EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), dated as of August 14, 2000,
is by and between Today's Man, Inc., a Pennsylvania corporation (the "Company"),
and Xxxxx Xxxxx, an individual (the "Executive").
Background
A. The Company operates menswear superstores specializing in tailored
clothing, furnishings, accessories and sportswear. The Company
also offers footwear through licensed shoe departments. The
superstores are located in the Greater Philadelphia, Washington,
D.C., Baltimore and New York markets.
B. The Company has determined to engage the Executive as its new
Chief Executive Officer and the Executive has indicated his desire
to accept such appointment on the terms and conditions set forth
in this Agreement.
Agreement
NOW, THEREFORE, incorporating the foregoing herein and in consideration
of the mutual covenants and agreements contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Term. Executive's employment shall begin on the date of this
Agreement and shall continue for an initial period of one year. Thereafter,
Executive shall serve until effectiveness of a written notice of termination
given by either party under Section 4 or until his death. The period of
Executive's employment under this Agreement is referred to as the "Term".
2. Duties. Executive shall, during the Term, be employed by the Company
with the title of Chief Executive Officer. Executive shall report to, and have
the responsibilities, duties and obligations assigned by, the Company's Chairman
and Board of Directors from time to time. The scope and nature of Executive's
duties shall generally be consistent with those performed by chief executive
officers of similarly situated public companies. During the Term, Executive
agrees to devote his full time, energy, skill and best efforts to the business
and affairs of the Company in order to maximize the Company's sales and profits
and to maintain or improve its product and service quality. Executive may engage
in charitable activities and community affairs provided such activities do not
materially interfere with the effective performance of his duties under this
Agreement. During the Term, the Company shall use reasonable efforts to cause
Executive to be nominated as a director of the Company.
3. Compensation and Benefits.
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3.1 Salary. During the Term, the Company shall pay Executive a
base salary of $400,000 per year ("Salary"), payable at the same time and in the
same manner as other senior executives of the Company are paid in accordance
with the Company's normal payroll practices.
3.2 Fringe Benefits.
3.2.1 Participation in Plans. During the Term,
Executive shall be entitled to participate in any employee benefit plan (e.g.,
health and hospitalization plan, group life insurance, group disability
insurance) of the Company generally available to senior executives to the extent
the Company determines in its sole discretion to sponsor any employee benefit
plan and to the extent Executive is eligible under the general provisions of
such plans. The Company shall continue to provide Executive with coverage under
such plans for one year following Executive's termination (unless Executive
resigns for other than Good Reason or shall have been terminated for Cause), to
the extent coverage of Executive post-employment is permitted by the terms of
such plans. The Company shall provide a directors' and officers' liability
insurance policy covering Executive to the same extent the Company provides such
coverage for its other executive officers.
3.2.2 Vacation. Executive shall be entitled to two
weeks of paid vacation during calendar year 2000 and four weeks of paid vacation
during each succeeding calendar year during the Term.
3.2.3 Reimbursement. The Company shall reimburse
Executive for reasonable out-of-pocket business expenses incurred in the course
of performing his duties under this Agreement, subject to the Company's standard
policies with respect to reimbursement of employee business expenses in effect
from time to time (including, without limitation, any documentation
requirements).
3.2.4 Local Housing. For a period of six months from
the date hereof, the Company shall, at its expense, provide Executive with a
furnished one or two bedroom apartment reasonably acceptable to him, including
basic utilities (other than telephone charges), within ten miles of the
Company's principal executive office.
3.2.5 Auto Allowance. During the term, the Company
shall pay Executive an automobile allowance in accordance with its standard
policy for executive automobile allowances in an amount not less than $1,000 per
month.
3.3 Bonus Opportunities. For each year during the Term, the
Company shall pay Executive a cash bonus in an amount, up to $200,000,
determined by the Compensation Committee of the Board of Directors based upon:
(i) the Company's financial performance and condition, (ii) Executive's
performance in view of goals and standards adopted by the Board of Directors,
and (iii) market conditions. Executive's performance will be evaluated
principally based upon EBITDA targets established in advance by the Compensation
Committee following consultation with Executive. Such bonus shall be paid at
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such time that bonuses are paid to the Company's other senior executives in
accordance with the policies of the Company.
3.4 Option. On the date of this Agreement, the Company shall
issue an incentive stock option to Executive, which shall entitle Executive to
acquire up to 280,000 shares of the Company's common stock at the fair market
value per share as of such date. Such option shall be subject to the terms and
conditions of the Company's Management Stock Option Plan. Subject to earlier
vesting pursuant to Section 4, the option shall vest as to 25% of the shares
subject to it on each anniversary of this Agreement on which Executive remains
employed by the Company as Chief Executive Officer.
3.5 Entire Compensation. The salary, benefits, stock option
and any bonus compensation provided above shall be the full consideration
payable by the Company to Executive for the services to be rendered by Executive
to the Company under this Agreement. The Company shall deduct or cause to be
deducted from the Executive's compensation all taxes and amounts required by law
to be withheld.
4. Termination.
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4.1 Termination Notice.
4.1.1 The Term shall expire:
(a) immediately upon the death of Executive;
(b) upon notice from the Company if Executive
becomes physically or mentally disabled to the extent that his ability to
perform his duties as Chief Executive Officer is materially impaired for 45
consecutive days or for 60 or more days in any three month period;
(c) upon notice from the Company if Cause exists
or by Executive if Good Reason exists; or
(d) after the first year of the Term, by either
party at any time for any reason or no reason by giving at least thirty (30)
days prior written notice of termination to the other party.
4.1.2 Upon termination by either party, all of
Executive's right to compensation and benefits under this Agreement shall
automatically and immediately terminate except for: (i) the right to any accrued
and unpaid salary; (ii) the right to coverage under any benefit plans that
permit coverage post-termination; (iii) if Executive has worked at least three
months during his final bonus year and has not been terminated for Cause, a
prorated portion of any bonus that would have been payable, and (iv) if
Executive was terminated by the Company without Cause and in the absence of
disability pursuant to Section 4.1.1(b) or if Executive has terminated this
Agreement for Good Reason, the right to the payment set forth in Section 4.2.
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4.2 Termination Without Cause.
4.2.1 If, at any time prior to August 30, 2004,
either (i) the Company terminates Executive's employment under this Agreement
without Cause, and in the absence of disability as provided in Section 4.1.1(b),
or (ii) Executive terminates this Agreement for Good Reason, then:
(a) The Company shall pay Executive, in four
equal quarterly installments, commencing on the first day of the month following
the date of termination, a severance payment equal to Executive's annual base
salary in effect on the date of termination;
(b) Executive's stock option granted in
accordance with this Agreement shall immediately vest as to 50% of the shares
subject to the option, in addition to any shares previously vested.
4.2.2 If the Executive terminates for Good Reason or
the Company terminates Executive's employment with or without Cause after August
30, 2004 no severance payment will be payable.
4.2.3 "Cause" means the Board of Directors has
determined that: (a) Executive is guilty of intentional or grossly negligent
misconduct; (b) Executive has breached this Agreement or any other written
agreement with the Company in any material respect and has failed to cure such
breach within 15 days after receiving notice of the breach; (c) Executive
continues to fail to perform any material duties assigned to him for 15 days
after receiving written notice of performance failure from the Board of
Directors; (d) Executive is convicted of any felony or any crime involving
fraud, larceny, embezzlement, moral turpitude or which negatively impacts the
Company's reputation; or (e) any court, regulator or government authority with
jurisdiction over the Company requests, requires or recommends to the Company
that Executive's employment be terminated.
4.2.4 "Good Reason" means the Company has materially
breached any of its obligations to Executive in this Agreement and has failed to
remedy such breach within 15 days after receiving notice of such breach from
Executive.
4.2.5 The benefits payable under Section 4.1.2 and
the severance payment under this Section 4.2 will be the sole and exclusive
compensation in the event Executive is terminated without Cause, and shall be
paid to Executive only if Executive first executes and delivers to the Company a
general release (in form reasonably acceptable to the Company), with such
release providing for, among other things, the full release of the Company, its
affiliates and their respective owners, directors, managers, officers,
employees, executives, representatives, agents, predecessors, successors and
assigns from any claims or liabilities related in any way to Executive's
employment or director relationship with the Company.
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4.2.6 If the Company terminates Executive without
Cause or if Executive terminates this Agreement for Good Reason during the first
year of the Term, Executive's salary from the termination date through the end
of such first year shall be deemed accrued and unpaid for purposes of this
Section 4.2.
4.3 Procedure Upon Termination. On termination of employment,
regardless of the reason, Executive (or his heirs, representatives or estate, as
the case may be) shall promptly return to the Company all information,
agreements, and other documents of the Company, and copies, notes and extracts
of any of the foregoing, and all other property belonging to the Company (or its
affiliates), including without limitation, customer, investor and institution
lists, data bases, manuals, letters, materials, reports, and records in
Executive's possession or control no matter from whom or in what manner
acquired.
5. Covenants.
5.1 Nondisclosure. Executive covenants and agrees that he will
not, for as long as he is employed by the Company and thereafter, except with
the express prior written consent of the Company, directly or indirectly,
whether as an employee, executive, owner, partner, member, agent, director,
officer, shareholder, consultant or in any other capacity, for his own account
or for the benefit of any Person (as hereinafter defined), communicate,
disclose, divulge or make available to any Person any confidential or
proprietary information of the Company or its affiliates, including, but not
limited to, information relating to the Company's (or any affiliate's)
customers, suppliers, investors, prospects, pricing, data bases, sales methods,
methods of doing business, financing, financial prospects, financial position
and results; but excluding information that is publicly available as of the date
of this Agreement or which becomes publicly available other than by breach of
this Agreement. For purposes of this Agreement, "Person" means a natural person,
corporation, partnership, limited liability company, trust, estate, joint
venture, sole proprietorship, government (and any branch or subdivision
thereof), governmental agency, association, cooperative or other entity.
5.2 Noncompetition and Nonsolicitation. Executive acknowledges
that: (a) the Company's business is highly competitive; and (b) the Company's
business requires substantial and continuous expenditures of time and money to
develop, market and maintain. Accordingly, during the period of Executive's
employment with the Company and for a period of 12 months thereafter (so long as
the Company has not terminated Executive without Cause and Executive has not
terminated this Agreement for Good Reason), Executive shall not, except with the
Company's express prior written consent, directly or indirectly, whether as a
consultant, employee, executive, owner, partner, member, agent, director,
officer, shareholder or in any other capacity, for Executive's own account or
for the benefit of any Person (other than in the case of carrying out his duties
for the Company):
5.2.1 Solicit, divert, take away or interfere with
any customers, investors, vendors/suppliers, strategic partners, or identified
prospects of the Company (or any of the Company's affiliates);
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5.2.2 Solicit, divert or induce any Person who is an
employee, executive or consultant of the Company (or any of the Company's
affiliates) to leave or to work for Executive or any Person with which Executive
is connected or affiliated; or
5.2.3 Establish, own or control, or participate in
the establishment, ownership or control of a business within the states of
Connecticut, Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia or
the District of Columbia which is in competition with any substantial part of
the Company's business as such business exists now (as described in the
Background to this Agreement) or may exist during the Term; provided, however,
that nothing in this Section 5.2.3 shall prevent Executive from owning not more
than five percent of the outstanding securities of any Person whose securities
are listed on the New York Stock Exchange, American Stock Exchange or are quoted
on the NASDAQ National Market System.
5.3 Equitable Relief. Executive acknowledges that any breach
by him of any of the covenants and agreements set forth in Section 5.1 and
Section 5.2 (collectively, the "Covenants") may result in irreparable injury to
the Company for which monetary damages may not adequately compensate the
Company. Therefore, in the event of any such breach, the Company shall be
entitled, in addition to all other rights and remedies which the Company may
have at law or in equity, to have an injunction issued by any competent court
enjoining and restraining Executive from continuing such breach. The existence
of any claim or cause of action which Executive or any such other Person may
have against the Company shall not constitute a defense or bar to the
enforcement of any of the Covenants. If the Company is obliged to resort to
litigation to enforce any of the Covenants which has a fixed term, then such
term shall be extended for a period of time equal to the period during which a
breach of such Covenant was occurring, beginning on the date of a final court
order holding that such a breach occurred or, if later, the last day of the
original fixed term of such Covenant.
5.4 Consideration. Executive expressly acknowledges and agrees
that the Covenants are (a) the result of arm's length negotiations between the
parties, and without Executive's agreement to be bound by the Covenants, the
Company would not have entered into this Agreement, (b) are reasonable in scope
and duration and (c) are necessary to protect the legitimate business interests
of the Company and that the level of compensation and benefits provided to
Executive hereunder includes good and adequate consideration for the Covenants.
5.5 Scope. If any portion of any Covenant or its application
is construed to be invalid, illegal or unenforceable, then the other portions
and their application shall not be affected thereby and shall be enforceable
without regard thereto. If any of the Covenants is determined to be
unenforceable because of its scope, duration, geographical area or similar
factor, then the court making such determination shall have the power to reduce
or limit such scope, duration, area or other factor, and such Covenant shall
then be enforceable in its reduced or limited form.
5.6 Work Product. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
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relate to the Company's or any of its affiliates' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and/or its affiliates ("Work Product") belong to, and are owned by, the
Company or such affiliate. Executive shall promptly disclose such Work Product
to the Company and perform all actions reasonably requested by the Company
(whether during or after the Term) to establish and confirm such ownership
(including, without limitation, executing and delivering assignments, consents,
powers of attorney and other instruments).
6. Representations.
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6.1 By Executive. Executive represents and warrants to the
Company: (a) that there are no restrictions or agreements whatsoever to which
Executive is a party which would prevent or make unlawful Executive's execution
of this Agreement or Executive's employment hereunder; (b) that Executive's
execution of this Agreement and Executive's employment hereunder shall not
constitute a breach or violation of any law, contract or agreement, oral or
written to which Executive is a party or by which Executive is bound; (c) that
Executive is free and able to execute this Agreement and to enter into
employment with the Company; and (d) that this Agreement is a valid and binding
obligation of Executive, enforceable in accordance with its terms. The foregoing
representations and warranties shall forever survive the termination of this
Agreement.
6.1 By Company. The Company hereby represents and warrants to
the Executive: (a) that there are no restrictions or agreements whatsoever to
which Executive is a party which would prevent or make unlawful the Company's
execution of this Agreement or employment of Executive hereunder; (b) that the
Company's execution of this Agreement shall not constitute a breach or violation
of any law, contract, agreement or understanding, oral or written to which the
Company is a party or by which it is bound; (c) that the Company is free and
able to execute this Agreement and to employ Executive; and (d) that this
Agreement is a valid and binding obligation of the Company, enforceable in
accordance with its terms. The foregoing representations and warranties shall
forever survive the termination of this Agreement.
7. Miscellaneous.
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7.1 Notices. All notices, requests, demands, consents or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if and when (1) delivered
personally, (2) mailed by first class certified mail, return receipt requested,
postage prepaid, (3) sent by a nationally recognized overnight courier service,
postage or delivery charges prepaid, with receipt, or (4) delivered by facsimile
(with receipt, and with original delivered in accordance with any of (1), (2) or
(3) above) to the parties at their respective addresses set forth on the
signature page of this Agreement or to such other addresses of which the parties
may give notice in accordance with this Section.
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7.2 Entire Understanding; Modification. This Agreement and the
documents referred to herein sets forth the entire understanding between the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous, written, oral, expressed or implied, communications, agreements
and understandings with respect to the subject matter hereof. This Agreement
shall not be amended, supplemented or terminated except in a writing signed by
both parties. No action taken by the Company hereunder, including without
limitation, any waiver, consent or approval, shall be effective unless
authorized by the Company's Board of Directors.
7.3 Parties in Interest. This Agreement shall inure to the
benefit of, bind and be enforceable by Executive and his heirs, personal
representatives, estate and beneficiaries, and the Company and its successors
and assigns (by merger, consolidation, purchase or otherwise). This Agreement is
a personal employment contract for Executive's personal services, and
Executive's rights and duties hereunder shall not be assignable or delegable by
Executive.
7.4 Severability. If any provision of this Agreement is
construed to be invalid, illegal or unenforceable, then the remaining provisions
hereof shall not be affected thereby and shall be enforceable without regard
thereto.
7.5 Counterparts. This Agreement may be fully executed in any
number of counterparts, each of which when so executed and delivered shall be an
original hereof, and such counterparts (whether original or reproductions)
together shall constitute one and the same instrument.
7.6 Section Headings; References. Section and subsection
headings in this Agreement are inserted for convenience of reference only, and
shall neither constitute a part of this Agreement nor affect its construction,
interpretation, meaning or effect. All words used in this Agreement shall be
construed to be of such number and gender as the context requires or permits.
7.7 Waivers; Abstention. Neither the failure nor delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall the single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
Executive shall not participate in any Board or committee vote that involves any
determination of Cause or any of Executive's rights, responsibilities or duties
under this Agreement.
7.8 Controlling Law. This agreement is made under, and shall
be governed by, construed and enforced in accordance with, the substantive laws
of the Commonwealth of Pennsylvania applicable to agreements made and to be
performed entirely therein without giving effect to principles of conflicts of
laws.
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7.9 EXCLUSIVE JURISDICTION. IN ANY ACTION OR PROCEEDING
BETWEEN THE PARTIES HERETO, EXECUTIVE AND THE COMPANY IRREVOCABLY CONSENT AND
AGREE TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS LOCATED IN
PHILADELPHIA, PENNSYLVANIA AND THE STATE COURTS LOCATED IN PHILADELPHIA COUNTY,
PENNSYLVANIA, AND TO SERVICE OF PROCESS BY HAND DELIVERY OR BY CERTIFIED MAIL
(RETURN RECEIPT REQUESTED), TO THE ADDRESSES FOR EACH PARTY SET FORTH ON THE
SIGNATURE PAGE HERETO. EACH OF THE PARTIES HERETO WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY ACTION OR PROCEEDING,
ANY CLAIM THAT IT OR HE IS NOT SUBJECT TO THE JURISDICTION OF THE ABOVE COURTS,
THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE
VENUE OF SUCH ACTION OR PROCEEDING IS IMPROPER.
7.10 ADVISOR REVIEW; COSTS. Executive has had the full
opportunity to seek independent advice from his advisors (including, but not
limited to, legal counsel) in connection with this Agreement and his employment
with the Company. Following execution of this Agreement, the Company shall
reimburse Executive for the reasonable legal fees and disbursements of
Executive's legal counsel incurred in connection with the preparation and
negotiation of this Agreement, up to $10,000.
{This Space Intentionally Left Blank - - Signature Page Follows}
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THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY, the parties hereto
have executed this Agreement as of the date above written.
TODAY'S MAN, INC.
By:
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Xxxxx Xxxx
Chairman
Address: 000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Fax: 000-000-0000
With a copy to:
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
EXECUTIVE:
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Xxxxx Xxxxx
Address:
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Fax:
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With a copy to:
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{Signature Page to Today's Man/Xxxxx Xxxxx Employment Agreement}
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