Exhibit 10.0
EMPLOYMENT AGREEMENT
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TABLE OF CONTENTS
PAGE
Term 1
Position and Duties 1
Compensation 2
Termination of Employment 5
Obligations of the Company upon Termination 8
Release 10
Non-Exclusivity of Rights 10
Full Settlement 10
Non-Competition; Confidential Information; and Non-Solicitation 11
Certain Additional Payments by the Company 12
Attorneys' Fees 14
Indemnification 14
Successors 14
Arbitration 15
Miscellaneous 15
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), dated November 23, 1999, is by and
between ▇▇▇▇-▇▇▇▇▇ Stores, Inc., a Florida Corporation (the "Company") and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ (the "Executive").
WITNESSETH THAT
WHEREAS, subject to the terms and conditions contained herein, the Company
wishes to provide for the employment by the Company of the Executive and the
Executive wishes to accept such employment; and
WHEREAS, this Agreement is the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements
concerning the same subject.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company and the Executive hereby agree as follows:
1. Term.
(a) Term of Employment.
(i) The Company shall employ the Executive, and the Executive shall
serve the Company, on the terms and conditions set forth in this
Agreement, commencing on the date above written (the "Effective
Date") and, unless sooner terminated pursuant to Paragraph 4,
continuing until the date that is the three-year anniversary of
the Effective Date or such later date as provided in subparagraph
(ii) of this subparagraph 1(a) (the "Term of Employment").
(ii) The Term of Employment shall be extended automatically for one
additional year on the last day before the first annual
anniversary of the Effective Date and for one additional year on
each annual anniversary thereafter unless either party gives
written notice not to extend this Agreement prior to the three
(3) months before such extension would be effectuated.
(b) Term of the Agreement. This Agreement shall become effective on the
Effective Date and shall continue in effect throughout the Term of
Employment; provided, however, the restrictive covenants contained in
Paragraph 9 of this Agreement and the Company's obligations under
Paragraphs 5, 10, 11, 12 and 14 of this Agreement shall survive the
Term of Employment and shall continue in effect through the periods
provided therein and/or until the Company's and the Executive's
obligations thereunder are satisfied.
2. Position and Duties.
(a) Positions, Duties, and Responsibilities. The Executive shall serve as
the President and Chief Executive Officer of the Company with such
duties and responsibilities as are customarily assigned to the
President and Chief Executive Officer, and such other duties and
responsibilities not inconsistent therewith as may from time to time
be assigned to him by the Board of Directors of the Company (the
"Board"). The Executive shall report solely and directly to the Board.
At the Effective Date, the Executive shall be elected by the Board to
a position on the Board and, at the next annual meeting thereof, shall
be nominated to serve as a member of the Board. The Executive agrees
to resign from Board membership upon termination of employment with
the Company upon written request of the Board.
(b) Time and Attention. Excluding any periods of vacation and sick leave
to which the Executive is entitled, the Executive shall devote
substantially all of his attention and time during normal working
hours to the business and affairs of the Company and its affiliates,
as directed by the Board. It shall not be considered a violation of
the foregoing, however, for the Executive to serve on corporate,
industry, civic, or charitable boards or committees, so long as such
activities do not materially interfere with the performance of the
Executive's responsibilities as an employee of the Company in
accordance with this Agreement or violate Paragraph 9 of this
Agreement.
3. Compensation. Except as otherwise expressly set forth below, the
Executive's compensation shall be determined by, and in the sole discretion
of, the Board.
(a) Annual Base Salary. The Executive shall receive an annual base salary
of not less than $700,000 (the annual base salary in effect from time
to time, "Annual Base Salary"). The Annual Base Salary shall be
payable in accordance with the Company's regular payroll practice for
its senior officers, as in effect from time to time. The Annual Base
Salary shall be reviewed from time to time, but not less frequently
than annually, and, in the sole discretion of the Board, may be
adjusted; provided, however, in no case shall the Annual Base Salary
be reduced from the minimum level set forth above. To the extent
Annual Base Salary is increased, then such increased salary shall be
Executive's Annual Base Salary for all purposes of this Agreement.
(b) Annual Bonus. Pursuant to the terms of the Company's Annual Incentive
Plan, the Executive shall be eligible to receive an annual bonus (the
"Annual Bonus") of up to 120% of his Annual Base Salary (with the
target annual bonus equal to 60% of Annual Base Salary), based on the
degree of achievement of performance goals established by the Board,
after consultation with the Executive, in writing, at the beginning of
each fiscal year and, with respect to the initial Annual Bonus, within
a reasonable time after the Effective Date. Notwithstanding the
foregoing, if, as of June 28, 2000, (i) the Executive is an employee
of the Company or (ii) the Executive's employment has been terminated
by the Company for other than Cause (as that term is defined in
subparagraph 4(b)(ii)) or by the Executive for Good Reason (as that
term is defined in subparagraph 4(c)(ii)), the Executive shall receive
an initial Annual Bonus (which shall be paid with respect to the
period ending on June 28, 2000, the last day of the Company's fiscal
year) of not less than $210,000.
(c) Stock Options. On the Effective Date, the Executive shall be granted
an option to purchase 500,000 shares of the Company's common stock at
a per share purchase price equal to the closing price of the Company's
common stock on the New York Stock Exchange on the Effective Date (the
"Option"). The Option shall have a ten year term, unless terminated
earlier pursuant to the terms hereof or the terms of the Option award
agreement pursuant to which the Option is granted (the "Option
Agreement"). Fifty percent (50%) of the Option (i.e., 250,000 shares
out of the 500,000 granted) shall vest and become immediately
exercisable on the Effective Date and the remaining fifty percent
(50%) of the Option (i.e., the remaining 250,000 shares out of the
500,000 granted), provided the Executive is an employee as of such
date, shall vest (and become immediately exercisable) on the first
annual anniversary of the Effective Date. Notwithstanding the
foregoing, the Option Agreement shall provide that upon (i) a Change
in Control (as that term is defined in subparagraph 15(i) hereof), or
(ii) a termination of the Executive's employment by the Company for
other than Cause (as that term is defined in subparagraph 4(b)(ii)) or
by the Executive for Good Reason (as that term is defined in
subparagraph 4(c)(ii)), or upon termination of employment for death or
Disability, the Option shall become fully vested and exercisable and
shall remain exercisable until the second one-year anniversary of the
Date of Termination (or, if earlier, the last day of the term of the
Option). Otherwise, upon a termination of the Executive's employment,
any portion of the Option that has not as of such date vested shall be
forfeited. Except as expressly provided herein, the Option shall be
administered pursuant to the terms and conditions of the Company's Key
Employee Stock Option Plan, as if granted thereunder, and the Option
Agreement. Notwithstanding any other provision contained herein, such
Option is being granted to the Executive in addition to, and not in
lieu of, any other award or benefit (whether or not based in Company
common stock) customarily granted to senior executive officers of the
Company.
(d) Incentive Compensation; Employee Benefits; Fringe Benefits.
(i) In addition to the foregoing, while the Executive is employed
pursuant to this Agreement,
(A) the Executive shall be eligible to participate in all cash
and equity-based incentive compensation (including the
Company's Key Employee Stock Option Plan (the "KESOP") and
Performance-Based Restricted Stock Plan, subject to
conditions on participation contained in the Company's Stock
Ownership Obligation policy, as it exists from time to
time), retirement, supplemental retirement, and deferred
compensation plans, policies and arrangements that are
provided generally to other senior officers of the Company
at a level (in terms of the amount and types of benefits and
incentive compensation that the Executive has the
opportunity to receive and the terms thereof) determined in
the sole discretion of the Board; provided, however, the
Executive's participation in such arrangements shall be at a
level no less favorable than that of other senior executive
officers of the Company;
(B) the Executive and/or the Executive's family, as the case may
be, shall be eligible for participation in, and shall
receive all benefits under, applicable welfare benefit
plans, practices, policies, and programs provided by the
Company to the same extent as is provided generally to other
senior officers of the Company; and
(C) the Executive shall be entitled to receive fringe benefits
substantially similar to those enjoyed generally by other
senior officers of the Company and shall be entitled to
avail himself of paid holidays (as determined from time to
time by the Company) on the same terms and conditions as
other senior officers of the Company.
(ii) With respect to the Executive's participation in cash and
equity-based incentive compensation plans, the combined
target annualized long-term incentive provided pursuant to
the KESOP and the Performance-Based Restricted Stock Plan
shall be equal to 180% of the Executive's Annual Base Salary
(90% of which shall be provided in the form of stock options
and the remaining 90% of which shall be provided through a
combination of restricted stock and contingent cash
payments), calculated without regard to the Options granted
pursuant to subparagraph 3(c) hereof.
(e) Vacation. The Executive shall be entitled to paid vacation
in accordance with the Company's vacation policy for senior
officers of the Company; provided, however, the Executive
shall be entitled to not less than four (4) weeks of
vacation per year. For purposes of this provision, reference
to a year shall be deemed to be the 365 day period beginning
on the Effective Date, and each anniversary thereof.
Vacation benefits shall be deemed earned and available on
the first day of each such year. Vacation days not used
within the applicable year shall be forfeited; provided,
however, that upon termination of the Executive's employment
hereunder, the Executive shall be paid for vacation days
unused for the year in which the termination occurs.
(f) Expenses.
(i) The Company shall, at its expense, cause to be provided
for the Executive's use, an office at the Company's
headquarters and such secretarial services and
necessary business supplies and equipment as the
Executive may reasonably require in carrying out his
obligations hereunder.
(ii) The Executive shall be reimbursed by the Company for
reasonable business expenses actually incurred in
rendering to the Company the services provided for
hereunder, payable in accordance with customary Company
practice, after the Executive presents written expense
statements or such other supporting information as the
Company may customarily require of its executives for
reimbursement of such expenses. Expenses for which
reimbursement will be made include, but shall not be
limited to, reasonable business entertainment, travel,
cellular telephone, portable computer, facsimile
machine, and similar related reasonable expenses that
are incidental to the Executive's performance of his
duties and responsibilities pursuant to this Agreement.
(iii)The Executive shall be reimbursed for the expenses
incurred by the Executive related to his relocation to
Jacksonville, Florida, as provided in Exhibit A. In
addition, the Company shall pay to the Executive (x) an
amount (not to exceed $50,000) for costs associated
with the termination of membership with Alaqua Country
Club and (y) all reasonable attorney's fees and
expenses incurred in connection with the negotiation of
this Agreement and related documentation. All expenses
and costs incurred by the Executive for which the
Executive seeks reimbursement hereunder shall be
substantiated by reasonable written documentation.
(g) No Duplication of Benefits. Notwithstanding the foregoing, except as
may be expressly set forth elsewhere in this Agreement, nothing
contained in any paragraph or subparagraph of this Agreement shall
entitle the Executive to receive duplicate payments or benefits under
the same plan or arrangement with respect to the same period(s) of
employment, other than with respect to the Options provided pursuant
to subparagraph 3(c) hereof; provided, to the extent of any
inconsistency between the terms of any such plan or arrangement and
the terms of this Agreement with respect to any one type of benefit,
the terms most beneficial to the Executive under either the respective
plan or arrangement or this Agreement shall govern and prevail.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death. The Company shall be
entitled to terminate the Executive's employment because of the
Executive's Disability during the Term of the Agreement. For purposes
of this Agreement, the term "Disability" shall have the same meaning
as is provided in the Company's long-term disability plan for "Total
Disability," as in effect on the Date of Termination (as that term is
defined in subparagraph 4(d)(ii) below); provided, however, that the
Executive shall not be considered to have experienced a Disability for
purposes of this Agreement unless and until, as a result of the
Executive's incapacity due to physical or mental illness, the
Executive shall have been substantially unable to perform his duties
hereunder for an entire period of six (6) consecutive months, and
within thirty (30) days after written Notice of Termination (as that
term is defined in subparagraph 4(d)(i) below) is given after such six
(6) month period, the Executive shall not have returned to the
substantial performance of his duties on a full-time basis.
(b) By the Company.
(i) The Company may terminate the Executive's employment without
Cause by delivering to the Executive written Notice of
Termination (as that term is defined in subparagraph 4(d)(i)
below), or for Cause by delivering to the Executive not less than
35 days (or 5 days if the termination is pursuant to subparagraph
4(b)(ii)(B)) prior written Notice of Termination (as that term is
defined in subparagraph 4(d)(i) below) and by affording the
Executive the due process rights set forth in subparagraphs
4(b)(ii) and (iii) below.
(ii) For purposes of this Agreement, "Cause" means: (A) the willful
engaging by the Executive in misconduct that is material and
demonstrably economically injurious to the Company or any of its
subsidiaries (monetarily or otherwise), or (B) the Executive's
conviction of, or pleading guilty or nolo contendere to, a felony
involving moral turpitude. For purposes of the foregoing, no act,
or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive
(I) not in good faith or without reasonable belief that his act,
or failure to act, was in the best interest of the Company, and
(II) without the direction of the Board or a committee thereof.
No event described in the foregoing subparagraph 4(b)(ii)(A)
shall constitute Cause unless the Company has given the Executive
written Notice of Termination (as that term is defined in
subparagraph 4(d)(i) below) specifying the condition(s) or
event(s) relied upon for such notice within 90 days from the
occurrence of such event (or, if later, from the earliest date
the Chairman of the Board became aware of such event) and the
Executive has failed to cure the condition or event asserted to
constitute Cause within the 30 day period following receipt of
such notice; provided, however, that during the 30 day period
following the receipt of such notice, the Board may, in its sole
discretion, place the Executive on paid leave of absence (during
which time the Executive shall continue to receive and/or accrue
all payments and benefits he was receiving or was eligible to
receive at the time such notice was given).
(iii)The Executive's termination for Cause shall be effective when
and if a resolution is duly adopted by an affirmative vote of
three-quarters of the entire membership of the Board (excluding
the Executive who shall not vote on this matter), stating that in
the good faith opinion of the Board the Executive is guilty of
the conduct described in the Notice of Termination (as that term
is defined in subparagraph 4(d)(i) below), and such conduct
constitutes Cause under this Agreement; provided, however, that
the Executive shall have been given the opportunity, together
with counsel, during the 35 day period (or 5 day period if the
termination is pursuant to subparagraph 4(b)(ii)(B)) following
the receipt by the Executive of the Notice of Termination (as
that term is defined in subparagraph 4(d)(i) below) and prior to
the adoption of the Board's resolution, to be heard by the Board.
Subject to Paragraph 14 hereof, this subparagraph 4(b)(iii) shall
not prevent the Executive from challenging in any court of
competent jurisdiction or arbitration proceeding the Board's
determination that Cause exists or that the Executive has failed
to cure any act (or failure to act) that purportedly formed the
basis for the Board's determination.
(c) By the Executive.
(i) The Executive may terminate his employment (A) for no
reason, or (B) for Good Reason; provided, however, that in
either case the Executive shall have given at least 30 days
prior written Notice of Termination (as that term is defined
in subparagraph 4(d)(i) below).
(ii) For purposes of this Agreement, the term "Good Reason" means
the occurrence (without the Executive's express written
consent) of any of the following acts or failures to act by
the Company:
(A) the assignment to the Executive of duties inconsistent
with the Executive's status as the President and Chief
Executive Officer of the Company, or any action by the
Company which results in a diminution in the
Executive's authority, duties, responsibilities or
reporting responsibilities;
(B) any reduction in the Executive's Annual Base Salary or
target Annual Bonus opportunity or the failure of the
Company to provide the Executive any material benefit
under this Agreement, including, without limitation,
the Options;
(C) the discontinuance of the Executive's eligibility to
participate in any incentive compensation, deferred
compensation, retirement or other employee benefit plan
without replacement with benefits providing both
equivalent current value and equivalent opportunity to
participate in future Company equity appreciation;
(D) the Company requiring the Executive to be based at any
office other than the Company's headquarters in
Jacksonville, Florida;
(E) the failure of the Executive to be nominated for
election or actually elected as a director on the Board
or the failure to appoint the Executive as the
President and Chief Executive Officer of the Company;
(F) the material breach by the Company of any of its other
obligations under this Agreement;
(G) any purported termination of the Executive's employment
for Cause that is not effected pursuant to the
procedures of subparagraph 4(b) (and for purposes of
this Agreement, no such purported termination shall be
effective);
(H) the Company's failure to provide in all material
respects the indemnification set forth in Paragraph 12
of this Agreement;
(I) a Change in Control of the Company (as that term is
defined in subparagraph 15(i) hereof) or the failure of
the Company to obtain the assumption of this Agreement
as contemplated in subparagraph 13(b) hereof; or
(J) the Company provides the notice to the Executive
contemplated by subparagraph 1(a)(ii) not to extend the
Term of Employment.
The Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness; provided, however,
that in the event of any such illness resulting in a significant impairment or
inability of the Executive to perform his material duties, the Board may (during
the disability period) suspend the Executive from his duties, authorization or
responsibilities to the extent necessary due to such inability or impairment
without triggering Good Reason; provided, that, if a Good Reason event (other
than as described in subparagraph 4(c)(ii)(A)) should occur during such
disability period, the Executive may terminate his employment for Good Reason.
The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder. Except with respect to subparagraph 4(c)(ii)(I) or (J), no
such event described above shall constitute Good Reason unless the Executive has
given a Notice of Termination (as that term in subparagraph 4(d)(i) below) to
the Company specifying the condition or event relied upon for such termination
within 90 days from the Executive's actual knowledge of the occurrence of such
event and the Company has failed to cure the condition or event constituting
Good Reason within the 30 day period following receipt of the Executive's Notice
of Termination.
(d) Termination Procedures.
(i) Notice of Termination. Any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other party
hereto in accordance with the notice provisions contained in
subparagraph 15(b) hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice that indicates the specific
termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated.
(ii) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of
Termination (but in no event shall such date be later than the 35th
day following the date the Notice of Termination is given) or the date
of the Executive's death.
(iii)No Waiver. The failure to set forth any fact or circumstance in a
Notice of Termination shall not constitute a waiver of the right to
assert such fact or circumstance in an attempt to enforce any right
under or provision of this Agreement.
5. Obligations of the Company upon Termination.
(a) Post-Employment Benefits. If the Executive's employment is terminated
by the Company for any reason other than Cause, death or Disability,
or the Executive terminates his employment for Good Reason:
(i) the Company shall pay or provide to the Executive, within 5
business days, the Accrued Obligations (as that term is defined
in subparagraph 5(b) below);
(ii) the Company shall pay, within five business days, to the
Executive a lump sum equal to three times (A) the Executive's
Annual Base Salary (at the same level that was being paid to the
Executive on the Date of Termination (disregarding any reduction
in Annual Base Salary that constitutes Good Reason hereunder) and
(B) the target Annual Bonus opportunity for the year in which the
Date of Termination occurs (disregarding any reduction in Annual
Bonus that constitutes Good Reason hereunder); provided, that
such target Annual Bonus shall not be less than 60% of the
Executive's Annual Base Salary on the Date of Termination; and
(iii)during the period beginning on the Date of Termination and
ending 36 months thereafter, the Executive (and, as applicable,
the Executive's covered dependents) shall be entitled to all
health and welfare benefits under the Company's welfare benefit
plans (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended), as if the
Executive were still employed during such period, at the same
level of benefits and at the same after-tax dollar cost to the
Executive as is available to all of the Company's senior
executives generally ("Continued Benefits"). If and to the extent
the Company is not permitted under the terms of the applicable
plan or applicable law to provide such benefits under its
existing plans, or if the provisions of such benefits would cause
the applicable plan to be deemed to be discriminating in favor of
highly compensated employees under the Employee Retirement Income
Security Act of 1974, as amended, the Company shall provide
equivalent benefits on an individual basis at no additional
after-tax cost to the Executive or shall provide the after-tax
cash equivalent thereof. The benefits provided in accordance with
this subparagraph 5(a)(iii) shall be reduced by any equivalent
benefits, without waiting period or pre-existing condition
limitations, provided to the Executive by another employer (such
benefits to be determined on a benefit-by-benefit basis);
(iv) the Company shall reimburse, within five business days of the
Date of Termination or, if later, the date the Executive submits
his request for reimbursement, the Executive pursuant to
subparagraph 3(f) for reasonable expenses incurred in accordance
with the Company's policy, but not paid prior to such termination
of employment;
(v) all outstanding stock options and restricted stock, including,
without limitation, the Options, held by the Executive shall
become immediately exercisable and/or vested, as the case may be,
and (A) the stock options (other than the Options) shall remain
exercisable pursuant to the terms of the plan pursuant to which
they were granted and (B) the Options shall remain exercisable
until the second one-year anniversary of the Date of Termination
(or, if earlier, the last day of the term of the Option); and
(vi) the Company shall pay the Executive, within 20 days, his target
entitlement under any and all long-term incentive bonuses, awards
or compensation he would have otherwise been entitled to be paid
in cash if he was employed on the relevant payment date(s) and
the target goals for such bonuses, awards or other compensation
had been achieved; provided, that such target entitlement shall
not be less than 60% of the Executive's Annual Base Salary on the
Date of Termination.
(b) Termination due to death or Disability; by the Company for Cause; by
the Executive without Good Reason. If the Executive's employment is
terminated by the Company for Cause, death or Disability, or by the
Executive for other than Good Reason (or upon expiration of the term
if the Executive provides the notice contemplated by subparagraph
1(a)(ii) hereof), the Company shall pay to the Executive (or to the
Executive's estate or personal representative, in the case of the
Executive's death) in a lump sum in cash within 20 days after the Date
of Termination the sum of the following amounts (the "Accrued
Obligations"): (i) any portion of the Executive's Annual Base Salary
and earned but unpaid Annual Bonus (i.e. from a prior year) through
the Date of Termination that has not yet been paid (and, if and only
if the Executive's employment is terminated due to the Executive's
death or Disability, a prorated Annual Bonus based on the target level
of the Annual Bonus for the year in which the Date of Termination
occurs, prorated based on the fraction of the year the Executive was
employed); (ii) any compensation previously deferred (provided, no
amounts paid or payable under subparagraph 5(a) shall be deemed
compensation previously deferred) by the Executive (together with any
accrued interest or earnings thereon) that has not yet been paid;
(iii) any unpaid vacation pay that was accrued during the year in
which the Date of Termination occurs; and (iv) any unpaid business
expenses under subparagraph 3(f). In addition, if the Executives'
employment is terminated due to his death or Disability, the Company
shall provide the Executive and his eligible dependents with Continued
Benefits for two years (after which the Executive shall be entitled to
continuation of benefits to the extent required by the Consolidated
Omnibus Budget Reconciliation Act (COBRA)). After making such
payment(s), the Company shall have no further obligations under this
Agreement.
(c) Liquidated Damages. The payments and benefits provided in subparagraph
5(a) are intended as liquidated damages for a termination of the
Executive's employment by the Company other than for Cause, death, or
Disability or for the actions of the Company leading to a termination
of the Executive's employment by the Executive for Good Reason, and
shall be the sole and exclusive remedy therefor.
6. Release. Notwithstanding any provision herein to the contrary, the Company
may require that, prior to payment of any amount or provision of any
benefit under subparagraph 5(a) or 5(b) of this Agreement, the Executive
shall have executed a complete release of the Company and its affiliates
and related parties in such form as is reasonably acceptable to both
parties and any waiting periods contained in such release shall have
expired; provided, however, that the Executive's obligation to execute such
a release shall be contingent upon the Company's execution of a complete
release of the Executive in such form as is reasonably acceptable to both
parties.
7. Non-Exclusivity of Rights. Except as otherwise provided in this Agreement,
nothing in this Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or practice provided
by the Company or any of its affiliated companies for which the Executive
may qualify (other than severance policies), nor shall anything in this
Agreement limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Vested benefits and other amounts that the Executive is
otherwise entitled to receive under any other plan, program, policy, or
practice of, or any contract or agreement with, the Company or any of its
affiliated companies on or after the Date of Termination shall be payable
in accordance with the terms of each such plan, program, policy, practice,
contract, or agreement, as the case may be, except as expressly modified by
this Agreement.
8. Full Settlement. Except in the event of a termination of the Executive's
employment for Cause, the Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this
Agreement shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right, or action that the Company may have against
the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement and (except as provided with respect to health and welfare
benefits in subparagraph 5(a)(iii) of this Agreement) the amount of any
payment or benefit provided for in this Agreement shall not be reduced by
any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company, or otherwise.
9. Non-Competition; Confidential Information; and Non-Solicitation.
(a) Non-Competition. During the Term of Employment and (i) if the
Executive's employment is terminated by the Company for other than
Cause or Disability or the Executive terminates his employment for
Good Reason, during the period beginning on the Date of Termination
and ending on the 24 month anniversary thereof or (ii) if the
Executive's employment is terminated by the Company for Cause or
Disability or the Executive terminates his employment for a reason
other than Good Reason, during the period beginning on the Date of
Termination and ending on the 12 month anniversary thereof (as
applicable, the "Restrictive Covenant Coverage Period"), the Executive
shall not, without the prior written consent of the Company, as a
shareholder, officer, director, partner, consultant, employee, or
otherwise, engage directly in any business or enterprise which is "in
competition" with the Company or its successors or assigns (such
entities collectively referred to hereinafter in this Paragraph 9 as
the "Company"); provided, however, that the Executive's ownership of
less than five percent of the issued and outstanding voting securities
of a publicly traded company shall not, in and of itself, be deemed to
constitute such competition. A business or enterprise is deemed to be
"in competition" if it is conducting a retail grocery business in any
of the geographical regions in which the Company conducts substantial
business on the Date of Termination and (I) more than 10% of the total
revenue of the business or enterprise is attributable to the retail
grocery business, and (II) the Executive does or will provide material
services for, advise, or consult or otherwise share material
information with, the portion of the business or enterprise, or the
employees thereof, engaged in competition. Notwithstanding anything
herein to the contrary, Wal Mart Stores, Inc. and its affiliates and
KMart Corporation and its affiliates shall be considered to be "in
competition" with the Company.
(b) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential
information, knowledge, trade secrets, methods, know-how or data
relating to the Company and its businesses or acquisition prospects
that the Executive obtained or obtains during the Executive's
employment by the Company and that is not and does not become
generally known to the public (other than as a result of the
Executive's violation of this Paragraph 9) ("Confidential
Information"). Except as may be required and appropriate in connection
with carrying out his duties under this Agreement, the Executive shall
not communicate, divulge, or disseminate any material Confidential
Information at any time during or after the Executive's employment
with the Company, except with the prior written consent of the Company
or as otherwise required by law or legal process; provided, however,
that if so required, the Executive will provide the Company with
reasonable notice to contest such disclosure.
(c) Non-Solicitation of Employees. The Executive recognizes that he may
possess confidential information about other employees of the Company
relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships with
suppliers to and customers of the Company. The Executive recognizes
that the information he will possess about these other employees may
not be generally known, may be of substantial value to the Company in
developing its respective businesses and in securing and retaining
customers, and may be acquired by him because of his business position
with the Company. The Executive agrees that, during the Restrictive
Covenant Coverage Period, he will not, directly or indirectly,
initiate any action to solicit or recruit anyone who is then an
employee of the Company for the purpose of being employed by him or by
any business, individual, partnership, firm, corporation or other
entity on whose behalf he is acting as an agent, representative or
employee and that he will not convey any such confidential information
or trade secrets about other employees of the Company to any other
person except within the scope of Executive's duties hereunder. The
restrictive provision of this subparagraph 9(c) shall have no effect
on any then-current employee of the Company who initiates contact with
the Executive seeking employment or who initiates discussions with the
Executive regarding his or her intent to cease employment with the
Company.
(d) Non-Interference with Suppliers or Customers. The Executive agrees
that, during the Restrictive Covenant Coverage Period, he will not
interfere with any business relationship between the Company and any
of its suppliers or customers.
(e) Remedies; Severability.
(i) The Executive acknowledges that if the Executive shall breach or
threaten to breach any provision of subparagraphs 9(a) through
(d), the damages to the Company may be substantial, although
difficult to ascertain, and money damages will not afford the
Company an adequate remedy. Therefore, if the provisions of
subparagraphs 9(a) through (d) are violated, in whole or in part,
the Company shall be entitled to specific performance and
injunctive relief, without prejudice to other remedies the
Company may have at law or in equity.
(ii) If any term or provision of this Paragraph 9, or the application
thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Paragraph 9, or
the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Paragraph 9 shall be valid and enforceable to
the fullest extent permitted by law. Moreover, if a court of
competent jurisdiction deems any provision hereof to be too broad
in time, scope, or area, it is expressly agreed that such
provision shall be reformed to the maximum degree that would not
render it unenforceable.
10. Certain Additional Payments by the Company.
(a) If the Accountant shall determine that the aggregate payments made and
benefits provided to the Executive pursuant to this Agreement, and any
other payments and benefits provided to the Executive from the Company
(or its successors or assigns or an entity that effectuates a Change
in Control) and its affiliates (whether or not pursuant to this
Agreement) that constitute "parachute payments" as defined in Section
280G of the Code (or any successor provision thereto) ("Parachute
Payments") would be subject to the excise tax imposed by Section 4999
of the Code (the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount
(determined by the Accountant) such that after payment by the
Executive of all taxes (including any Excise Tax) imposed upon the
Gross-Up Payment and any interest or penalties imposed with respect to
such taxes, the Executive retains from the Gross-Up Payment an amount
equal to the Excise Tax imposed upon the Parachute Payments. For
purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to (A) pay federal income taxes at the
highest marginal rate of taxation for the calendar year in which the
Gross-Up Payment is to be made and (B) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. For purposes of this
Paragraph 10, the "Accountant" shall mean an independent accounting
firm, which shall be selected by the Company from among the three
largest accounting firms in the United States, and which shall be
reasonably acceptable to the Executive, the fees and disbursements of
which shall be paid by the Company.
(b) If the Accountant shall determine that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion that
the Executive has substantial authority not to report any Excise Tax
on the Executive's Federal income tax return. If the Executive is
subsequently required to make a payment of any Excise Tax, then the
Accountant shall determine the amount of such additional payment
("Gross-Up Underpayment"), and any such Gross-Up Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.
The fees and disbursements of the Accountant shall be paid by the
Company.
(c) The Executive shall notify the Company in writing within 45 days of
any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of a Gross-Up Payment. If the
Company notifies the Executive in writing that it desires to contest
such claim and that it will bear the costs and provide the
indemnification as required by this sentence, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by
the Company,
(iii)cooperate with the Company in good faith in order to effectively
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and
pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest
and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a result
of such representation and payment of costs and expenses. The
Company shall control all proceedings taken in connection with
such contest; provided, however, that if the Company directs the
Executive to pay such claim and ▇▇▇ for a refund, the Company
shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income
tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; further provided,
the Executive shall retain the right to participate in all such
proceedings at his own expense.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to subparagraph 10(c)(iv), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall, within 45 days, pay to the Company the amount of such
refund, together with any interest paid or credited thereon after
taxes applicable thereto.
11. Attorneys' Fees. Except as otherwise provided in Paragraph 10, the Company
shall pay (on an ongoing basis) to the Executive to the fullest extent
permitted by law, all legal fees, court costs, litigation expenses and/or
arbitration expenses (as applicable) reasonably incurred by the Executive
or others on his behalf as a result of any contest or dispute regarding the
validity or enforceability of or liability under, or otherwise involving,
any provision of this Agreement (such amounts collectively referred to as
the "Reimbursed Amounts"); provided, that, the Executive shall reimburse
the Company for the Reimbursed Amounts if it is determined that the
Executive has not been successful on the material issues raised in such
contest or dispute.
12. Indemnification. The Executive shall be indemnified by the Company for
actions taken in his position as an officer, director, employee and agent
of the Company to the greatest extent as permitted by applicable law. The
Executive shall also be covered as an insured by a liability insurance
policy secured by and maintained by the Company covering acts of officers
and members of the Board of Directors of the Company in amounts not less
than $25,000,000 per loss. The Company also agrees to indemnify and forever
hold harmless the Executive from any and all pending, threatened, or
completed actions, suits or proceedings to which the Company, any of its
employees, directors or officers is a party or is threatened to be made a
party by virtue of any act or omission which arose prior to the Effective
Date hereof.
13. Successors.
(a) Assignment of Agreement. This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) Successors of the Company. No rights or obligations of the Company
under this Agreement may be assigned or transferred except that the
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall
mean the Company as herein before defined and any successor to its
business and /or assets (by merger, purchase or otherwise) that
executes and delivers the agreement provided for in this Paragraph 13
or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
14. Arbitration. In the event of any dispute or difference between Company and
the Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, either the Executive or Company may, by
written notice to the other, require such dispute or difference to be
submitted to arbitration. The arbitrator or arbitrators shall be selected
by agreement of the parties or, if they cannot agree on an arbitrator or
arbitrators within 30 days after the date arbitration is required by either
party, then the arbitrator or arbitrators shall be selected by the American
Arbitration Association (the "AAA"), upon the application of the Executive
or the Company. The determination reached in such arbitration shall be
final and binding on both parties without any right of appeal or further
dispute. Execution of the determination by such arbitrator may be sought in
any court of competent jurisdiction. The arbitrators shall not be bound by
judicial formalities and may abstain from following the strict rules of
evidence and shall interpret this Agreement as an honorable engagement and
not merely as a legal obligation. Unless otherwise agreed by the parties,
any such arbitration shall take place in Jacksonville, Florida and shall be
conducted in accordance with the Employment Dispute Resolution Rules of the
AAA.
15. Miscellaneous.
(a) Governing Law and Captions. This Agreement shall be governed by, and
construed in accordance with, the laws of Florida, without reference
to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.
(b) Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery or by
facsimile (provided confirmation of receipt of such facsimile is
received) to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
1333 New Hampshire Avenue, N.W., Suite 400
Washington, District of Columbia 20036
If to the Company:
▇▇▇▇-▇▇▇▇▇ Stores, Inc.
Attention: General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as either party furnishes to the other in writing in
accordance with this subparagraph 15(b). Notices and communications shall be
effective when actually received by the addressee.
(c) Amendment. This Agreement may not be amended or modified except by a
written --------- agreement executed by the parties hereto or their
respective successors and legal representatives.
(d) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement. If any provision of this Agreement
shall be held invalid or unenforceable in part, the remaining portion
of such provision, together with all other provisions of this
Agreement, shall remain valid and enforceable and continue in full
force and effect to the fullest extent consistent with law.
(e) Withholding. Notwithstanding any other provision of this Agreement,
the Company may withhold from amounts payable under this Agreement all
federal, state, local, and foreign taxes that are required to be
withheld by applicable laws or regulations. All cash amounts required
to be paid hereunder shall be paid in United States dollars.
(f) Waiver. The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this
Agreement (including, without limitation, the right of the Executive
to terminate employment for Good Reason) shall not be deemed to be a
waiver of such provision or right or of any other provision of or
right under this Agreement.
(g) Entire Understanding. The Executive and the Company acknowledge that
this Agreement supersedes and terminates any other severance and
employment agreements between the Executive and the Company or any
Company affiliates. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same instrument.
(h) Rights and Benefits Unsecured. The rights and benefits of the
Executive under this Agreement may not be anticipated, assigned,
alienated, or subject to attachment, garnishment, levy, execution, or
other legal or equitable process except as required by law. Any
attempts by the Executive to anticipate, alienate, assign, sell,
transfer, pledge, or encumber the same shall be void. Payments
hereunder shall not be considered assets of the Executive in the event
of insolvency or bankruptcy.
(i) Change in Control. For purposes of this Agreement, "Change in Control"
shall mean:
(i) any person (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934 (the "Act"), excluding (A) those persons and
entities included in the joint Schedule 13(G) filing filed with the
Securities and Exchange Commission on February 12, 1999, and all
current or future heirs, successors and affiliates to such persons and
all trusts or other entities established or maintained, or to be
established or maintained, for the benefit of such persons and their
heirs, successors and affiliates (collectively, the "▇▇▇▇▇ Family"),
(B) any employee benefit plan or related trust sponsored or maintained
by the Company, and (C) a corporation or other entity owned, directly
or indirectly, by all or substantially all of the shareholders of the
Company immediately prior to the transaction in substantially the same
proportions as their ownership of stock of the Company ("Person")),
becoming the beneficial owner, directly or indirectly, of twenty-five
(25) percent or more of the outstanding voting stock of the Company
requiring the filing of a report with the Securities and Exchange
Commission under Section 13(d) of the Act; provided, that, at the time
of the acquisition of such beneficial ownership interest, such
Person's beneficial ownership interest in the Company exceeds that of
the ▇▇▇▇▇ Family;
(ii) consummation of a merger, consolidation, liquidation or dissolution of
the Company, or the sale of all or substantially all of the assets of
the Company (a "Business Combination"), in each case, unless,
following such Business Combination, all or substantially all of the
shareholders of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty
(50) percent of the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination; or
(iii)during any period of 24 consecutive months, individuals who at the
beginning of such period constitute the Board and any new directors
whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of a majority of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority of the Board.
(j) Noncontravention. The Company represents that the Company is not
prevented from entering into, or performing this Agreement by the
terms of any law, order, rule or regulation, its by-laws or
declaration of trust, or any agreement to which it is a party, other
than which would not have a material adverse effect on the Company's
ability to enter into or perform this Agreement.
(k) Paragraph and Subparagraph Headings. The paragraph and subparagraph
headings in this Agreement are for convenience of reference only; they
form no part of this Agreement and shall not affect its
interpretation.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization of the Board, the Company
has caused this Agreement to be executed, all as of the day and year first above
written.
ATTEST: ▇▇▇▇-▇▇▇▇▇ STORES, INC.
____________________________ By:_____________________________________
Secretary Its
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
EXHIBIT A
RELOCATION EXPENSES
The Company shall reimburse the Executive, on an after-tax basis, for all
relocation expenses incurred in connection with Executive's move, including
without limitation, reasonable transportation costs for the Executive and his
family to move to the Jacksonville, Florida area (the "Metro Area"), all real
estate brokerage and related fees, closing costs (including, without limitation,
points), and legal expenses incurred in connection with the purchase or leasing
of a new home and sale of the Executive's current residence, and the actual cost
of moving the Executive's and his family's household goods and personal effects
(including, without limitation, storage).
In addition, the Company and the Executive shall agree upon an independent
appraiser who shall appraise the Executive's current residence in Orlando,
Florida within 30 days of the Effective Date (such value as determined by the
appraiser, the "Appraised Value"). The Executive shall agree to make reasonable
efforts to sell his current residence; provided, however, that the Company
agrees that if the Executive is unable to sell such residence by July 1, 2000,
the Company shall, if requested by the Executive, buy the house for the
Appraised Value.
The Company shall reimburse the Executive, on an after-tax basis, the cost of
temporary housing in the Metro Area (not to exceed nine (9) months) suitable for
the Executive and his family during the period from his family's relocation to
the Metro Area until the closing date on the purchase or lease of the family's
new permanent residence in the Metro Area.