EXHIBIT 10.7
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EMPLOYMENT AGREEMENT
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Agreement, dated as of February 1, 2000, between Weiner's Stores,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the
"Executive").
W I T N E S S E T H :
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WHEREAS, the Company desires to continue the employment of the
Executive, and the Executive desires to accept such employment, on all the terms
and conditions specified herein; and
WHEREAS, the Executive and the Company desire to set forth in writing
all of their respective duties, rights and obligations with respect to the
Executive's employment by the Company;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Employment and Term. The Company hereby continues the employment
of the Executive, and the Executive hereby accepts such employment by the
Company, in the capacity and upon the terms and conditions hereinafter set
forth. The term of employment under this Agreement shall be for the period
commencing as of February 1, 2000 and ending on January 31, 2003, unless earlier
terminated as herein provided (the "Term of Employment").
2. Duties. During the Term of Employment the Executive shall continue
to serve as the Company's Executive Vice President, Chief Operating Officer and
Chief Financial Officer and as a member of the Company's Board of Directors (the
"Board"). As such, the Executive shall direct and manage the affairs of the
Company with such duties, functions and responsibilities (including the right to
hire and dismiss employees (subject to approval of the Board in the case of
corporate officers)) as are customarily associated with and incident to the
position of Executive Vice President, Chief Operating Officer and Chief
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Financial Officer, and as the Company may, from time to time, require of him,
subject to the direction of the Company's Chief Executive Officer. The Executive
shall serve the Company faithfully, conscientiously and to the best of the
Executive's ability and shall promote the interests and reputation of the
Company. Unless prevented by sickness or disability, the Executive shall devote
all of the Executive's time, attention, knowledge, energy and skills, during
normal working hours, and at such other times as the Executive's duties may
reasonably require, to the duties of the Executive's employment, provided,
however, that it shall not be a breach of this Agreement for the Executive to
manage his own private financial investments; or with the consent of the Board
(which consent shall not be unreasonably withheld) to be a member of the board
of directors of other companies which do not compete with the Company, so long
as, in either case, such activities do not require the Executive to spend a
material amount of time away from his performance of his duties hereunder, do
not otherwise interfere with the Executive's performance of his duties
hereunder, or otherwise violate this Agreement (including, but not limited to,
Section 4 hereof) or the Company's other policies. The principal place of
employment of the Executive shall be the principal executive offices of the
Company. The Executive acknowledges that in the course of his employment he may
be required, from time to time, to travel on behalf of the Company.
3. Compensation, Benefits and Business Expenses. As full and complete
compensation for the Executive's execution and delivery of this Agreement and
performance of any services hereunder, and as the Company's policy with respect
to the reimbursement or payment of the Executive's business expenses, the
Company shall pay, grant or provide the Executive, and the Executive agrees to
accept, the following:
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a. Base Salary: The Company shall pay the Executive a base salary at
an annual rate of $250,000 payable at such times and in accordance with the
Company's standard payroll practices for senior executives of the Company.
b. Medical, Dental and Disability Insurance: The Company shall afford
the Executive the opportunity to participate during the Term of Employment in
any medical, dental and disability insurance plans or programs which the Company
maintains for its senior executive officers. In addition, the Company shall pay
or cause to be paid, or waive or reimburse the Executive for, any costs or
contributions otherwise payable by the Executive as a condition to participation
in the Company's medical plan or hospitalization plan, other than such
deductible, co-payment or similar amounts as may be provided in any such plan.
Nothing in this Agreement shall require the Company to establish, maintain or
continue any of the benefit programs already in existence or hereafter adopted
for employees of the Company and nothing in this Agreement shall restrict the
right of the Company to amend, modify or terminate any such benefit program.
c. Expenses: The Executive shall be entitled to reimbursement or
payment of reasonable business expenses (in accordance with the Company's
policies as amended from time to time in the Company's sole discretion),
following the Executive's submission of appropriate receipts and/or vouchers to
the Company.
d. Vacations, Holidays or Temporary Leave: The Executive shall be
entitled to take annual vacation without loss or diminution of compensation, not
exceeding four (4) weeks, such vacation to be taken at such time or times, and
as a whole or in increments, as the Executive shall elect, consistent with the
reasonable needs of the Company's business and such vacation policies as may be
established by the Board. The Executive shall further be entitled to the number
of paid holidays, and leaves for illness or temporary disability in accordance
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with the policies of the Company for its senior executives, as the Company may
amend or terminate such policies from time to time in its sole discretion.
e. Management Incentive Compensation Plan: The Executive shall be
entitled to participate in the Company's Management Incentive Compensation Plan
(the "Incentive Plan") to the extent provided in, and subject to the conditions
and any terms and limitations of, the Incentive Plan, and, subject to the
discretion of the Board, any stock option plan ("Stock Plan") currently in
effect or hereafter adopted by the Company which is applicable to employees or
executive employees generally to the extent provided in, and subject to the
conditions and any terms and limitations of, such Stock Plan; provided, however,
that nothing in this Agreement shall require the Company to maintain or continue
the Incentive Plan or any Stock Plan and nothing in this Agreement shall
restrict the right of the Company to amend, modify or terminate the Incentive
Plan or any Stock Plan.
f. No Other Compensation or Benefits: The Executive agrees that he
will not be entitled to and he shall not request or receive any compensation or
benefits with respect to his services during the Term of Employment, that is in
addition to or different from the compensation and benefits set forth in this
paragraph 3 and in paragraph 6 of this Agreement.
4. Non-Competition and Protection of Confidential Information:
a. Restrictive Covenants:
(1) During the Term of Employment and for one (1) year following the
termination of the Executive's employment with the Company ("Date of
Termination"), the Executive shall not, directly or indirectly, solicit or
induce any employee of the Company to terminate his or her employment for any
purpose, including without limitation, in order to enter into employment with
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any entity which competes with any business conducted by the Company.
(2) During the Term of Employment and for all time following the Date
of Termination, the Executive shall not, directly or indirectly, furnish or make
accessible to any person, firm, or corporation or other business entity, whether
or not he, she, or it competes with the business of the Company, any trade
secret, technical data, or know-how acquired by the Executive during his
employment by the Company which relates to the business practices, methods,
processes, equipment, or other confidential or secret aspects of the business of
the Company without the prior written consent from the Company, unless such
information is or hereafter may become in the public domain other than by being
divulged or made accessible by the Executive in breach of this provision, or
which is demonstrated by the Executive to the Company's reasonable satisfaction
to be known by him prior to the disclosure to him by the Company, or which is or
may hereafter be disclosed by the Company to third parties without similar
restrictions on disclosure or use, or which is required to be disclosed pursuant
to governmental or judicial process or procedure.
b. Geographic Scope: The provisions of this Section 4 shall be in
full force and effect in each state in the United States where the Company
carries on business at any time during the Term of Employment and for one (1)
year following the Date of Termination.
c. Remedies: The Executive acknowledges that his services are of a
special, unique and extraordinary character and, his position with the Company
places him in a position of confidence and trust with the clients and employees
of the Company, and that in connection with his services to the Company, the
Executive will have access to confidential information vital to the Company's
businesses. The Executive further acknowledges that in view of the nature of the
business in which the Company is engaged, the foregoing restrictive covenants in
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this Section 4 hereof are reasonable and necessary in order to protect the
legitimate interests of the Company and that violation thereof would result in
irreparable injury to the Company. Accordingly, the Executive consents and
agrees that if the Executive violates or threatens to violate any of the
provisions of this Section 4 hereof the Company would sustain irreparable harm
and, therefore, the Company shall be entitled to obtain from any court of
competent jurisdiction, without the posting any bond or other security,
preliminary and permanent injunctive relief as well as damages and an equitable
accounting of all earnings, profits and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies in law or equity to which the Company may be entitled.
5. Termination of Employment:
a. The Executive's employment with the Company shall terminate upon
the occurrence of any of the following events:
(1) The completion of the Executive's Term of Employment on January
31, 2003;
(2) the death of the Executive during the Term of Employment;
(3) the Disability (as defined below) of Executive during the
Term of Employment;
(4) during the Term of Employment, upon not less than fourteen
(14) days' written notice to the Executive from the Company of the termination
of his employment for Cause (as defined below) ("Notice of Termination");
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(5) during the Term of Employment, upon not less than fourteen
(14) days' written notice to the Executive from the Company of termination of
his employment Without Cause (as defined below);
(6) during the Term of Employment, upon not less than fourteen
(14) days' written notice to the Company of the resignation by the Executive for
Good Reason (as defined below) ("Notice of Resignation"), provided, however,
notwithstanding Section 10 hereof relating to waivers, in the case of a
resignation by the Executive due to a Change of Control, the Executive's
resignation shall be deemed to have been for Good Reason hereunder only if such
resignation occurs more than three (3) months following such Change of Control,
but less than six (6) months following such Change of Control; or
(7) During the Term of Employment, upon not less than fourteen
(14) days' written notice to the Company of the resignation by the Executive
Without Good Reason (as defined below) during the Term of Employment.
b. For purposes of this Agreement, the "Disability" of the Executive
shall mean his inability, because of mental or physical illness or incapacity,
whether total or partial, to perform his duties under this Agreement for a
continuous period of 120 days or for shorter periods aggregating 120 days out of
any 180-day period.
c. For purposes of this Agreement, "Cause" shall mean conduct by the
Executive constituting (i) fraud; (ii) material dishonesty relating to the
conduct of the business of the Company or dishonesty which does not relate to
the conduct of the business of the Company which adversely affects the Company
or the Executive's ability to manage the business of the Company; (iii) willful
and material breach of any of the provisions or covenants of this Agreement;
(iv) willful gross neglect or willful gross misconduct in carrying out the
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Executive's duties as an employee of the Company resulting, in either case, in
material economic harm to the Company; (v) embezzlement; (vi) chronic alcoholism
or chronic drug dependency that in either case precludes his performing his
duties contemplated herein; or (vii) the conviction of or plea or guilty or nolo
contendere to a felony, or any crime involving securities or commodities laws
violations or moral turpitude.
d. For purposes of this Agreement, "Without Cause" shall mean any
reason other than that defined in this Agreement as constituting Cause. The
parties expressly agree that a termination of employment Without Cause pursuant
to Section 5a(5) hereof may be for any reason whatsoever, or for no reason, in
the sole discretion of the Company.
e. For purposes of this Agreement, "Good Reason" shall mean (i)
willful and material breach of the Agreement by the Company; (ii) assignment of
duties or responsibilities materially inconsistent with those described in
Section 2 hereof without the consent of the Executive; or (iii) any Change in
Control (as defined below). Good Reason as defined in subdivision (ii) of this
Section 5e includes:
(1) The cessation of the Executive's membership on the
Company's, or its successor's, Board and/or his removal from the position of
Chief Operating Officer, of the Company or its successor; or
(2) the Company's requiring, without the written consent of the
Executive, the Executive to be based at any office or location more than 50
miles from the current offices of the Company in Houston, Texas.
f. For purposes of this Agreement, "Without Good Reason" shall mean
any reason other than that defined in this Agreement as constituting Good
Reason.
g. For purposes of this Agreement, "Change of Control" shall mean (a)
the disposition, whether by sale, merger, consolidation, etc. of all or
substantially all of the Company's assets, unless in advance of any such
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disposition the Executive waives this provision in writing; (b) any person,
entity or group (as the term "group" is defined in the rules and regulations
relating to Section 13D of the Securities Exchange Act of 1934, as amended),
other than Chase Bank of Texas, acquires 50% or more of the voting common stock
of the Company; or (c) a contested proxy solicitation of Company shareholders
that results in the contesting party obtaining the ability to cast 25% or more
of the votes entitled to be cast in electing directors of the Company.
h. Upon the termination of the Executive's employment for any reason,
the Executive shall, upon the request of the Company, promptly resign from all
officerships and directorships held by the Executive in the Company or any other
business enterprise in which the Executive is serving at the Company's request.
If the Executive refuses to resign in accordance herewith within seven (7) days
of such request, the Executive agrees that the Executive shall be deemed to have
resigned all of such officerships and directorships as of the date requested by
the Company.
i. A Notice of Termination described in Section 5a(4) shall state the
Date of Termination and the basis for the Company's determination that the
Executive's actions establish Cause hereunder. Upon the Executive's receipt of a
Notice of Termination, the Executive may, prior to the Date of Termination, seek
to cure any conduct identified in the Notice of Termination as establishing
Cause (to the extent susceptible to cure) and shall, upon his written request,
be accorded the right to address the Board, with or without counsel to the
Executive present at the Executive's option, for the purpose of responding to
the Notice of Termination. Following such meeting between the Executive and the
Board, if the Board does not withdraw or modify the Notice of Termination, the
Executive's employment shall terminate on the Date of Termination stated in the
Notice of Termination.
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j. A Notice of Resignation described in Section 5a(6) shall state the
Date of Termination and the basis for the Executive's determination that the
Company's actions establish Good Reason hereunder. Upon the Company's receipt of
a Notice of Resignation, the Company may, prior to the Date of Termination, seek
to cure any conduct identified in the Notice of Resignation as establishing Good
Reason (to the extent susceptible to cure) and shall, upon the Company's
request, be accorded the right to address the Executive, with or without counsel
to the Executive present at the Executive's option, for the purpose of
responding to the Notice of Resignation. Following such meeting between the
Executive and the Board, if the Executive does not withdraw or modify the Notice
of Resignation, the Executive's employment shall terminate on the Date of
Termination stated in the Notice of Resignation.
6. Payments Upon Termination of Employment: Death or Disability:
a. If the Executive's employment hereunder is terminated due to the
Executive's death or Disability pursuant to Sections 5a(2) or (3) hereof, the
Company shall pay or provide to the Executive, his designated beneficiary or to
his estate (i) all base salary pursuant to Section 3a hereof, any management
incentive compensation earned in accordance with the Incentive Plan pursuant to
Section 3e hereof, and any vacation pay pursuant to Section 3d hereof, in each
case which has been earned but which remains unpaid as of the Date of
Termination, such payments to be made at such times as will be in accordance
with the Company's normal payroll practices; and (ii) any benefits to which the
Executive may be entitled under any medical, dental or disability plan or
program pursuant to Section 3b hereof in which he is a participant in accordance
with the terms of such plan or program up to and including the Date of
Termination. Upon termination of the Executive's employment due to the
Executive's Disability, the Executive shall continue to have the obligations
provided for in Section 4 hereof. The Executive may designate in writing to the
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Chief Executive Officer of the Company from time to time a beneficiary to whom
payments shall be made hereunder in the event of the Executive's death. In the
absence of such a designation payments shall be made to the Executive's estate
in the event of the Executive's death.
b. Termination for Cause or Resignation Without Good Reason: If the
Executive's employment hereunder is terminated due to the termination of the
Executive's employment by the Company for Cause pursuant to Section 5a(4) or due
to the Executive's resignation Without Good Reason pursuant to Section 5a(7),
the Company shall pay or provide to the Executive (i) all base salary pursuant
to Section 3a hereof, any management incentive compensation earned in accordance
with the Incentive Plan pursuant to Section 3e hereof, and any vacation pay
pursuant to Section 3d hereof, in each case which has been earned but which
remains unpaid as of the Date of Termination, such payments to be made at such
times as will be in accordance with the Company's normal payroll practices; and
(ii) any benefits to which the Executive may be entitled under any medical,
dental or disability plan or program pursuant to Section 3b hereof in which he
is a participant in accordance with the terms of such plan or program up to and
including the Date of Termination.
c. Termination Without Cause or Resignation For Good Reason: If the
Executive's employment hereunder is terminated due to the termination of the
Executive's employment by the Company Without Cause pursuant to Section 5a(5) or
due to the Executive's resignation for Good Reason pursuant to Section 5a(6),
the Company shall pay or provide to the Executive (i) all base salary pursuant
to Section 3a hereof, any management incentive compensation earned in accordance
with the Incentive Plan pursuant to Section 3e hereof, and any vacation pay
pursuant to Section 3d hereof, in each case which has been earned but which
remains unpaid as of the Date of Termination, such payments to be made at such
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times as will be in accordance with the Company's normal payroll practices; (ii)
any benefits to which the Executive may be entitled under any medical, dental or
disability plan or program pursuant to Section 3b hereof in which he is a
participant in accordance with the terms of such plan or program up to and
including the Date of Termination; and (iii) if the Company terminates the
Executive's employment Without Cause pursuant to Section 5a(5) or due to the
Executive's resignation for Good Reason pursuant to Section 5a(6) at any time
during the Term of Employment, then the Company shall make a single lump sum
payment within twenty (20) days of after the Date of Termination in an amount
equal to twelve (12) months of the Executive's then current base salary. The
Company's obligation to make the payment pursuant to Section 6c(iii) shall be
conditioned upon the Company's prior receipt and the effective date of an
executed general release of claims and covenant not to xxx.
d. Expiration of Term of Employment Without Renewal: If the
Executive's employment terminates on January 31, 2003 pursuant to Section 1 of
this Agreement, the Company shall pay or provide to the Executive (i) all base
salary pursuant to Section 3a hereof, any management incentive compensation
earned in accordance with the Incentive Plan pursuant to Section 3e hereof, and
any vacation pay pursuant to Section 3d hereof, in each case which has been
earned but which remains unpaid as of the Date of Termination of the Executive's
employment, such payments to be made at such times as will be in accordance with
the Company's normal payroll practices; (ii) any benefits to which the Executive
may be entitled under any medical, dental or disability plan or program pursuant
to Section 3b hereof in which he is a participant in accordance with the terms
of such plan or program up to and including the Date of Termination; and (iii) a
single lump sum payment within twenty (20) days of after the Date of Termination
in an amount equal to twelve (12) months of the Executive's then current base
salary. Notwithstanding the foregoing, in the event that prior to the
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termination of this Agreement on January 31, 2003 pursuant to Section 1 of this
Agreement (i) on or before December 2, 2002 the Company offers to renew this
Agreement upon the completion of the Executive's Term of Employment on January
31, 2003, or offers the Executive employment with the Company on substantially
similar terms and conditions as those contained in this Agreement, or on terms
and conditions more favorable to the Executive than the terms and conditions
contained in this Agreement, in each case for a term of employment of no less
than 24 months, and (ii) the Executive does not accept such offer of renewal or
such employment on or before December 16, 2002, then the Company shall not be
obligated to make the payment pursuant to Section 6d(iii). The Company's
obligation to make the payment pursuant to Section 6d(iii) shall be conditioned
upon the Company's prior receipt and the effective date of an executed general
release of claims and covenant not to xxx.
e. No Other Payments: Except as provided in this Section 6, the
Executive shall not be entitled to receive any other payments or benefits from
the Company due to the termination of his employment by the Company, including,
but not limited to, any employee benefits under any of the Company's employee
benefits plans or programs (other than at the Executive's expense under the
Consolidated Omnibus Budget Reconciliation Act of 1985 or pursuant to the terms
of any pension plan which the Company may have in effect from time to time) or
any right to be paid severance pay.
7. No Conflicting Agreements. The Executive hereby represents and
warrants that he is not a party to any agreement, or non-competition or other
covenant or restriction contained in any agreement, commitment, arrangement or
understanding (whether oral or written), which would in any way conflict with or
limit his ability to continue to work for the Company during the Term of
Employment or would otherwise limit his ability to perform all responsibilities
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in accordance with the terms and subject to the conditions of this Agreement.
8. Deductions and Withholding. The Executive agrees that the Company
shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect and all
amounts required to be deducted in respect of the Executive's coverage under
applicable employee benefit plans.
9. Entire Agreement. This Agreement embodies the entire agreement of
the parties with respect to the Executive's employment and supersedes any other
prior oral or written agreements between the Executive and the Company with
respect to the Executive's employment including, but not limited to, the
Employment Agreement between the Company and the Executive dated February 24,
1995 and all amendments thereto. This Agreement may not be changed or terminated
orally but only by an agreement in writing signed by the parties hereto.
10. Waiver. The waiver by the Company of a breach of any provision of
this Agreement by the Executive shall not operate or be construed as a waiver of
any subsequent breach by the Executive. The waiver by the Executive of a breach
of any provision of this Agreement by the Company shall not operate or be
construed as a waiver of any subsequent breach by the Company.
11. Governing Law. This Agreement shall be subject to, and governed
by, the laws of the State of Delaware applicable to contracts made and to be
performed in the State of Delaware, regardless of where the Executive is in fact
required to work.
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12. Assignability. The obligations of the Executive may not be
delegated and, except as expressly provided in Section 6a relating to the
designation of beneficiaries, the Executive may not, without the Company's
written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate
or otherwise dispose of this Agreement or any interest therein. Any such
attempted delegation or disposition shall be null and void and without effect.
The Company and the Executive agree that this Agreement and all of the Company's
rights and obligations hereunder may be assigned or transferred by the Company
to and shall be assumed by and binding upon and shall inure to the benefit of
any successor to the Company. The term "successor" shall mean, with respect to
the Company or any of its subsidiaries, any corporation or other business entity
which, by merger, consolidation, purchase of the assets, or otherwise, acquires
all or a material part of the assets of the Company.
13. Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or the validity or enforceability of this
Agreement. If any court construes any of the provisions of Section 4 hereof, or
any part thereof, to be unreasonable because of the duration of such provision
or the geographic or other scope thereof, such court may reduce the duration or
restrict the geographic or other scope of such provision and enforce such
provision as so reduced or restricted.
14. Notices. All notices to the Executive hereunder shall be in
writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, to:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx.
Xxxxxxx, Xxxxx 00000
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All notices to the Company hereunder shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested,
to:
Weiner's Stores, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party.
15. Effective Date. This Agreement shall be effective, as of the date
first above set forth, following execution of four originals of this Agreement
by both parties.
16. Paragraph Headings. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
/s/ Xxxxxxx X. Xxxxxx Weiner's Stores, Inc.
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Xxxxxxx X. Xxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
12/1/99
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Date
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