dELiA*s, INC. Employment Agreement for Michele Donnan Martin
Exhibit
10.1
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xXXxX*s,
INC.
Employment
Agreement for Xxxxxxx Xxxxxx Xxxxxx
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xXXxX*s,
INC.
Employment
Agreement
for Xxxxxxx Xxxxxx Xxxxxx
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29.
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AGREEMENT,
made and entered into as of
the 28th day of January, 2008 by and between xXXxX*s, Inc., a Delaware
corporation (together with its successors and assigns permitted under this
Agreement, the “Company”), and Xxxxxxx Xxxxxx Xxxxxx (the
“Executive”).
W
I T
N E S S E T H :
WHEREAS,
the Company desires to employ
the Executive pursuant to an agreement embodying the terms of such employment
(this “Agreement”) and the Executive desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this
Agreement;
NOW,
THEREFORE, in consideration of the
premises and mutual covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged, the Company and
the Executive (individually a “Party” and together the “Parties”) agree as
follows:
1.
Definitions.
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(a)
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“Amended
and Restated 2005 Stock Incentive Plan” shall have the meaning set forth
in Section 6 below.
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(b) “Base
Salary” shall have the meaning set forth in Section 4 below.
(c) “Board”
shall mean the Board of Directors of the Company.
(d) “Cause”
shall have the meaning set forth in Section 10(b) below.
(e) “Confidential
Information” shall have the meaning set forth in Section 11 below.
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(f)
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“Constructive
Termination Without Cause” shall have the meaning set forth in Section
10(c) below.
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(g) “Effective
Date” shall have the meaning set forth in Section 2 below.
(h) “MIP”
shall have the meaning set forth in Section 5 below.
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(i)
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“Original
Term of Employment” shall have the meaning set forth in Section 2
below.
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(j) “Renewal
Term” shall have the meaning set forth in Section 2 below.
(k) “Restriction
Period” shall have the meaning set forth in Section 12 below.
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(l)
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“Severance
Period” shall have the meaning set forth in Section 10(c)(ii) below,
except as provided otherwise in Section 10(e)
below.
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(m) “Subsidiary”
shall have the meaning set forth in Section 11 below.
(n) “Term
of Employment” shall have the meaning set forth in Section 2 below.
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(o)
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“Termination
Without Cause” shall have the meaning set forth in Section 10(c)
below.
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(a)
The term of the Executive's employment under this Agreement shall commence
on
January 28, 2008 (the “Effective Date”) and end on the fourth anniversary of
such date, unless Executive’s employment ceases earlier pursuant to the terms of
this Agreement (the “Original Term of Employment”). The Original Term
of Employment shall be automatically renewed for successive one-year terms
(the
“Renewal Terms”) unless at least 180 days prior to the expiration of the
Original Term of Employment or any Renewal Term, either Party notifies the
other
Party in writing that Executive is electing to terminate this Agreement at
the
expiration of the then current Term of Employment. “Term of
Employment” shall mean the Original Term of Employment and all Renewal
Terms.
(b)
Notwithstanding anything in this Agreement to the contrary, at least one year
prior to the expiration of the Original Term of Employment, the Parties shall
meet to discuss this Agreement and attempt to negotiate a mutually acceptable
new employment agreement or amendment to this Agreement, governing the period
subsequent to the Original Term of Employment. Nothing in this
subparagraph 2(b) shall obligate Company or Executive to enter into a new
employment agreement or an amendment of this Agreement.
3.
Position, Duties and
Responsibilities.
(a) Generally. Executive
shall serve initially as President of the Company’s xXXxX*s Brand (Retail and
Direct) reporting to the Company’s Chief Executive
Officer. Initially, Executive shall be responsible for merchandising,
art and visual design, fashion and styling direction and trend and
color direction on all xXXxX*s Brand merchandise whether in the catalog, on
xXXxX*s website or in the stores. Within a reasonable period of time
as determined by Company, Executive’s responsibilities are expected to expand to
include all creative and design elements as they pertain to the design and
creative direction of the xXXxX*s catalog, as well as visual merchandising
of
the stores. Executive shall have and perform such duties,
responsibilities, and authorities as shall be reasonably assigned by the Company
from time to time and as are consistent with the above-mentioned position,
which
may be modified as the Company deems necessary in its reasonable
discretion. Executive shall devote substantially all of Executive’s
business time and attention (except for periods of vacation or absence due
to
illness), and Executive’s best efforts, abilities, experience, and talent to
Executive’s position and the businesses of the Company in accordance with all
Company policies.
(b) Other
Activities. Anything herein to the contrary notwithstanding,
nothing in this Agreement shall preclude the Executive from (i) engaging in
reasonable charitable activities and community affairs and (ii) managing
Executive’s personal investments and affairs, provided that such activities do
not materially interfere with the proper performance of Executive’s duties and
responsibilities under this Agreement and not otherwise detrimental to the
interests of the Company. Unless approved in writing by the Board of
the Company, the Executive may not serve on the board of directors of any
corporation or the board of any association and/or charitable
organization.
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4.
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Base
Salary.
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The
Executive shall be paid an
annualized salary, payable in accordance with the regular payroll practices
(including bi-weekly pay periods) of the Company, of not less than $500,000,
less applicable withholdings, subject to annual review thereafter at the start
of each fiscal year for increase at the discretion of the Compensation Committee
of the Board (“Base Salary”). Executive’s first annual review is
expected to occur on or about March, 2009.
5.
Annual Incentive Awards.
(a) Subject
to the terms and conditions of the plan that shall govern eligibility and
participation, Executive shall participate in the Company’s Management Incentive
Plan each year during the Term of Employment (the “MIP”) with a target annual
incentive award opportunity of no less than 60% of Base Salary or in a successor
plan to the MIP that provides the Executive with a substantially equivalent
opportunity. Payment of annual incentive awards shall be made at the
same time that other participants in the MIP receive their incentive
awards.
(b)
Additionally, the minimum amount of the annual incentive award payable to
Executive under the 2008 MIP for the Company’s fiscal year ending January 31,
2009 shall be ($300,000), subject to the terms and conditions of the plan that
shall govern eligibility and participation. Such amount shall be
payable as follows: 40% of the minimum bonus ($120,000) will be paid in August,
2008 and the remaining 60% of the minimum bonus amount ($180,000) will be paid
on or about March, 2009. Such minimum amount shall be
pro-rated for the amount of time Executive is employed by the Company for fiscal
year 2008 if Executive is not employed by the Company for the entire 2008 fiscal
year.
6.
Long-Term Stock Incentive
Programs.
(a) General/Options. Subject
to the terms and conditions of the Amended and Restated 2005 Stock Incentive
Plan governing eligibility and participation, Executive shall be eligible to
participate in and to receive stock incentive awards under the Amended and
Restated 2005 Stock Incentive Plan and any successor plan. Executive
shall also receive an initial stock option grant of 275,000 stock options at
an
exercise price equal to the closing price of xXXxX*s stock on NASDAQ on the
day
prior to the Effective Date. Such stock options shall vest in four
equal installments of 68,750 on each of the 1st, 2nd,
3rd and 4th
anniversaries of
the Effective Date.
(b) Restricted
Stock. On Effective Date, the Company shall grant Executive a
restricted stock grant of 25,000 shares of the Company’s common stock, which
restrictions shall lapse in four (4) equal installments of 6,250 shares on
each
of the 1st,
2nd, 3rd
and 4th anniversaries
of
the Effective Date.
7.
Employee Benefit
Programs.
During
the Term of Employment, the
Executive shall be entitled to participate in such employee pension and welfare
benefit plans and programs of the Company as are made available to the Company’s
employees generally, as such plans or programs may be in effect or modified
from
time to time, including, without limitation, health, medical, dental, long-term
disability, life insurance, 401(k) with Company match and employee
discounts. Executive will be eligible for four (4) weeks paid
vacation as well as Company observed holidays, five (5) sick days and three
(3)
personal days in accordance with Company policy. The terms of the
Company’s official plan documents shall govern the terms of Executive’s
eligibility and participation in Company’s benefit plans.
8.
Disability.
(a) During
the Term of Employment, and subject to the terms and conditions on eligibility
and participation as set forth in the Company’s Long-Term Disability Plan
documents, the Executive shall be entitled to disability coverage as described
in this Section 8(a). In the event the Executive becomes disabled, as
that term is defined under the Company’s Long-Term Disability Plan, the
Executive shall be entitled to receive benefits pursuant to the Company’s
Long-Term Disability Plan in place of Executive’s Base Salary and any other
employee benefits other than for disabled employees in an amount pursuant to
the
Company’s Long-Term Disability Plan in effect at the commencement date of
the
disability
(“Commencement Date”) for a period beginning on the Commencement Date and ending
with the Executive’s attainment of age 65. If (i) the Executive
ceases to be disabled (as determined in accordance with the terms of
the Long-Term Disability Plan) during the Term of Employment,
(ii) Executive’s position or another senior executive position is then
vacant and (iii) the Company requests in writing that Executive resume such
position, Executive may elect to resume such position by written notice to
the
Company within 15 days after the Company delivers its request. If
Executive resumes such position, Executive shall thereafter be entitled to
Executive’s Base Salary at the annual rate in effect at the Commencement Date
and, for the year Executive resumes Executive’s position, a pro rata annual
incentive award and to participate in any other employee benefit programs
outlined in Section 6 and 7 of this Agreement that are then in
effect. If Executive ceases to be disabled and does not resume
Executive’s position in accordance with the preceding sentence, Executive shall
be treated as if Executive voluntarily terminated Executive’s employment
pursuant to Section 10(e) as of the date the Executive ceases to be
disabled. If the Executive is not offered Executive’s position or
another executive position after Executive ceases to be disabled during the
Term
of Employment, Executive shall be treated as if Executive’s employment was
terminated without Cause pursuant to Section 10(c) as of the date the Executive
ceases to be disabled.
(b) Subject
to the applicable plan documents, during the period the Executive is
receiving disability benefits pursuant to Section 8(a) above, Executive shall
continue to be treated as an employee for purposes of all employee benefits
and
entitlements in which Executive was participating on the Commencement Date,
including without limitation, the benefits and entitlements referred to in
Sections 6 and 7 above, except that the Executive shall not be entitled to
receive any annual salary increases or any new stock incentive awards following
the Commencement Date.
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9.
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Reimbursement
of
Business and Other
Expenses.
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The
Executive is authorized to incur
reasonable expenses in carrying out Executive’s duties and
responsibilities under this Agreement, and the Company shall promptly reimburse
Executive for all business expenses incurred in connection therewith, subject
to
documentation in accordance with the Company’s travel and expense reimbursement
policy.
10.
Termination of Employment.
(a) Termination
Due to Death. In the event the Executive’s employment with the
Company is terminated due to Executive’s death, Executive’s estate or
Executive’s beneficiaries, as the case may be, shall be entitled to and their
sole remedies under this Agreement shall be:
(i) Base
Salary through the date of death, which shall be paid in a single lump sum
not
later than 15 days following the Executive’s death;
(ii) the
right to exercise all outstanding stock options that are vested as of the
date
of death for a period of one year following death or for the
remainder of the exercise period, if less;
(iii) the
restrictions shall lapse on all shares of restricted stock awarded where
restrictions have not yet lapsed; and
(iv) other
or additional benefits then due or earned in accordance with applicable plans
and programs of the Company.
(b) Termination
by the Company for Cause.
(i)
“Cause” shall mean:
(A) Executive’s
conviction of, entrance of a plea of guilty or nolo contendere to, a felony
unless the Executive’s conduct is so severe or the threat to the Company’s
reputation requires the Company to terminate the Executive immediately in
its
reasonable discretion or business judgement; or
(B) fraudulent
conduct by Executive in connection with the business affairs of the Company;
or
(C) theft,
embezzlement, or other criminal misappropriation of funds by Executive from
the
Company (other than good faith expense account disputes); or
(D) Executive’s
willful misconduct, which has, or would if generally known, material adversely
affect the goodwill, business, or reputation of the Company; or
(E) Executive’s
material breach of this Agreement.
For
purposes of this Agreement, an act or failure to act on Executive’s part shall
be considered “willful” if it was done or omitted to be done by Executive not in
good faith, and shall not include any act or failure to act resulting from
any
incapacity of Executive.
(ii) In
the event the Company terminates the Executive’s employment for Cause, Executive
shall be entitled to and Executive‘s sole remedies under this Agreement shall
be:
(A) Base
Salary through the date of the termination of Executive’s employment for Cause,
which shall be paid in a single lump sum not later than 15 days following
the
Executive s termination of employment; and
(B) other
or additional benefits, to the extent then due or earned in accordance with
applicable plans or programs of the Company.
(c) Termination
Without Cause or Constructive Termination Without Cause. In the
event the Executive’s employment with the Company is terminated without Cause
(which termination shall be effective as of the date specified by the Company
in
a written notice to the Executive), other than due to death, or in the event
there is a Constructive Termination Without Cause (as defined below), the
Executive shall be entitled to and Executive’s sole remedies under this
Agreement shall be:
(i) Base
Salary through the date of termination of the Executive’s employment, which
shall be paid in a single lump sum not later than 15 days following the
Executive’s termination of employment;
(ii) Base
Salary, at the annualized rate in effect immediately prior to the date of
communication (verbal or otherwise) from Company to Executive of termination
of
the Executive’s employment (or in the event a reduction in Base Salary is the
basis for a Constructive Termination Without Cause, then the Base Salary
in
effect immediately prior to such reduction), for a period of 12 months following
such termination to be paid, less applicable withholdings, in accordance
with
the Company’s standard payroll cycle (the “Severance Period”); provided further
that the salary continuation payment under this Section 10(c)(ii) shall be
in
lieu of any salary continuation arrangements under any other severance program
of the Company or any other agreement between the Executive and the
Company;
(iii) (A)
the tranche of stock options which are scheduled to vest on the next succeeding
anniversary date of the Effective Date after the date of termination shall
vest
as of the date of termination and (B) the right to exercise all outstanding
stock options that are vested as of the date of termination during the 90-day
period following termination or for the remainder of the
exercise period, if less;
(iv) (A)
the restrictions on the tranche of shares of restricted
shares which are scheduled to lapse on the next succeeding anniversary of
the
Effective Date after the date of termination shall lapse as of the date of
termination and (B) all other shares of restricted stock awarded where
restrictions have not yet lapsed as of the date of termination shall be
cancelled as of the date of termination;
(v) continued
participation in all medical, and dental plans at the same benefit level
at
which Executive was participating on the date of the termination of Executive’s
employment, subject to the terms and conditions of the official plan documents,
until the earlier of:
(A) the
end of the Severance Period; or
(vi) other
or additional benefits then due or earned in accordance with applicable plans
and programs of the Company.
“Termination
Without Cause” shall mean the Executive’s employment is terminated by the
Company for any reason other than Cause (as defined in Section 10 (b)) or
due to
death.
“Constructive
Termination Without Cause” shall mean a termination of the Executive’s
employment at Executive’s initiative as provided in this Section 10(c) following
the occurrence, without the Executive’s written consent, of one or more of the
following events (except as a result of a prior termination):
(A) a
material reduction in Executive’s title or a material reduction of Executive’s
duties or responsibilities;
(B) a
material decrease in annual Base Salary, or target annual incentive award
opportunity below 60% of Base Salary; or
(C) a
failure by the Company to perform any
material obligation under, or breach by the Company of any material provision
of, this Agreement that is not cured within 30 days of receipt of written
notice
from Executive.
(d) Voluntary
Termination.
(i) In
the event of a termination of employment by the Executive on Executive’s own
initiative after delivery of 90 days advance written notice, other than a
termination due to death or Constructive Termination Without Cause, the
Executive shall have the same entitlements as provided in Section 10(b)(ii)
above for a termination for Cause. Notwithstanding any implication to
the contrary, the Executive shall not have the right to terminate Executive’s
employment with the Company during the Term of Employment except in the event
of
a Constructive Termination Without Cause and any voluntary termination of
employment during the Term of Employment in violation of this Agreement shall
be
considered a material breach. In the event the Executive becomes
disabled, as that term is defined under the Company’s Long Term Disability Plan,
the Executive’s termination of employment shall be governed by the terms of
Section 8 of this Agreement.
(ii) If,
and only if, there is a change in or replacement of the Company’s Chief
Executive Officer during the Original Term of Employment then:
(A) Within
seven (7) days after the expiration of the six (6) month period after the
date
of such change or replacement, Executive may provide the Company with a 90-day
notice of termination on the Executive’s own initiative; and
(B) Company,
at its option and in its sole discretion, shall select either:
(1) Upon
termination to provide Executive with the entitlements contained in Section
10(c) of this Agreement and the provisions of Section 12 shall continue to
apply; or
(2) Upon
termination, to provide Executive with the entitlements contained in Section
10(b)(ii) of this Agreement and the provisions of Section 12 of this Agreement
shall not apply; provided, however that all other provisions of
this Agreement which apply after termination shall continue to
apply.
(e) No
Mitigation; No Offset. In the event of
any termination of employment under this Section 10, the Executive shall
not be
obligated to seek other employment; amounts due the Executive under this
Agreement shall not be offset by any remuneration attributable to any subsequent
employment that Executive may obtain.
(f) Nature
of Payments. Any amounts due under this Section 10 are in the
nature of severance payments considered to be reasonable by the Company and
are
not in the nature of a penalty.
(g) Exclusivity
of Severance Payments. Upon termination of the Executive’s
employment during the Term of Employment, Executive shall not be entitled
to any
severance payments or severance benefits from the Company or any payments
by the
Company on account of any claim by Executive of wrongful termination, including,
but not limited to, claims under any federal, state or local human and civil
rights or labor laws, other than the payments and benefits provided in this
Section 10.
(h) Release of Employment
Claims. The
Executive agrees, as a condition to receipt of the termination payments and
benefits provided for in this Section 10, that Executive
will execute a release agreement, in a
form reasonably satisfactory to the Company, releasing any and all claims
arising out of the Executive’s employment (other than enforcement of this
Agreement).
11.
Confidentiality; Cooperation
with Regard to Litigation.
(a) During
the Term of Employment and thereafter, the Executive shall not, without the
prior written consent of the Company, disclose to anyone or make use of any
Confidential Information, except when required to do so in the normal
course of conducting business on behalf of the Company, by legal process, by
any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) that requires Executive to divulge, disclose or make accessible such
information. In the event that the Executive is so ordered, Executive
shall give prompt prior written notice to the Company in order to allow the
Company the opportunity to object to or otherwise resist such order and consents
and will not object to the Company’s standing to consent or seek protection
relating to any such order.
(b) During
the Term of Employment and thereafter, Executive shall not disclose the
existence or contents of this Agreement beyond what is disclosed in the proxy
statement or documents filed with the government unless and to the extent such
disclosure is required by law, by a governmental agency, or in a document
required by law to be filed with a governmental agency
or in connection with enforcement of his rights under this
Agreement. In the event that disclosure is so required, the Executive
shall give prompt prior written notice to the Company in order to allow the
Company the opportunity to object to or otherwise resist such
requirement. This restriction shall not apply to such disclosure by
Executive to members of Executive’s immediate family, Executive’s tax, legal or
financial advisors, any lender or tax authorities or to potential future
employers to the extent necessary, each of whom shall be advised not to disclose
such information. Similarly, Executive acknowledges that the Company
shall have the right to advise potential or actual future employers of Executive
of her post-employment obligations under this Agreement.
(c) “Confidential
Information” shall mean all information that is not known or available to the
public concerning the business of the Company or any Subsidiary relating to
any
of their products, product development, designs, costing, marketing plans and
strategies, expansion plans and strategies, trade secrets, customers, suppliers,
finances, and business plans and strategies. For this purpose,
information known or available generally within the trade or industry of the
Company or any Subsidiary shall be deemed to be known or available to the
public. Confidential Information shall include information that is,
or becomes, known to the public as a result of a breach by the Executive of
the
provisions of Section 11(a) above.
(d) “Subsidiary”
shall mean any corporation controlled directly or indirectly by the Company
and
any affiliate of the Company.
(e) At
any time during the Term of Employment when requested by the Company, or
immediately upon Executive’s cessation of employment with the Company, Executive
shall return all Company property to the Company, including, without limitation
all Company issued computers, laptops, PDAs, Blackberries or other Company
property or Confidential Information.
(f) The
Executive agrees to cooperate with the Company, during the Term of Employment
and thereafter (including following the Executive’s termination of employment
for any reason), by making himself or herself available to testify on behalf
of
the Company or any Subsidiary or affiliate of the Company, in any action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, and
to
assist the Company, or any Subsidiary or affiliate of the Company, in any such
action, suit, or proceeding, by providing information and meeting and
consulting with the Board or its representatives or counsel, or
representatives or counsel to the Company, or any Subsidiary or affiliate of
the
Company, requesting Executive’s provision of testimony or
assistance.
12. Non-competition.
(a) During
the Restriction Period (as defined in Section 12(b) below) and in consideration
for any payments pursuant to Section 10, the Executive shall not engage in
Competition with the Company or any Subsidiary. “Competition” shall
mean engaging in any activity, except as provided below, for a Competitor of
the
Company or any Subsidiary, whether as an employee, consultant, principal, agent,
officer, director, partner, shareholder (except as a less than one percent
shareholder of a publicly traded company) or otherwise. A
“Competitor” shall mean any designer, manufacturer, wholesaler or retailer which
designs, manufactures, markets or sells in the United States specialty apparel,
clothing or accessories to girls and women between the ages of 11 and 25
(“Competitive Business”) and (i) operates stores that engage in the Competitive
Business within seventy-five, or (75) miles of any store location of the
Company, or (ii) operates a catalog business that engages in the Competitive
Business or (iii) operates an e-commerce business that engages in the
Competitive Business, including but not limited to, those listed on Exhibit
A
annexed hereto. If the Executive commences employment or becomes a
consultant, principal, agent, officer, director, partner, or shareholder of
any
entity that is not a Competitor at the time the Executive initially becomes
employed or becomes a consultant, principal, agent, officer, director, partner,
or shareholder of the entity, future activities of such entity shall not result
in a violation of this provision unless (x) such activities were contemplated
at
the time the Executive initially became employed or becomes a consultant,
principal, agent, officer, director, partner, or shareholder of the entity
(and
the contemplation of such activities was known to the Executive) or (y) the
Executive commences directly or indirectly overseeing or managing the activities
which are competitive with the activities of the Company or
Subsidiary.
(b) For
the purposes of this Section 12 and Section 13 below, “Restriction Period” shall
mean the period beginning with the Effective Date and ending with the first
anniversary of such termination.
13.
Non-solicitation
(a) Employees. During
the Restriction Period, Executive shall not induce and/or solicit employees
of
the Company or any Subsidiary to terminate their employment. During
the portion of the Restriction Period following the termination of the
Executive’s employment, the Executive shall not directly or indirectly hire any
employee of the Company or any Subsidiary or any person who was employed by
the
Company or any Subsidiary within 180 days of such hiring.
(b) Vendors/Business
Partners. Executive promises and agrees that during the
Restriction Period, Executive will not influence or attempt to influence
vendors, or business partners of the Company or any of its present or future
subsidiaries, either directly or indirectly, to divert from the Company their
business to any individual, partnership, firm, corporation or other entity
then
in competition with the business of the Company or any subsidiary or the
Company.
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14.
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In
addition to whatever other rights
and remedies the Company may have at equity or in law, if the Executive breaches
any of the provisions contained in Sections 11, 12 or 13 above or any other
obligations of Executive to the Company under this Agreement, the Company (a)
shall have the right to immediately terminate all payments and benefits due
under this Agreement (b) shall have the right to seek injunctive relief without
the necessity for posting a bond and (c) shall have the right to seek attorneys’
fees and costs associated with enforcing its rights under this
Agreement. The Executive acknowledges that such a breach would cause
irreparable injury and that money damages would not provide an adequate remedy
for the Company and that the Company retains its rights to seek all other
available relief in addition to the relief set forth in this
Section.
15.
Resolution of Disputes.
Any
disputes arising under or in
connection with this Agreement, other than seeking injunctive relief under
Section 14, shall be resolved by binding arbitration, to be held at an office
closest to the Company’s principal offices in accordance with the Commercial
rules and procedures of the American Arbitration Association, except that
disputes arising under or in connection with Sections 11, 12 and 13 above shall
be submitted to the federal or state courts in the State of New York, New York
County. Discovery in any arbitration shall be conducted in accordance
with the Federal Rules of Civil Procedure. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Pending the resolution of any arbitration or court
proceeding, the Company shall continue payment of all amounts and benefits
due
the Executive under this Agreement.
16. Indemnification.
(a) Company
Indemnity. The Company agrees that if the Executive is made a
party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a “Proceeding”), by
reason of the fact that Executive is or was a director, officer or employee
of
the Company or any Subsidiary or is or was serving at the request of the Company
or any Subsidiary as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of
such
Proceeding is the Executive’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Company to the fullest extent
legally permitted or authorized by the Company’s certificate of incorporation or
bylaws or resolutions of the Company's Board of Directors or, if greater, by
the
laws of the State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney’s fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if Executive has ceased
to be a director, member, officer, employee or agent of the Company or other
entity and shall inure to the benefit of the Executive s heirs, executors and
administrators.
(b) No
Presumption Regarding Standard of Conduct. Neither the failure of
the Company (including its board of directors, independent legal counsel or
stockholders) to have made a determination prior to the commencement of any
proceeding concerning payment of amounts claimed by the Executive under Section
16(a) above that indemnification of the Executive is proper because Executive
has met the applicable standard of conduct, nor a determination by the Company
(including its board of directors, independent legal counsel or stockholders)
that the Executive has not met such applicable standard of conduct, shall create
a presumption that the Executive has not met the applicable standard of
conduct.
(c) Liability
Insurance. The Company agrees to continue and maintain a
directors and officers liability insurance policy covering the Executive to
the
extent the Company provides such coverage for its other executive
officers.
17.
Effect of Agreement on Other
Benefits.
Except
as specifically provided in this
Agreement, the existence of this Agreement shall not be interpreted to preclude,
prohibit or restrict the Executive’s participation in any other employee benefit
or other plans or programs in which Executive currently
participates.
18. Assignability;
Binding Nature.
This
Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Executive) and permitted assigns. No rights or obligations
of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred
to
a subsidiary of the Company or in connection with the sale or transfer of all
or
substantially all of the assets of the Company, provided that the assignee
or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations
and
duties of the Company, as contained in this Agreement, either contractually
or
as a matter of law. The Company further agrees that, in the event of
a sale or transfer of assets as described in the preceding sentence, it shall
use reasonable efforts in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than Executive’s
rights to compensation and benefits, which may be transferred only by will
or
operation of law, except as provided in Section 24 below.
19.
Representation.
Each
Party represents and warrants that
it is fully authorized and empowered to enter into this Agreement and that
the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization.
20.
Entire Agreement.
This
Agreement contains the entire
understanding and agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties
with
respect thereto.
21. Amendment
or
Waiver.
No
provision in this Agreement may be
amended unless such amendment is agreed to in writing and signed by the
Executive and an authorized officer of the Company. No waiver by
either Party of any breach by the other Party of any condition or provision
contained in this Agreement to be performed by such other Party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and signed by
the Executive or an authorized officer of the Company, as the case may
be.
22. Severability
and
Modification.
In
the event that any provision or
portion of this Agreement shall be determined to be invalid or unenforceable
for
any reason, in whole or in part, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by law. In the event that a court or other
tribunal determines that the restraints in Sections 11, 12 and 13 are in any
way
overbroad or unenforceable, the Parties acknowledge and agree that the court
or
tribunal shall have the right to modify or sever the restraints in order to
enforce them to the fullest extent permitted by applicable law.
23.
Survivorship.
The
respective rights and obligations
of the Parties hereunder shall survive any termination of the Executive’s
employment to the extent necessary to the intended preservation of such rights
and obligations.
24.
Beneficiaries/References.
The
Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary
or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive’s death by giving the Company written notice
thereof. In the event of the Executive's death or a judicial
determination of Executive’s incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to Executive’s
beneficiary, estate or other legal representative.
25. Governing
Law/Jurisdiction.
This
Agreement shall be governed by and
construed and interpreted in accordance with the laws of New York without
reference to principles of conflict of laws. Subject to Section 15,
the Company and the Executive hereby consent to the exclusive jurisdiction
of
any or all of the following courts for purposes of resolving any dispute under
this Agreement: (i) the United States District Court for New York and (ii)
the
Supreme Court of the State of New York, New York County. The Company
and the Executive hereby waive, to the fullest extent permitted by applicable
law, any objection which it or he may now or hereafter have to such jurisdiction
and any defense of inconvenient forum.
26.
Notices.
Any
notice given to a Party shall be in
writing and shall be deemed to have been given when delivered personally or
sent
by certified or registered mail, postage prepaid, return receipt requested,
or
via nationally recognized overnight courier prepaid, duly addressed to the
Party
concerned at the address indicated below or to such changed address as such
Party may subsequently give such notice of:
|
|
If
to the Company:
|
xXXxX*s,
Inc.
00
Xxxx 00xx
Xx.
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Vice President Human Resources and Vice President and General
Coun
|
|
|
If
to the Executive:
|
Xxxxxxx
Xxxxxx Xxxxxx
000
Xxxxxx Xxxxxx
Xxx,
Xxx Xxxx 00000
|
27. Headings.
The
headings of the sections contained
in this Agreement are for convenience only and shall not be deemed to control
or
affect the meaning or construction of any provision of this
Agreement.
28.
Counterparts
This
Agreement may be executed in two
or more counterparts.
29.
Tax Matters
(a) Tax
Withholding. The Company shall withhold from any amounts payable
under this Agreement such federal, state and local taxes as may be required
to
be withheld pursuant to any applicable law or regulation.
(b) Section
409A Compliance. The intent of the parties is that payments and
benefits under this Agreement comply with Internal Revenue Code Section 409A
and
the regulations and guidelines promulgated thereunder (collectively “Code
Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith. If Executive
notifies the Company (with specificity as to the reason therefore) that
Executive believes that any provision of this Agreement (or of any award of
compensation, including equity compensation or benefits) would cause Executive
to incur any additional tax or interest under Code Section 409A, the Company
shall, after consulting with Executive, reform such provision to try to comply
with Code Section 409A through good faith modifications to the minimum extent
reasonably appropriate to conform with Code Section 409A. To the
extent that any provision hereof is modified in order to comply with Code
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to Executive and the Company of the applicable provision without
violating the provision of Code Section 409A.
(c) Special
Section 409A Rules. This paragraph shall apply to all or any
portion of any payment or benefit a payable under the Agreement as a result
of
termination of Executive’s employment that is not exempted from Code Section
409A (“409A Severance Compensation”).
(i) Separation
from Service. If the termination of the Employee’s employment
does not qualify as a “separation from service” within the meaning of Treasury
Regulation section 1.409A-1(h) from the “Company’s Controlled Group”, then any
409A Severance Compensation will not commence until a “separation from service”
occurs or, if earlier, the earliest other date as is permitted under Code
Section 409A. For this purpose, the “Company’s Controlled Group”
means the Company (i) any corporation which is a member of a controlled group
of
corporations (as defined in Code Section 414(b)) which includes the Company
and
(ii) any trade or business (whether or not incorporated) which is under common
control (as defined in Code Section 414(c)) with the Company.
(ii) Six-Month
Delay for “Specified Employees”. Notwithstanding any provisions
to the contrary in this Agreement, if the Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A (a)(2)(B), then with regard to any payment or the provision
of
any benefit that is specified as subject to this Section, such payment or
benefit shall not be made or provided prior to the earlier or (i) the expiration
of six (6)-month period measured from the date of Executive’s “separation from
service” (as such term is defined under Code Section 409A), and (ii) the date of
Executive’s death (the “Delay Period”). Upon the expiration of the
Delay Period, all payments and benefits delayed pursuant to this Section 30(c)
(whether they would have otherwise been payable in a single sum or in
installments in absence of such delay) shall be reimbursed to the Executive
in a
lump sum, and any remaining payments and benefits due under this Agreement
shall
be paid or provided in accordance with the normal payment dates specified for
them herein.
IN
WITNESS WHEREOF, the undersigned
have executed this Agreement as of the date first written above.
|
xXXxX*s,
INC.
|
|
By:
|
| /s/ Xxxxxx Xxxxxxxx |
|
Name:
Xxxxxx Xxxxxxxx
|
|
Title:
Cheif Operating Officer
|
|
EXECUTIVE
|
| /s/ Xxxxxxx Xxxxxx Xxxxxx |
|
Xxxxxxx
Xxxxxx Xxxxxx
|
EXHIBIT
A
Guess?
Inc.
Aeropostale,
Inc.
Zumiez,
Inc.
Abercrombie
& Fitch, Co.
American
Eagle Outfitters, Inc.
Gap,
Inc.
Wet
Seal,
Inc.
Pacific
Sunwear of California, Inc.
Limited
Brands, Inc.
Hot
Topic, Inc.
The
Buckle, Inc.
J.
Crew
Group, Inc.
Urban
Outfitters, Inc.
Xxxxxxxxx
Xxxxx Holding, Inc.
Forever
21
H
&
M
Genesco,
Inc.
Garage
Top
Shops
Zara
Next
Plc
Liz
Claiborne, Inc. (Juicy and Lucky divisions)
AGX
Mast
Industries
Femme
Knits
All
subsidiaries, divisions, affiliates and successors of the above-named entities
are included.
14
