EXHIBIT 10.106
GOODY'S FAMILY CLOTHING, INC.
XXXXXX X. XXXXXXXXXX
NON-QUALIFIED DEFERRED COMPENSATION PLAN AND AGREEMENT
THIS PLAN AND AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation ("Goody's") and XXXXXX X. XXXXXXXXXX
("Xxxxxxxxxx"), as follows:
W I T N E S S E T H:
WHEREAS, Xxxxxxxxxx currently serves as Chairman of the Board and
Chief Executive Officer of Goody's; and
WHEREAS, Xxxxxxxxxx and Goody's have agreed that, in addition to
other forms of compensation otherwise agreed to between them, Goody's shall
provide as deferred compensation for Xxxxxxxxxx a cash benefit to Xxxxxxxxxx
pursuant to the terms and provisions set forth in this Plan, the Internal
Revenue Code of 1986, as amended, and all regulations thereunder, and the
Employee Retirement Income Security Act of 1974, as amended and all regulations
thereunder; and
WHEREAS, it is intended that the Plan shall remain unfunded for
purposes of Title I of ERISA and for tax purposes; and
NOW, THEREFORE, IN CONSIDERATION OF THE ABOVE PREMISES, and the
mutual covenants hereinafter set forth, faithfully to be kept by the parties
hereto, Goody's hereby establishes and adopts the Goody's Family Clothing, Inc.
Xxxxxx X. Xxxxxxxxxx Nonqualified Deferred Compensation Plan and Agreement, as
an unfunded arrangement to provide cash benefits to Xxxxxxxxxx pursuant to this
Plan.
ARTICLE 1
PURPOSE
The Plan is intended to be an unfunded arrangement for purposes of
Sections 201(2), 301(a)(3) and 401(a)(1) of Title I of ERISA to provide a form
of deferred compensation for Xxxxxxxxxx and his beneficiaries.
ARTICLE 2
DEFINITIONS
2.1 "Administrator" means the Compensation Committee of the Board.
2.2 "Beneficiary" means the person who is the Eligible Spouse on the
Benefit Distribution Date or, if there is no Eligible Spouse on the Benefit
Distribution Date, then the Beneficiary shall be Xxxxxxxxxx'x children who are
living on the Benefit Distribution Date (in equal shares); provided, however if
there is no Eligible Spouse on the Benefit Distribution Date and if there are no
children of Xxxxxxxxxx living on the Benefit Distribution Date, then the
Beneficiary shall be the estates of Xxxxxxxxxx'x children (in equal shares).
EXHIBIT 10.106
2.3 "Benefit Distribution Date" means February 26, 2015.
2.4 "Board" means the Board of Directors of Goody's. The members of
the Board are hereinafter referred to as "Directors."
2.5 "Cause" means (i) Xxxxxxxxxx'x gross negligence in the
performance of his duties to Goody's in his capacity as an executive officer of
Goody's which has resulted, or is likely to result, in material economic damage
to Goody's (as determined in good faith by a majority of the Board, excluding
Xxxxxxxxxx); (ii) any willful act by Xxxxxxxxxx which has resulted, or is likely
to result, in material damage to the business reputation of Goody's (as
determined in good faith by a majority of the Board, excluding Xxxxxxxxxx); or
(iii) the conviction of Xxxxxxxxxx of a felony or the entering of a plea of
guilty or nolo contendre to a felony by Xxxxxxxxxx. For purposes of the Plan, no
act or omission shall be considered willful unless done or omitted to be done in
bad faith and without reasonable belief that such act or omission was in the
best interest of Goody's. Notwithstanding the foregoing, a termination shall not
be considered for Cause unless it is made by delivery to Xxxxxxxxxx of a notice
of termination setting forth the reason for the termination and, prior to the
termination of his employment with Goody's for a basis set forth in clause (i)
or (ii) above (which is capable of being cured), Xxxxxxxxxx shall have been
given a reasonable opportunity to cure such breach, which shall not be less than
30 days, following a meeting with the Board which shall take place to enable
Xxxxxxxxxx to refute or explain acts or omissions referred to in such notice of
termination.
2.6 "Code" means the Internal Revenue Code of 1986, as amended.
2.7 "Corporate Contribution Amount" shall mean Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00).
2.8 "Aggregate Corporate Contribution Amount" means the sum of (x)
all of the Corporate Contribution Amounts required to be contributed by Goody's
pursuant to Section 4.1 and (y) any Earnings, and reduced by (z) expenses and
taxes pursuant to Section 4.6 and by losses on investments pursuant to Section
4.7.
2.9 "Earnings" means the income, including without limitation,
dividends, interest and gains, of the Trust attributable to the investment of
the Corporate Contributions and any Earnings thereon.
2.10 "Effective Date" of the Plan means the 29th day of July 2005.
2.11 "Eligible Spouse" means the wife of Xxxxxxxxxx to whom
Xxxxxxxxxx is married on the Benefit Distribution Date or on the date of
Xxxxxxxxxx'x death if Xxxxxxxxxx is deceased prior to the Benefit Distribution
Date.
2.12 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.13 "Goody's" means Goody's Family Clothing, Inc., a corporation
organized and existing under the laws of the State of Tennessee, and any
corporate successor thereto, whether by merger, consolidation, liquidation, or
otherwise.
2.14 "Plan" means the Goody's Family Clothing, Inc. Xxxxxx X.
Xxxxxxxxxx Non-qualified Deferred Compensation Plan and Agreement established by
this document and any related documents executed by Xxxxxxxxxx.
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EXHIBIT 10.106
2.15 "Trust" means the Trust for the Goody's Family Clothing, Inc.
Xxxxxx X. Xxxxxxxxxx Non-Qualified Deferred Compensation Plan and Agreement, by
and between Goody's and the Trustee, which is created simultaneously herewith
for the benefit of Xxxxxxxxxx pursuant to the terms of the Plan.
2.16 "Trustee" means Regions Xxxxxx Xxxxxx Trust Company or its
designated affiliate.
ARTICLE 3
ELIGIBILITY
Xxxxxxxxxx is a highly compensated employee as defined in Section
414(q) of the Code and he shall be the only individual eligible to participate
in the Plan. Xxxxxxxxxx shall be deemed to be included within a select group of
management or highly compensated employees of Goody's. For purposes of this
Plan, Xxxxxxxxxx shall be deemed fully vested in the Aggregate Corporate
Contribution Amount.
ARTICLE 4
ESTABLISHMENT OF THE TRUST AND CONTRIBUTIONS TO THE TRUST
4.1 Subject to the provisions of Section 4.2, each Goody's fiscal
year beginning with the fiscal year ended January 29, 2005 and ending with and
including the Goody's fiscal year in which Xxxxxxxxxx'x 64th birthday occurs or,
in the case of his death prior to such date, the date on which his 64th birthday
would have occurred, Goody's shall make a contribution of cash or other
immediately available funds to the Trust in an amount equal to the Corporate
Contribution Amount. Subject to the provisions of Section 4.2, Goody's shall
contribute the Corporate Contribution Amount annually by transfer of the
Corporate Contribution Amount from Goody's to the Trust on or before the last
day of the fiscal year with respect to which such contribution is being made. It
is understood that the first Corporate Contribution Amount (relating to the
fiscal year ended January 29, 2005) shall be contributed to the Trust promptly
following execution of this Plan.
4.2 Goody's shall not be required to make any further contributions
to the Trust hereunder after such time as Xxxxxxxxxx'x employment with Goody's
has been terminated for Cause by Goody's. Notwithstanding the preceding
sentence, there shall be no forfeiture with respect to Xxxxxxxxxx or the
Beneficiary of any amounts theretofore contributed to the Trust by Goody's or
with respect to past or future Earnings on such contributions, as Xxxxxxxxxx
shall be fully vested in all such amounts. If Xxxxxxxxxx'x employment is
terminated (either by Xxxxxxxxxx, by Goody's or otherwise) for any reason other
than for Cause, including by reason of his death or disability, Goody's shall be
obligated to continue to contribute the remaining Corporate Contribution Amounts
to the Trust.
4.3 The Trust is intended to be treated as a grantor trust under the
Code, and the establishment of the Trust is not intended to cause Xxxxxxxxxx to
realize current income on amounts contributed thereto. Accordingly, until paid
to Xxxxxxxxxx or his Beneficiary, all assets held by the Trust, including all
property and rights purchased with such amounts, and all income attributable to
such amounts, property, or rights, shall remain solely the property and rights
of Goody's, subject only to the claims of any general creditors of Goody's.
4.4 Notwithstanding anything to the contrary contained in this Plan,
Goody's shall make no provision for the funding of any benefits payable
hereunder that (i) would cause the Plan to be a
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EXHIBIT 10.106
funded plan for purposes of section 404(a)(5) of the Code, or Title I of ERISA,
or (ii) would cause the Plan to be other than an "unfunded and unsecured promise
to pay money or other property in the future" under Treasury Regulations Section
1.83-3(e) promulgated under Section 83 of the Code; and shall have no obligation
to make any arrangement for the accumulation of funds to pay any amounts under
this Plan.
4.5 Xxxxxxxxxx is hereby authorized to instruct Goody's as to the
manner in which the Aggregate Corporate Contribution Amount shall be invested
and re-invested by the Trust among the investments set forth on Schedule A
hereto. The investment instruction shall be made by Xxxxxxxxxx in writing on a
form prescribed by the Administrator and shall be delivered to the Administrator
prior to the beginning of the applicable Goody's fiscal year. The investment
instruction made in accordance with this Section 4.5 shall continue unless
Xxxxxxxxxx changes the investment instruction in accordance with procedures
designated by the Administrator. Any such change shall become effective for the
month subsequent to the receipt by the Administrator of the changed investment
instruction. The Administrator shall be authorized to permit more frequent
changes in investment options to be effective on such dates as it shall specify.
The Administrator shall honor the investment instruction and shall use
commercially reasonable efforts to cause the Trustee to follow the investment
instruction within 10 business days after the date of such investment election,
unless expressly precluded from doing so as a result of applicable law.
Dividends, interest and other distributions credited with respect to any such
request shall be deemed to be invested in accordance with the same investment
instruction.
4.6 Any expenses, including Trustee fees, allocable to the
administration or operation of the Plan or litigation with respect thereto as
provided in Section 8.2 of the Trust and any taxes arising from Earnings on the
assets of the Trust shall be paid from the Trust and the amount of such payments
shall reduce the Aggregate Corporate Contribution Amount.
4.7. Any losses arising from investment of the assets of the Trust
shall reduce the Aggregate Corporate Contribution Amount.
ARTICLE 5
PAYMENT OF BENEFITS
The assets of the Trust, which shall consist of the Aggregate
Corporate Contribution Amount, shall be paid over and distributed to Xxxxxxxxxx
or his Beneficiary on or within ten (10) business days after the Benefit
Distribution Date. Benefits shall only be paid over and distributed to the
Beneficiary if Xxxxxxxxxx is deceased as of the Benefit Distribution Date. If
the assets of the Trust consist of an amount less than the Aggregate Corporate
Contribution Amount by reason of a payout of the assets of the Trust that is
required to be made to creditors, any shortfall shall be a direct obligation of
Goody's to Xxxxxxxxxx.
ARTICLE 6
ADMINISTRATION
6.1 Administrator. This Plan shall be administered by the
Administrator.
6.2 Administrator's Powers and Duties. The Administrator shall have
the powers and duties to:
(a) Construe and interpret the provisions of the Plan;
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EXHIBIT 10.106
(b) Adopt, amend, or revoke rules and regulations for the
administration of the Plan, provided they are not inconsistent with the
provisions of the Plan;
(c) Provide appropriate parties with such returns, reports,
descriptions and statements as may be required by law, within the times
prescribed by law and to make them available for examination by Xxxxxxxxxx when
required by law;
(d) Take such other action as may reasonably be required to
administer the Plan in accordance with its terms or as may be provided for or
required by law;
(e) Withhold applicable taxes and file with the Internal
Revenue Service appropriate information returns, with respect to distributions
made from the Plan;
(f) Appoint and retain such persons as may be necessary to
carry out the functions of the Administrator; and
(g) Make withdrawals from the Trust to pay expenses and taxes
consistent with Section 4.6.
ARTICLE 7
CLAIMS FOR BENEFITS
7.1 Submission of Claim. Claims for benefits under this Plan are to
be submitted to the Administrator.
7.2 Notice of Denial of Claim. If a claim for benefits under this
Plan is denied, the Administrator shall provide notice to the claimant in
writing of the denial within 90 days after its submission. The notice shall be
written in a manner calculated to be understood by the claimant and shall
include: (i) the specific reason or reasons for the denial; (ii) specific
reference to the pertinent Plan provisions on which the denial is based; (iii) a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary; and (iv) an explanation of the Plan's claims review procedures.
7.3 Extension of Time. If special circumstances require an extension
of time for processing the initial claim, a written notice of the extension and
the reason therefor shall be furnished to the claimant before the end of the
initial 90 day period. In no event shall such extension exceed 90 days.
7.4 Review of Denial of Claim. The decision on review shall be made
within 60 days of receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. If such an extension of time is
required, written notice of extension shall be furnished to the claimant before
the end of the original 60 day period. The decision on review shall be made in
writing, shall be written in a manner calculated to be understood by the
claimant, and shall include specific references to the provisions of the Plan on
which the denial is based. If the decision on review is not furnished within the
time specified above, the claim shall be deemed denied on review.
7.5 Determination of Beneficiaries. For purposes of Section 2.2,
Xxxxxxxxxx'x spouse on the date hereof is Xxxxx X. Xxxxxxxxxx and Xxxxxxxxxx'x
children as of the date hereof are (i) Xxxxxxx X. Xxxxxxxxxx, (address redacted)
and (ii) Xxxxxx X. Xxxxxxxxxx, (address redacted). Xxxxxxxxxx shall promptly
notify
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EXHIBIT 10.106
the Administrator of any changes or additions to the names and addresses of each
person who could be a Beneficiary under this Plan. In determining the existence
or identity of a Beneficiary under this Plan, the Administrator may rely
conclusively upon information supplied by Xxxxxxxxxx'x personal representative,
executor or administrator. If a question arises as to the existence or identity
of a Beneficiary, or if a dispute arises with respect to a payment to any
Beneficiary, then, nothwithstanding the other provisions of this Plan, the
Administrator, in its sole discretion, may cause such payment to be distributed
to Xxxxxxxxxx'x estate without liability for any tax or other consequences which
might flow therefrom, or may take such other action as the Administrator deems
appropriate, including, but not limited to, causing such funds to be deposited
into the control of a court of competent jurisdiction, in any of which events
the Administrator shall have no further obligations or responsibilities with
respect thereto. In searching for any Beneficiary, the Administrator shall not
be obligated to search beyond the sending of a registered letter to the last
known address for such person as it appears on Goody's records.
ARTICLE 8
MISCELLANEOUS
8.1 Amendment to Plan. This Plan may be modified or amended, in
whole or in part, only in writing signed by the parties hereto; provided,
however, that Goody's may amend this Plan as necessary without the consent of
Xxxxxxxxxx to avoid the imposition of an excise tax under Section 409A of the
Code, provided, however, that any such amendment shall not result in Xxxxxxxxxx
receiving benefits that are less favorable to Xxxxxxxxxx than if he had been
subject to such excise tax under Section 409A of the Code.
8.2 Termination of Plan. This Plan may only be terminated upon the
prior written consent of Xxxxxxxxxx and Goody's.
8.3 Unsecured Promise. Goody's and Xxxxxxxxxx acknowledge that this
Plan shall create only an unsecured promise by Goody's to Xxxxxxxxxx to pay the
benefits provided herein. Until the occurrence of a distribution event, at which
point Xxxxxxxxxx or the Beneficiary shall be entitled to receive amounts
provided hereunder, all such amounts shall remain solely the property of
Goody's, subject only to the claims of Goody's general creditors.
8.4 Assignment of Rights to Benefits. Xxxxxxxxxx'x and the
Beneficiary's rights to the benefits under the Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by Xxxxxxxxxx, the Beneficiary or by
creditors of Xxxxxxxxxx or the Beneficiary.
8.5 Unfunded Plan. It is the intention of Goody's and Xxxxxxxxxx
that the Plan be unfunded for tax purposes and for purposes of Title I of ERISA.
8.6 Right to Employment. This Plan shall not be construed as giving
Xxxxxxxxxx any right to continued employment with Goody's.
8.7 Binding Nature of the Plan. The Plan shall be binding upon and
inure to the benefit of Goody's, its successors and assigns, Xxxxxxxxxx and his
heirs and legal representatives.
8.8 Written Notice. Any notice or other communication required or
permitted under the Plan shall be in writing. If directed to Goody's, the notice
or communication shall be sent to the Board of Goody's at the principal
executive offices of Goody's. If directed to Xxxxxxxxxx or the Beneficiary, it
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EXHIBIT 10.106
shall be sent to Xxxxxxxxxx or the Beneficiary at the last known address as it
appears on Goody's records or, if Xxxxxxxxxx is employed by Goody's, at the work
site, at Goody's option.
8.9 Entire Plan. This Plan, as completed and executed by Goody's and
Xxxxxxxxxx, shall constitute the entire Plan between Goody's and Xxxxxxxxxx.
8.10 Controlling Law. This Plan shall be construed in accordance
with the laws of the State of Tennessee.
8.11 Captions. The captions or headings in this Plan are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Plan.
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EXHIBIT 10.106
IN WITNESS WHEREOF, Goody's Family Clothing, Inc., by and through
its duly authorized officers and Xxxxxx X. Xxxxxxxxxx have caused this
instrument to be executed under seal on the 29th day of July 2005, such Plan
intended to be effective as of the Effective Date.
GOODY'S FAMILY CLOTHING, INC.
By:___________________________
________________________
Its:__________________________
ATTEST:
_______________________
Its Secretary
[CORPORATE SEAL]
_____________________________
XXXXXX X. XXXXXXXXXX
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EXHIBIT 10.106
Schedule A
American Funds Growth Fund of America
Xxxxx New York Venture
Xxx Xxxxxx Xxxxxxxx
Xxxxxx Mid Cap Select
Lord Xxxxxx Small Cap Blend
Xxxxxx Xxxx International Equity
RMK High Income Bond
RMK Intermediate Bond
9
