EXHIBIT 10(i)
STATE OF NORTH CAROLINA
EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT, made and entered into effective the 17th
day of December 1996, by and between FAMILY DOLLAR STORES, INC.,
a Delaware corporation (hereinafter referred to as the
"Company"); and R. Xxxxx Xxxxx (hereinafter referred to as the
"Employee");
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee and the
Employee desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and the Employee agree as follows:
1. DEFINITIONS. When used in this Agreement, these words
shall be defined as follows:
1.01 "Affiliate" - Any corporation directly or
indirectly controlling, controlled by or under the common control
of or with the Company.
1.02. "Group" - The Company and all Affiliates.
1.03. "Confidential Information" - Any information
(including, without limitation, any method of operation, source
of supply, organizational details, personnel information,
information regarding real estate activities, including
landlords, prospective landlords and lease data, business
secret, or any formula, pattern, patent, device, plan, process
or compilation of information) which (a) is, or is designed to
be, used in the business of any member of the Group, (b) is
private or confidential in that it is not generally known or
available to the public, and (c) gives any member of the Group
an opportunity to obtain an advantage over competitors who do
not know or use it.
1.04. "Present Territory" - All counties, towns and
cities in North Carolina, Virginia, Georgia, South Carolina, West
Virginia, Maryland, Pennsylvania, Kentucky, Tennessee,
Mississippi, Alabama, Florida, Louisiana, Arkansas, Ohio, Texas,
Delaware, Indiana, New Jersey, Missouri, Oklahoma, Illinois,
Michigan, Kansas, Iowa, New York, Wisconsin, Massachusetts,
Connecticut, Rhode Island, Vermont, New Hampshire, Minnesota,
Nebraska, South Dakota, Colorado, New Mexico and Maine.
1.05. "Future Territory" - All counties, towns and
cities in States other than those listed in the definition of
Present Territory in which the Company does business while the
Employee is employed by the Company.
1.06. "Competitive Company" - A corporation,
partnership, proprietorship or any other legal entity operating
discount retail stores in the Present Territory or the Future
Territory, or in any portion thereof, the majority of which
stores each have 50,000 square feet or less of total space,
including non-selling areas, and that sell or offer for sale
merchandise similar or identical to merchandise sold by the
Group.
1.07. "Cause" -
(a) Willful failure of the Employee to comply
with reasonable written directives of the Chairman of the Board
or Executive Committee or Board of Directors of the Company.
(b) Chronic absenteeism that prevents the
Employee from being able to actively and regularly perform his
duties and responsibilities under this Agreement, including
absenteeism due to medical related reasons but not resulting from
Medical Disability.
(c) Willful misconduct or gross negligence.
(d) Willful violation of substantive Company
policies, practices or procedures.
(e) Indictment of or conviction of the
Employee of a crime involving an act of moral turpitude.
(f) Should the Employee become an alcoholic or
become addicted to habit-forming drugs.
1.08. "Medical Disability" - An illness or medical
condition preventing the Employee from being able to actively and
regularly perform his duties and responsibilities under this
Agreement and that qualifies the Employee for benefits under the
Company's Long Term Disability Insurance Plan.
2. EMPLOYMENT. The Employee shall be employed by the
Company and any Affiliate in the capacity provided for in
Paragraph 3 for the period commencing February 3, 1997, or sooner
if it is reasonably practicable for the Employee to report to
work prior thereto (the "Commencement Date"), and ending on
January 31, 2000, or upon the termination of this Agreement as
provided in Paragraph 6.
3. DUTIES AND RESPONSIBILITIES. The Employee shall be
employed as Vice Chairman and Chief Financial Officer of the
Company and shall perform such reasonable duties and
responsibilities as the Chairman of the Board of the Company
or Board of Directors of the Company or the Executive Committee
of the Board of Directors of the Company may, from time to time,
assign to the Employee. The Employee agrees to accept this
employment and to devote his full time and attention and his best
efforts, ability and fidelity to the performance of the duties
attaching to such employment. In addition, the Employee shall
serve as a director and officer of the Company and any
corporation in the Group, if appropriately elected. During
the period of his employment, the Employee shall not, for
remuneration or profit, directly or indirectly, render any
service to, or undertake any employment for, any other person,
firm or corporation, whether in an advisory or consulting
capacity or otherwise, without first obtaining the written
consent of the Company.
4. COVENANT NOT TO COMPETE AND DISCLOSE CONFIDENTIAL
INFORMATION.
4.01. The Employee will not, directly or indirectly,
for a period of one (1) year from the date of the termination of
his employment with the Company, whether such termination is
voluntary or involuntary or due to the expiration of the term of
this Agreement, (a) engage in competition with the Company, any
Affiliates, or their successors or assigns, for or on behalf of
any Competitive Company, or (b) provide information to, or
travel, canvass, advertise, solicit or sell for, or acquire an
interest in, become employed by, act as agent for, or in any
manner assist, any Competitive Company; provided that the
Employee may become employed by or act as agent or consultant
for, in any capacity, a Competitive Company when his duties and
responsibilities with the Competitive Company do not, directly or
indirectly, involve any business activity in the Present
Territory or the Future Territory; or (c) directly or indirectly
approach, solicit, offer employment to or in any manner induce or
seek to induce any employee of the Group to become employed by a
Competitive Company or to otherwise interfere with the Company's
relationship with any employee in the Group.
The foregoing provisions, however, shall not
prohibit the Employee from making investments in any securities
listed on the New York or American Stock Exchanges or actively
traded in the over-the-counter market in amounts not exceeding 1%
of any single class of such securities outstanding, nor prohibit
the Employee from making investments of any nature in any
securities of the Company.
4.02. The Employee acknowledges that the signing of
this Agreement is a condition of employment and understands that
in the performance of his services hereunder, he may have access
to and obtain knowledge of Confidential Information (as
hereinbefore defined) relating to the business and activities of
the Group. The Employee shall not, without the written consent
of the Company, either during the period of his employment or
thereafter, except to the extent required to be disclosed by law
or judicial action (a) use or disclose any Confidential
Information outside the Group, (b) publish any article with
respect thereto, or (c) except in the performance of his services
hereunder, remove or aid in the removal from the premises of the
members of the Group any such Confidential Information or any
property or material which relates thereto.
5. COMPENSATION.
5.01. In consideration of the services to be rendered
by the Employee pursuant to this Agreement, the Company shall
pay, or cause to be paid, to the Employee a weekly base salary
from the Commencement Date to August 31, 1998 of $8,653.85
($450,000.00 per annum). For subsequent periods during the term
of this Agreement, the Compensation Committee of the Board of
Directors annually shall review and establish the weekly base
salary, which salary is subject to ratification by the Board of
Directors; provided that such weekly base salary shall not be
reduced below $8,653.85.
The salary shall be payable at such intervals
in conformity with the Company's prevailing practice as such
practice shall be established or modified from time to time.
5.02. In addition, during the term of this Agreement
the Employee shall be entitled to:
(a) Participate in the Company's Target Bonus
Plan, as it may be amended or modified in any respect, including
achievement of established goals, as Vice Chairman. The Target
Bonus Plan generally will give the Employee the opportunity to
earn a bonus of up to fifty (50%) percent of the Employee's base
salary actually received for a fiscal year, subject to the
Company's achievement of certain financial goals, the Employee's
performance, and all terms and conditions of the Target Bonus
Plan as in effect for said fiscal year; provided that the amount
of bonus paid may not be increased by the annual individual
performance rating of the Employee by the Chairman of the Board.
The Employee acknowledges that he has received a copy of the form
of the Target Bonus Plan and Bonus Conditions for the fiscal year
commencing September 1, 1996, and is familiar with the terms and
conditions thereof. Nothing contained herein shall limit the
Company's right to alter, amend or terminate the Target Bonus
Plan at any time for any reason. The Employee further
acknowledges that, as provided in the Target Bonus Plan, in the
event the Employee is not employed by the Company, for whatever
reason, at the time the bonus for the fiscal year is customarily
paid in December following the end of the fiscal year, the
Employee will not be entitled to receive the bonus.
(b) Be granted an option to purchase one
hundred fifty thousand (150,000) shares of the Common Stock of
the Company under and in accordance with the Company's 1989
Non-Qualified Stock Option Plan and the standard form of Option
Agreement used thereunder. The Employee represents that the
Employee has received copies of said Plan and form of Option
Agreement and is familiar with the terms of said Plan and the
standard form of Option Agreement used thereunder. Such stock
option shall be granted within ten (10) days after the
Commencement Date on a date to be determined by the Stock Option
Committee of the Board of Directors of the Company. In addition,
the Chairman agrees that the Chairman will recommend to the Stock
Option Committee that the Stock Option Committee grant an option
to the Employee within ten (10) days after February 1, 1998, to
purchase one hundred thousand (100,000) shares of the Common
Stock of the Company under and in accordance with said Plan and
the standard form of Option Agreement used thereunder. The
Employee acknowledges that by the terms of said Plan, no options
may be granted under said Plan after November 30, 1998. However,
if the Company adopts and the Stockholders approve (to the extent
Stockholders' approval is required) another Stock Option Plan
(the "New Plan") or an extension of the 1989 Non-Qualified Stock
Option Plan that is effective in February 1999, the Chairman
agrees that the Chairman will recommend to the Stock Option
Committee that the Stock Option Committee grant an option to the
Employee within ten (10) days after February 1, 1999, to purchase
fifty thousand (50,000) shares of the Common Stock of the Company
under and in accordance with the New Plan or the extended
existing Plan. The Employee acknowledges that under the 1989
Non-Qualified Stock Option Plan and under the New Plan, he will
have to be employed by the Company at the date of the grant of an
option in order to be entitled to the grant and that with limited
exceptions as set forth in the 1989 Non-Qualified Stock Option
Plan, he will have to be employed by the Company on the date of
the exercise of an option in order to be entitled to exercise an
option.
(c) Take twenty days (exclusive of Saturdays,
Sundays and paid Company holidays) of vacation during the period
between the Commencement Date and January 31, 1998, and take
twenty days (exclusive of Saturdays, Sundays and paid Company
holidays) of vacation during each succeeding twelve-month period
during the term of this Agreement. Vacation time will accrue
ratably during the course of said periods and cannot be
accumulated from year to year.
(d) Additional benefits and/or compensation
in such form and in such manner and at such times as the
Compensation Committee of the Board of Directors of the Company,
in the exercise of its absolute discretion, shall determine. It
is understood and agreed that any additional salary, benefits and
compensation shall only be paid by the Company upon the approval
of the Compensation Committee of the Board of Directors and not
by any officer or any other person acting on behalf of the
Company.
(e) All insurance and other fringe benefits
afforded to the Company employees pursuant to any plan adopted by
the Company in accordance with the terms of the plan and the
Employee's position in the Company.
6. TERMINATION.
6.01. It is agreed that either party may terminate
this Agreement for any reason at any time upon five (5) days'
prior written notice to the other party, whereupon (except as
provided in Paragraphs 4, 6, 7 and 8), this Agreement shall no
longer be of any force and effect (the expiration date of this
notice period is herein called the "Termination Date"). If
either party terminates this Agreement, the Company may relieve
the Employee of all duties and responsibilities effective on the
date of the notice. The Company may also terminate this
Agreement should the Employee experience a Medical Disability,
which termination shall be effective upon the Company's giving
written notice to the Employee following the occurrence of the
Medical Disability. Upon the death of the Employee, the Company
shall pay to his widow or his estate if his widow predeceases him
only such amount as was due and payable to the Employee at the
time of his death. The Company may terminate this Agreement at
any time, without notice, for Cause.
6.02. Upon termination of this Agreement by the
Company, other than for Cause, except for the provisions of
Paragraph 4, the Employee's employment under the terms of this
Agreement and all other agreements and contracts between the
Employee, the Company and the Company's Affiliate and subsidiary
corporations, shall be terminated effective on the Termination
Date. Should the Company terminate this Agreement prior to
January 31, 2000, for reasons other than for Cause or Medical
Disability, it shall pay to the Employee the balance of the base
salary set forth in, or established by the Compensation Committee
in accordance with, Paragraph 5.01 above due for the period from
the Termination Date through January 31, 2000 (which shall
constitute payment in full of the compensation due to the
Employee hereunder). Any such payments shall be made in equal
monthly installments with the first such installment due and
payable not later than thirty (30) days after the Termination
Date. In the event this Agreement is not terminated by the
Company or the Employee for any reason prior to August 31, 1999,
and the Company and the Employee do not agree in writing before
August 31, 1999, to extend the term of this Agreement beyond
January 31, 2000, or to enter into a new agreement to extend the
employment relationship beyond January 31, 2000, this Agreement
shall terminate automatically on August 31, 1999, which shall be
the Termination Date, and the Company shall pay to the Employee
six (6) months of the base salary established by the Compensation
Committee of the Board of Directors and in effect on August 31,
1999 (which shall constitute payment in full of the compensation
due to the Employee hereunder). Any such payments shall be made
in six (6) equal monthly installments with the first installment
due and payable not later than thirty (30) days after the
Termination Date. Payments made by the Company to the Employee
under this Paragraph 6.02 are herein called "Termination
Compensation." In the event the Employee accepts or begins other
employment as an employee, consultant or in any other capacity
prior to the date on which the last monthly installment of
Termination Compensation is due and payable, the monthly payments
of any unpaid balance of the Termination Compensation as of the
date of such new employment shall be (i) eliminated if the
monthly base salary and all other monthly remuneration and
compensation from the new employment exceeds the monthly base
salary of the Employee in effect on the date of the notice, or
(ii) reduced to the amount by which the monthly base salary of
the Employee in effect on the date of the notice exceeds the
monthly base salary and all other monthly remuneration and
compensation from the new employment. The Employee agrees to
pursue reasonable, good faith efforts to obtain other employment
in a position suitable to his background and experience.
6.03. On the Termination Date and at the end of the
term of this Agreement, the Employee agrees that the Company, its
Affiliates, and their officers, directors, members of the
Executive Committee, and employees, and their successors, heirs
and assigns, shall be fully released and discharged from any and
all expenses, claims, considerations, liabilities, obligations
and causes of action of every kind and nature arising out of or
in any manner related to this Agreement, and any and all previous
agreements, contracts and other rights, claims and obligations
between the parties, to the Employee's employment with the
Company, its Affiliate and subsidiary corporations, and to the
Employee's association or relationship with the Company and its
Affiliates, including but not limited to, all compensations,
salaries, bonuses (including Target Bonus Plan bonuses and
guarantees of bonuses thereunder), director's pay, vacation pay,
stock options (except as otherwise provided in Paragraph 7),
stockholder's claims or suits, loans and other similar
liabilities or related claims; provided, that nothing herein
contained shall qualify or in any manner restrict the right of
the Employee to realize his Termination Compensation, if any, and
his interests in any of the fringe benefits (such as insurance,
401(k) plan and stock options) of the Company to which he has
become legally entitled.
6.04. On the Termination Date or at the end of
the term of this Agreement, the Employee agrees that he will
resign as an officer, director and member of the Executive
Committee of the Company, its Affiliate and subsidiary
corporations (if and when elected), and from any other positions,
which resignations shall become effective on the Termination
Date.
6.05. After the Termination Date or the end of the
term of this Agreement, the Employee covenants to render further
advice and assistance to the Company as may be required from time
to time, and to provide all information available to him on
matters handled by and through him while employed by the Company
or of which he has personal knowledge, and by making available to
the Company at reasonable times and circumstances, upon request
by the Company, information pertinent to its operations in his
possession; and, to the extent that it is necessary, to cooperate
with and assist the Company to conclude any matters that are
pending and which may require his assistance; provided, that he
shall be paid reasonable compensation by the Company in the event
he is required to expend time in the performance of such
services; and provided further, that the Employee may perform
such services in a manner that does not unreasonably interfere
with other employment obtained by the Employee. The Employee
shall be reimbursed for any expenses incurred by him in the
performance of the covenants herein set forth in this Paragraph
6.05, provided the Company approves such expenses in writing in
advance.
6.06. After the Termination Date or the end of the
term of this Agreement, the Employee agrees that he will not
discuss his employment and resignation or termination or
Termination Compensation, if any, with any representatives of the
media, either directly or indirectly, without the written consent
and approval of the Company.
7. EXERCISE OF STOCK OPTIONS. Notwithstanding any other
provision of this Agreement and the 1989 Non-Qualified Stock
Option Plan and the New Plan and form of Option Agreement, if the
Company (a) terminates this Agreement prior to the end of the
term of this Agreement on January 31, 2000, for reasons other
than for Cause or Medical Disability or (b) terminates the
Employee's employment after the end of the term of this Agreement
and prior to February 28, 2001, (i) for reasons other than for
Cause or Medical Disability, or (ii) because the Employee will
not agree to the extension of the term of this Agreement for the
period through February 28, 2001, on the same terms and
conditions of this Agreement, including a weekly base salary of
not less than $8,653.85, but without the grant of any options,
the Employee shall be considered an employee of the Company
through February 28, 2001, for the sole and limited purpose of
permitting the Employee to exercise said option for one hundred
fifty thousand (150,000) shares as described in Paragraph 5.02(b)
above and to exercise any portion of the options for one hundred
thousand (100,000) shares and fifty thousand (50,000) shares
exercisable by the Employee in accordance with the terms of the
1989 Non-Qualified Stock Option Plan and the New Plan if said
options have been granted to the Employee as referred to in
Paragraph 5.02(b) above. Except as expressly provided in this
Agreement, after the Termination Date or the end of the term of
this Agreement the Employee shall not be entitled to any
compensation or benefits and shall not be considered an employee
other than for the limited purpose of permitting the Employee to
exercise said option or options.
8. TARGET BONUS PLAN. Notwithstanding any other
provision of this Agreement, if the Company terminates this
Agreement prior to the end of the term of this Agreement on
January 31, 2000, for reasons other than for Cause or Medical
Disability, the Employee shall be entitled to receive as a
severance payment an amount equal to the pro rata share of the
bonus, if any, under and subject to the terms and conditions of
the Target Bonus Plan referred to in Section 5.02(a) based on
fifty (50%) percent of the Employee's base salary actually
received for the period from the beginning of the fiscal year in
which the Company so terminates this Agreement through the
Termination Date. This payment is equal to the amount, if any,
the Employee would have received in December following the end of
the fiscal year if the Target Bonus Plan did not have a
requirement that the Employee be employed by the Company at the
time the bonus is customarily paid. Such payment shall be made
to the Employee on December 15 following the end of the fiscal
year in which the Company so terminated this Agreement.
9. SPECIAL PROVISIONS. This Agreement shall inure to the
benefit of any successor to or assignee of the Company, and the
Employee specifically agrees on demand to execute any and all
necessary documents in connection with the performance of this
Agreement. No waiver by either party of any breach by the other
of any provision hereof shall be deemed to be a waiver of any
later or other breach thereof or as a waiver of any such or other
provision of this Agreement. If any provision of this Agreement
shall be declared invalid or unenforceable as a matter of law,
such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision of this Agreement or of
the remainder of this Agreement as a whole.
This Agreement sets forth all of the terms of the
understanding between the parties with reference to the subject
matter set forth herein and may not be waived, changed,
discharged or terminated orally or by any course of dealing
between the parties, but only by an instrument in writing signed
by the party against whom any waiver, change, discharge or
termination is sought.
10. NORTH CAROLINA LAW APPLIES. This Agreement shall be
governed by and construed in accordance with the laws of the
State of North Carolina.
11. NOTICES. Any notice or other communications to be
given hereunder shall be deemed to have been given or delivered
when delivered by hand to the individuals named below or three
(3) days after deposit in United States mail, registered or
certified, with proper postage and registration or certification
fees prepaid, addressed to the parties as follows (or to such
other address as one party shall give the other in the manner
provided herein):
Family Dollar Stores, Inc. Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxx Xxxxxx
With copy to: Xxxxxx X. Xxxxxxx, Xx.
Family Dollar Stores, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, XX 00000-0000
R. Xxxxx Xxxxx: 0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in triplicate, all as of the day and year first
above written.
FAMILY DOLLAR STORES, INC.
By XXXX XXXXXX
XXXX XXXXXX
Attest: Chairman of the Board
XXXXXX X. XXXXXXX, XX.
XXXXXX X. XXXXXXX, XX.
Secretary
(Corporate Seal)
R. XXXXX XXXXX (SEAL)
R. XXXXX XXXXX
Witness:
XXXXXXXX X. XXXXX
XXXXXXXX X. XXXXX
