EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 2nd day of February 1996, by and between Proffitt's, Inc.
("Company"), and William White ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Senior Vice
President of Systems Development of Company or in such other
capacity with Company and its subsidiaries as Company's Board of
Directors shall designate.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best
efforts to follow the policies and directions of Company's Board of
Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base
salary ("Base Salary") at a rate of no less than $155,000 per year
(beginning on February 4, 1996). In addition, the Board of
Directors of Company shall, in good faith, consider granting
increases in such Base Salary based upon such factors as
Executive's performance and the growth and/or profitability of
Company. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of
payroll taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive
shall be eligible, as long as he holds the position stated in
paragraph 1, for a yearly cash bonus of up to 30% of Base Salary
based upon his performance in accordance with specific annual
objectives, set in advance, all as approved by the Board of
Directors.
(c) Incentive Compensation. Executive shall be and
hereby is granted a non-qualified option as of February 4, 1996,
("Option") to purchase ten thousand (10,000) shares of Company
common stock at an option price equal to the closing price of the
stock on February 2, 1996, as reported in the Wall Street Journal.
The Option is granted pursuant to Company's 1994 Long-Term
Incentive Plan ("1994 LTIP"), and shall be subject to the terms and
conditions thereof. The Option shall be exercisable on or after
February 4, 1996, (the "Grant Date") to the extent of 20% of the
shares covered thereby; exercisable to the extent of an additional
20% of the shares covered thereby on and after the first
anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on and after the
second anniversary of the Grant Date; exercisable to the extent of
an additional 20% of the shares covered thereby on and after the
third anniversary of the Grant Date; and exercisable to the extent
of any remaining shares on and after the fourth anniversary of the
Grant Date; provided, however, that no portion of the Option shall
be exercisable any earlier than six months from the Grant Date.
The Option may be exercised (as provided in the 1994 LTIP) up to
ten (10) years from the Grant Date. Any portion of the Option not
exercised within said ten (10) year period shall expire.
Notwithstanding the preceding paragraph, the Option granted
under this Agreement shall not be exercisable if Executive has been
demoted from the position stated in paragraph 1 or otherwise been
reassigned duties at a lower level in the Company. In the case of
such a demotion or reassignment of duties at a lower position,
Company retains the right to reduce the number of option shares
granted under this Agreement and, in such a case, vesting will
occur as if the reduced number of option shares had been granted on
the Grant Date.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the 1994 LTIP) any
Options granted to Executive prior to such Change of Control shall
immediately vest.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each
executive benefit that Company provides for senior executives at
the level of Executive's position.
5. Term. The term of this Agreement shall be for two (2)
years, beginning February 4, 1996, provided, however, that Company
may terminate this Agreement at any time upon thirty (30) days'
prior written notice (at which time this Agreement shall terminate
except for Section 9, which shall continue in effect as set forth
in Section 9). In the event of such termination by Company,
Executive shall be entitled to receive his Base Salary (at the rate
in effect at the time of termination) through the end of the term
of this Agreement. Such Base Salary shall be paid thereafter in
monthly installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise
any unexercised stock options pursuant to Company's stock option
plan then in effect, (b) other entitlements under this contract
that expressly survive death, and (c) any rights which Executive's
estate or dependents may have under COBRA or any other federal or
state law or which are derived independent of this Agreement by
reason of his participation in any plan maintained by Company.
6. Termination by Company for Cause. (a) Company shall have
the right to terminate Executive's employment under this Agreement
for cause, in which event no salary or bonus shall be paid after
termination for cause. Termination for cause shall be effective
immediately upon notice sent or given to Executive. For purposes
of this Agreement, the term "cause" shall mean and be strictly
limited to: (i) conviction of Executive, after all applicable
rights of appeal have been exhausted or waived, for any crime that
materially discredits Company or is materially detrimental to the
reputation or goodwill of Company; (ii) commission of any material
act of fraud or dishonesty by Executive against Company or
commission of an immoral or unethical act that materially reflects
negatively on Company, provided that Executive shall first be
provided with written notice of the claim and with an opportunity
to contest said claim before the Board of Directors; or (iii)
Executive's material breach of his obligations under paragraph 2 of
the Agreement, as so determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company
(or any of its subsidiaries or affiliates), effective as of the
date of such termination, and Executive agrees to return to Company
upon such termination any of the following which contain
confidential information: all documents, instruments, papers,
facsimiles, and computerized information which are the property of
Company or such subsidiary or affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a
Potential Change in Control of Company as defined below, Executive
shall receive his Base Salary (at the rate in effect at the time of
termination) for a period of two years or through the end of the
term of this Agreement, whichever is longer.
As used herein, the term "Change in Control" means the
happening of any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, other than Company, a subsidiary of Company, or any
employee benefit plan of Company or its subsidiaries, becomes the
beneficial owner of Company's securities having 25 percent or more
of the combined voting power of the then
outstanding securities of Company that may be cast for the
election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course
of business); or
(b) As the result of, or in connection with, any cash
tender or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination of the
foregoing transactions, less than a majority of the combined voting
power of the then outstanding securities of Company or any
successor corporation or entity entitled to vote generally in the
election of directors of Company or such other corporation or
entity after such transaction, are held in the aggregate by holders
of Company's securities entitled to vote generally in the election
of directors of Company immediately prior to such transactions; or
(c) During any period of two consecutive years,
individuals who at the beginning of any such period constitute the
Board of Directors of Company cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election by Company's stockholders, of each director
of Company first elected during such period was
approved by a vote of at least two-thirds of the directors of
Company then still in office who were directors of Company at the
beginning of any such period.
As used herein, the term "Potential Change in Control" means
the happening of any of the following:
(a) The approval by stockholders of an agreement by
Company, the consummation of which would result in a Change of
Control of Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of
Company or its subsidiaries (including any trustee of such plan
acting as trustee)) of securities of Company representing 5 percent
or more of the combined voting power of Company's outstanding
securities and the adoption by the Board of Directors of Company of
a resolution to the effect that a Potential Change in Control of
Company has occurred for purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time
during the term of this Agreement, he shall after he becomes
disabled continue to receive all payments and benefits provided
under the terms of this Agreement for a period of twelve
consecutive months, or for the remaining term of this Agreement,
whichever period is shorter. In the event that Executive is
disabled for more than twelve consecutive months during the term of
this Agreement, Executive shall, at the expiration of the initial
twelve consecutive month period, be entitled to receive under this
Agreement 50% of his Base Salary plus the insurance and benefits
described in Section 4 of this Agreement for the remaining term of
this Agreement. For purposes of this Agreement, the term
"disabled" shall mean the inability of Executive (as the result of
a physical or mental condition) to perform the duties of his
position under this Agreement with reasonable accommodation and
which inability is reasonably expected to last at least one (1)
full year.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is
employed under this Agreement, and for a period of one year
thereafter, Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder
of less than 5% of the stock of a corporation the securities of
which are traded on a national securities exchange or in the over-
the-counter market), director, officer, employee or otherwise, in
competition with (i) the businesses conducted at the date hereof by
Company or any subsidiary or affiliate, or (ii) any business in
which Company or any subsidiary or affiliate is substantially
engaged at any time during the employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at
the date hereof or of any business in which Company is
substantially engaged at any time during the term of this
Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship
in order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive
is employed under this Agreement, and for a further period of two
years thereafter, Executive shall not, except as required by any
court or administrative agency, without the written consent of the
Board of Directors, or a person authorized thereby, disclose to any
person, other than an employee of Company or a person to whom
disclosure is reasonably necessary or appropriate in connection
with the performance by Executive of his duties as an executive for
Company, any confidential information obtained by him while in the
employ of Company; provided, however, that confidential information
shall not include any information now known or which becomes known
generally to the public (other than as a result of unauthorized
disclosure by Executive).
(c) Scope of Covenants; Remedies. The following
provisions shall apply to the covenants of Executive contained in
this Section 9:
(i) the covenants contained in paragraph (i) and
(ii) of Section 9(a) shall apply within all the territories in
which Company is actively engaged in the conduct of business while
Executive is employed under this Agreement, including, without
limitation, the territories in which customers are then being
solicited;
(ii) without limiting the right of Company to pursue
all other legal and equitable remedies available for violation by
Executive of the covenants contained in this Section 9, it is
expressly agreed by Executive and Company that such other remedies
cannot fully compensate Company for any such violation and that
Company shall be entitled to injunctive relief to prevent any such
violation or any continuing violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to
enforce the covenants contained in this Section 9, any term,
restriction, covenant or promise contained therein is found to be
unreasonable and accordingly unenforceable, then such term,
restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such court or agency;
and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by
Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing
or by mail, registered or certified, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the
parties at the addresses set forth below, but each party may change
his or its address by written notice in accordance with this
Section 10 (a). Notices shall be deemed communicated as of the
actual receipt or refusal of receipt.
If to Executive: William White
c/o Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this
Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions shall,
nevertheless, continue in full force and without being impaired or
invalidated in any way.
(c) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Tennessee.
(d) Entire Agreement. Except for any prior grants of
options or other forms of incentive compensation evidenced by a
written instrument, this Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto
(and between Younkers, Inc. and Executive) with respect to
employment of Executive by Company or Younkers, Inc., and contains
all of the covenants and agreements between the parties, and
between Younkers, Inc. and Executive, with respect to such
employment. Each party to this Agreement acknowledges that no
representations, inducements or agreements, oral or otherwise, that
have not been embodied herein, and no other agreement, statement or
promise not contained in this Agreement, shall be valid or binding.
Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this
Agreement, Executive warrants that he is not a party to any
restrictive covenant, agreement or contract which limits the
performance of his duties and responsibilities under this Agreement
or under which such performance would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define
or limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
PROFFITT'S, INC.
BY: _____________________
James A. Coggin
President
_____________________
William White
Executive