EXHIBIT 10.24
EMPLOYMENT AGREEMENT
OF
MICHAEL K. SPEAR
AGREEMENT, dated as of March 6, 1995 by and between FRED'S,
INC., a Tennessee corporation, with offices at 4300 New Getwell
Road, Memphis, Tennessee 38118 ("Company") and MICHAEL K. SPEAR,
currently residing at 3293 Piedmont Cove, Memphis, Tennessee
38115, ("Executive").
In consideration of the mutual covenants and conditions
herein set forth, the parties hereto and each of them agree as
follows:
1. Company hereby agrees to employ Executive to serve as
its "Executive Vice President and Director of Merchandising,
Advertising and Purchasing", for a term of three (3) years from
and after the date hereof (the "Initial Term"). At the end of
the Initial Term and at the end of each successive Additional
Term (defined below), the term of this Agreement shall be
automatically extended for an additional one year term
("Additional Terms"), unless either party shall have given to the
other written notice of termination at least six (6) months prior
to the end of the then current term (which termination shall
become effective at the end of the then current term).
2. Executive agrees to serve as Company's "Executive Vice
President and Director of Merchandising, Advertising and
Purchasing" during the term of this Agreement. As such, he shall
have and agrees to assume primary responsibility (subject at all
times to the control of the Chief Executive Officer of the
Company) for matters assigned to him by the Chief Executive
Officer. In the performance of such duties, Executive agrees to
make available to Company all of his professional and managerial
knowledge and skill and such portion of his time as may be
required for the proper fulfillment of his duties. In addition,
during the term of this Agreement, Executive shall continue to
serve in the aforesaid capacity and in such other offices and
capacities to which he may be appointed or elected by the Board
of Directors of Company.
3. As compensation for all of the services to be performed
hereunder, Company agrees to pay and Executive agrees to accept
an annual base salary of $165,000. The annual base salary of
Executive during the term of this Agreement shall be reviewed
annually and shall be subject to upward adjustment from the
aforesaid level at the discretion of the Board of Directors of
Company. Executive's compensation will be paid in conformity
with Company's practice for payment of its executives'
compensation, as such practice may be established or modified
from time to time. Company will make available to Executive such
benefits on the same terms as are or shall be granted or made
available by Company to its other executive employees, to the
extent that Executive shall become qualified or eligible for such
employee benefits or any of them (except that Executive shall be
entitled to 3 weeks of vacation per successive 12-month period
under this Agreement, in accordance with the notice and
scheduling provisions of Company policy). In addition, Executive
shall (i) be paid a minimum bonus of $35,000 with respect to each
of the first three twelve-month periods under this Agreement, and
shall thereafter be considered for any bonus awards on the same
basis as are other executives of Company, (ii) be granted
qualified options for 40,000 shares of Company's Common Stock at
fair market value therefor as of the date first written above
pursuant to the Incentive Stock Option Agreement attached hereto
as Exhibit A, and (iii) be conditionally awarded 20,000 shares of
Company's Common Stock pursuant to the Restricted Stock Award
Agreement attached hereto as Exhibit B. Company shall also
assist Executive with the sale of his current residence in
Bentonville, Arkansas and the expenses of moving his family to
Memphis, Tennessee, in accordance with the Executive Moving
Package attached hereto as Exhibit C.
4. Company shall reimburse Executive, upon the submission
of receipts or vouchers therefor, for all necessary expenses and
disbursements reasonably incurred by him for the proper
performance of his duties as Executive Vice President of Company.
Executive, as a condition to such reimbursement, shall submit
reports of such expenses and disbursements to the chief financial
officer of Company (i) not later than one month from the date
such expenses and disbursements are incurred and determinable,
(ii) in a form and with such detail as will constitute a proper
record of tax deductible expenses, (iii) together with proper
vouchers and receipts therefor.
5. (a) This Agreement shall continue unless and until
terminated, (i) with or without cause, by written notice of
termination as provided in Section 1 above, (ii) by either party
for cause, upon not less than ninety (90) days prior written
notice to the other (except that such notice of termination may
be (x) effective immediately in the case of termination by
Company for acts of Executive involving moral turpitude or breach
of duty of loyalty, or (y) effective in ten (10) days in the case
of termination by Executive due to non-payment of Executive's
salary or bonus by the Company), or (iii) as otherwise provided
herein.
(b) If, during any term of this Agreement, Executive
shall become unable to perform his duties by reason of illness or
incapacity, then Company, may, at its option, terminate this
Agreement. In such event, the notice period shall be not less
than the applicable elimination period in any employee disability
plan of the Company in which Executive participates.
(c) If, during any term of this Agreement, Company
shall terminate this Agreement for any reason, or Executive shall
terminate this Agreement, retire or die, whether at or prior to
the end of the Initial or any Additional Term, then and in that
event, the sole payments to which Executive, his heirs, legatees
and legal representatives shall be entitled shall be payment to
Executive of the compensation herein provided (i.e., base salary
and minimum bonus) prorated to the date of such termination, and
thereafter Company shall have no further obligations or
liabilities hereunder, except as provided in subsection (d) below
as to certain terminations hereunder.
(d) In the event of any termination hereunder, whether
by Company or by Executive, other than termination by Company for
cause and other than pursuant to Section 1, Company shall
continue, from and after the termination date for the greater of
one (1) year or the remaining portion of the then current term
hereof (the "Extension Period"), (i) to pay Executive at the same
annual base rate of compensation (plus any minimum bonus referred
to in Section 3 above) as Company was paying Executive prior to
the date of termination, and (ii) to provide Executive and his
family the same benefits provided to other executives and their
families as fully as if he were still employed by the Company.
Provided, however, if Executive or his family becomes ineligible
to receive such benefits during the Extension Period, then
Company shall provide for him and them the level of benefits
obtainable by expending the same amount therefor as Company would
have expended had Executive and his family continued to be
eligible under the Company's employee plans. Provided, further,
that such extended pay and benefits (i) shall not be paid or
provided in the event Executive is terminated for cause, and (ii)
shall be abated to the extent that Executive obtains alternate
employment during the Extension Period (and Executive hereby
covenants to use reasonable efforts to find and to accept such
alternate employment with compensation and benefits comparable to
those provided under this Agreement). "Cause", for purposes of
this Agreement and as invoked by Company, shall be deemed to be
(i) conviction for a felony, (ii) refusal to perform the duties
of his employment, (iii) misconduct or negligence in the
performance of the duties of his employment, or (iv) violation of
his duty of loyalty to Company. "Cause", for purposes of this
Agreement and as invoked by Executive, shall be deemed to be
failure of Company to pay the compensation required to be paid or
to provide the benefits required to be provided by Company
hereunder.
6. For a period of one (1) year from and after any
termination of this Agreement (other than by either party
pursuant to Section 1 or by Executive for cause) (the "Non-
compete Period"), Executive shall not, directly or indirectly, in
any capacity, (i) engage in any activity in competition with
Company, whether Executive is self-employed or employed by any
person or entity (whether on a full-time or part-time basis or as
a consultant or other independent contractor), in the discount
retail sales or pharmacy businesses, through any retail outlet(s)
located within 25 miles of any retail outlet(s) operated or
franchised by Company (a "Prohibited Activity"), or (ii) own any
interest in any entity which engages in any Prohibited Activity
(unless such entity is an entity whose equity is publicly traded
and such ownership is less than 5%).
7. Except as instructed by the Chief Executive Officer or
as necessary in the course of his employment hereunder, Executive
covenants and agrees that he shall not at any time during the
term of this Agreement or during the Non-compete Period, directly
or indirectly, use, disseminate, disclose, publish or transfer
any Confidential Information to any persons other than then
current employees of the Company. As used herein, the term
"Confidential Information" shall mean all customer and
correspondence lists, reports, vendor lists, purchase or pricing
information, sales or indexing information, employee names,
marketing strategies and plans, store location and layout plans,
planograms, trade secrets, know how, marketing or merchandising
information, and statistical data, arising from or relating to
the business of Company and received or developed by Executive
during the term of his employment hereunder, whether in the form
of oral communications, writings, discs, diskettes, charts, com-
puter cards, memory or tapes, or embodied in any other form what-
soever.
8. This Agreement is personal in nature and is not
assignable by Executive or by Company except that Company, its
successors and assigns, including any other entity which succeeds
to its business, whether by acquisition, reorganization, merger,
consolidation or other similar event, shall be bound by the terms
hereof and shall enjoy the benefits hereof.
9. This Agreement contains the entire understanding of the
parties and all prior or contemporaneous oral or written
understandings of the parties with relation thereto are void and
of no effect whatsoever. Except as herein provided, no
amendment, change or modification of any of the terms hereinabove
contained shall be binding unless set forth in writing signed by
the party to be charged. Executive acknowledges and agrees that
the breach of any covenant contained herein would cause Company
irreparable damage, and that the remedy at law for such a breach
would be inadequate, and that this Agreement may be specifically
enforced. Remedies available hereunder or otherwise shall not be
exclusive, but shall be cumulative. If any one or more of the
provisions contained in this Agreement shall for any reason be
held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but it shall be construed as
if such invalid, illegal or unenforceable provision had never
been contained herein. This Agreement has been executed and
shall be performed in the State of Tennessee, and shall be
construed and interpreted in accordance with the laws thereof.
In the event it should become necessary for either party to
initiate any suit or proceeding to enforce the terms of this
Agreement, the party adjudged to be in breach shall pay all costs
and expenses thereof, including reasonable attorneys' fees.
10. All notices required hereunder shall be deemed to have
been duly given only if contained in writing and mailed Certified
Mail, Return Receipt Requested, to the parties at the respective
addresses hereinabove set forth or to such other address as they
may have designated.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
FRED'S, INC.
ATTEST:
/s/ Charles S. Vail By: /s/ Michael J. Hayes
- ------------------------------ ---------------------------
Secretary MICHAEL J. HAYES, Chief
Executive Officer and
President
WITNESS:
/s/ Michael K. Spear
/s/ Carolyn Tilman ------------------------------
- ------------------------------ MICHAEL K. SPEAR, Executive
Exhibit A
INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO THE FRED'S, INC.
INCENTIVE STOCK OPTION PLAN
FRED'S, INC., a Tennessee corporation (the "Company"),
hereby grants to Mike K. Spear (the "Optionee") an option
("Option") to purchase a total of 40,000 shares of no par value
Class A common stock of the Company (the "Shares"), at the price
determined as provided herein, and in all respects subject to the
terms, definitions and provisions of the INCENTIVE STOCK OPTION
PLAN (the "Plan") adopted by the Company which is incorporated
herein by reference.
1. Nature of the Option. This Option is intended to be an
"incentive stock option" within the meaning of section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Option Price. Except as otherwise provided in Section
8, the option price is $9.75 for each Share, which is the fair
market value of the Shares on the date of grant set forth below
("Date of Grant"), as determined by the Plan Administrator.
3. Exercise of Option. This Option shall be exercisable
only in accordance with the provisions of the Plan, and only by
written notice which shall:
(a) state the election to exercise the Option, the
number of Shares in respect of which it is being exercised,
the person in whose name the stock certificate or
certificates for such Shares is to be registered, his or her
address and Social Security Number (or if more than one, the
names, addresses and Social Security Numbers of such
persons);
(b) contain such representations and agreements as to
the holder's investment intent with respect to such Shares
as may be required by the Company pursuant to the Plan or
this Agreement;
(c) be signed by the person or persons entitled to
exercise the Option, and if the Option is being exercised by
any person or persons other than the Optionee, be
accompanied by proof, satisfactory to the Company, of the
right of such person or persons to exercise the Option;
(d) be in writing and delivered in person or by
certified mail to the Secretary of the Company; and
(e) be accompanied by payment in full (including
applicable withholding taxes, if any, as described in
Section 8 of this Agreement). Payment of the purchase price
shall be in cash, currency or by certified or bank cashier's
check, or a combination thereof pursuant to the provisions
of the Plan.
Unless the sale of Shares pursuant to this Option has been
registered under the Securities Act of 1933 on Form S-8 or
successor form, the certificate or certificates for Shares as to
which the Option shall be exercised shall contain the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TO THE DISTRIBUTION THEREOF, AND SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED
UNLESS SUCH SALE OR TRANSFER IS REGISTERED
UNDER SUCH ACT OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES SATISFACTORY TO THE COMPANY
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE
ACT, AND UNLESS SUCH SALE OR TRANSFER IS
AUTHORIZED UNDER APPLICABLE STATE LAW."
4. Extent of Exercise. This Option shall be exercisable
in such amounts and at such times as are set forth below:
This Option shall be exercisable to the extent of 25% of the
Shares covered hereby on or after the Date of Grant; exercisable
to the extent of an additional 25% of the Shares covered hereby
on or after the first anniversary of the Date of Grant;
exercisable to the extent of an additional 25% of the Shares
covered hereby on or after the second anniversary of the Date of
Grant; and exercisable to the extent of the remaining 25% of the
Shares covered hereby on or after the third anniversary of the
Date of Grant; provided, however, that the aggregate fair market
value (determined as of the Date of Grant) of the Shares with
respect to which this Option are exercisable for the first time
by the Optionee in any calendar year (under all plans of the
Company and its subsidiary corporations (which term, as used
hereinafter, shall have the meaning ascribed thereto in section
425(f) of the Code )) shall not exceed $100,000.
5. Restrictions on Exercise. This Option may not be
exercised if the issuance of such Shares upon such exercise would
constitute a violation of any applicable federal or state
securities laws or other law or regulation. As a condition to
the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be
required by any applicable law or regulation or may otherwise be
appropriate.
6. Nontransferability of Option. This Option may not be
sold, assigned, transferred, exchanged, pledged, hypothecated, or
otherwise encumbered, other than by will or by the laws of
descent and distribution. During the lifetime of the Optionee
this Option is exercisable only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
7. Term of Option. Except as provided in this Section 7
and in Section 8 below, this Option may not be exercised more
than five (5) years from the date of grant of this Option and may
be exercised during such term only in accordance with the Plan
and the terms of this Agreement. In the event that an Optionee
ceases to be an employee of the Company for any cause other than
Retirement (as defined below), death or Disability (as defined
below), the Optionee shall have the right to exercise this Option
during its term within a period of 30 days after such termination
to the extent that this Option was exercisable at the time of
termination, or within such other period, and subject to such
terms and conditions, as may be specified by the Plan
Administrator. (As used herein, the term "Retirement" means
retirement from active employment with the Company on or after
age 65, or such earlier age with the express written consent for
purposes of the Plan of the Company at or before the time of such
retirement, and the term "Retires" has the corresponding meaning.
As used herein, the term "Disability" means a condition that, in
the judgment of the Plan Administrator, has rendered an Optionee
completely and presumably permanently unable to perform any and
every duty of his or her regular occupation, and the term
"Disabled" has the corresponding meaning). In the event that an
Optionee Retires, dies or becomes Disabled prior to the
expiration of this Option and without having fully exercised this
Option, the Optionee or his or her Beneficiary (as defined below)
shall have the right to exercise this Option during its term
within a period of (i) one year after termination of employment
due to Retirement, death or Disability, or (ii) one year after
death if death occurs either within one year after termination of
employment due to Retirement or Disability or within 30 days
after termination of employment for other reasons, to the extent
that the option was exercisable at the time of death or
termination, or within such other period, and subject to such
terms and conditions, as may be specified by the Plan
Administrator. (As used herein, the term "Beneficiary" means the
person or persons designated in writing by the Optionee as his or
her Beneficiary with respect to this Option; or, in the absence
of an effective designation or if the designated person or
persons predecease the Optionee, the Optionee's Beneficiary shall
be the person or persons who acquire by bequest or inheritance
the Optionee's rights in respect this Option). In order to be
effective, the designation of a Beneficiary must be on file with
the Plan Administrator before the Optionee's death, but any such
designation may be revoked and a new designation substituted
therefor at any time before the Optionee's death.
8. Ten Percent Shareholders. If the Optionee owns at the
Date of Grant stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or
of a subsidiary corporation of the Company, then notwithstanding
anything herein to the contrary, the option price shall be 110
percent of the fair market value (as determined by the Plan
Administrator) of the stock subject to this Option at the Date of
Grant and this Option shall not be exercisable after the
expiration of five years from the Date of Grant.
9. Withholding. Prior to the issuance of Shares under
this Option, the Optionee shall remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax
requirements. The Optionee may satisfy the withholding
requirement in whole or in part by electing to have the Company
withhold Shares having a value equal to the amount required to be
withheld. The value of the Shares to be withheld shall be the
fair market value, as determined by the Plan Administrator, of
the stock on the date that the amount of tax to be withheld is
determined (the "Tax Date"). Such election must be made prior to
the Tax Date, must comply with all applicable securities law and
other legal requirements, as interpreted by the Plan
Administrator, and may not be made unless approved in advance by
the Plan Administrator, in its discretion. The Company reserves
the right to make whatever further arrangements it deems
appropriate for the withholding of any taxes in connection with
any transaction contemplated by this Agreement or the Plan.
10. Merger. This Agreement supersedes any other agreement,
written or oral, between the parties with respect to the subject
matter hereof.
11. General Restrictions. This Option is subject to the
requirement that if at any time the Company shall determine that
(i) the listing, registration or qualification of the Shares
subject or related thereto upon any securities exchange or under
any state or federal law, or (ii) the consent or approval of any
regulatory body, or (iii) an agreement by the Optionee with
respect to the disposition of Shares, or (iv) the satisfaction of
withholding tax or other withholding liabilities, is necessary or
desirable as a condition of the issuance or purchase of Shares
hereunder, this Option shall not be exercised in whole or in part
unless such listing, registration, qualification, consent,
approval, agreement, or withholding shall have been effected or
obtained free of any conditions not acceptable to the Company.
Any such restriction affecting this Option shall not extend the
time within which this Option may be exercised; and neither the
Company nor its directors or officers nor the Plan Administrator
shall have any obligation or liability to the Optionee or to a
Beneficiary with respect to any Shares with respect to which this
Option shall lapse or with respect to which the issuance or
purchase of Shares shall not be effected, because of any such
restriction.
12. Rights of the Shareholder. The Optionee shall have no
rights as a shareholder with respect thereto unless and until
certificates for Shares are issued to him or her, and the
issuance of Shares shall confer no retroactive right to
dividends.
13. Rights to Terminate Employment. Nothing in the Plan or
in this Agreement shall confer upon any person the right to
continue in the employment of the Company or affect any right
which the Company may have to terminate the employment of such
person.
14. Adjustments. In the event of any change in the
outstanding common stock of the Company, by reason of a stock
dividend or distribution, recapitalization, merger,
consolidation, reorganization, split-up, combination, exchange or
Shares or the like, the Board of Directors shall adjust
proportionately the number of Shares subject to this Agreement,
and the exercise price hereof, and may make such other changes in
as it deems equitable in its absolute discretion to prevent
dilution or enlargement of the rights of the Optionee, provided
that any fractional Shares resulting from such adjustments shall
be eliminated.
15. Effect on Other Plans. Participation in the Plan shall
not affect the Optionee's eligibility to participate in any other
benefit or incentive plan of the Company. Any awards made
pursuant to the Plan shall not be used in determining the
benefits provided under any other plan of the Company unless
specifically provided therein.
16. Optionee Acknowledgement. Optionee acknowledges
receipt of a copy of the Plan, which is annexed hereto, and
represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all
the terms and provisions thereof. Optionee hereby agrees to
accept as binding, conclusive and final decisions or
interpretations of the Plan Administrator upon any questions
arising under the Plan.
DATE OF GRANT: March 6, 1995
FRED'S, INC.
By: /s/ Michael J. Hayes
-------------------------------
Its: President
Agreed to and accepted this 6th day of March, 1995.
/s/ Mike K. Spear
----------------------------------
Signature
/s/ Mike K. Spear
----------------------------------
Print Name
SUMMARY OF TERMS
40,000 shares at $9.75 which expire March 6, 2000
Vesting as follows: 25% on date of grant
50% one year from date of grant
75% two years from date of grant
100% three years from date of grant
Exhibit B
RESTRICTED STOCK AWARD AGREEMENT
PURSUANT TO THE FRED'S, INC.
1993 LONG-TERM INCENTIVE PLAN
FRED'S, INC., a Tennessee corporation (the "Company"),
hereby grants to MICHAEL K. SPEAR (the "Grantee") a conditional
award (the "Award") of 20,000 shares of no par value common stock
of the Company (the "Shares"), subject in all respects to the
terms, definitions and provisions of this agreement (the
"Agreement") and the 1993 LONG-TERM INCENTIVE PLAN (the "Plan")
adopted by the Company which is incorporated herein by reference.
Capitalized terms used in this Agreement and not otherwise
defined herein shall have the respective meanings assigned to
such terms in the Plan.
1. Restrictions and Forfeiture. The Shares shall be
subject to the following restrictions (the "Restrictions"):
(a) Except as otherwise permitted by paragraph 5 of this
Agreement or the Plan, neither this Award nor the Shares issued
hereunder may be sold, assigned, transferred, exchanged, pledged,
hypothecated, or otherwise encumbered prior to redelivery of the
Shares to the Grantee pursuant to paragraph 3(b) hereof.
(b) The Shares shall be forfeited to the Company, and all
rights of the Grantee to such Shares shall terminate without any
payment, if the Grantee fails to remain continuously as an
employee of the Company until the Restrictions lapse for any
reason other than (i) the Grantee's death, or (ii) by reason of
any other circumstances the Committee may, in its discretion,
find acceptable.
2. Restriction Period. The Restrictions on all of the
Shares covered hereby shall lapse on the second anniversary of
the date of grant set forth below (the "Date of Grant");
provided, however, in the event of Grantee's death, all remaining
Restrictions applicable to the Shares shall be deemed to have
lapsed on the day prior to such death.
3. Deposit of Certificates. In order to enforce the
Restrictions, the following procedures shall apply:
(a) Each certificate issued in respect of the Shares
subject to this Award shall be registered in the name of the
Grantee and deposited by him, together with a stock power
endorsed in blank, with the Company. Unless and until forfeited
as provided herein, the Grantee shall be entitled to vote all
Shares, receive all cash dividends with respect thereto and
otherwise be treated as a shareholder with respect to such
Shares. All other distributions with respect to the Shares,
including, without limitation, Shares received as a result of a
stock dividend, stock split, combination of shares or otherwise,
shall be retained by the Company in escrow or, if delivered to
the Grantee, the Grantee will deposit such distribution with the
Company in escrow pursuant to this paragraph 3(a).
(b) Certificates for Shares which are no longer
forfeitable pursuant to paragraphs 1 and 2 shall be redelivered
by the Company to the Grantee (or his legal representative,
beneficiary or heir) promptly after the applicable Restrictions
have lapsed; provided, however, that the Company shall be under
no obligation to redeliver such Shares to the Grantee until the
Grantee has paid or caused to be paid all taxes required to be
withheld pursuant to paragraph 6 hereof and the Plan.
(c) Each certificate issued in respect of the Shares
subject to this Award shall bear the following legend until the
Restrictions lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE)
CONTAINED IN THAT CERTAIN RESTRICTED STOCK AWARD
AGREEMENT PURSUANT TO THE FRED'S, INC. 1993 LONG-TERM
INCENTIVE PLAN BETWEEN THE CORPORATION AND MICHAEL K.
SPEAR, DATED MARCH 6, 1995, A COPY OF WHICH IS ON FILE
IN THE OFFICE OF THE SECRETARY OF THE CORPORATION, AND
THE PROVISIONS OF WHICH ARE INCORPORATED HEREIN BY
REFERENCE.
4. General Provisions.
(a) The Grantee represents and warrants that if in the
future he should decide to offer or dispose of any Shares or
interest therein, he will be able to do so only in compliance
with this Agreement, the Act and applicable state securities
laws.
(b) The Company may require the Grantee to make any
other representation and warranty to the Company as may be
required by any applicable law or regulation or may otherwise be
appropriate.
5. Nontransferability of Award. This Award may not be
sold, assigned, transferred, exchanged, pledged, hypothecated, or
otherwise encumbered, other than by will or by the laws of
descent and distribution. The terms of this Agreement shall be
binding upon the executors, administrators, heirs, successors and
assigns of the Grantee.
6. Withholding. (a) Except as provided in paragraph
6(b) hereof, the Grantee shall remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax
requirements, prior to redelivery of the Shares under paragraph
3(b) hereof. The Grantee may satisfy the withholding requirement
in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be
withheld. The value of the Shares to be withheld shall be the
fair market value, as determined by the Committee, of the stock
on the date that the amount of tax to be withheld is determined
(the "Tax Date"). Such election must be made prior to the Tax
Date, must comply with all applicable securities law and other
legal requirements, as interpreted by the Committee, and may not
be made unless approved in advance by the Committee, in its
discretion.
(b) If the Grantee makes the election provided under
Section 83(b) of the Code to be taxed currently on the value of
the Shares notwithstanding the Restrictions, the Grantee shall
promptly notify the Company of such election, and shall
immediately remit to the Company in cash an amount sufficient to
satisfy any federal, state or local withholding tax requirements.
(c) The Company reserves the right to make whatever
further arrangements it deems appropriate for the withholding of
any taxes in connection with any transaction contemplated by this
Agreement or the Plan.
7. Merger. This Agreement supersedes any other agreement,
written or oral, between the parties with respect to the subject
matter hereof.
8. Grantee Acknowledgement. Grantee acknowledges receipt
of a copy of the Plan, which is annexed hereto, and represents
that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Award subject to all the terms and
provisions thereof. Grantee hereby agrees to accept as binding,
conclusive and final decisions or interpretations of the
Committee upon any questions arising under the Plan.
DATE OF GRANT: March 6, 1995
FRED'S, INC.
By: /s/ Michael J. Hayes
--------------------------------
Its: President
Agreed to and accepted as of the 6th day of March, 1995.
/s/ Mike K. Spear
-----------------------------------
MIKE SPEAR
Exhibit C
Executive Relocation Package
1. Premises: The subject premises ("Premises") are the real
estate described on the attached legal description and the
improvements located thereon, and known as 1304 N.E. 10th
Street, Bentonville, Arkansas 72712. Executive represents
and warrants that there is no existing lien, mortgage or
encumbrance on the Premises.
2. Objective: Enable Executive to realize from the sale of the
Premises the full "Appraised Value."
3. Appraised Value: The "Appraised Value" is as follows:
Name of Appraiser: Cosby & Associates, Inc.
Date of Appraisal: June 6, 1994
Appraised Value: $297,500.00
4. Price Protection: Executive has listed the Premises for
sale. If Executive obtains a contract for sale of the
Premises for an amount which would net him more than the
Appraised Value, Company shall have no further obligation
under this package and Executive will be free to resell the
Premises at such higher value. If Executive obtains a
contract to purchase the Premises for an amount which would
net him less than the Appraised Value, then the Company will
have two alternatives: (i) Company may purchase the Premises
from Executive for the Appraised Value, and will have the
right to resell the Premises pursuant to the contract, and
Executive will not be obligated to refund the negative
difference to Company, or (ii) Company may lend Executive
the Appraised Value, take a mortgage on the Premises, and
seek a contract on the Premises at a higher purchase price,
pursuant to which Executive shall sell the Premises. In the
event Company makes such loan, Executive will cause to be
executed all documents necessary to give Company a first
mortgage lien on the Premises. Any such loan shall bear no
interest and shall become due and payable upon the sale of
the Premises.
5. Interim Funding: In the event Executive requires funds to
purchase a residence or to purchase a lot and build a
residence in Memphis prior to the sale of the Premises,
Company will loan Executive the funds necessary to so
purchase or build, up to the Appraised Value of the
Premises. Such loan shall bear no interest and shall become
due and payable upon the sale of the Premises. In the event
Company makes such loan, Executive will cause to be executed
all documents necessary to give Company a first mortgage
lien on the Premises. Any such loan shall bear no interest
and shall become due and payable upon the sale of the
Premises. Alternatively and in addition, the Company may
elect at any time after Executive first requests such funds,
to purchase the Premises as set forth in the preceding
paragraph.
6. Trusts: Executive and his wife will do all things necessary
to facilitate any sale of the Premises or mortgaging of the
subject Premises for the benefit of Company as contemplated
hereinabove by the Revocable Living Trusts dated September
20, 1990 under the Declarations of Trust dated September 20,
1990 for the Benefit of Michael K. Spear and Susan J. Spear.
Executive and his wife evidence their obligation so to do by
their signatures hereinbelow.
7. Costs: Executive will bear no sales agent's commission
cost, no cost of any closing of sale(s) of the Premises, nor
the cost of any mortgaging of the Premises for the benefit
of Company, if bearing such costs would cause Executive to
realize less than the Appraised Value from the Premises.
Rather, all such costs shall be borne by Company.
/s/ Michael K. Spear, Co-
Trustee
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Michael K. Spear, Co-Trustee
under the Declaration of Trust
dated September 20, 1990 for
the benefit of Michael K.
Spear and Susan J. Spear
/s/ Susan J. Spear, Co-Trustee
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Susan J. Spear, Co-Trustee
under the Declaration of Trust
dated September 20, 1990 for
the benefit of Michael K.
Spear and Susan J. Spear
FRED'S, INC.
/s/ Michael J. Hayes
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Michael J. Hayes
Chief Executive Officer &
President
Attest:
/s/ Charles S. Vail
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Charles S. Vail, Secretary