EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 30th day of October,
2000, by and between One Price Clothing Stores, Inc., a Delaware corporation
with its principal place of business in Spartanburg County, South Carolina,
hereinafter referred to as "Employer," and Xxxxxx X. Xxxxx, currently a resident
of Tennessee, hereinafter referred to as "Employee."
W I T N E S S E T H :
For and in consideration of the mutual covenants and promises of the
parties hereto and the benefits inuring to the parties hereto, Employer and
Employee agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer employs Employee as Senior Vice President, General Merchandise Manager
and Employee accepts such employment with Employer. The employment hereunder
shall commence on the date the Employee reports for full-time work, currently
scheduled for October 30, 2000.
2. DUTIES OF EMPLOYEE. Employee shall serve Employer faithfully and to the best
of his ability. Employee shall devote his full time and efforts to his duties as
an employee of the Employer.
3. COMPENSATION AND BENEFITS.
(a) Salary. For all services rendered to Employer under this
Agreement, Employer shall pay Employee an annual base salary
of not less than $300,000, subject to annual review, payable
in bi-weekly installments in accordance with the usual payroll
practice of Employer, less all legally required deductions.
(b) Bonus. Employee shall be subject to the normal management
bonus structure, as approved annually by the Board of
Directors.
(c) Stock Options. As an inducement to Employee joining the
Company, Employee shall receive a grant of 50,000 stock
options for the purchase of shares of Employer's common stock,
with an exercise price equal to the average of the high and low
sales price per share of such common stock on the effective
date of this agreement, exercisable twenty (20%) percent
immediately and then twenty (20%) percent each year thereafter
from the date of grant for the next four (4) years. The "grant
date" of such options shall be the date the Employee signed the
offer letter, October 13, 2000. Employee understands and agrees
that such options will be the subject of a separate stock
option plan which will be filed by the Employer with the
Securities & Exchange Commission on Form S-8 as promptly as
practicable, and that Employee shall not have the right to
exercise such options until such filing is completed.
(d) Other Benefits.
(i) During the term of his employment, Employee shall be
entitled to participate in all employee benefits as
are customarily provided to its officers by Employer,
and to participate in such other employee benefits as
may from time to time be instituted by Employer's
Board of Directors.
(ii) Employee shall also be entitled to reimbursement of
all reasonable hotel, travel, entertainment and other
business expenses actually incurred by Employee in
the course of Employee's employment upon submission
to Employer of satisfactory documentation thereof.
(e) Moving Expenses. Employer shall reimburse Employee for:
(i) Mileage reimbursement for interim travel allowance of
$1,500.
(ii) Two house-hunting trips to include four nights, five
days of hotel accommodations and meals.
(iii) Transportation of household goods, from Tennessee to
South Carolina billed directly to the company.
(iv) Reimbursement of mileage incurred driving up to 2
vehicles from Tennessee to South Carolina upon
relocation to South Carolina.
(v) Upon reporting for work Employer agrees to reimburse
Employee up to $6,000 for interim living expenses,
such reimbursement to cover lodging only.
(vi) Employer shall pay brokerage fees up to 6% and
similar expenses related to the sale of Employee's
home and for loan origination fees up to 1% for
purchase of a new home. This payment will be made
upon presentation of supporting documentation on or
after the first day of employment.
(vii) The allowance for (ii) and (v) is available within a
24 month period from date of hire.
(f) Payments Upon Termination.
(i) In the event Employee is terminated by Employer, without cause, Employer
shall continue Employee's salary following Employee's termination for six
(6) additional months at Employee's annual base salary in effect at the
date of Employee's termination, payable in accordance with Employer's usual
payroll practices. In addition, provided Employee has diligently pursued
another position following his involuntary termination, in the event
Employee has not taken a position with another entity (including a position
with a company, or partnership, or substantially full-time self employment)
by the end of such six months from the date of Employee's involuntary
termination, Employer shall pay to Employee up to an additional six (6)
months salary continuation on a bi-weekly basis so long as other employment
has not begun and Employee is continuing to pursue diligently another
position. Employer shall be entitled to receive from Employee, upon
request, reasonable proof of such diligent effort(s) to pursue another
position, failing which, such additional six months of salary shall cease.
(ii) In the event Employee voluntarily terminates his employment with Employer,
or is terminated for "cause", he shall be entitled to no additional payment
upon such termination other than any then accrued but unpaid salary,
vacation pay, or other normal reimbursement items. "Cause" shall mean (a)
commission by Employee of any felony, (b) the commission by Employee of any
crime or other activity involving dishonesty or moral turpitude, (c) the
engagement by Employee in any act of fraud, misappropriation or similar
misfeasance, (d) the engagement by Employee in any activity in
contravention of paragraph 5 hereof ("Confidential Information") or any
action otherwise resulting in a material adverse effect to Employer or (e)
repeated non-attentiveness by Employee to his duties under this Agreement.
(g) Change of Control. In the event the Employee's employment with the Company
is terminated by the Employer without Cause, or for "Good Reason" by the
Employee, within 24 months after "Change of Control" of Employer (an
"Employment Event"), then Employer shall pay to Employee, in one lump sum,
an amount equal to eighteen (18) months severance pay rather than the
maximum of twelve (12) months severance pay currently provided for in the
Agreement. Termination for "Good Reason" shall be deemed to have occurred,
and the Employee shall be entitled to the benefits of this provision, if
the Employee voluntarily terminates his employment after 30 days written
notice to Employer and following the occurrence of any of the following
events, provided a "Change of Control" has occurred:
(i) the assignment to the Employee of any duties inconsistent with the highest
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities attained by the Employee during the
period of his employment with the Employer or any action by the Employer
which results in a material diminishment in such position, authority,
duties or responsibilities as were in effect immediately prior to the
"Change of Control";
(ii) a decrease in the Employee's compensation (including base salary, bonus or
fringe benefits)
(iii)relocation by Employer of the Employee more than 50 miles outside of the
Greenville/Spartanburg area of South Carolina; or
(iv) failure of any successor of the Employer to comply with this Agreement.
In consideration for the benefits conferred to Employee under this
provision, in the absence of an Employment Event Employee agrees to
continue his employment, following a "Change of Control," for a minimum
period of six (6) months.
In addition, should a "Change of Control" occur, all stock options
granted by Employer to Employee, and not yet expired as of the date of
such "Change of Control," shall become immediately exercisable. In such
event, the normal expiration date shall apply to such options,
provided, however, that Employee shall have 90 days to exercise such
options in the event of termination following an Employment Event.
For purposes hereof, "Change of Control" shall be deemed to have
occurred following either of the following two events:
(i) A change in the Board of Directors of the Company, with the
result that members of the Board, as elected by the
stockholders of the Company on June 10, 1998 ("Incumbent
Directors"), no longer constitute a majority of such Board,
provided that any person who becomes a director and whose
appointment or election was supported by a majority of the
Incumbent Directors shall be considered an Incumbent Director
for purposes hereof; or;
(ii) The occurrence of a Section 11 (a) (ii) Event, as defined in
the Shareholders Rights Agreement, dated November 3, 1994,
between Wachovia Bank of North Carolina, N.A., as Rights
Agent, and Employer ("Right Agreement"), as amended, provided,
however, that for those purposes the applicable percentage for
a Change of Control to arise from a change in stock ownership
shall be 40% and not 20% as provided for in the Rights
Agreement.
4. CONFIDENTIAL INFORMATION. Employee acknowledges that during his employment
he will have access to confidential information belonging to the Employer.
Such confidential information shall consist of all information disclosed to
Employee as a result of employment by Employer not generally known in the
retail business in which Employer is engaged including information
concerning Employer's suppliers, including the costs, quantities and types
of goods supplied, and the identity of such suppliers; information
concerning the Employer's marketing and/or sales strategy or plans; real
estate strategy and expansion plans; all pricing information relating to
merchandise offered for sale by Employer, customers' list and all
information dealing with customers' needs or preferences; all data
processing information; all financial information including financial
statements, financing plans and forecasts, and any and all information
designated or marked as confidential. Employee will not use or disclose, or
otherwise made available, such confidential information to any other person
or entity without prior express written consent of Employer, either during
or following the termination of Employee's employment. Upon termination of
employment, Employee shall turn over to Employer all property then in his
possession or custody belonging to Employer and shall not retain any copies
or reproductions of correspondence, memoranda, reports, notebooks,
drawings, photographs, or other documents relating in any way to the
affairs of Employer, including any such information on Employees
computer(s), whether or not owned by the Employer.
5. NON-COMPETITION.
(a) Upon termination of Employee's employment with employer, whether
voluntary or involuntary, and whether with or without cause, Employee
will not, for a period of one (1) year from date of such termination,
conduct or engage in, directly or indirectly, alone or jointly, with
any other person or corporation as agent, consultant, employee,
manager, purchaser, proprietor, stockholder, co-partner, or otherwise,
and type of "Off-price" retail apparel business whose price points
and/or customer base could reasonably be considered in competition
with the business of Employer, either now or at the time of such
termination. Ceiling price points and single price point concepts
shall be included. This restriction applies to the continental United
States.
(b) Employee agrees not to employ, solicit for employment or cause to be
employed any other employee of Employer for a period of three (3)
years after Employee's termination of employment. This restriction
applies to any type of business which Employee may enter.
6. RELEASE. In the event of involuntary termination, and in consideration
for Employer's agreements hereunder, Employee agrees to execute a
release in Favor of Employer in form and substance reasonably
satisfactory to Employer.
7. NOTICES. All notices, consents, changes of address and other
communications (hereinafter referred to as "Notice(s)" required or
permitted to be made under the terms of this Agreement shall be in
writing and shall be (i) personally delivered by an agent of the
relevant Party, or (ii) transmitted by postage prepaid, certified
or registered mail:
To Employer: One Price Clothing Stores, Inc.
Post Xxxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
To Employee: Xxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
8. WAIVER OF BREACH. The waiver of Employer of a breach by Employee of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by Employee. No waiver shall be valid unless in
writing and signed by an authorized officer of Employer.
9. ASSIGNMENT. Employee acknowledges that the services to be rendered by
Employee are unique and personal. Accordingly, Employee may not assign any
Employee's rights or delegate any of Employee's duties or obligations under
the Agreement. The rights and obligations of Employer under this Agreement
shall inure to the benefit of an all be binding upon the Employer, and its
successors and assigns.
10. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants to
Employer that he is under no obligation to or bound by any contract with
any person, corporation or other entity which would prohibit or in any way
interfere with his accepting employment with Employer or the performance of
his duties and obligations to Employer under this Agreement.
11. SEVERABILITY. If any provision of this Agreement as applied to either party
or to any circumstances shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, or the application of each provision to any other fact or
circumstances.
12. ENTIRE AGREEMENT, MODIFCATION OR AMENDMENT. This Agreement constitutes the
entire agreement of the parties with respect to its subject matter and
supersedes all prior oral or written agreements. This Agreement may be
modified or amended from time to time by the mutual agreement of the
parties hereto. No modification or amendment of this Agreement shall be
binding upon either party unless it is in writing and executed by the party
sought to be charged.
13. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one instrument.
14. CAPTIONS. The captions contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina, without giving
effect to South Carolina's rules of conflicts of law, and regardless of the
place or places of its physical execution and performance.
16. ENFORCEMENT. This Agreement may only be enforced in a court of
competent jurisdiction in Spartanburg County, South Carolina.
Employee agrees to submit to the jurisdiction of a court of
competent jurisdiction in Spartanburg County, South Carolina,
whether or not then residing in South Carolina. The prevailing
party shall be entitled to recover from the other party the cost
of any court action, including reasonable attorney's fees.
17. "Executive Officer" Status - Employee understands that as the Senior
Vice President and GMM for Employer, he will be considered an
"Executive Officer" of the Company, and accordingly will need to
file a Form S-3 upon commencement of his employment. In this
respect, as an Executive Officer, Employee will be subject, among
other things, to the requirements of Section 16 of the Securities
Exchange Act of 1934, including the ongoing filing requirements of
Section 16(a), and the xxxxxxx xxxxxxx provisions of Section
16(b).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Witnesses: One Price Clothing Stores, Inc.
/s/ Xxxxx Xxxxxx By:/s/ Xxxxx X. Xxxxxx
As to Employer Xxxxx X. Xxxxxx
President & Chief
Executive Officer
"EMPLOYER"
/s/ Xxxxxxx X. Xxxxxxx By:/s/ Xxxxxx X. Xxxxx
As to Employee Xxxxxx X. Xxxxx
"Employee"
______________(Seal)
