of this Agreement, such
confidential information shall include any data or information regarding
the business of the Company or any subsidiary or affiliate of the Company
that is not generally known to the public, including without limitation any
confidential information or data regarding the cost of products sold by, or
the plans of, the Company or its affiliates or the business methods of the
Company or its affiliates not in general use by others or the identity of
any customers or suppliers of the Company or its affiliates or information
respecting transactions or prospective transactions therewith.
11. Notice. All notices hereunder shall be in writing and shall be
deemed to have been duly given (a) when delivered personally or by courier,
or (b) on the third business day following the mailing thereof by
registered or certified mail, postage prepaid, in each case addressed as
set forth below:
(a) If to the Company
Edison Brothers Stores, Inc.
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
(b) If to Employee:
____________________
____________________
____________________
Any party may change the address to which notices are to be addressed by
giving the other party written notice in the manner herein set forth.
12. Definitions.
(a) Cause, when used in connection with the termination of
Employee's employment by the Company, shall mean (i) the willful or
repeated failure by Employee substantially to perform his duties or
otherwise comply with any of his obligations hereunder (other than any
such failure resulting from his Disability), which failure is not or
cannot be cured within five business days after the Company has given
written notice thereof to Employee specifying in detail the
particulars of the acts or omissions deemed to constitute such
failure; (ii) the engaging by Employee in willful misconduct which is
materially injurious to the Company; (iii) the engaging by Employee in
any act of moral turpitude that is reasonably likely to materially and
adversely affect the Company or its business; or (iv) Employee's
conviction of, or entry of a plea of nolo contendere with respect to,
any felony. For purposes of this definition, no act, or failure to
act, on Employee's part shall be considered willful unless done,
or omitted to be done, by Employee in bad faith and without reasonable
belief that his action or omission was in the best interests of the
Company.
(b) Change in Control shall mean the occurrence of any of the
following events:
(i) any person or group (as such terms are used in
Section 13(d) of the Securities Exchange Act of 1934, as amended
(the Exchange Act )) becomes the beneficial owner (as
determined pursuant to Rules 13d-3 and 13d-5 promulgated under
the Exchange Act), directly or indirectly, of securities of the
Company having more than 33% of the total voting power of all
classes of capital stock of the Company entitled to vote
generally in the election of directors of the Company; or
(ii) at any time during any 24-month period, individuals who
at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose
election, or nomination for election by the stockholders of the
Company, to the Board of Directors was approved by a majority of
the directors then still in office who either were 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 the Board of Directors of the Company
then in office; or
(iii) the sale, lease, transfer or other disposition of all
or substantially all of the assets of the Company, in one
transaction or a series of related transactions, to any person
or group (as such terms are used in Section 13(d) of the
Exchange Act) other than a wholly-owned subsidiary of the
Company; or
(iv) the merger or consolidation of the Company with or into
another corporation, unless immediately after such merger or
consolidation (a) securities having more than 50% of the total
voting power of all classes of capital stock entitled to vote
generally in the election of directors of the surviving or
resulting corporation are then beneficially owned (as
determined pursuant to Rules 13d-3 and 13d-5 under the Exchange
Act) by the holders of the capital stock of the Company
immediately prior to such merger or consolidation, and (b) no
person or group (as such terms are used in Section 13(d) of
the Exchange Act) beneficially owns (as determined pursuant
to Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, securities having more than 33% of the total voting
power of all classes of capital stock entitled to vote generally
in the election of directors of the surviving or resulting
corporation; or
(v) the Company is liquidated or dissolved or adopts a plan
of liquidation or dissolution;
provided, however, that no such event shall be deemed a Change in
Control if it occurs as part of the implementation of, and pursuant to
the express terms of, a plan of reorganization of the Company that has
been confirmed by the Bankruptcy Court in the Company's Chapter 11
case, and provided further that two or more entities shall not be
deemed to constitute a person or group for purposes of this
Section 12 in respect of any securities of the Company received by
them pursuant to such plan of reorganization merely by virtue of the
fact that such entities were each members of the statutory Creditors'
Committee appointed in the Company's Chapter 11 case.
(c) Company shall have the definition set forth in Section 13
hereof.
(d) Completion Date shall mean the date the Employment Term
would have ended under the provisions of Section 2 hereof had it not
been terminated pursuant to Section 5 or Section 6.
(e) Disability shall mean Employee's inability to perform the
duties of Employee's position with the Company by reason of a
medically determined physical or mental impairment which has existed
for a continuous period of at least 26 weeks and which, in the
judgment of a physician who certifies to such judgment, is expected to
be of indefinite duration or to result in imminent death.
(f) Good Reason, when used with reference to a voluntary
termination by Employee of his employment with the Company prior to
the occurrence of a Change in Control, shall mean:
(i) a reduction in Employee's base salary as in effect on
the Commencement Date or as the same may be increased from time
to time;
(ii) the assignment to Employee of any duties materially
inconsistent with his status as an executive of the Company; or
(iii) the mandatory transfer of Employee to another
geographic location, except for required travel on Company
business to an extent substantially consistent with Employee's
business travel obligations as of the Commencement Date;
Good Reason, when used with reference to a voluntary termination
by Employee of his employment with the Company after the occurrence of
a Change in Control, shall mean:
(i) a reduction in Employee's base salary as in effect on
the Commencement Date or as the same may be increased from time
to time;
(ii) the assignment to Employee of any duties materially
inconsistent with, or the reduction of powers or functions
associated with, his positions, responsibilities or status with
the Company immediately prior to the Change in Control, or any
removal of Employee from or any failure to re-elect Employee to
any positions or offices held by Employee immediately prior to
the Change in Control, except in connection with the termination
of Employee's employment by the Company for Cause or for
Disability;
(iii) the mandatory transfer of Employee to another
geographic location, except for required travel on Company
business to an extent substantially consistent with Employee's
business travel obligations immediately prior to the Change in
Control;
(iv) the failure by the Company to continue in effect any
employee benefit plan, program or arrangement in which Employee
was participating immediately prior to the Change in Control (or
plans, programs or arrangements providing Employee with
substantially similar benefits), or the taking of any action by
the Company which would adversely affect Employee's participation
in, or materially reduce Employee's benefits under, any of such
plans, programs or arrangements, or the failure by the Company to
provide Employee with the number of paid vacation days per annum
to which Employee was entitled immediately prior to the Change in
Control; or
(v) any purported termination of Employee's employment by
the Company which is not effected pursuant to the requirements of
this Agreement.
(g) Termination Date shall mean the effective date as
provided hereunder of the termination of Employee's employment.
(h) Without Cause, when used in connection with the
termination of Employee's employment by the Company, shall mean any
termination of the employment of Employee by the Company which is not
a termination of employment for Cause or for Disability.
13. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, upon
or prior to such succession, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession
had taken place. A copy of such assumption and agreement shall be
delivered to Employee promptly after its execution by the successor.
Failure of the Company to obtain such agreement upon or prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Employee to benefits from the Company in
the same amounts and on the same terms as Employee would be entitled
hereunder if Employee terminated his employment for Good Reason after
a Change in Control. For purposes of the preceding sentence, the date
on which any such succession becomes effective shall be deemed the
Termination Date. As used in this Agreement, Company shall mean
the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 13(a) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law.
(b) This Agreement is personal to Employee and Employee may not
assign or delegate any part of his rights or duties hereunder to any
other person, except that this Agreement shall inure to the benefit of
and be enforceable by Employee's legal representatives, executors,
administrators, heirs and beneficiaries.
14. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall to any extent be
held to be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
15. Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not in any way affect the meaning
or interpretation of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
17. Waiver. Neither any course of dealing nor any failure or neglect
of either party hereto in any instance to exercise any right, power or
privilege hereunder or under law shall constitute a waiver of such right,
power or privilege or of any other right, power or privilege or of the same
right, power or privilege in any other instance. Without limiting the
generality of the foregoing, Employee's continued employment without
objection shall not constitute Employee's consent to, or a waiver of
Employee's rights with respect to, any circumstances constituting Good
Reason. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged therewith, and, in the case of
the Company, by its duly authorized officer.
18. Entire Agreement. This instrument constitutes the entire
agreement of the parties in this matter and as of the Commencement Date
shall supersede any other agreement between the parties, oral or written,
concerning the same subject matter, including the Amended and Restated
Employment Agreement dated June 21, 1996 between the Company and Employee;
provided that, this Agreement shall not affect or supersede any rights
Employee may have under any incentive bonus, stock option, restricted
stock, pension, medical, dental, life insurance or any other employee
benefit plan, program or arrangement sponsored or maintained by the
Company.
19. Amendment. This Agreement may be amended only by a writing which
makes express reference to this Agreement as the subject of such amendment
and which is signed by Employee and by a duly authorized officer of the
Company.
20. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Missouri, without reference to the conflict of laws rules of such State.
21. Post Employment Term Change in Control. In the event a Change in
Control occurs after the end of the Employment Term but at a time when
Employee is still employed by the Company, and if, within eighteen months
after the occurrence of such Change in Control, Employee's employment is
terminated by the Company Without Cause or is terminated by Employee for
Good Reason, then Employee shall be entitled to the payments and benefits
specified in subparagraphs (a), (b), (c) and (d) of Section 7 of this
Agreement. For purposes hereof, the term Completion Date as used in
Section 7 shall be deemed to be the last day of such eighteen-month period.
22. Survival. This Agreement, and the respective rights and
obligations of the Company and Employee hereunder, shall survive and remain
in full force and effect following the expiration of the Employment Term
and the termination of Employee's employment hereunder.
IN WITNESS WHEREOF, Employee and the Company have executed this
Agreement as of the day and year first above written.
EDISON BROTHERS STORES, INC.
By: _/S/______________________________
Name: Xxxx X. Xxxxxx
Title: Chairman, President
and Chief Executive
Officer
_______________________________
[name of employee]
