EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Agreement is entered into as of the [first day of the Contract
Term] between THE MAY DEPARTMENT STORES COMPANY ("May") and [name] (generally
referred to as "you").
1. Employment. (a) May will employ you and you will provide personal services to
May, from [start date] to [end date] (the "Contract Term") as [position] and/or
perform such other executive duties as may be required of you by May. You
represent that you are not subject to any other employment agreement or other
obligation that would prevent you from performing or would interfere with your
ability to perform your obligations under this Agreement.
(b) May will pay you basic compensation for your services at the annual
rate of [annual rate], payable semi-monthly. The annual rate will be subject to
review by May each year and may be increased but not decreased. If you are
selected to participate in a May bonus plan (the "Incentive Plan"), you will be
entitled to the awards, if any, that may be payable under the terms of the
Incentive Plan. You may elect to have all or any part of your compensation paid
under the terms of any applicable deferred compensation plan.
(c) May will reimburse you for all reasonable normal expenses you incur
in accordance with May's employee expense reimbursement policies.
(d) If you continue as a May employee after the Contract Term expires,
this Agreement will continue in full force, except that your employment will
then become terminable "at will" by either you or May.
(e) The most recent Executive Compensation Change Memorandum, as
initialed by May and by you, is incorporated by reference and is a part hereof.
(f) May provides to its executives certain employee benefit plans and
fringe benefits. May reserves the right to amend, modify or terminate any of
these plans and benefits. You will be entitled to whatever benefits may be
provided to you in accordance with the terms of these plans and benefits, as
amended form time to time.
2. Your Duties. For the remaining period of the Contract Term and for any period
you may continue to work for May after the Contract Term expires:
(a) you will (i) faithfully and diligently perform your duties in
accordance with May's directions and serve May to the best of your ability; (ii)
devote your undivided time and attention to May's business, subject to
reasonable vacations in accordance with May's vacation policy, to such extent as
may be reasonably necessary for you to perform your personal services properly;
and (iii) maintain your residence in [principal city] or within reasonable
access to the business activities of May in that city; and
(b) you will not (i) engage in any activity that conflicts with or
adversely affects your performance of your duties under this Agreement; (ii)
accept any other employment, whether as an executive, as a consultant or in any
other capacity, whether or not you are compensated therefor, or (iii) violate
any of the policies described in May's then applicable Policy of Business
Conduct.
3. Disability. You will be "Totally Disabled" if you are unable to substantially
fulfill the normal duties of your position under this Agreement. If you remain
Totally Disabled for more than 180 days during any 360 day period, May may
terminate its obligations under this Agreement by giving you written notice. If
May does so, your employment will terminate on the last day of the month in
which notice is given. If you have previously elected to participate in May's
Long Term Disability Plan, then the terms of that plan will apply.
4. Termination of Employment. (a) If your employment terminates because of your
death or Total Disability or your voluntary termination of employment or if it
is terminated by May for Cause, (i) you will not be entitled to receive basic
compensation and employee benefits following your termination or any other
payment or benefit
except as expressly provided herein or in any applicable
employee benefit plan or arrangement; and (ii) you (or your legal
representative(s)) will be entitled to receive any incentive compensation
payable under the terms of the Incentive Plan.
(b) If your employment terminates because of your voluntary termination
of employment, or if it is terminated by May for Cause, then your obligations
under this Agreement, including those contained in Paragraphs 5 through 13,
remain in full force and effect, and May will be entitled to all legal and
equitable rights and remedies under this agreement.
(c) If your employment is terminated by May without Cause, then
(i) your obligations under this Agreement, including those contained in
Paragraphs 5 through 13, remain in full force and effect, and May will be
entitled to all legal and equitable rights and remedies under this Agreement;
and
(ii) you will be entitled to your basic compensation and the other
benefits provided for in Paragraph 1(f) for the remaining period of the Contract
Term, subject to the provisions of Paragraph 4(c)(v); and
(iii) you will be entitled to any incentive compensation payable under
the terms of the Incentive Plan; and
(iv) you will be entitled to post-termination benefits payable under
May's employee benefit plans, including any right to participate in May's
medical plans under COBRA, based on your service up to the termination date; and
(v) you will use your best efforts to obtain other employment
consistent with the terms of Paragraph 5. If you accept other employment, you
will promptly notify May of the compensation receivable or which you expect to
receive from that employment that is attributable to the remaining period of the
Contract Term. All basic compensation otherwise payable under Paragraph 4(c)
(except pursuant to Paragraph 4(c)(vi)) for any remaining period of the Contract
Term will be reduced by the amount of any compensation receivable or which you
expect to receive from your subsequent employment; and
(vi) notwithstanding the foregoing, the minimum amount payable to you
upon your termination shall be your basic compensation for the period during
which your post-termination obligations under Paragraph 5 are in force.
(d) "Cause" in this Agreement means (i) an intentional act of fraud,
embezzlement, theft or any other material violation of law that occurs during or
in the course of your employment with May; (ii) intentional damage to May's
assets; (iii) intentional disclosure of May's confidential information contrary
to May's policies; (iv) breach of your obligations under this Agreement; (v)
intentional engagement in any competitive activity which would constitute a
breach of your duty of loyalty or of your obligations under this Agreement; (vi)
intentional breach of any of May's policies; (vii) the willful and continued
failure to substantially perform your duties for May (other than as a result of
incapacity due to physical or mental illness); or (viii) willful conduct by you
that is demonstrably and materially injurious to May, monetarily or otherwise.
For purposes of this Paragraph 4(d), an act, or a failure to act, shall not be
deemed "willful" or "intentional" unless it is done, or omitted to be done, by
you in bad faith or without a reasonable belief that your action or omission was
in the best interest of May. Failure to meet performance standards or
objectives, by itself, does not constitute "Cause". "Cause" also includes any of
the above grounds for dismissal regardless of whether May learns of it before or
after terminating your employment.
(e) In addition to any other remedies, May can offset any amount due
you as wages, compensation, bonus, deferred compensation or otherwise by any
unpaid amount which you owe to May.
(f) If your employment terminates because of your voluntary termination
of employment more than nine months after the later of (a) the effective date of
this Employment Agreement or (b) the effective date of any future written
amendment to the Employment Agreement, then
(i) May will pay you your basic compensation to the earlier of
(i) the date on which you qualify to retire under the terms of May's
tax-qualified Retirement Plan or (ii) the end of the period during which your
post-termination obligations under Paragraph 5 of the Employment Agreement are
in force; and
(ii) you will use your best efforts to obtain other employment
consistent with the terms of Paragraph 5 of the Employment Agreement. If you
accept other employment that is consistent with the terms of that Paragraph 5,
you will promptly notify May of the compensation receivable or which you expect
to receive from that employment that is attributable to that entire period. All
basic compensation otherwise payable under Paragraph 4(f)(i) of this Employment
Agreement will be reduced by the amount of any compensation receivable or which
you expect to receive from your subsequent employment.
5. Avoiding Conflict of Interest. (a) At all times while you are employed by May
and for [two years - Principals; one year - SVP, EVP; six months - VP level]
after your employment terminates you will not directly or indirectly:
(i) own, manage, operate, finance, join, control, advise, consult,
render services to; have an interest or future interest in or participate in the
ownership, management, operation, financing or control of, or be employed by or
connected in any manner with any Competing Business;
(ii) solicit for employment, hire or offer employment to, or otherwise
aid or assist (by disclosing information about employees or otherwise) any other
person or entity other than May or a May subsidiary in soliciting for
employment, hiring or offering employment to, any employee of May or a May
subsidiary; or
(iii) take any action which is intended to harm May or its reputation,
or that May reasonably concludes could harm May or its reputation or lead to
unwanted or unfavorable publicity for May.
Ownership of an investment of less than the greater of $25,000 or 1% of any
class of equity or debt security of a Competing Business will not be deemed
ownership or participation in ownership for purposes of Paragraph 5(a).
(b) "Competing Business" includes, but is not limited to,
(i) any (x) retail department store, specialty store or other retail
business that sells goods or merchandise of any types sold in May's (or its
subsidiaries' or divisions') stores at retail to consumers or (y) any group of
such stores or businesses or any other business that (A) competes (for
customers, suppliers, employees or any other resource) with May or a May
subsidiary, division or store; (B) is located in the United States or another
country where May or a May subsidiary or division operates a store or stores;
and (C) had annual gross sales volume or revenues (including sales in leased
departments) in the prior fiscal year of more than $25 million or is reasonably
expected to have gross sales volume or revenues in either of the current fiscal
year or the next following fiscal year of more than $25 million; or
(ii) any business that provides buying office services to any store or
group of stores or businesses referred to in Paragraph 5(b)(i); or
(iii) any business in the United States or another country where May or
a May subsidiary or division operates a store or stores in which your duties and
functions would be substantially similar to your duties and functions under this
Agreement and that is in material competition with May or a May subsidiary or
division.
(c) You agree that the restrictions set forth above are reasonable,
appropriate and enforceable because:
(i) May is one of the leading retail companies in the United States,
with department stores throughout the United States;
(ii) as an integral part of its business, May has expended a great deal
of time, money and effort to develop and maintain confidential, proprietary and
trade secret information to compete against similar businesses;
this information, if misused or disclosed, could be very harmful to May's
business and its competitive position in the marketplace.
(iii) your position with May provides you with access to May's
confidential and proprietary trade secret information, strategies and other
confidential business information that would be of considerable value to a
Competing Business;
(iv) May compensates its executives and other associates to, among
other things, develop and maintain valuable goodwill and relationships on May's
behalf and to develop and maintain business information for May's exclusive
ownership and use;
(v) long-term customer and supplier relationships are difficult to
develop and maintain and require a significant investment of time, effort and
expense;
(vi) May is entitled to appropriate safeguards (x) to ensure that you
do not use any confidential information given to you during your employment by
May or take any other action that could result in a loss of May's goodwill
developed on May's behalf and at its expense, and (y) to prevent you and/or any
Competing Business from having an unfair competitive advantage over May;
(vii) the amount of compensation and benefits you receive from May is
based in considerable part on your express agreement to refrain from competing
with May and to maintain the confidentiality of May's proprietary information in
accordance with the terms of this Agreement;
(viii) the limited time period during which you have agreed not to
compete with May after leaving May's employment, the limited scope of the
restriction and the limited prohibition on your activities are reasonable to
ensure that May's confidential current and long-term business methods,
strategies and plans are not made available to its competitors; and
(ix) on balance, in light of your training and background, the
restrictions will not pose an undue hardship on you.
(d) If you engage in any activity which would violate your obligations
under this Agreement (including this Paragraph 5) and which involves another
person or employer or Competing Business, you will disclose your obligations
under this Agreement to that other person, employer or Competing Business.
(e) Any time during which you violate any of these restrictions will
not be counted in determining the time during which the restrictions apply. For
example, if you were to comply with the restriction for all except the last four
months of the restriction, and then join a Competing Business in violation of
the restrictions in Paragraph 5(a) and work for that business for a month before
a court enjoined this violation, then the remaining four months of the
restriction would begin when the injunction was issued. The month during which
you violated the restriction would not be included in the time that the
restriction is to apply.
6. Preservation of Confidential Information. (a) You will not, at any time,
directly or indirectly, use or disclose any of May's Confidential Information
except as authorized and within the scope of your employment with May.
(b) At May's request and/or on termination of your employment with May,
you will return to May all documents, records, notebooks, computer diskettes and
tapes and anything else containing May's Confidential Information, including all
copies thereof, as well as any other May property, in your possession, custody
or control. You will also delete from your own computer or other electronic
storage medium any of May's proprietary or confidential information. Not later
than 20 days after your employment is terminated, you will certify in writing to
May that you have complied with these obligations.
(c) During your employment with May and thereafter, you will (i) notify
and provide May immediately with the details of any unauthorized possession, use
or knowledge or any of May's Confidential
Information, (ii) assist in preventing any reoccurrence of this possession, use
or knowledge, and (iii) cooperate with May in any litigation or other action to
protect or retrieve May's Confidential Information.
(d) "Confidential Information" means any non-public information
pertaining to May's business. Confidential Information includes information
disclosed by May to you, and information developed or learned by you during the
course of or as a result of your employment with May, which you also agree is
May's property. You further agree that any item of intellectual or artistic
property generated or prepared by you, by yourself or with others, in connection
with your employment by May is May's sole property and shall remain so unless
May otherwise specifically agrees in writing. Confidential Information includes,
without limitation, information and documents concerning May's processes;
suppliers (including May's terms, conditions and other business arrangements
with suppliers); supplier and customer lists; advertising and marketing plans
and strategies, profit margins; seasonal plans, goals objectives and
projections; compilations, analyses and projections regarding May's divisions,
stores, product segments, product lines, suppliers, sales and expenses; files;
trade secrets and patent applications (prior to their being public); salary,
staffing and employment information (including information about performance of
other executives); and "know-how" techniques or any technical information not of
a published nature relating, for example, to how May conducts its business.
(e) You agree that you will not disclose to May or use, or induce, May
to use, any proprietary information, trade secret or confidential business
information of any other person or entity, including any previous employer of
yours. You also represent that you have returned all property, proprietary
information, trade secret and confidential business information belonging to any
prior employer.
7. Automatic Amendment by Court Order and Interim Enforcement. (a) If a court
determines that, but for the provisions of this Paragraph 7, any part of this
Agreement illegal, void as against public policy or otherwise unenforceable,
then the relevant part will automatically be amended to the extent necessary to
make it sufficiently narrow in scope, time and geographic area to be legally
enforceable. All other terms will remain in full force and effect.
(b) If you raise any question as to the enforceability of any part or
terms of this Agreement, including, without limitation, Paragraphs 5 and 6, you
specifically agree that you will comply fully with this Agreement unless and
until an appropriate court designated in Paragraph 13 has entered a final
judgment to the contrary.
(c) You agree that the restrictions in Paragraph 5 and 6 will apply
regardless of the manner in which your employment with May is terminated,
whether voluntarily, for Cause, without Cause or otherwise.
8. Equitable and Legal Remedies. (a) May and you shall each be entitled to
pursue all legal and equitable rights and remedies to secure performance of
their respective obligations and duties under this Agreement, unless otherwise
expressly provided herein, and enforcement of one or more of these rights and
remedies will not preclude May or you from pursuing any other rights and
remedies.
(b) You acknowledge and agree that the individualized services and
capabilities that you will provide to May under this Agreement are of a
personal, special, unique, unusual, extraordinary and intellectual character.
(c) You acknowledge and agree that the restrictions in this Agreement
are reasonable to protect May's rights under this Agreement and to safeguard
May's Confidential Information. You expressly consent to injunctive and other
equitable relief. Without limiting the foregoing, if you breach or threaten to
breach your obligations under Paragraphs 5 or 6, you consent to entry of a
temporary, preliminary and/or permanent injunction enjoining you from breaching
those obligations.
(d) If any legal proceeding is instituted, neither you nor May will be
entitled to seek or obtain punitive or exemplary damages of any kind from the
other or, in your case, from May's subsidiaries or divisions, or from the
officers, directors or employees of May, its subsidiaries or divisions, or to
seek or obtain damages or compensation for emotional distress. Nothing herein
shall preclude an award of compensatory and punitive damages against any other
third party.
(e) If you terminate your employment voluntarily or if your employment
is terminated by May for Cause, you will be liable for all attorneys' fees and
costs incurred by May in seeking to enforce its rights under this Agreement.
9. Entire Understanding. The entire understanding and agreement between you and
May has been incorporated into this Agreement, and this Agreement supersedes any
other agreements and understandings between you and May with respect to your
employment by May. There are no other promises, representations, understandings
or inducements other than those specifically set forth in this Agreement. This
Agreement may not be altered, amended or added to except in a single writing
signed by both you and May.
10. Arm's Length. This Agreement was entered into at arm's length, without
duress or coercion, and is to be interpreted as an agreement between two parties
of equal bargaining strength. Both you and May agree that this Agreement is
clear and unambiguous as to its terms, and that no parol or other evidence will
be used or admitted to alter or explain the terms of this Agreement, but that it
will be interpreted based on the language within its four corners in accordance
with the purposes for which it is entered into.
11. Successors and Assigns. This Agreement will inure to the benefit of, and
will be binding upon, May, its successors and assigns and you and your heirs,
successors and assigns; provided however, that, because this is an agreement for
the personal services, you cannot assign any of your obligations under this
Agreement to anyone else. May may assign its obligations under this Agreement to
a May subsidiary; any assignment, however, will not relieve May of it
obligations hereunder except to the extent that they are actually discharged by
the subsidiary. Whenever this Agreement refers to May, that reference includes
any of May's subsidiaries or divisions in existence at any time during which
this Agreement governs the conduct of you and May.
12. Signing this Agreement. This Agreement may be executed in counterparts, in
which case each of the two counterparts will be deemed to be an original and the
final counterpart will be deemed to have been executed in St. Louis, Missouri.
13. Missouri Law Governs. This Agreement has been executed by May at May's
corporate headquarters and principal executive offices in St. Louis, Missouri.
May and you agree that your relationship with May is centered in St. Louis,
Missouri and that the weight of your contracts with and obligations to May is
also in St. Louis, Missouri. Any questions or other matter arising under this
Agreement, whether of validity, interpretation, performance or otherwise, will
therefore be governed by and construed in accordance with the laws of the State
of Missouri applicable to agreements made and to be performed in Missouri
without regard to Missouri's choice of law rules. All actions and proceedings
arising out of or relating directly or indirectly to this Agreement will be
filed and litigated exclusively in any state court or federal court located in
the City or County of St. Louis, Missouri. May and you expressly consent to the
jurisdiction of these courts, agree that venue is proper in these courts and May
and you expressly consent to the jurisdiction of these courts, agree that venue
is proper in these courts, and you consent to service of process made at your
last known address in May's records.
BY SIGNING THIS AGREEMENT, YOU HEREBY CERTIFY THAT YOU (A) HAVE
RECEIVED A COPY OF THIS AGREEMENT TO REVIEW AND STUDY BEFORE SIGNING IT; (B)
HAVE READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAVE HAD SUFFICIENT
OPPORTUNITY BEFORE SIGNING IT TO ASK ANY QUESTIONS ABOUT IT AND HAVE RECEIVED
SATISFACTORY ANSWERS TO ALL YOUR QUESTIONS; (D) HAVE HAD AN OPPORTUNITY TO
DISCUSS IT WITH YOUR OWN LEGAL COUNSEL AND TO BE ADVISED AS TO ITS TERMS AND
YOUR OBLIGATIONS AND RIGHTS UNDER IT; AND (E) UNDERSTAND YOUR RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, this Agreement has been executed by you and then by
May in St. Louis, Missouri on the dates shown below, but effective as of the
date and year first above written.
Date:
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Executive
THE MAY DEPARTMENT STORES COMPANY
Date: BY:
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