EXHIBIT 10(r) Employment Agreement dated April 12, 1999 between the Registrant
and H. Xxxx Xxxxxxxx
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 12th day of April,
1999, 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 H. Xxxx Xxxxxxxx, a resident of North
Carolina, 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 employees Employee as its Senior Vice President and Chief Financial
Officer and Employee accept such employment with Employer. The employment
hereunder shall commence on the date the Employee reports for full-time work,
currently scheduled for April 12, 1999.
2. TERM. The employment hereunder shall continue for a term of two years,
unless terminated earlier, as hereinafter provided.
3. DUTIES OF EMPLOYEE. Employee shall serve Employer faithfully and to
the best of his ability. Employee shall devote his full time and efforts to his
duties as an employee of the Employer.
4. COMPENSATION AND BENEFITS.
(a) Salary. For all services rendered to Employer under this
Agreement, Employer shall pay Employee an annual base salary
of not less than $240,000, subject to annual review, payable
in bi-weekly installments in accordance with the usual payroll
practice of Employer, less all legally required deductions.
(b) Bonus. Employee shall be subject to the normal management
bonus structure, as approved annually by the Board of
Directors, provided, however, that solely for fiscal 1999
Employee shall be entitled to a guaranteed bonus of $30,000,
payable upon payment of 1999 bonuses to other management
personnel, anticipated to be in March of 2000.
(c) Special Stock Option. As an inducement to Employee joining the
Company, Employee shall receive a grant of 40,000 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 date of this agreement, exercisable twenty (25)
percent annually commencing twelve (12) months from the day of
grant. The "grant date" of such options shall be the day the
Employee reports for full-time work. Employee understands and
agrees to file a Form S-8 with respect to such options with
the Security and Exchange Commission.
(d) Loan. A loan of $70,000, bearing interest at a rate of __ %
per annum will be made to Employee upon commencement of his
employment. Such loan shall be repaid, along with all interest
accrued and unpaid, within 30 days of the sale of Employee's
home in North Carolina; provided, however, that such loan and
interest shall, in any event, be due and payable no later than
twelve months from the effective date of this agreement.
Employee agrees to sign a loan agreement and promissory note
with the Company evidencing said loan and repayment terms.
(e) 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 also be entitled to reimbursement of
all reasonable hotel, travel, entertainment and other
business expenses actually incurred by Employee in
the course of Employee's employment upon submission
to Employer of satisfactory documentation thereof.
(f) Moving Expenses. Employer shall reimburse Employee for:
(i) House Hunting trip to include two nights, three days to include meals and
lodging.
(ii) Transportation of household goods and effects, and
not more than (1) automobile, plus mileage incurred
driving car(s) from North Carolina to South Carolina.
(iii) Upon reporting for work Employer agrees to reimburse
Employee for up to six (6) months for the cost of
interim living expenses, such reimbursement to cover
lodging only. Total cost of interim living expense
not to exceed $5,000.
(iv) Employer shall pay brokerage fees up to 6% and
similar expenses related to the sale of Employee's
home and for loan origination fees up to 1% for
purchase of a new home. This payment will be made
upon presentation of documentation on or after the
first day of employment.
(g) Payments Upon Termination.
(i) In the event Employee is terminated by Employer, without
cause, Employer shall continue Employee's salary following
Employee's termination for six (6) additional months at
Employee's annual base salary in effect at the date of
Employee's termination, payable in accordance with
Employer's usual payroll practices.
(ii) In addition, provided Employee has diligently pursued
another position following his involuntary termination, in
the event Employee has not taken a position with another
entity (including a position with a company, or
partnership, or substantially full-time self employment)
by the end of six months from the date of Employee's
involuntary termination, Employer shall pay to Employee up
to an additional six (6) months salary continuation on a
bi-weekly basis so long as other employment has not begun,
and Employee is continuing to diligently pursue another
position. Employer shall be entitled to receive from
Employee, upon request, reasonable proof of such diligent
efforts(s) to pursue another position, failing which, such
additional six months of salary shall cease.
(iii) 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. "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
otherwise resulting in a material adverse effect to
Employer or (e) repeated non-attentiveness by Employee to
his duties under this Agreement, provided, however, that
prior to any termination based on cause hereunder,
Employee shall have received written notice from the
President & CEO and the Chairman of the Board of Directors
stating in reasonable detail the basis therefor and shall
be given an opportunity to meet with such individuals
regarding the grounds for such termination.
(h) Change of Control. In the event the Employee's employment with the Company
is terminated by the Employer without Cause, or for "Good Reason" by the
Employee, within 24 months after "Change of Control" of Employer (an
"Employment Event"), then Employer shall pay to Employee, in one lump sum,
an amount equal to eighteen (18) months severance pay rather than the
maximum of twelve (12) months severance pay currently provided for in the
Agreement. 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)
(iii) relocation by Employer of the Employee more than 50 miles outside of
the Greenville/Spartanburg area of South Carolina; or
(iv) failure of any successor of the Employer to comply with this Agreement.
In consideration for the benefits conferred to Employee under this
provision, in the absence of an Employment Event Employee agrees to
continue his employment, following a "Change of Control," for a minimum
period of six (6) months.
In addition, should a "Change of Control" occur, all stock options
granted by Employer to Employee, and not yet expired as of the date of
such "Change of Control," shall 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;
(ii) The occurrence of a Section 11 (a) (ii) Event, as defined in
the Shareholders Rights Agreement, dated November 3, 1994,
between Wachovia Bank of North Carolina, N.A., as Rights
Agent, and Employer ("Right Agreement"), as amended, 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 20% as 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 made 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 turn over to Employer all property then in his
possession or custody belonging to Employer 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,
and 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.
(b) Employee agrees not to employ or cause to be employed any
other employee of Employer for a period of three (3) years
after Employee's termination of employment. This restriction
applies to
any type of business which Employee may enter.
7. RELEASE. In the event of involuntary termination, and in consideration
for Employer's agreements hereunder, Employee agrees to execute a release
in favor of Employer in form and substance reasonably satisfactory to
Employer.
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
To Employee: H. Xxxx Xxxxxxxx
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 not obligation to or bound by any contract with
any person, corporation or other entity which 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, MODIFCATION 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 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 counter- parts,
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 Spartanburg County, South Carolina. Employee agrees to
submit to the jurisdiction of a court of competent jurisdiction in
Spartanburg 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Witnesses: One Price Clothing Stores, Inc.
/s/ Xxxxx X'Xxxxxx By: /s Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President &
Chief Executive Officer
As to Employer
"EMPLOYER"
(SEAL)
/s/ Xxxxx X'Xxxxxx
/s/ Xxxxxx X. Xxxxxxxx
As to Employee
