EXHIBIT 10(l) Employment Agreement dated January 15, 2001 between the Registrant
and Xxxxxxx X. Xxxxxx.
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 15th day of January, 2001
("Agreement"), by and between One Price Clothing Stores, Inc., a Delaware
corporation with its principal place of business in Spartanburg County, South
Carolina, hereinafter referred to as "Employer," and Xxxxxxx X. Xxxxxx,
currently a resident of Tucson, Arizona, hereinafter referred to as "Employee."
W I T N E S S E T H :
For and in consideration of the mutual covenants and promises of the
parties hereto and the benefits inuring to the parties hereto, Employer and
Employee agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer employs Employee on an interim basis as its Executive Chairman and
Chief Executive Officer, and Employee accepts such employment with Employer. The
employment hereunder shall commence as of the date hereof, January 15, 2001, and
shall continue for a term of not less than six months (the "Minimum Term"). At
the option of the Company, such Minimum Term may be extended for up to two
additional three-month periods (("Extension Period(s)).
2. DUTIES OF EMPLOYEE. Employee shall serve Employer faithfully and to the
best of his ability. Employee shall devote at least three full business weeks
per month on the Company's business, of which a minimum of ten business days per
month shall be at the headquarters office of the Company in Duncan, South
Carolina. It is expressly understood that Employee currently serves as a member
of the Board of Directors of two other companies and on committees of such
boards and it is agreed that Employee may continue to serve as a member of such
Boards of Directors and on committees of the boards of these two companies.
3. RESPONSIBILITIES, AUTHORITY AND REPORTING. Employee shall have all the
responsibilities and authority normally accorded an Executive Chairman and Chief
Executive officer of a public company. In addition, Employee shall work closely
with the Board of Directors ("Board"), or a committee or individual assigned by
the Board, in the search, selection and ultimate employment of a full-time Chief
Executive Officer. Employee is also charged with the immediate task of
finalizing and implementing any action steps ultimately approved by the Board
regarding the store portfolio analysis and cost reduction initiatives currently
under consideration. Employee shall report to the Governance Committee of the
Board or such other Committee as may be designated by the Board from time to
time.
4. COMPENSATION AND BENEFITS.
(a) Salary. For all services rendered to Employer under this
Agreement, Employer shall pay Employee a monthly base salary
of $41,667 for the Minimum Term and any Extension Period(s).
Such salary shall be payable in bi-weekly installments in
accordance with the usual payroll practices of Employer, less
all legally required deductions. In the event a permanent
Chief Executive Officer is employed prior to the end of the
Minimum Term or any applicable Extension Period(s), and the
Company has accepted Employee's resignation and appointed him
Non-Executive Chairman as contemplated, then Employee shall
continue to receive the compensation of $41,667 per month
provided for in this section through the remainder of the
Minimum Term or any such applicable Extension Period. It is
understood that any compensation payable to Employee once he
has resigned and assumed the position of Non-Executive
Chairman shall commence only following the final payment due
as an Employee at the end of the Minimum Term (or any
applicable Extension Period(s)). In this respect it is also
understood that any compensation payable to Employee as
Interim Executive Chairman
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and Chief Executive Officer shall not overlap with that
payable as Non-Executive Chairman.
(b) Bonus. In view of the interim nature of this employment
arrangement, and as an inducement for Employee to terminate
existing consulting and related activities, Employee shall
receive a lump-sum signing bonus of $50,000 at the
commencement of his employment. In addition, Employee shall
receive a performance bonus of $40,000 upon successful
implementation of the action steps approved by the Board
regarding the store portfolio analysis and cost reduction
program referred to in Article 3, above. Such performance
bonus shall be payable at the end of the Minimum Term or
earlier to the extent earned upon early termination without
"Cause" (as hereinafter defined), or resignation with the
approval of the Company. In the event of extension of this
Agreement by the Company beyond the Minimum Term, a separate
bonus plan will be negotiated in good faith, taking into
consideration such factors as the year-to-date operating
results.
(c) Stock Options. In a desire to directly align Employee's
interests with those of the stockholders, Employee shall
receive a grant of 50,000 stock options for the purchase of
shares of Employer's common stock, with an exercise price
equal to the average of the high and low sales price per share
of such common stock on the effective the first business day
the stock market was open prior to the date of this agreement,
January 12, 2001, with all such options vesting at the end of
the Minimum Term ((or any applicable Extension Period(s) or
upon Employee's resignation with the consent of the Company,
whichever shall occur first. In the event Employee is
terminated without "Cause," or a "Change of Control" shall
have occurred, as hereinafter defined, or Employee shall not
have been offered the position of Non-Executive Chairman
following appointment of a permanent Chief Executive Officer,
then all such options shall vest immediately.
(d) Other Benefits.
(i) During the term of his employment, Employee shall be
entitled to participate in all employee benefits as are
customarily provided to its officers by Employer, and to
participate in such other employee benefits as may from
time to time be instituted by Employer's Board of
Directors.
(ii) Employee shall be entitled to the equivalent of four (4)
weeks of vacation annually, pro-rated for the period he
continues to be employed pursuant to this Agreement.
(e) Moving & Living Expenses. It is understood that Employee will
establish temporary lodging near the Company's headquarters
and will be commuting, from time to time, to and from his
residence in Tucson, Arizona. Employer agrees to reimburse
Employee for all reasonable out-of-pocket expenses incurred by
either Employee or Employee's spouse as a result of Employee's
assumption of employment with the Company, such as the cost of
related travel, interim lodging, telephone, car rental
expenses and the like. Payment for any such business expenses
shall be made bi-weekly, following receipt of appropriate
evidence documenting such expenses. In the event reimbursement
of such expenses shall be deemed to be taxable to Employee
then the Company shall gross-up such reimbursement to
compensate for such taxability.
(f) Payments Upon Termination.
(i) In the event Employee is terminated by Employer while
serving as Executive Chairman and Chief Executive
Officer prior to the end of the Minimum Term (or any
Extension Period) without Cause or if not offered the
position of Non-Executive Chairman when a permanent
Chief Executive Officer is hired, then Employee shall
receive any salary which would otherwise be due for the
period remaining in the Minimum Term (or any Extension
Period, if applicable), along
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with any earned but unpaid bonus and a lump-sum payment
of $250,000.
(ii) In the event Employee voluntarily terminates his
employment with Employer, or is terminated for Cause, he
shall be entitled to no additional payment upon such
termination other than any then accrued but unpaid
salary, vacation pay, or other normal reimbursement
items, pursuant to the Employer's normal policies and
procedures. "Cause" shall mean (a) commission by
Employee of any felony, (b) the commission by Employee
of any crime or other activity involving dishonesty or
moral turpitude, (c) the engagement by Employee in any
act of fraud, misappropriation or similar misfeasance,
(d) the engagement by Employee in any activity in
contravention of paragraph 5 hereof ("Confidential
Information") or any action otherwise resulting in a
material adverse effect to Employer, including violation
of any material policy of the Employer or (e) gross
negligence by Employee under this Agreement.
(g) Change of Control. In the event the Employee's employment with
the Company is terminated by the Employer without Cause, or is
terminated by the Employee for "Good Reason", after a "Change
of Control" of Employer (an "Employment Event"), then Employer
shall pay to Employee $750,000, together with his salary for
the remainder of the Minimum Term or any applicable Extension
Period(s), in one lump sum. Termination for "Good Reason"
shall be deemed to have occurred, and the Employee shall be
entitled to the benefits of this provision, if the Employee
voluntarily terminates his employment after 30 days written
notice to Employer and following the occurrence of any of the
following events, provided a "Change of Control" has occurred:
(i) The assignment to the Employee of any duties inconsistent with
the highest position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities
attained by the Employee during the period of his employment
with the Employer or any action by the Employer which results
in a material diminishment in such position, authority, duties
or responsibilities as were in effect immediately prior to the
Change of Control.
(ii) A decrease in the Employee's compensation (including base salary, bonus or
fringe benefits); or
(iii) Failure of any successor of the Employer to comply with this Agreement.
In addition, as previously noted, should a "Change of Control" occur, all
un-expired stock options shall vest and become immediately exercisable. In such
event, the normal expiration date shall apply to such options, provided,
however, that Employee shall have 90 days to exercise such options in the event
of termination following an Employment Event.
For purposes hereof, "Change of Control" shall be deemed to have occurred
following either of the following two events:
(i) A change in the Board of Directors of the Company, with the
result that members of the Board, as elected by the
stockholders of the Company on June 10, 1998 ("Incumbent
Directors"), no longer constitute a majority of such Board,
provided that any person who becomes a director and whose
appointment or election was supported by a majority of the
Incumbent Directors shall be considered an Incumbent Director
for purposes hereof; or;
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(ii) The occurrence of a Section 11 (a) (ii) Event, as defined in
the Shareholders Rights Agreement, originally dated November
3, 1994, between Wachovia Bank of North Carolina, N.A., as
Rights Agent, as amended and restated, and Employer ("Rights
Agreement"), provided, however, that for those purposes the
applicable percentage for a Change of Control to arise from a
change in stock ownership shall be 40% and not 15% as
currently provided for in the Rights Agreement.
5. CONFIDENTIAL INFORMATION. Employee acknowledges that during his
employment he will have access to confidential information belonging
to the Employer. Such confidential information shall consist of all
information disclosed to Employee as a result of employment by
Employer not generally known in the retail business in which
Employer is engaged including information concerning Employer's
suppliers, including the costs, quantities and types of goods
supplied, and the identity of such suppliers; information concerning
the Employer's marketing and/or sales strategy or plans; real estate
strategy and expansion plans; all pricing information relating to
merchandise offered for sale by Employer, customers' list and all
information dealing with customers' needs or preferences; all data
processing information; all financial information including
financial statements, financing plans and forecasts, and any and all
information designated or marked as confidential. Employee will not
use or disclose, or otherwise make available, such confidential
information to any other person or entity without prior express
written consent of Employer, either during or following the
termination of Employee's employment. Upon termination of
employment, Employee shall promptly return to all property then in
his possession or custody belonging to Employer, including, without
limitation, cell phone(s), lap-top computer, fax machine, along with
all documents and shall not retain any copies or reproductions of
correspondence, memoranda, reports, notebooks, drawings,
photographs, or other documents relating in any way to the affairs
of Employer.
6. NON-COMPETITION.
(a) Upon termination of Employee's employment with employer,
whether voluntary or involuntary, and whether with or without
cause, Employee will not, for a period of one (1) year from
date of such termination, conduct or engage in, directly or
indirectly, alone or jointly, with any other person or
corporation, as agent, consultant, employee, manager,
purchaser, proprietor, stockholder, co-partner, or otherwise,
any type of "Off-price" retail apparel business whose price
points and/or customer base could reasonably be considered in
competition with the business of Employer, either now or at
the time of such termination. Ceiling price points and single
price point concepts shall be included. This restriction
applies to the continental United States and Puerto Rico.
(b) Employee agrees not to solicit, attempt to employ, employ or
cause to be employed, either directly or indirectly, any other
employee of Employer for a period of one (1) year after
Employee's termination of employment. This restriction applies
to any type of business that Employee may enter.
7. RELEASE. In consideration for the lump sum payments referred to in
Sections 4. f. and 4 g. of this Agreement, and for Employer's other
agreements hereunder, Employee agrees to execute a general release
and waiver of any claims against Employer, in form and substance
reasonably satisfactory to Employer, prior to (or simultaneously
with) receipt of any such lump sum payment.
8. NOTICES. All notices, consents, changes of address and other
communications (hereinafter referred to as "Notice(s)" required or
permitted to be made under the terms of this Agreement shall be in
writing and shall be (i) personally delivered by an agent of the
relevant Party, or (ii) transmitted by postage prepaid, certified or
registered mail:
To Employer: One Price Clothing Stores, Inc.
Post Xxxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attn: Office of the General Counsel
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To Employee: Xx. Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
9. WAIVER OF BREACH. The waiver of Employer of a breach by Employee of
any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by Employee. No waiver shall be
valid unless in writing and signed by an authorized officer of
Employer.
10. ASSIGNMENT. Employee acknowledges that the services to be rendered
by Employee are unique and personal. Accordingly, Employee may not
assign any Employee's rights or delegate any of Employee's duties or
obligations under the Agreement. The rights and obligations of
Employer under this Agreement shall inure to the benefit of an all
be binding upon the Employer, and its successors and assigns.
11. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants to
Employer that he is under no obligation to, or bound by any contract
with, any person, corporation or other entity that would prohibit or
in any way interfere with the performance of his duties and
obligations to Employer under this Agreement.
12. SEVERABILITY. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court to
be invalid or unenforceable, the same shall in no way affect any
other provision of this Agreement, or the application of each
provision to any other fact or circumstances.
13. ENTIRE AGREEMENT, MODIFICATION OR AMENDMENT. This Agreement
constitutes the entire Agreement of the parties with respect to its
subject matter and supersedes all prior oral or written agreements.
This Agreement may be modified or amended from time to time by the
mutual agreement of the parties hereto. No such modification or
amendment of this Agreement shall be binding upon either party
unless it is in writing and executed by the party sought to be
charged.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
15. CAPTIONS. The captions contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina, without
giving effect to South Carolina's rules of conflicts of law, and
regardless of the place or places of its physical execution and
performance.
17. ENFORCEMENT. This Agreement may only be enforced in a court of
competent jurisdiction in Greenville, South Carolina. Employee
agrees to submit to the exclusive jurisdiction of a court of
competent jurisdiction in Greenville County, South Carolina, whether
or not then residing in South Carolina. The prevailing party shall
be entitled to recover from the other party the cost of any court
action, including reasonable attorney's fees.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Witnesses: One Price Clothing Stores, Inc.
Board of Directors
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
As to the Company Chair - Compensation Committee
/s/ Xxxxx X. X'Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
As to the Employee Xxxxxxx X. Xxxxxx
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