Exhibit 10.1
FORM OF
CARMAX, INC.
EMPLOYMENT AGREEMENT
FOR
EXECUTIVE OFFICERS
THIS EMPLOYMENT AGREEMENT is made, entered into, and is effective as of
the 1st day of August, 2004 (the "Effective Date"), by and between CarMax, Inc.,
a Virginia Corporation, and its affiliated companies (collectively, the
"Company") and ____________________________ (the "Executive").
WHEREAS, the Company recognizes the Executive's intimate knowledge and
experience in the business of the Company, and desires to employ the Executive
in the role of [Title] of the Company;
WHEREAS, the Executive will develop and/or come in contact with the
Company's proprietary and confidential information that is not readily available
to the public, and which is of great importance to the Company and is treated by
the Company as secret and confidential information; and
WHEREAS, the Company and Executive desire to agree upon the terms,
conditions, compensation and benefits of Executive's future employment; and
WHEREAS, upon execution of this Agreement, any prior employment
agreement between the Executive and the Company and/or Circuit City Stores,
Inc., whether oral or written, will have no force and effect with respect to the
terms and conditions of Executive's employment and will be replaced and
superseded by the terms of this Agreement.
NOW, THEREFORE, in consideration of the Executive's continued
employment and of the mutual covenants and agreements of the parties set forth
in this Agreement, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Article 1. Term of Employment
The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment as [Title] of the Company, in accordance with the
terms and conditions set forth herein, for an initial period of two (2) years,
commencing as of the Effective Date of this Agreement as indicated above (the
"Initial Term"); subject, however, to earlier termination as expressly provided
herein.
The Initial Term will automatically be extended for an additional
period of one (1) year at the end of the Initial Term, and then again each
successive year thereafter (collectively, the "Renewal Periods," which, together
with the Initial Term, constitute the "Term" of this Agreement). This Agreement
will not, however, be extended if either party gives written notice of its
intent not to renew, delivered at least ninety (90) days before the end of the
Initial Term or any Renewal Period. For purposes of this Agreement, an
"Employment Year" shall mean any twelve (12) month period during the Term of
this Agreement beginning on the Effective Date or on any anniversary thereof.
Article 2. Position and Responsibilities
During the Term of this Agreement, the Executive agrees to serve as
[Title] of the Company. In his capacity as [Title] of the Company, the Executive
shall report directly to the [Board of Directors (for Chief Executive Officer) /
Chief Executive Officer (for Executive Vice Presidents and Senior Vice
Presidents)] and shall have the duties and responsibilities of [Title] of the
Company and such other duties and responsibilities not inconsistent with the
performance of his duties as [Title] of the Company. The Executive's work
location shall be the corporate headquarters of the Company located in the
Richmond Metropolitan Statistical Area.
Article 3. Standard of Care
During the term of this Agreement, Executive shall devote his full
business time, attention, knowledge and skills to the Company's business and
interests. The Executive covenants, warrants, and represents that he shall:
(a) Devote his best efforts and talents to the performance of his
employment obligations and duties for the Company;
(b) Exercise the highest degree of loyalty and the highest
standards of conduct in the performance of his duties;
(c) Observe and conform to the Company's by-laws and other rules,
regulations, and policies established or issued by the
Company; and
(d) Refrain from taking advantage, for himself or others, of any
corporate opportunities of the Company.
Article 4. Other Employment
During the Term, the Executive shall comply with the provisions of
Article 8 herein. Furthermore, during his employment, the Executive agrees to
obtain the Company's written consent before entering into any other occupation,
even if dissimilar to that of the Company. Such consent may be granted or
withheld, in the Company's absolute discretion.
Article 5. Compensation and Benefits
As remuneration for all services to be rendered by the Executive during
the Employment Period, and as consideration for complying with the covenants
herein, the Company shall pay and provide to the Executive the following:
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5.1. Base Salary. During the Term, the Company shall pay the Executive
a base salary ("Base Salary") in an amount established and approved by the
Compensation and Personnel Committee of the Board of Directors ("the
Compensation Committee"); provided, however, that such Base Salary shall be
established at a rate of not less than $[amount] per year. This Base Salary
shall be subject to all appropriate federal and state withholding taxes and
payable in accordance with the normal payroll practices of the Company. The
Compensation Committee shall review and adjust the Base Salary as it deems
appropriate at least annually during the Term of this Agreement; provided,
however, that Executive's Base Salary shall not be decreased without his written
consent. If adjusted, the Base Salary shall be so adjusted for all purposes of
this Agreement.
5.2. Annual Bonus. In addition to his Base Salary, the Executive shall
be entitled to participate in the Company's Annual Performance-Based Bonus Plan
("Annual Bonus Plan"), as such program may exist from time to time during the
Term of this Agreement.
Under the Company's Annual Bonus Plan, the Executive has the
opportunity to earn an annual bonus with respect to any fiscal year of the
Company ("Annual Bonus"). The Annual Bonus will be determined by a formula
approved each fiscal year by the Compensation Committee ("the Annual Bonus
Formula") in its sole discretion. At the beginning of each fiscal year, the
Compensation Committee will authorize in accordance with the Annual Bonus Plan
the Executive's Annual Bonus for that fiscal year which shall be targeted at
[amount] percent (__%) of the Executive's Base Salary for that fiscal year (the
"Target Bonus Rate"). The specified Target Bonus Rate may be increased from time
to time by the Compensation Committee but shall not be decreased without the
Executive's written consent. Depending upon the actual financial performance
recorded by the Company for any given fiscal year, the Executive's Annual Bonus
may be increased or decreased solely in accordance with the Annual Bonus
Formula.
5.3. Long-Term Incentives. During the Term, the Executive shall be
eligible to participate in the Company's 2002 Stock Incentive Plan (or any
successor incentive plan thereto) to the extent that the Compensation Committee,
in its sole discretion, determines is appropriate. The Compensation Committee
will make its determination consistent with the methodology used by the Company
for compensating its peer executives. Additionally, the Executive shall be
entitled to participate in all other incentive plans, whether equity or cash
based, applicable generally to peer executives of the Company.
5.4. Savings, Retirement and Executive Compensation Plans. During the
Term, the Executive shall be entitled to participate in all savings, retirement,
insurance, and executive compensation plans, policies and programs applicable
generally to peer executives of the Company, subject to the eligibility and
participation requirements of such plans, policies and programs.
5.5. Welfare Benefit Plans. During the Term, the Executive and/or the
Executive's family will be eligible for participation in and will receive
benefits under welfare benefit plans, policies and programs, including those
defined under Section 3(1) of the Employee Retirement Income Security Act of
1974 ("ERISA") (hereinafter collectively "Welfare Plans"), provided by the
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Company to other peer executives of the Company, subject to the eligibility
requirements and other provisions of such plans, policies and programs. Such
Welfare Plans may include group term life insurance, comprehensive health and
major medical insurance, dental insurance, and short-term and long-term
disability benefits.
5.6. Fringe Benefits. During the Term the Executive will be entitled to
fringe benefits in accordance with the most favorable plans, policies and
programs of the Company in effect for other peer Executives of the Company.
5.7 Vacation. During the Term, Executive will be entitled to
participate in the Company's Time Away paid time off program for salaried
employees ("Time Away") as that program is administered by the Company and as it
may be amended or modified from time to time. In the event that the Company
discontinues the Time Away program, then Executive will be entitled to 30 days
of paid vacation each fiscal year. Vacation periods need not be consecutive. A
maximum of 10 accrued but unused vacation days in a fiscal year may be carried
over and used during the next succeeding fiscal year. Vacation days accrued but
unused shall be forfeited. Upon termination of employment, Executive shall be
entitled to payment for a maximum of 30 unused vacation days accrued during his
employment by the Company.
5.8. Right to Change Plans. By reason of Sections 5.4, 5.5, 5.6 and 5.7
herein, the Company shall not be obligated to institute, maintain, or refrain
from changing, amending, or discontinuing any benefit plan, policy or program,
so long as such changes are similarly applicable to peer executives.
Article 6. Expenses
During the Term, the Company shall pay or reimburse the Executive for
all ordinary and necessary expenses, in a reasonable amount, that the Executive
incurs in performing his duties under this Agreement including, but not limited
to, travel, entertainment, professional dues and subscriptions, and all dues,
fees, and expenses associated with membership in various professional, business,
and civic associations and societies in which the Company finds that the
Executive's participation is in the best interests of the Company. The payment
or reimbursement of expenses shall be subject to such rules concerning
documentation of expenses and the type or magnitude of such expenses as the
Compensation Committee or the Company, as applicable, may establish from time to
time.
Article 7. Employment Termination
7.1. Termination Due to Retirement or Death. In the event the
Executive's employment ends by reason of retirement (defined as either voluntary
"Normal Retirement" or voluntary "Early Retirement", as applicable, under the
then established definitions and rules of the Company's tax-qualified retirement
plan, and hereinafter referred to as "Retirement") or the Executive's death
during the term of this Agreement, the Executive's benefits shall be determined
in accordance with the Company's retirement, survivor's benefits, insurance,
and/or other applicable programs of the Company then in effect.
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The date of termination ("Date of Termination") due to Retirement or
death shall be (a) ninety (90) days following the date the Executive provides
the Company with written notice that the Executive is ending employment by
reason of Retirement or (b) on the Executive's date of death, as the case may
be. Upon the Date of Termination, the Company shall be obligated to pay the
Executive or, if applicable, the Executive's beneficiary or estate; (a) any Base
Salary that was accrued but not yet paid as of the Date of Termination; (b) the
unpaid Annual Bonus, if any, with respect to the fiscal year preceding the Date
of Termination (such Annual Bonus, if any, to be determined in the manner it
would have been determined and payable at the time it would have been payable
under Section 5.2 had there been no termination of the Employment Period); (c) a
pro rata share of the target Annual Bonus for the fiscal year in which the Date
of Termination occurs (calculated by multiplying (i) the Base Salary in effect
on the Date of Termination by (ii) the Target Bonus Rate in effect on the Date
of Termination and by (iii) a fraction, the numerator of which is the number of
full completed days in the Employment Year through the Date of Termination, and
the denominator of which is three hundred sixty-five (365)); (d) any
compensation previously deferred by the Executive by his own election, and (e)
all other vested rights and benefits that the Executive is entitled to pursuant
to other plans and programs of the Company. All of the Executive's outstanding
stock options, stock grants, stock appreciation rights, performance-based
grants, and all other forms of incentive compensation, regardless of whether
such is equity or cash based, will, to the extent allowed under the terms and
conditions of the applicable incentive compensation award agreement, become
fully vested and immediately exercisable by the Executive, the Executive's
personal representatives, distributees, legatees, or estate, as applicable.
7.2. Termination Due to Disability. The Company shall have the right to
terminate the Executive's employment for disability. For the purposes of this
Agreement, disability (hereinafter referred to as "Disability" or "Disabled")
shall mean any physical or mental illness or injury that causes the Executive to
be unable to substantially perform the Executive's normal duties; provided
however that the Executive shall not be considered Disabled until: (a) the
Executive has been so disabled for one hundred eighty (180) days in the
aggregate during any period of twelve (12) consecutive months; (b) the
Executive's attending physician shall have furnished to the Company
certification that the return of the Executive to his normal duties is
impossible or improbable; or (c) the Executive is determined to be totally
disabled by the long-term disability insurer then insuring the Executive, if
any. The Board shall review the foregoing information and shall determine in
good faith if the Executive is Disabled. The Board's decision shall be binding
on the Executive.
The Date of Termination due to Disability shall be specified in a
written notice, delivered to the Executive, which date shall be no less than
thirty (30) calendar days after the delivery of such written notice to the
Executive. Upon the Date of Termination, the Company shall be obligated to pay
the Executive: (a) any Base Salary that was accrued but not yet paid as of the
Date of Termination; (b) the unpaid Annual Bonus, if any, with respect to the
fiscal year preceding the Date of Termination (such Annual Bonus, if any, to be
determined in the manner it would have been determined and payable at the time
it would have been payable under Section 5.2 had there been no termination of
the Employment Period); (c) a pro rata share of the target Annual Bonus for the
fiscal year in which the Date of Termination occurs (calculated by multiplying
(i) the Base Salary in effect on the Date of Termination by (ii) the Target
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Bonus Rate in effect on the Date of Termination and by (iii) a fraction, the
numerator of which is the number of full completed days in the Employment Year
through the Date of Termination, and the denominator of which is three hundred
sixty-five (365)); (d) any compensation previously deferred by the Executive by
his own election, and (e) all other vested rights and benefits that the
Executive is entitled to pursuant to other plans and programs of the Company. In
addition, all of the Executive's outstanding stock options, stock grants, stock
appreciation rights, performance-based grants, and all other forms of incentive
compensation, regardless of whether such is equity or cash based, will, to the
extent allowed under the terms and conditions of the applicable incentive
compensation award agreement, become fully vested and immediately exercisable by
the Executive, the Executive's personal representatives, distributees, or
legatees, as applicable.
It is expressly understood that the disability of the Executive for a
period of one hundred eighty (180) calendar days or less in the aggregate during
any period of twelve (12) consecutive months, in the absence of any reasonable
expectation that his disability will exist for more than such a period of time,
shall not constitute a failure by him/her to perform his duties hereunder and
shall not be deemed a Disability or breach or default of this Agreement and the
Executive shall receive full compensation for any such period of disability or
for any other temporary illness or incapacity during the term of this Agreement.
7.3. Voluntary Termination by the Executive. The Executive may
terminate his employment at any time by giving the Company at least forty-five
(45) days written notice. The Company reserves the right to require the
Executive not to work during the notice period but shall pay the Executive his
full Base Salary, at the rate then in effect as provided in Section 5.1 herein,
through the notice period in addition to any deferred compensation and all other
benefits to which the Executive has a vested right on the last day of
employment; provided, however, that the Executive shall forfeit any Annual Bonus
with respect to the fiscal year in which his voluntary termination under this
Section 7.3 occurs. The Company thereafter shall have no further obligations
under this Agreement.
7.4. Involuntary Termination by the Company Without Cause. The
Company may terminate the Executive's employment, at any time, for any reason
other than death, Disability, Retirement, or for Cause (as hereinafter defined)
("Involuntary Termination Without Cause"), by providing the Executive with at
least ninety (90) days written notice.
(a) The Company's decision not to renew this Agreement by
providing ninety (90) days notice before the end of the
Initial Term or any Renewal Period, in accordance with Article
1, shall be deemed an Involuntary Termination Without Cause;
provided, however, that for purposes of this Section 7.4 (a),
no variation, alteration, modification, cancellation, change
or amendment made to this Agreement pursuant to Section 17.3
or 17.4 at a time other than the expiration date of the
Initial Term or any Renewal Period, shall be deemed an
Involuntary Termination Without Cause.
(b) In the event of Executive's Involuntary Termination Without
Cause, the Company shall pay to the Executive, in equal
monthly installments over the following twenty-four (24)
month period, an amount equal to the product of two (2) times
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both the Executive's Base Salary and the Executive's target
Annual Bonus established for the fiscal year in which the
Executive's Date of Termination occurs. The Company shall
also pay to the Executive an additional amount equal to a
pro rata share of the target Annual Bonus for the fiscal year
in which the Date of Termination occurs (calculated by
multiplying (i) the Base Salary in effect on the Date of
Termination by (ii) the Target Bonus Rate in effect on the
Date of Termination and by (iii) a fraction, the numerator
of which is the number of full completed days in the
Employment Year through the Date of Termination, and the
denominator of which is three hundred sixty-five (365)).
The Company shall also pay to the Executive any compensation
previously deferred by the Executive by his own election. In
addition, the Company shall continue, at the same cost to
the Executive as existed as of the Date of Termination, the
Executive's participation in the Welfare Plans for two (2)
full years following the Executive's termination of
employment; provided, however, that the applicable COBRA
"period of coverage" under any plan subject to Section 4980B
of the Internal Revenue Code of 1986, as amended (the "Code"),
or Sections 601 through 609 of ERISA shall begin as of the
Date of Termination.
(c) The Company shall provide the Executive with outplacement
services not to exceed a cost of $[amount].
(d) All of the Executive's outstanding stock options, stock
grants, stock appreciation rights, performance-based grants,
and all other forms of incentive compensation, regardless of
whether such is equity or cash based, will, to the extent
allowed under the terms and conditions of the applicable
incentive compensation award agreement, become fully vested
and immediately exercisable by the Executive. The Executive
must satisfy the tax withholding requirements.
(e) The Executive will be credited with age and service credit
through the end of the Initial Term or current Renewal
Period of this Agreement for purposes of computing benefits
under the Company's retirement and Welfare Plans, and the
Company will continue the Executive's coverage under the
Company's retirement and Welfare Plans as if the Executive
remained employed through the end of the term of this
Agreement. Notwithstanding the foregoing, if crediting such
age and service credit or continued coverage could adversely
affect the tax qualification or tax treatment of a retirement
plan, or otherwise have adverse legal ramifications to either
the plan or the Company, the Company shall pay the Executive
a lump sum cash amount that reasonably approximates the
after-tax discounted present value to the Executive of such
age and service credit and continued coverage through the
end of the term of this Agreement, in lieu of giving such age
and service credit and continued coverage. The discounted
present value shall be determined by using a discount rate
equal to the lesser of (i) the applicable federal long-term
rate, as determined pursuant to section 1274(d) of the
Internal Revenue Code of 1986, as amended, or (ii) seven and
one-half percent (7 1/2 %) .
The Company thereafter shall have no further obligations under this
Agreement.
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7.5. Termination For Cause. Nothing in this Agreement shall be
construed to prevent the Company from terminating the Executive's employment
under this Agreement, without notice or liability for doing so, for "Cause."
For purposes of this Agreement, "Cause" means a good faith
determination by the Board that one (1) or more of the following has occurred:
(a) The Executive has committed a material breach of this
Agreement, which breach was not cured, or waived by the
Company, within ten (10) days of receipt by the Executive of
written notice from the Company specifying the breach;
(b) The Executive has committed gross negligence in the
performance of his material duties hereunder, intentional
nonperformance or intentional misperformance of such duties,
intentional misconduct or refusal to abide by or comply with
the directives of the Board, his superior officers, or the
Company's policies and procedures, as applicable, which
actions continued for a period of ten (10) days after receipt
by the Executive of written notice of the need to cure or
cease;
(c) The Executive has been convicted of a felony;
(d) The Executive has engaged in illegal conduct, embezzlement or
fraud with respect to the business or affairs of the Company;
(e) The Executive has failed to disclose to the Board or his
superior officer, as applicable, a conflict of interest, of
which the Executive knew or, with reasonable diligence, would
have known, in connection with any transaction entered into on
behalf of the Company; or
(f) The Executive has failed to agree to a modification of this
Agreement, pursuant to Section 17.3 below, when the purpose of
the modification is to comply with applicable federal, state
and/or local laws or regulations, or when such modification is
designed to further define the restrictions of Article 8 or
otherwise enhance the enforcement of Article 8 without
increasing the scope of the Article 8 restrictions.
If the Executive's employment is terminated for Cause during the Term
of this Agreement, this Agreement will terminate without further obligation of
the Company to the Executive other than the payment to the Executive of his Base
Salary through the Date of Termination for Cause, plus the payment of any
compensation previously deferred by the Executive by his own election. The
Executive shall immediately thereafter forfeit all unvested rights and benefits
he would otherwise have been entitled to receive under this Agreement.
7.6. Termination for Good Reason. At any time during the term of this
Agreement, the Executive may terminate this Agreement for Good Reason (as
hereinafter defined) by giving the Company forty-five (45) days written notice,
which notice sets forth in detail the facts and circumstances claimed to provide
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a basis for such termination; provided, however, the Company shall, at its
option, have thirty (30) days from receipt of such written notice to cure any
event or circumstance that could constitute Good Reason.
If the Company chooses not to cure, the Date of Termination for Good
Reason shall occur upon the expiration of the forty-five (45) days notice period
that is specified by the Executive in the written notice.
For purposes of this Agreement, Good Reason shall mean, without the
Executive's express written consent, the occurrence of any one (1) or more of
the following:
(a) Reducing the Executive's Base Salary;
(b) Failing to maintain the Executive's participation in any of
the Company's short-and long-term incentive plans including,
but not limited to, the Company's Performance-Based Pay Plan,
2002 Stock Incentive Plan (including such successor or
replacement plans that may be instituted during the Initial
Term or any Renewal Term hereof), in a manner that is
consistent with other peer executive employees of the Company;
(c) Failing to maintain the Executive's benefits under, or
relative level of participation in, all of the Company's
executive compensation plans, Welfare Plans, retirement and
fringe benefit plans, policies, practices, or arrangements in
which the Executive participates as of the Effective Date of
this Agreement (including such successor or replacement plans
that may be instituted during the Initial Term or any Renewal
Term hereof) at a level consistent with other peer executive
employees of the Company;
(d) Enforcing a material reduction in the Executive's duties or
authority;
(e) Requiring the Executive to be based at any office or location
that is more than thirty-five (35) miles from the location
where the Executive is based as of the Effective Date of this
Agreement except in connection with the relocation of
substantially all senior Company executives pursuant to the
relocation of the Company's headquarters;
(f) Terminating the Executive's employment otherwise than as
expressly permitted by this Agreement;
(g) Failing to comply with and satisfy Section 12.1 by requiring
any successor to the Company to assume and agree to perform
the Company's obligations hereunder; or
(h) The Company's failure to honor any material term or provision
of this Agreement.
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In the event of Executive's Termination for Good Reason, the Executive
shall be entitled to receive thereafter the same payments and benefits as he
would be entitled to receive following an Involuntary Termination Without Cause,
as specified in Section 7.4 herein. Said payment shall commence within
forty-five (45) calendar days following the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness.
Article 8. Covenant Not to Compete.
The Executive acknowledges and agrees as follows:
8.1. The Company operates a unique business concept in the United
States regarding the sale and servicing of new and used vehicles in a highly
competitive industry.
8.2. The Company's competitors have attempted to duplicate the
Company's business concept in various markets throughout the United States,
including markets where the Company does not currently have a business location,
and may continue to do so.
8.3. In connection with the Executive's employment, he will receive
access to, and training regarding, the Company's business concept and will,
accordingly, acquire commercially valuable knowledge of, and insight into, the
Company's operations and its proprietary and confidential information, any of
which if made available to the Company's competitors could place the Company at
an unfair competitive disadvantage.
8.4. In order to protect the Company's legitimate business interests
from competitors and to protect the Company's critical interest in its
proprietary and confidential, and in return for the consideration set forth in
this Agreement, the Executive covenants and agrees as follows:
During the Executive's employment and for a period of two (2) years
following the last day of the Executive's employment, the Executive will not,
directly or indirectly, compete with the Company by acting "in a competitive
capacity" (as defined in Section 8.5 below), whether as an individual, partner,
or joint venturer, for, or on behalf of, any person or entity operating or
developing the same or similar business as the Company within any Metropolitan
Statistical Area ("MSA") in which the Company has a business location or in
which the Company is engaged in real estate site selection. Such business
entities include, but are not limited to: Sonic Automotive, Inc.; Lithia Motors,
Inc.; Group 1 Automotive, Inc.; UnitedAuto Group; AutoNation, Inc.; Penske
Motors; ▇▇▇▇▇▇ Automotive Group; Price One; ▇▇▇▇▇▇▇▇ Automotive Group;
CarMotive; Saturn Group; Hertz; Enterprise; and any automotive retail operation
affiliated with, owned, operated, or controlled by Home Depot, Inc.; ▇▇▇▇'▇
Companies, Inc.; Target Corporation; Wal-Mart Stores, Inc.; Sears, ▇▇▇▇▇▇▇ and
Company; Carrefour; Costco Wholesale Corporation; Royal Dutch/Shell Group of
Companies and its affiliates; Exxon Mobil Corporation and its affiliates; and/or
ChevronTexaco Corp. and its affiliates.
A business will not be considered to be in competition with the Company
for purposes of this Section 8.4 if the business, or operating unit of the
business, in which the Executive will be employed does not have, nor is expected
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to have within the two (2) years following the Executive's termination of
employment, annual gross revenues of at least $5,000,000 derived from the sale
and servicing of new and used vehicles.
8.5. Acting "in a competitive capacity" shall mean providing to a
person or entity covered by Section 8.4, directly or indirectly, the same or
similar services as the Executive provided to the Company during his employment,
and/or engaging in any business or segment of business about which the Executive
first acquired proprietary or confidential information during the course of his
employment with the Company.
8.6. Notwithstanding the foregoing, nothing herein shall be deemed to
prevent or limit the right of the Executive to invest in the capital stock or
other securities of any corporation whose stock or securities are regularly
traded on any public exchange, nor shall anything herein contained be deemed to
prevent the Executive from investing in real estate for his own benefit so long
as such investment (a) is not related to or in support of any entity engaged in
a business similar to that of the Company or (b) does not detract from the
Executive's performance of his duties and obligations hereunder.
8.7. The Executive and the Company have examined in detail the Covenant
Not to Compete contained herein and agree that the restraint imposed upon the
Executive is reasonable in light of the legitimate business interests of the
Company, and it is not unduly harsh upon the Executive's ability to earn a
livelihood. If any provision of the Covenant Not to Compete relating to the time
period, geographic area or scope of restricted activities shall be declared by a
court of competent jurisdiction to exceed the maximum time period, geographic
area or scope of activities, as applicable, that such court deems reasonable and
enforceable, said time period, geographic area or scope of activities shall be
deemed to be, and thereafter shall become, the maximum time period, scope of
activities or largest geographic area that such court deems reasonable and
enforceable and this Agreement shall automatically be considered to have been
amended and revised to reflect such determination.
8.8. The Executive and the Company acknowledge that the Executive's
services are of a special, extraordinary, and intellectual character which gives
the Executive unique value, that the Company's business is highly competitive,
and that violation of the Covenant Not to Compete provided herein would cause
immediate, immeasurable, and irreparable harm, loss, and damage to the Company
not adequately compensable by a monetary award. In the event of any breach or
threatened breach by the Executive of the Covenant Not to Compete, the Company
shall be entitled to such equitable and injunctive relief as may be available to
restrain the Executive from violating the provisions hereof. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
available at law or in equity for such breach or threatened breach, including
the recovery of damages and the immediate termination of the employment of the
Executive hereunder for Cause.
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Article 9. Non-Solicitation / Non-Hiring of Employees.
The Executive agrees that during the Executive's employment with the
Company and for a period of two (2) years following the last day of the
Executive's employment, the Executive shall not, directly or indirectly, solicit
or induce, or attempt to solicit or induce, any employee of the Company to leave
the Company for any reason whatsoever or hire any individual employed by the
Company. For purposes of this Article 9, employee shall mean any individual
employed by the Company within the three (3) month period prior to, and
including, the last day of the Executive's employment.
Article 10. Confidentiality.
The Executive understands and agrees that any information, data and/or
trade secrets about the Company or its suppliers and/or distributors is the
property of the Company and is essential to the protection of the Company's
goodwill and to the maintenance of the Company's competitive position and
accordingly should be kept secret. For purposes of this Agreement, "Protected
Information" means trade secrets, confidential and proprietary business
information of or about the Company, and any other information of the Company,
including, customer lists (including potential customers), sources of supply,
processes, plans, materials, pricing information, internal memoranda, marketing
plans, promotional plans, internal policies, research, purchasing, accounting
and financial information, computer programs, hardware, software, and products
and services which may be developed from time to time by the Company and its
agents or employees, including the Executive; provided, however, that
information that is in the public domain (other than as a result of a breach of
this Agreement), approved for release by the Company or lawfully obtained from
third parties who are not bound by a confidentiality agreement with the Company,
is not Protected Information.
The Company has advised the Executive, and the Executive acknowledges,
that it is the policy of the Company to maintain as secret and confidential all
Protected Information and that Protected Information has been and will be
developed at substantial cost and effort to the Company. The Executive agrees to
hold in strict confidence and safeguard any information of or about the Company
gained by the Executive in any manner or from any source during the Executive's
employment. The Executive shall not, without the prior written consent of the
Company, at any time, directly or indirectly, divulge, furnish, use, disclose or
make accessible to any person, firm, corporation, association, or other entity
(otherwise than as may be required in the regular course of the Executive's
employment with the Company), either during the Executive's employment with the
Company or subsequent to the last day of the Executive's employment, any
Protected Information, or cause any such information of the Company to enter the
public domain.
Nothing contained in this Article 10 is intended to reduce in any way
protection available to the Company pursuant to the Uniform Trade Secrets Act as
adopted in Virginia or any other state or other applicable laws that prohibit
the misuse or disclosure of confidential or proprietary information.
12
Article 11. Change in Control; Sale of Assets
11.1. Purpose. The Company recognizes that the possibility of a Change
in Control or Asset Sale exists, and the uncertainty and questions that it may
raise among management may result in the departure or distraction of management
personnel to the detriment of the Company. Accordingly, the purpose of this
Article 11 is to encourage the Executive to continue employment after a Change
in Control or Asset Sale by providing reasonable employment security to the
Executive and to recognize the prior service of the Executive in the event of a
termination of employment under certain circumstance after a Change in Control
or Asset Sale. This Article 11 shall not become effective, and the Company shall
have no obligation hereunder, if the employment of the Executive with the
Company terminates before a Change in Control or Asset Sale.
11.2. Definitions.
(a) Change in Control of the Company means the occurrence of
either of the following events: (i) a third person, including
a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, becomes, or obtains the
right to become, the beneficial owner of Company securities
having twenty percent (20%) or more of the combined voting
power of the then outstanding securities of the Company that
may be cast for the election of directors to the Board of the
Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business);
or (ii) as the result of, or in connection with, any cash
tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions, the persons who
were directors of the Company before such transactions shall
cease to constitute a majority of the board or of the board of
directors of any successor to the Company.
(b) "Asset Sale" shall mean a sale of all or substantially all of
the assets of the Company in a single transaction or a series
of related transactions.
11.3. Immediate Vesting of Incentive Compensation. Upon the occurrence
of a Change in Control or Asset Sale, all of the Executive's outstanding stock
options, stock grants, stock appreciation rights, performance-based grants,
and all other forms of incentive compensation, regardless of whether such is
equity or cash based, will, to the extent allowed under the terms and conditions
of the applicable incentive compensation award agreement, become fully vested
and immediately exercisable by the Executive. The Executive must satisfy the tax
withholding requirements.
11.4 Continued Employment Following Change in Control or an Asset Sale.
If a Change in Control or an Asset Sale occurs and the Executive is employed by
the Company on the date the Change in Control or Asset Sale occurs (the "Change
in Control Date"), the Company or its successor will continue to employ the
Executive in accordance with the terms and conditions of this Agreement for the
13
period beginning on the Change in Control Date and ending on the second (2nd)
anniversary of such date (the "Change in Control Employment Period").
11.5. Positions and Duties. During the Change in Control Employment
Period, (a) the Executive's position, title, authority, duties and
responsibilities will be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time during the
ninety (90) day period immediately preceding the Change in Control Date and (b)
the Executive's services will be performed at the location where the Executive
was employed immediately preceding the Change in Control Date or any office that
is the headquarters of the Company and is less than thirty-five (35) miles from
such location.
11.6. Compensation. During the Change in Control Employment Period, the
Executive will be entitled to receive a Base Salary in an amount at least equal
to the highest Base Salary paid or payable to Executive for the two (2) years
immediately preceding the Change in Control Date. The Base Salary will be
reviewed at least annually and will be increased at any time and from time to
time as will be substantially consistent with increases in Base Salary generally
awarded in the ordinary course of business to other peer executives of the
Company. In addition to the Base Salary, Executive will be awarded for each year
during the Change in Control Employment Period an Annual Bonus in cash at least
equal to the highest Annual Bonus paid or payable for the two (2) years
immediately preceding the year in which the Change in Control Date occurs.
11.7. Benefits. During the Change in Control Employment Period, the
Executive will be entitled to participate in all incentive plans (including
stock incentive plans), savings plans, retirement plans, insurance plans,
Welfare Plans, and fringe benefit plans, policies and programs applicable
generally to other peer executives of the Company, but in no event will such
plans, policies or programs provide the Executive with incentive opportunities,
savings opportunities or benefit opportunities, in each case, less favorable, in
the aggregate, than those provided by the Company for the Executive during the
six (6) months preceding the Change in Control Date.
11.8. Termination of Employment Following Change in Control or Asset
Sale. The Executive will be entitled to the compensation and benefits described
in this Section 11.8 if, during the Change in Control Employment Period (a) the
Company terminates his employment without Cause (as Cause is defined in Section
7.5), or (b) the Executive terminates his employment with the Company for Good
Reason (as Good Reason is defined in Section 7.6), or (c) the Executive delivers
to the Company written notice of his voluntary termination at any time during
the thirty (30) day period commencing on the twelfth (12th) month following the
Change in Control Date. The compensation and benefits described in this Section
11.8 are in lieu of, and not in addition to, any compensation and benefits
provided to the Executive pursuant to Sections 7.4 and 7.6 herein.
(a) Accrued Obligations. The "Accrued Obligations" are the sum
of (1) the Executive's Base Salary accrued through the Date of
Termination at the rate in effect just prior to the
termination date; (2) the unpaid Annual Bonus, if any, with
respect to the fiscal year preceding the Date of Termination
(such Annual Bonus, if any, to be determined in the manner it
would have been determined and payable at the time it would
14
have been payable under Section 5.2 had there been no
termination); (3) the amount equal to a pro rata share of the
target Annual Bonus for the calendar year in which the Date
of Termination occurs (calculated by multiplying (i) the Base
Salary in effect on the Date of Termination by (ii) the Target
Bonus Rate in effect on the Date of Termination and by (iii)
a fraction, the numerator of which is the number of full
completed days in the Employment Year through the Date of
Termination, and the denominator of which is three hundred
sixty-five (365)); (4) the amount of any long-term incentive
compensation earned but not yet paid as of the Date of
Termination; (5) all compensation previously deferred by the
Executive by his own election; and (6) all benefits or awards
(including both cash and stock components) that pursuant to
the terms of any plans, policies or programs have been earned
or become payable, but which have not yet been paid to
Executive. The Accrued Obligations will be paid to the
Executive in a lump sum cash payment within ten (10) days
after the Date of Termination.
(b) Salary Continuance Benefit. The Salary Continuance Benefit is
an amount equal to 2.99 times the Executive's Final
Compensation. For purposes of this Agreement, "Final
Compensation" means the Base Salary in effect at the Date of
Termination, plus the highest Annual Bonus paid or payable for
the two (2) most recently completed years and any amount
contributed by the Executive during the most recently
completed year pursuant to a salary reduction agreement or any
other program that provides for pre-tax salary reductions or
compensation deferrals. The Salary Continuance Benefit will be
paid to the Executive in a lump sum cash payment not later
than the forty-fifth (45th) day following the Date of
Termination.
(c) Welfare Continuance Benefit. For twenty-four (24) months
following the Date of Termination (the "Welfare
Continuance Period"), the Executive and his dependents will
continue to be covered under all Welfare Plans in which the
Executive or his dependents were participating immediately
prior to the Date of Termination (the "Welfare Continuance
Benefit"). The Company will pay all or a portion of the cost
of the Welfare Continuance Benefit for the Executive and his
dependents under the Welfare Plans on the same basis as is
applicable, from time to time, to active employees covered
under the Welfare Plans and the Executive will pay any
additional costs. If participation in any one or more of the
Welfare Plans included in the Welfare Continuance Benefit is
not possible under the terms of the Welfare Plan or any
provision of law would create an adverse tax effect for the
Executive or the Company due to such participation, the
Company will provide substantially identical benefits directly
or through an insurance arrangement. The Welfare Continuance
Benefit as to any Welfare Plan will cease if and when the
Executive has obtained coverage under one or more welfare
benefit plans of a subsequent employer that provides for
equal or greater benefits to the Executive and his dependents
with respect to the specific type of benefit. The Executive or
his dependents will become eligible for COBRA continuation
15
coverage as of the date the Welfare Continuance Benefit
ceases for all health and dental benefits.
(d) Outplacement Services. Provision of outplacement services for
the Executive not to exceed a cost of $[amount]; and
(e) Age and Service Credit. The Executive will be credited with
age and service credit through the end of the Welfare
Continuance Period for purposes of computing the
Executive's benefits under the Company's Retirement plan.
Notwithstanding the foregoing, if crediting such age and
service credit or continued coverage could adversely affect
the tax qualification or tax treatment of the Company's
Retirement plan, or otherwise have adverse legal
ramifications to either the plan or the Company, the Company
shall pay the Executive a lump sum cash amount that reasonably
approximates the after-tax discounted present value to the
Executive of such age and service credit through the end of
the Welfare Continuance Period, in lieu of giving such age
and service credit. The discounted present value shall be
determined by using a discount rate equal to the lesser of
(i) the applicable federal long-term rate, as determined
pursuant to section 1274(d) of the Internal Revenue Code of
1986, as amended, or (ii) seven and one-half percent (7 1/2%).
11.9 Death, Disability or Retirement Termination Following a Change in
Control. If the Executive's employment ends by reason of Retirement (as defined
in Section 7.1), the Executive's death, or as a result of Disability (as defined
in Section 7.2), during the Change in Control Employment Period, this Agreement
will terminate without any further obligation on the part of the Company under
this Agreement other than for (a) the payment of the Accrued Obligations (which
shall be paid to the Executive or his beneficiary designated in writing or his
estate, as applicable, within thirty (30) days of the date of death or
termination of employment); (b) full vesting and immediate exercisability by the
Executive, the Executive's personal representatives, distributees, legatees, or
estate, as applicable, of any unvested stock options or any outstanding stock
options, stock grants, stock appreciation rights, restricted stock, including
restricted stock grants issued under a performance-based plan, and all other
forms of incentive compensation, to the extent allowed under the terms and
conditions of the applicable incentive compensation award agreement, and (c) the
timely payment of all death, disability or retirement benefits pursuant to any
plan, policy or program of the Company.
11.10 Cause; Other Than For Good Reason Following a Change in Control.
If the Executive's employment is terminated for Cause (as Cause is defined in
Section 7.5) during the Change in Control Employment Period, this Agreement will
terminate without further obligation to the Executive other than the payment to
the Executive of the Base Salary through the Date of Termination plus the amount
of any compensation previously deferred by the Executive at his own election
(which together shall be paid in a lump sum in cash within thirty (30) days of
the Date of Termination). If the Executive terminates employment during the
Change in Control Employment Period other than (a) for Good Reason (as defined
in Section 7.6), or (b) by delivering to the Company written notice of his
voluntary termination at anytime during the thirty (30)day period commencing on
the twelfth (12th) month following the Change in Control Date, this Agreement
16
will terminate without further obligation to the Executive other than for
payment of the Accrued Obligations (which shall be paid in a lump sum in cash
within thirty (30) days of the Date of Termination) and any other benefits to
which the Executive may be entitled pursuant to the terms of any plan, program
or arrangement of the Company.
11.11. Gross-Up Payment. In the event any payment or distribution by
the Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 11.11) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any interest or penalties are incurred by the Executive with respect
to such excise tax (collectively, the "Excise Tax"), then the Executive will be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any income
taxes and interest or penalties imposed with respect to such taxes) and the
Excise Tax imposed on the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed on the Payments. All
determinations required to be made under this Section 11.11, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment,
will be made by the independent accounting firm of the Company immediately prior
to the Executive's termination of employment (the "Accounting Firm"). All fees
and expenses of the Accounting Firm will be borne solely by the Company, and any
determination by the Accounting Firm will be binding upon the Company and the
Executive. Any Gross-Up Payment, as determined pursuant to this Section 11.11),
will be paid by the Company to the Executive within ten (10) days of the receipt
of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall so indicate to the Executive in writing. In the event there
is an under-payment of the Gross-Up Payment due to the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm will determine the amount of any
such under-payment that has occurred and such amount will be promptly paid by
the Company to or for the benefit of the Executive.
Notwithstanding anything contained in this Section 11.11 to the
contrary, if the present value of the payments made under this Article 11,
without taking into account the Gross-Up Payment, is no greater than one hundred
and ten percent (110%) of the amount payable to the Executive assuming the
Executive's payments under this Agreement were limited ot the maximum amount
that could be payable without application of the excise tax imposed by Section
4999 of the Internal Revenue Code (the "Section 4999 Limit"), the Executive's
payments hereunder shall be limited to the Section 4999 Limit.
Article 12. Assignment
12.1. Assignment by Company. This Agreement may and shall be assigned
or transferred to, and shall be binding upon and shall inure to the benefit of,
any successor of the Company, and any such successor shall be deemed substituted
for all purposes of the "Company" under the terms of this Agreement. As used in
17
this Agreement, the term "successor" shall mean any person, firm, corporation,
or business entity which, at any time, whether by merger, purchase, or
otherwise, acquires all or substantially all, or control of all or substantially
all, of the assets or the business of the Company. Except as provided herein,
the Company may not otherwise assign this Agreement.
12.2. Assignment by Executive. The services to be provided by the
Executive to the Company hereunder are personal to the Company and the
Executive's duties may not be assigned by the Executive; provided, however, that
this Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, and administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive dies
while any amounts payable to the Executive hereunder remain outstanding, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, in the absence of such designee, to the Executive's estate.
Article 13. Dispute Resolution.
Except for actions initiated by the Company to enjoin a breach by,
and/or recover damages from, the Executive related to violation of any of the
restrictive covenants in Article 8 of this Agreement, which the Company may
bring in an appropriate court of law or equity, any disagreement between the
Executive and the Company concerning anything covered by this Agreement or
concerning other terms or conditions of the Executive's employment or the
termination of the Executive's employment will be settled by final and binding
arbitration pursuant to the Company's Associate Issue Resolution Program. The
Dispute Resolution Agreement and the Dispute Resolution Rules and Procedures are
incorporated herein by reference as if set forth in full in this Agreement. The
decision of the arbitrator will be final and binding on both the Executive and
the Company and may be enforced in a court of appropriate jurisdiction. Each
party will bear its own expenses of arbitration, including legal fees, except
that in the event of an action brought by the Executive under this Agreement
following a Change in Control, then insofar as such action is not deemed to be
frivolous by the arbitrator, the Company shall bear all expenses related to the
arbitration, including all legal fees.
Article 14. Litigation By Third Parties.
All litigation or inquiries by third parties (including, but not
limited to, those by the Company's shareholders or by government agencies)
arising out of or in connection with Executive's performance under the this
Agreement, against either the Company or the Executive or both, shall be jointly
defended or opposed by the parties hereto to support this Agreement. The Company
shall appoint legal counsel for the parties and shall bear the costs, reasonable
legal fees and expenses related to such litigation or inquiry.
Article 15. Indemnity; Limitation of Liability.
As an officer of the Company, Executive shall be entitled to indemnity
and limitation of liability as provided pursuant to the Company's Articles of
Incorporation, by-laws and any other governing document, as the same shall be
amended from time to time.
18
Article 16. Notice.
Any notices, requests, demands, or other communications provided for by
this Agreement shall be sufficient if in writing, and if delivered in person or
sent by registered or certified mail, postage prepaid (in which case notice will
be deemed to have been given on the third day after mailing) or by overnight
delivery by a reliable overnight courier service (in which case notice will be
deemed to have been given on the day after delivery to such courier service).
Notices to the Executive shall be directed to the last address he has filed in
writing with the Company. Notices to the Company shall be directed to the
Secretary of the Company, with a copy directed to the Chairman of the Board of
the Company.
Article 17. Miscellaneous
17.1. Entire Agreement. This Agreement supersedes any prior agreements
or understandings, oral or written, between the parties hereto, with respect to
the subject matter hereof, and constitutes the entire agreement of the parties
with respect thereto. Without limiting the generality of the foregoing sentence,
this Agreement completely supersedes any and all prior employment agreements
entered into by and between the Company, and the Executive, and all amendments
thereto, in their entirety.
17.2. Return of Materials. Upon the termination of the Executive's
employment with the Company, however such termination is effected, the Executive
shall promptly deliver to the Company all property, records, materials,
documents, and copies of documents concerning the Executive's business and/or
its customers (hereinafter collectively "Company Materials") which the Executive
has in his possession or under his control at the time of termination of his
employment. The Executive further agrees not to take or extract any portion of
Company Materials in written, computer, electronic or any other reproducible
form without the prior written consent of the [Board of Directors (for Chief
Executive Officer) / Chief Executive Officer (for Executive Vice Presidents and
Senior Vice Presidents)].
17.3. Modification. This Agreement shall not be varied, altered,
modified, canceled, changed, or in any way amended except by mutual agreement of
the parties in a written instrument executed by the parties hereto or their
legal representatives.
17.4. Severability. It is the intention of the parties that the
provisions of the restrictive covenants herein shall be enforceable to the
fullest extent permissible under the applicable law. If any clause or provision
of this Agreement is held to be illegal, invalid, or unenforceable under present
or future laws effective during the term hereof, then the remainder of this
Agreement shall not be affected thereby, and in lieu of each clause or provision
of this Agreement which is illegal, invalid or unenforceable, there shall be
added, as a part of this Agreement, a clause or provision as similar in terms to
such illegal, invalid or unenforceable clause or provision as may be possible
and as may be legal, valid and enforceable.
17.5. Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
19
17.6. Tax Withholding. The Company may withhold from any benefits
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
17.7. Restrictive Covenants of the Essence. The restrictive covenants
of the Executive set forth herein are of the essence of this Agreement; they
shall be construed as independent of any other provision in this Agreement; and
the existence of any claim or cause of action of the Executive against the
Company, whether predicated on this Agreement or not, shall not constitute a
defense to the enforcement by the Company of the restrictive covenants contained
herein. The Company shall at all times maintain the right to seek enforcement of
these provisions whether or not the Company has previously refrained from
seeking enforcement of any such provision as to the Executive or any other
individual who has signed an agreement with similar provisions. Notwithstanding
any provision contained within this Agreement, the obligations of the Executive
under Articles 8, 9, 10 and 17 of this Agreement shall continue after the
termination of this Agreement and shall be binding on the Executive's heirs,
executors, legal representatives and assigns.
17.8. Beneficiaries. The Executive may designate one (1) or more
persons or entities as the primary and/or contingent beneficiaries of any
amounts to be received under this Agreement. Such designation must be in the
form of a signed writing acceptable to the Executive's immediate manager. The
Executive may make or change such designation at any time.
17.9. Payment Obligation Absolute. The Company's obligation to make the
payments and the arrangement provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against the Executive or anyone else. All
amounts payable by the Company hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the' Company shall be final, and the
Company shall not seek to recover all or any part of such payment from the
Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
result in any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement; provided, however, that
continued health, welfare, and benefit plan participation pursuant to Section
7.4(b) or Section 11.8(c) herein shall be discontinued in the event the
Executive becomes eligible to receive substantially similar benefits from a
successor employer.
17.10. Contractual Rights to Benefits. This Agreement establishes and
vests in the Executive a contractual right to the benefits to which he is
entitled hereunder. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets in trust or otherwise
to provide for any payments to be made or required hereunder.
20
17.11 Resignations. Upon the termination of Executive's employment,
however such termination is effected, he shall be deemed to have resigned as of
the date of such termination all officer and director positions he may have held
with the Company.
Article 18. Governing Law
To the extent not preempted by federal law, the provisions of this
Agreement shall be construed and enforced in accordance with the laws of the
Commonwealth of Virginia, without reference to Virginia's choice of law statutes
or decisions.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the Effective Date.
CARMAX, INC.:
By:
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[NAME]
[TITLE]
EXECUTIVE:
____________________________________________________________________
[NAME]
____________________________________________________________________
____________________________________________________________________
ADDRESS
SSN:
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ATTEST:
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21
CARMAX, INC.
Schedule of Terms
of Employment Agreement
for Named Executive Officers
Target Amount of
Base Bonus Outplacement
Executive Title Salary 1 Rate 2 Services 3
--------- ----- -------- ------ ----------
▇▇▇▇▇▇ ▇▇▇▇▇ President and Chief Executive Officer $750,000 100% $50,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Executive Vice President, Store Operations $495,000 60% $25,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Executive Vice President and Chief $495,000 60% $25,000
Financial Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President and Chief $440,000 40% $25,000
Information Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President, Marketing and $440,000 40% $25,000
Strategy
--------
1 See Section 5.1 of the Employment Agreement.
2 See Section 5.2 of the Employment Agreement.
3 See Sections 7.4(c) and 11.8(d) of the Employment Agreement.