EX-10.1
SHOE CARNIVAL, INC.
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This EMPLOYMENT AND NONCOMPETITION AGREEMENT (the “Agreement”) is made and entered into as of March 14, 2023, by and between SHOE CARNIVAL, INC., an Indiana corporation with its principal offices located at 7500 East Columbia Street, Evansville, Indiana (the “Company”), and ERIK GAST (“You” or the “Employee”).
RECITALS
WHEREAS, the Company is one of the largest retailers of family footwear in the United States; and
WHEREAS, the Company desires to employ You upon the terms and conditions set forth herein; and
WHEREAS, You desire to be so employed by the Company, to be eligible for opportunities of advancement, potential compensation increases and the potential payments provided for herein; and
WHEREAS, the Company and You desire to enter into this Agreement to set forth the terms and conditions of the employment relationship between the Company and You; and
WHEREAS, in connection with its business, the Company has expended a substantial amount of time, money, and effort to develop and maintain its confidential, proprietary and trade secret information, and that this information, if misused or disclosed, could be very harmful to the Company’s business and its competitive position in the marketplace;
NOW THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:
AGREEMENT
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2.1 Position. You shall serve as the Executive Vice President, Chief Financial Officer of the Company or in such other or additional positions as the Company’s President, Chief Executive Officer and/or Board of Directors (the “Board”) may determine from time to time. In such position, You shall (a) report to the Company’s President or such other person as the Company may designate from time to time, and (b) have such duties, authority and responsibility as shall be determined from time to time by the Company’s President, Chief Executive Officer and/or Board.
2.2 Duties. You agree to perform such duties incident to Your position, as well as any other duties for the Company as may be directed by the Company’s President, Chief Executive Officer and/or Board, and to assume such other or additional title, duties, and/or responsibilities as the President, Chief Executive Officer or Board may determine. During the Term, You shall devote substantially all of Your business time and attention to the performance of Your duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the President, Chief Executive Officer or Board. Notwithstanding the foregoing, You will be permitted to act or serve as a volunteer, director, trustee, committee member or principal of any civic or charitable organization, provided such service does not interfere with Your work for the Company. You shall not engage in any activity that is competitive with the Company’s business or make any preparations to engage in any competitive activity. You shall be supportive of the Company’s business and its best interests and shall not, directly or indirectly, take any action which could reasonably be expected to have an adverse effect upon the business or best interests of the Company. You agree that You will at all times honestly and fairly conduct Your duties, and will at all times maintain the highest of professional standards in representing the interests of the Company. You will comply with Company policies, decisions, and instructions, which may be changed by the Company from time to time.
2.3 Primary Work Location. You will primarily perform Your duties and responsibilities from the Company’s South office presently located in Fort Mill, South Carolina; provided, however, You will be expected (a) to make regular working visits to the Company’s headquarters office in Evansville, Indiana and (b) to engage in other business travel as may be necessary. The Company reserves the right to change Your primary work location.
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In the event of termination of Your employment by the Company for Cause, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (x) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (y) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.
In the event the Company terminates Your employment without Cause, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, within thirty (30) calendar days following the date of termination, a lump sum amount equal to fifty-five percent (55%) of the product of (i) multiplied by (ii), where “(i)” is Your Base Salary for the fiscal year in which the termination occurs, and where “(ii)” is a fraction, the numerator of which is the number of days elapsed in such fiscal year through the date of termination and the denominator of which is 365; (d) the Company shall pay to You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to one hundred fifty percent (150%) of Your Base Salary for the fiscal year in which the termination occurs; and (e) the
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Company shall pay You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to eighteen (18) times the monthly “COBRA Premium Rate” (which is the monthly amount charged, as of the termination date, for continuation coverage under the Company’s group medical and dental plans pursuant to the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) for the coverage options and coverage levels applicable to You and Your covered dependents immediately prior to the termination date). Payment of the severance compensation set forth in subparts (c), (d) and (e) of this Section 4.3 is subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.
In the event that You unilaterally terminate Your employment, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.
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In the event You terminate Your employment for Good Reason, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, within thirty (30) calendar days following the date of termination, a lump sum amount equal to fifty-five percent (55%) of the product of (i) multiplied by (ii), where “(i)” is Your Base Salary for the fiscal year in which the termination occurs, and “(ii)” is a fraction, the numerator of which is the number of days elapsed in such fiscal year through the date of termination and the denominator of which is 365; (d) the Company shall pay to You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to one hundred fifty percent (150%) of Your Base Salary for the fiscal year in which the termination occurs; and (e) the Company shall pay You, within thirty (30) calendar days following the termination date, a lump sum payment in an amount equal to eighteen (18) times the monthly COBRA Premium Rate. Payment of the severance compensation set forth in subparts (c), (d) and (e) of this Section 4.5 is subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.
In the event Your employment is terminated as a result of Your death or Disability, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; and (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date.
4.7.1 For purposes of this Agreement, a “Timely Qualifying Termination” shall mean either (a) a termination by the Company without Cause that occurs within
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two (2) years immediately following a Change In Control or (b) a termination by You for Good Reason that occurs within two (2) years immediately following a Change In Control.
4.7.2 For purposes of this Agreement, “Change In Control” of the Company shall mean and shall be deemed to have occurred as of the first day on which any one of the following conditions has been satisfied:
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Notwithstanding any other provision of this Section to the contrary, an occurrence shall not constitute a Change In Control if it does not constitute a change in the ownership or effective control of, or in the ownership of a substantial portion of the assets of, the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”) and its interpretive regulations.
4.7.3 In the event of a Timely Qualifying Termination, then, in lieu of all other benefits under this Agreement, the Company’s obligation to pay and provide You compensation and benefits under this Agreement shall immediately terminate, except: (a) You shall be entitled to receive that portion of Your Base Salary which shall have been earned through the termination date; (b) the Company shall pay or provide You such other payments and benefits, if any, which had vested hereunder before the termination date; (c) the Company shall pay to You, in a lump sum not later than thirty (30) calendar days after the termination date, an amount equal to two times one hundred fifty-five percent (155%) of Your Base Salary for the fiscal year in which the termination occurs; (d) the Company shall pay You, in a lump sum not later than thirty (30) calendar days after the termination date, an amount equal to eighteen (18) times the COBRA Premium Rate; and (e) the Company shall provide You with reasonable and appropriate out-placement services, as determined and coordinated by the Company, by paying a fee, not to exceed Two Thousand Five Hundred Dollars ($2,500.00), to an outplacement services provider selected by the Company, provided that such services shall not extend past the end of the second taxable year following the taxable year in which the Timely Qualifying Termination occurs. Payment and provision of the severance compensation and benefits set forth in subparts (c), (d) and (e) of this Section 4.7.3 are subject to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement.
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You understand that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used.
You understand and agree that Confidential Information includes information developed by You in the course of Your employment by the Company as if the Company furnished the same Confidential Information to You in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to You; provided that, such information was not made available by, or is not known by the public as a result of, any direct or indirect fault of You or person(s) acting on Your behalf.
5.3 Disclosure and Use Restrictions. You agree and covenant: (a) to treat all Confidential Information as strictly confidential; (b) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or person whatsoever (including other employees of the Company) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Company and, in any event, not to anyone outside of the direct employ of the Company except as required in the performance of Your authorized employment duties to the Company or with the prior consent of the Chief Executive Officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and (c) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents,
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records, files, media or other resources from the premises or control of the Company, except (x) as required in the performance of Your authorized employment duties to the Company (and then, such disclosure shall be made only within the limits and in the ordinary course of such duties), (y) with the prior consent of the Chief Executive Officer acting on behalf of the Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such consent), or (z) in connection with Your reporting possible violations of law or regulations to any governmental agency or making other disclosures protected under any applicable whistleblower laws. Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid subpoena or order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. You shall, unless prohibited by applicable law, promptly provide written notice of any such subpoena or order to the Chief Executive Officer.
5.4 Survival of Non-Disclosure Obligations. You understand and acknowledge that Your obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon You first having access to such Confidential Information (whether before or after You begin employment by the Company) and shall continue during and after Your employment by the Company until such time as such Confidential Information has become public knowledge other than as a result of Your breach of this Agreement or breach by those acting in concert with You or on Your behalf.
5.5 Defend Trade Secrets Act Notice. Notwithstanding anything to the contrary in this Section 5, any other provision of this Agreement or any policy of the Company, You may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney if such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law or for pursuing an anti-retaliation lawsuit; or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and You do not disclose the trade secret except pursuant to a court order. In the event a disclosure is made, and You file a lawsuit against the Company alleging that the Company retaliated against You because of Your disclosure, You may disclose the relevant trade secret or Confidential Information to Your attorney and may use the same in the court proceeding only if (x) You ensure that any court filing that includes the trade secret or Confidential Information at issue is made under seal; and (y) You do not otherwise disclose the trade secret or Confidential Information except as required by court order
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5.6 Other Permitted Disclosures. Notwithstanding anything to the contrary contained in this Agreement, nothing in this Agreement prohibits or restricts: (i) You from disclosing or discussing conduct You reasonably believe to be illegal harassment, illegal discrimination, illegal retaliation, wage and hour violations, or sexual assault, that is recognized as illegal under state, federal, or common law, or that is recognized as against the clear mandate of public policy, occurring in the workplace, at work-related events coordinated by or through the Company (or any of its affiliates), between employees, or between Company (or any of its affiliates) and any employee, whether on or off the work premises; (ii) You (or Your attorney) from filing a charge or complaint with the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other securities regulatory agency or authority, the Occupational Safety and Health Administration (OSHA), any other self-regulatory organization, or any other federal or state regulatory authority or law enforcement agency (collectively, “Government Agencies”) if (A) You use commercially reasonable efforts to ensure that any filing that includes the trade secret or Confidential Information at issue is made under seal or other confidential manner and (B) You do not otherwise disclose the trade secret or Confidential Information except as required by order of the Government Agency; (iii) Your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency without notice to Company; or (iv) Your right to receive an award for information provided to any Government Agencies.
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To You: Erik Gast
[REDACTED]
[REDACTED]
To Company: Chief Executive Officer
Shoe Carnival, Inc.
7500 East Columbia Street
Evansville, IN 47715
Either party may designate a different address by providing written notice to the other party.
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[Remainder of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this Employment and Noncompetition Agreement as of the date set forth above.
SHOE CARNIVAL, INC. EMPLOYEE
By: /s/ Mark J. Worden /s/ Erik Gast
ERIK GAST
Its: President & CEO