EXHIBIT 10.23
August 29, 2001
Dear Xxxx:
In recognition of the important contributions you have made, and we
expect will continue to make, to the success of Xxxxxxxxx Xxxxx Holding, Inc.
(the "Company"), I am pleased to formalize in writing our commitment to you
concerning the terms of your employment as Executive Vice President and Director
of Stores for the Company. When signed by you, this agreement shall supersede
and be in place of any prior agreements or understandings between us and shall
be the sole and exclusive agreement between us pertaining to your employment
with the Company.
DUTIES. You will perform and discharge your duties and responsibilities
faithfully, diligently and to the best of your ability. You will devote
substantially all of your working time and efforts to the business and affairs
of the Company.
BASE SALARY. Your base salary will continue to be paid at the rate of
$150,000.00 gross per year; paid bi-weekly. Annually throughout your employment,
the Board of Directors will review your base salary and determine the level of
your base salary for the following year. All payments under this paragraph or
any other paragraph of this agreement will be made in accordance with the
regular payroll practices of the Company, reduced by applicable federal and
state withholdings.
PERFORMANCE BONUS. You will be eligible for an annual bonus, as determined by
the Board of Directors in its sole discretion, based upon your achievement and
the Company's achievement of annual performance goals established by the Board
of Directors. All decisions by the Board of Directors pertaining to bonus
eligibility and/or achievement are final.
BENEFITS. You will receive a paid vacation per year (according to the Company's
stated vacation policy) to be taken at such times as you and Company mutually
agree upon. You will be eligible to participate in all benefit and welfare plans
made generally available to senior management executives of the Company, as in
effect from time to time, subject to Company's right to modify or terminate such
plans or benefits at any time with respect to employees of similar rank and
title.
TERMINATION OF EMPLOYMENT AND SEVERANCE. You understand and agree that this
agreement is not meant to constitute a contract of employment for a specific
term, and consequently your employment will be "at-will". What this means is
that either you or the Company may terminate your employment at any time,
without notice and with or without "Cause" (as defined herein). If the Company
terminates your employment for Cause, or you terminate your employment, the
Company's only obligation to you under this Agreement will be to continue to pay
your base salary through the date of termination and pay to you any unused
earned vacation as of the last date of your employment. If, however, the Company
terminates your employment for any reason other than for Cause, including your
death or disability, the Company will continue to pay your base salary for a
period of six months following such termination (and will make these payments to
your beneficiary in the event of death). In addition, if the Company terminates
your employment as a result of a "Change of Control" (as defined herein), all of
your outstanding stock options which are not then exercisable shall immediately
become exercisable. There are certain conditions which must be met in order for
you to receive any severance payment under this agreement. First, you must sign
a general release agreement in favor of the Company. Second, you must abide by
all terms of this agreement. The Company shall have the right to cease making
any severance payment under this agreement in the event you breach any provision
of it. Third, any severance payment(s) made to you under this Agreement shall be
offset by the amount of any interim earnings you may have and will cease
altogether when you obtain a new
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position which pays you compensation equal to or higher than your rate of
compensation as of the last date of your employment with Xxxxxxxxx Xxxxx. You
will not be entitled to any fringe benefits following termination of employment,
except as specifically provided in writing in the applicable benefit plan or
policy.
For purposes of this agreement, "Cause" means (i) willful breach of duty, gross
neglect of duty, gross carelessness or gross misconduct in the performance of
your duties; (ii) commission of a felony or other crime involving moral
turpitude; (iii) commission of any act of dishonesty involving the Company; (iv)
the unauthorized disclosure of material privileged or confidential information
related to the Company or its employees, except as may be compelled by legal
process or court order; (v) the commission of a willful act or omission which
violates material Company policy, procedures, or otherwise constitutes unethical
or detrimental business conduct; (vi) alcohol or controlled substance abuse that
materially impacts the performance of your duties; or (vii) any other willful
act or omission which, in the opinion of the Board of Directors of the Company
has, or is reasonably likely to have, a material adverse impact upon the Company
or its reputation; provided, however, that with respect to the first occurrence
of any of the acts specified in clauses (i), (v), (vi) and (vii) above, you will
have an opportunity to cure such act, violation or condition after receiving
written notice from the Company. The amount of time to cure such act, violation
or condition shall be in the sole discretion of the Company.
For purposes of this agreement, "Change of Control" means the merger or
consolidation of the Company with or into, or the sale of all or substantially
all the assets of the Company to, another entity or group of entities where at
least 50% of the combined voting power of the continuing, surviving or acquiring
entity's outstanding securities immediately after such merger, consolidation, or
acquisition is owned by persons who were not shareholders of the Company
immediately prior to such merger, consolidation or other reorganization, or (ii)
the acquisition, directly or indirectly, of capital stock representing more than
50% of the voting power of the then outstanding shares of the Company's capital
stock by any person or persons acting as a group; provided, however, that a
Change of Control shall not include any merger or consolidation with or into,
any sale of assets to, or any acquisition of capital stock by funds advised by
Xxxxxxxx Xxxx & Xxxxxx, X.X. or any entity controlled by such funds.
RESTRICTED ACTIVITIES. During the term of your employment with the Company, you
will not, directly or indirectly, be connected as an officer, employee, Board
member, consultant, advisor, owner or otherwise (whether or not for
compensation) with any business which competes with any business of the Company
or its subsidiaries in any area where such business is then being conducted or
actively planned by the Company or a subsidiary. During the term of your
employment with the Company, and for a period of two years thereafter, you will
not, and you will not assist any other person or entity to, hire or solicit the
employment of any employees of the Company or any of its subsidiaries (or any
person who in the prior six months was such an employee) or otherwise seek to
induce any such employee to terminate his or her employment with the Company or
any of its subsidiaries. Other than in connection with the performance of your
duties for the Company, you will not disclose to any person or entity any
information obtained by you while in the employ of the Company, the disclosure
of which may be adverse to the interests of the Company, or use any such
information to the detriment of the Company. You understand that your
commitments in this paragraph are in exchange for the Company's commitments to
you in this letter, and that the restrictions contained in the preceding two
sentences apply after your employment terminates, regardless of the reason for
such termination.
MISCELLANEOUS. The headings in this agreement are for convenience only and do
not affect the meaning hereof. This letter constitutes the entire agreement
between the Company and you, and supersedes any prior communications, agreements
and understandings, whether written or oral, with respect to your employment and
compensation and all matters pertaining thereto. This agreement shall be
governed by and construed in accordance with the law of the State of California.
Should any action or proceeding be brought to construe or enforce the terms and
conditions of this agreement, the losing party will pay to the prevailing party
all court costs and reasonable attorneys' fees and costs incurred in such action
or proceeding.
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DISPUTES. Any dispute between the Company and you concerning the meaning or
interpretation of this Agreement, or any alleged breach thereof, shall be
resolved in a binding arbitration to be conducted in San Diego, California
before a single neutral arbitrator to be selected by the parties from a list of
arbitrators on the Employment Dispute Panel of the Judicial Arbitration and
Mediation Service ("JAMS"). Arbitration shall be initiated by the party desiring
arbitration by serving written notice to the other. Said arbitration shall be
conducted no later than 120 days following the date of said written notice,
absent the written agreement of the parties otherwise. The prevailing party in
such an arbitration shall be entitled to costs of suit and attorneys' fees, in
addition to any award by the arbitrator.
PARTIAL INVALIDITY. If the application of any provision of this agreement is
held invalid or unenforceable, the remaining provisions shall not be affected ,
but will continue to be given full force and effect as if the part held invalid
or unenforceable had not been included.
ACCEPTANCE. In accepting the terms and conditions reflected in this letter, you
represent that you have not relied on any agreement or representation, oral or
written, express or implied, that is not set forth expressly in this letter. If
this letter reflects your understanding, please sign and return a copy to me,
whereupon it shall become a binding agreement between the Company and you.
Very truly yours,
Xxxxxxxxx Xxxxx Holding, Inc.
By /s/ XXXXXXX XXXXXXXX
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Xxxxxxx Xxxxxxxx
Chairman and Chief Executive Officer
Accepted and Agreed To:
/s/ R. XXXX XXXXXXXX Date: September 6, 2001
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R. Xxxx Xxxxxxxx
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