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EXHIBIT 10.2
AMENDMENT TO EMPLOYMENT AGREEMENT
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Amendment dated this 22nd day of August, 1997 to the Amended and Restated
Agreement made as of the 5th day of June 1992 by and among Filene's Basement
Corp., a Massachusetts corporation ("FBC"), Filene's Basement, Inc., a
Massachusetts corporation ("FBI"; each of FBC and FBI are sometimes referred to
herein as the "Employer" or the "Company"), and Xxxx Xxxxxxx, III (the
"Executive").
Recitals
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WHEREAS, the Executive and the Employer entered into the Amended and
Restated Agreement referenced above (the "Employment Agreement"), pursuant to
which the Executive served as President and Chief Operating Officer of the
Company, and
WHEREAS, the executive and the Employer desire to amend the Employment
Agreement so as to continue the Executive's employment on a less than full-time
basis and in a different capacity,
NOW THEREFORE, the parties hereto agree as follows:
1. SECTION 1 is hereby deleted and the following inserted in lieu thereof:
"1. EMPLOYMENT. The Employer shall employ the Executive and the Executive shall
perform services for and continue in the employment of the Employer for the
period (the "Employment Period") commencing on September 1, 1997 and ending
August 31, 2000 (the "Expiration Date"), unless such employment shall have been
sooner terminated as hereinafter set forth."
2. SECTION 2 is hereby deleted and the following inserted in lieu thereof:
"POSITION AND DUTIES" The Executive shall serve as Vice Chairman of the Board of
Directors and Chairman of the Executive Committee of FBC and FBI. In such
positions, the Executive shall assist and advise the chief Executive Officer and
the Board of Directors with respect to acquisitions, divestitures, new concept
developments, real estate policies and short-term and long-term strategies and
shall be accountable to, and shall have such other powers, duties and
responsibilities, consistent with his positions, as may from time to time be
prescribed by the Board of Directors of the Company. The Executive shall perform
and discharge, faithfully, diligently and to the best of his ability, such
duties and responsibilities. The Executive shall not be a full-time employee of
the Company, but shall during each year of the Employment Period devote up to
the following percentage of his working time and efforts to the business
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and affairs of the Company:
Annual Period Percentage
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September 1, 1997 through August 31, 1998 ("Year") 75%
September 1, 1998 through August 31, 1999 ("Year") 50%
September 1, 1999 through August 31, 2000 ("Year") 50%
Notwithstanding the foregoing, nothing herein contained shall be deemed to
prevent or limit the right of the Executive (a) to make, without prior approval
of the Board of Directors of the Company, any investments in any company or
business, PROVIDED, HOWEVER, that no investment may be made, without prior
approval of the Board of Directors, in any competitor of the Company unless such
investment (i) is a passive investment and does not exceed 3% of the outstanding
capital stock of such competitor corporation (or interests of another competitor
entity), or (ii) such stock (or interests) does not exceed $1,000,000, whichever
is less, and in connection with which investments in such competitor the
Executive is not obligated or required to, and shall not in fact, devote any
managerial efforts or (b) to serve as a director (or in a similar capacity) of
any business entity or participate in charitable or community activities or in
trade or professional organizations, except that the Board of Directors of the
Company shall have the right to prohibit the Executive from serving as a
director of any competitor business entity and shall have the right to limit
such participation whenever the Board shall reasonably believe that the time
spent on such activities infringes upon the time required by the Executive for
the performance of his duties under this Employment Agreement.
3. SUBSECTIONS (a) AND (b) OF SECTION 3 are hereby deleted and the
following inserted in lieu thereof:
"(a) SALARY. During Year 1 of the Employment Period, the Executive shall receive
an annual salary ("Salary") equal to 75% of the annual salary payable to the
Chief Executive Officer of the Company ("CEO's Annual Salary") for that year and
during each of Year 2 and Year 3, the Executive shall receive a Salary equal to
50% of the CEO's Annual Salary for each of such years, payable monthly in
advance. Except as otherwise provided in this Employment Agreement, the Salary
shall be pro-rated for any period of service less than a full year.
(b) INCENTIVE BONUS. In accordance with the Company's long-term and annual bonus
programs, the Executive shall receive for Year 1 bonuses equal to 75% of the
bonuses payable to the Chief Executive Officer of the Company ("CEO's Bonuses")
for that year, and for each of Year 2 and Year 3 bonuses equal to 50% of the
CEO's Bonuses for each of such years.
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4. SUBSECTION (c) OF SECTION 5 is hereby amended by deleting the words "on
a full-time basis" and inserting in lieu thereof the following: "on a part-time
basis as provided in Section 2 of this Agreement."
5. SUBSECTION (e)(i)(a)(II) OF SECTION 5 is hereby amended by deleting the
second and third paragraphs of subclause II and inserting in lieu thereof the
following:
"The amount of the Annualized Bonus shall be the product of (x) the amount
of the annual bonus paid in respect of the last year for which an annual bonus
was paid ("Last Bonus Year Amount") preceding the year in which the Termination
Date occurs (or 75% of the Last Bonus Year Amount if the Termination Date occurs
in Year 1 or 50% of the Last Bonus Year Amount if the Termination Date occurs in
Year 2 or Year 3) and (y) a fraction, the numerator of which is the number of
months in the year in which the Termination Date occurs that have elapsed prior
to the Termination Date (counting partial months as full months) and the
denominator of which is twelve."
6. SUBSECTION (e)(i)(b)(I) OF SECTION 5 is hereby amended by deleting the
first paragraph of subclause I and inserting in lieu thereof the following:
"(I) SALARY AND ANNUAL BONUS. An amount equal to the sum of (x) the
Executive's Termination Salary (as defined below), multiplied by a fraction, the
numerator of which is the number of months (counting partial months as full
months) from the Termination Date through the Expiration Date and the
denominator of which is twelve, and (y) his Annualized Bonus."
7. SUBSECTION (e) OF SECTION 5 is hereby amended by inserting at the end of
subsection (e) after clause (iii) thereof two new paragraphs, as follows:
"In addition, after termination of the Executive's employment (x) prior to
the Expiration Date by reason of termination (i) by the Company other than for
cause, (ii) because of his incapacity as set forth in subsection (c) of this
Section 5, or (iii) by the Executive for Good Reason, or (y) because of the
occurrence of the Expiration Date, whichever occurs earlier, the Company shall
provide the Executive with the following termination benefits commencing
immediately after the Termination Date:
(A) An office at the Company's facilities and secretarial assistance until the
earlier of the date the Executive reaches age 65 (or such later date as the
Company and the Executive determine);
(B) Discounts equivalent to the customary discounts provided for principal
executive officers of the Company for purchases made by the Executive at the
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Company's retail stores for the remainder of the Executive's life;
(C) Life insurance coverage of $1,000,000 on the life of the Executive under the
Company's contributory life insurance program, at the Company's expense, for the
remainder of the Executive's life;
(D) Health insurance benefits for the remainder of the Executive's life, at the
Company's expense, reasonably equivalent to the health insurance benefits
required to be provided during the Employment Period pursuant to Section
3(d)(vi) of this Employment Agreement; and
(E) In measuring the Executive's compensation for purposes of determining his
supplemental retirement benefits under the Company's supplemental executive
retirement plan ("SERP"), the Company shall include as credited service the
employment of the Executive pursuant to this Amendment during the Employment
Period and shall base such benefits on the five years of highest compensation
(rather than the five consecutive years of highest compensation) during the ten
years prior to the Termination Date, and the Company shall cause the SERP to be
so amended to reflect the foregoing.
"Notwithstanding anything herein to the contrary, in the event that, after
termination of his employment for any of the reasons set forth in the preceding
paragraph, the Executive is employed by any other employer or employers
("Subsequent Employers") which provide life insurance coverage and/or health
insurance benefits to the Executive as an employee, the benefits and/or the
amounts payable pursuant to subparagraphs (C) and (D) of the preceding paragraph
shall be reduced by the life insurance benefits and health insurance benefits,
as the case may be, which are provided by such Subsequent Employers and only so
long as they are so provided; except that nothing herein shall require the
Executive to seek other employment or mitigation as set forth in Section 8 of
this Employment Agreement."
8. SECTION 6 is hereby amended by adding a new sentence at the end of
Section 6, as follows:
"Notwithstanding anything herein to the contrary, the Company shall cause all of
Executive's stock options to vest and become exercisable in full on September
22, 1999."
9. In the event that a Change of Control (as defined in the "Change in
Control" described in Section 10 of this Employment Agreement) occurs at any
time prior to September 1, 2000, for purposes of determining payments to be made
pursuant to Section 1(a) of the Change in Control Agreement, the Executive's
"base salary" and the Executive's "Average Salary" shall be equal to the base
salary and Average Salary of
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the Chief Executive Officer of the Company, rather than the salary payable to
the Executive as a part-time employee pursuant to Section 3(a) of this
Employment Agreement.
10. Section 11 is hereby deleted and the following inserted in lieu
thereof:
"11. NOTICES. All notices and other
communications hereunder shall be in
writing and shall be deemed given when
delivered personally or three days after
being mailed by registered or certified
mail (return receipt requested) to the
parties at the following addresses (or at
such other address for a party as shall be
specified by like notice):
(a) if to either FBC or FBI:
Filene's Basement Corp.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President and General Counsel
with copies to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
(b) if to the Executive,
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with copies to:
Xxxxxxx, Procter & Xxxx
Exchange Place
Boston, MA 02109-2887
Attention: Xxxxxxx X. Floor, Esq.
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11. Except as specifically amended in this Amendment, the Employment
Agreement and the Change in Control Agreement shall continue to remain in full
force and effect and are hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of this date first above written.
FILENE'S BASEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Chief Executive Officer
FILENE'S BASEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: Chief Executive Officer
XXXX XXXXXXX, III
/s/ Xxxx Xxxxxxx, III
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