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EXHIBIT 10.14(c)
Schedule of Certain Terms of Employment Agreements
At a hearing of the United States Bankruptcy Court for the Central
District of California (the "Bankruptcy Court") held on September 24, 1997, the
Bankruptcy Court authorized the Company to enter into employment agreements (the
"Employment Agreements") with Xx. Xxxxxxxxx and each of Messrs. Xxxxxx,
XxXxxxxxxx, Haggar and Xxxxx (each an "Executive"). Upon entry of the related
Bankruptcy Court order, the Company will enter into such Employment Agreements,
which extend through confirmation of a plan of reorganization of the Company.
Set forth below is a summary of certain other terms of such Employment
Agreements.
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CERTAIN TERMS OF EMPLOYMENT AGREEMENTS
Plan of Reorganization Confirmation
Bonus (as a percentage of annual base salary)(2)
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If confirmation
Maximum Annual occurs on or after If confirmation
Cash Bonus May 1, 1998 occurs on or after
(as a percentage If confirmation through and July 1, 1998
Annual Base of annual occurs prior to including and prior to
Executive/Title Salary base salary(1) May 1, 1998 June 30, 1998 September 30, 1998
--------------- ----------- ---------------- --------------- ------------------ ------------------
Xxxxxx X. Xxxxxxxxx.... $400,000 100% 125% 100% 75%
President and Chief
Executive Officer
X. Xxxxx Xxxxxx........ $275,000 75% 125% 100% 75%
Executive Vice
President, Chief
Financial Officer
and Secretary
Xxxxx X. XxXxxxxxxx.... $225,000 60% 125% 100% 75%
Senior Vice President
- Merchandising
Xxxx X. Xxxxxx......... $165,000 50% 125% 100% 75%
Vice President -
Operations
Xxxx X. Xxxxx.......... $120,000 33% 125% 100% 75%
Vice President -
Marketing
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(1) Such bonuses are payable as follows: (i) 50% thereof are payable if the
Company achieves projected earnings before interest, taxes, depreciation
and amortization for its 1998 fiscal year, (ii) 10% thereof are payable if
the Company meets or exceeds its November 30, 1997 projected inventory
levels, (iii) 10% thereof are payable if the Company meets or exceeds its
December 31, 1997 projected cash deposit, receivable and inventory levels,
(iv) 10% thereof are payable if the Company meets its December 31, 1997
projected general and administrative expenses, (v) 10% thereof are payable
if, as of February 1998, there is total availability under the borrowing
base in the Company's revolving credit facility (as modified by the cash
collateral stipulation field with the Bankruptcy Court) plus total cash
balances of at least $4.1 million, and payables are maintained within
agreed upon vendor terms, and (vi) the remaining 10% are payable upon
receipt from vendors of 1.4 times the amount of inventory returned by
November 1997 and at the end of February 1998.
(2) A condition to the payment of such bonus will require that the Company have
an asset-based, working capital credit facility on market terms on the
confirmation date of a plan or reorganization.
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Under the Employment Agreements, if an Executive's employment is
terminated by the Company without cause, by the Executive with good reason
(including a sale of the Company under the Bankruptcy Code), due to an
Executive's death or disability, or as a result of the confirmation of a plan
of reorganization, such Executive is entitled to receive (i) accrued annual
base salary and vacation, (ii) his maximum annual cash bonus if (A) the fiscal
year end 1998 performance targets have been achieved (provided that such target
will be prospectively applicable with respect to termination resulting from
confirmation of a plan prior to the end of such fiscal year) or (B) in the
event of a Change-in-Control (as defined below) of the Company at a time when
the Company is a going concern or the death or disability of an Executive if
any applicable performance conditions have been met, and (iii) if such
termination without cause or with good reason occurs prior to confirmation of a
plan of reorganization of the Company, his confirmation bonus. If the
Executive's employment is terminated by the Company for cause (i.e.,
malfeasance or misfeasance) or by the Executive without good reason, such
Executive is entitled to receive accrued annual base salary and vacation, but
no annual cash bonus or confirmation bonus (if such termination occurs prior to
confirmation). Under the Employment Agreements, a "Change-in-Control" includes
the dissolution or liquidation of the Company, a reorganization, merger or
consolidation of the Company with one or more corporations in which the Company
is not the surviving entity or as a result of which the Company's outstanding
voting securities are converted to or reclassified as cash, securities of
another corporation or other property, a sale of assets of the Company or its
subsidiaries having a fair market value equal to more than 50% of the total
fair market value of the Company's assets to a nonaffiliate of the Company, or
the acquisition of more than 30% of the then-outstanding voting securities of
the Company by a nonaffiliate.
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