1
January 24, 1995
EMPLOYMENT AGREEMENT
This Agreement dated as of January 24, 1995, by and between Robert
Brann ("Employee"), and Trak Auto CORPORATION, a Delaware corporation
("Employer").
WITNESSETH:
WHEREAS, the parties hereto desire by this Agreement to provide for
the employment of Employee by Employer;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which the parties conclusively
acknowledge, the parties hereto, intending to be legally bound, agree as
follows:
1. EMPLOYMENT
(a) Duties. Employer hereby employs Employee, and
Employee accepts employment by Employer, as Executive Vice President,
Merchandising during the Employment period (as defined in Section 2), with such
duties, responsibilities and authority as are commensurate with and appropriate
to such position and as are from time to time set forth in the bylaws of the
Employer and otherwise delegated to him or her by the Board of Directors of
the Employer ("the Board of Directors"), and shall report to the Chairman of
the Board, the President, and the Board of Directors. Employee agrees to
observe and comply with the rules and regulations of Employer as adopted by the
Board of Directors respecting the performance of his or her duties and to carry
out and follow the orders, policies and directions stated by Employer to him or
her from time to time, provided, however, that such regulations and directions
are consistent with the authority and responsibility of the position specified
above.
(b) Full Time Employment. During the Employment period
Employee shall devote all his or her time and attention to his services for
Employer and shall diligently perform his or her duties and responsibilities
under this Agreement. Employee acknowledges that the proper performance of his
or her duties and responsibilities may require the rendering of services not
only during normal business hours, but over and beyond those hours as well.
(c) Place of Employment and Travel. Employee's principal
place of employment shall be at the executive offices of Employer in Landover,
Maryland. If Employer's executive offices are moved from Landover, Maryland,
Employee's principal place of employment shall be changed to the location where
such executive offices are moved. Employee agrees to travel for the
performance of his or her duties under this Agreement as Employer may request
from time to time. If Employers executive offices are relocated a distance
greater than 100 miles from Landover, Maryland, Employee's relocation expenses
will be paid by Employer if Employee elects to relocate. At the Employee's
option, if Employee decides not to relocate, the relocation of the executive
offices will be deemed a termination without cause and the Employee will be
eligible to receive severance benefits as outlined in Section 7 (e) of this
Agreement.
2. TERM
2
The term of Employee's employment under this Agreement (the
"Employment Period") shall commence on February 1, 1995 and end on January 31,
1996. However, Employer and Employee agree that the term of this agreement
automatically extends for an additional one (1) year at the end of each
Employment Period, unless Employee has been , or is being, terminated pursuant
to Section 7.
3. COMPENSATION
(a) Base Salary. Employee's annual base salary shall be
Two Hundred Forty Thousand Dollars ($240,000.00), subject to an annual increase
as recommended by the Compensation Committee of the Board of Directors
following review and performance appraisal of Employee, and approved by the
Board of Directors. Employee's base salary shall be paid in accordance with
Employer's normal payroll procedure.
(b) Withholding Tax. All compensation shall be subject
to the customary withholding tax and other employment taxes as required with
respect to compensation paid by a corporation to an employee.
(c) Bonus Compensation : Employee's Bonus Compensation
shall be paid in accordance with Employee's Bonus Agreement following review
and performance appraisal of Employee by the Compensation Committee of the
Board of Directors, and approval by the Board of Directors. Employee's bonus
shall be paid in one lump sum immediately following approval.
4. STOCK OPTIONS
(a) Stock Options. Employee shall be eligible for the
annual award of stock options pursuant to the stock option plans under which
the Employee is currently a participant, as determined by the Board(s) of
Directors of the company(s), pursuant to the individual company's stock option
plan(s).
(b) Exercise upon Certain Terminations of Employment. In
the event of the termination of Employee's employment hereunder for any reason
other than pursuant to Section 7 (d), Employee shall have the right to
exercise, on or before the effective date of the termination of this Agreement,
any option which has vested in Employee hereunder coincident with or prior to
the effective date of the termination of Employee's employment hereunder,
subject to the other terms and conditions of such option plan(s). In addition,
in the event of the termination of Employee's employment due to his or her
death, the personal representative of the Employee shall have the right to
exercise any such option within sixty (60) days of the date of Employee's
death.
5. EMPLOYEE BENEFITS
During the Employment Period, Employer shall provide Employee
with the following benefits:
(a) Health Plan Coverage. Employer shall provide
Employee with health benefits, including major medical health insurance and
Long Term Disability (LTD), Accidental Death and Dismemberment (AD&D) and such
other benefits that are in effect at the time of this Agreement for the
Employee and his or her immediate family all in accordance with Employer's
"Executive Health Plan" as now in effect.
(b) Further Benefits. Employee shall, during the term of
this Agreement (and thereafter to the extent provided herein), be eligible to
3
participate in all applicable profit sharing and 401 (k) plans and insurance
benefits in effect for all salaried employees of the Employer, together with
any future improvements in such plans or benefits, subject to the eligibility
requirements of such plans. In addition, Employee shall be entitled during the
term of this Agreement, and thereafter to the extent provided for herein or in
any such plan, to receive such other and further benefits as shall be generally
made applicable to key executive employees of the Employer, and such additional
benefits, as may be granted from time-to-time by the Board of Directors, in
it's sole discretion.
(c) Vacation. Employee shall be entitled to paid vacation
leave of Three (3) weeks in every year of employment, increased pursuant to
Employer's vacation plan. Any accrued vacation previously earned prior to the
date of this Agreement shall be permanently accrued to the Employee
(grandfathered). Effective with this Agreement, all vacation earned subsequent
to the date of this Agreement shall be taken no later than by the end of the
following year or be forfeited, unless prior approval is granted by the
Compensation Committee of the Board of Directors.
(d) Business Expenses. Employer shall reimburse Employee
pursuant to Employer's policy of Employee expense reimbursement of all items of
travel, entertainment and miscellaneous expenses reasonably incurred by
Employee on behalf of Employer and presented to Employer on the appropriate
voucher.
(e) Automobile Allowance: Employer shall pay to Employee as an
automobile allowance the sum of Six Hundred and Fifty Dollars ($650.00) per
month.
6. PROPRIETARY DATA
(a) Trade Secrets and Other Confidential Information.
During the Employment Period and for three (3) years thereafter, Employee shall
keep confidential any data, documents, or financial or other information of a
trade secret or confidential nature relating to Employer's past, present or
future operations (the "Proprietary Data"), shall not disclose the Proprietary
Data to any third parties other than officers, employees or agents of Employer
on a "need to know" basis, shall take all necessary steps to ensure that such
officers, employees or agents keep such Proprietary Data confidential, and
shall use the Proprietary Data only in connection with rendering services to
Employer. Upon the end of the Employment Period, Employee shall promptly
return to Employer the originals and all copies of the Proprietary Data in the
possession of Employee, and shall not use any of the Proprietary Data for his
or her own benefit or for the benefit of any third parties. The covenants
contained in this Section 6 (a) shall not apply to Proprietary Data which is or
becomes a matter of general knowledge in the industry otherwise than by a
breach of the provisions of this Section 6 (a).
(b) Injunctive Relief. Employee acknowledges that the
convenants contained in Sections 6 (a) are necessary for the protection of the
legitimate business interests of Employer and are reasonable limitations of
activities, that the rights of Employer are of a specialized and unique
character, and that immediate and irreparable damage will result to Employer if
Employee fails to or refuses to perform or comply with such covenants.
Therefore, notwithstanding any election by Employer to claim damages from
Employee as a result of any such failure or refusal, Employer may, in addition
to any other remedies and damages available, seek an injunction in a court of
competent jurisdiction to restrain any such failure or refusal (and no bond or
other security shall be required in
4
connection therewith). In that connection, Employee represents and
warrants that his or her expertise and capabilities are such that performance or
compliance with the covenants (and the enforcement thereof by injunction or
otherwise) will not prevent him or her from earning a livelihood. If a court
refuses to enforce the covenants set forth in Section 6 (a) because they are
found to be unreasonable, Employee and Employer agree to abide by any lesser
restrictions (for instance, as to duration and geographic area) that are found
to be reasonable.
7. TERMINATION
(a) Definition of Compensation: For purposes of termination,
compensation at the time of termination shall be deemed to include accrued sick
and vacation and salary and accrued bonus through the effective date of
termination, plus any and all benefits normally granted by Employer to
Employees upon termination.
(b) Death. The Employment Period shall forthwith
terminate upon the death of Employee, whereupon Employer shall not have any
further obligations or liability hereunder except to pay the Employee's estate
the unpaid portion, if any, of Employee's compensation accrued for the period
up to the date of Employee's death.
(c) Total Disability. In the event of the Total
Disability (as that term is hereafter defined) of Employee for a period of four
(4) consecutive calendar months, or for eighty percent (80%) or more of the
normal working days during a period of six (6) consecutive full calendar
months, Employer shall have the right to end the Employment Period by giving
Employee ten (10) days written notice. Upon the expiration of such ten (10)
day period, the Employment Period shall end and Employer shall not have any
further obligations hereunder except to pay Employee the unpaid portion, if
any, of Employee's compensation accrued for the period up to the date of
termination of Employee's employment. As used in this Agreement, the term
"Total Disability" shall mean a mental or physical condition which, in the
opinion of Employer and in the opinion of two consulting physicians, renders
Employee unable or incompetent to carry out his obligations hereunder,
provided, however that said disability must also be in accordance with
disability as defined in the Company's Long Term Disability coverage.
(d) With Cause. Employer shall have the right to
terminate the employment of Employee at any time for cause (as hereinafter
defined) upon at least five (5) days' written notice setting forth the specific
details of the action or inaction of Employee which constitutes cause. For
purposes of the foregoing, "cause" shall mean (i) Employee's commission of any
act which shall be an offense involving moral turpitude under federal, state or
local law; (ii) Employee's conviction of a felony; (iii) Employee's material
breach of any of the terms of this Agreement; or (iv.) Employee's refusal to
follow lawful and reasonable directive(s) of the Board of Directors. Upon such
termination, Employer shall have no further obligations or liability hereunder
except to pay Employee the unpaid portion, if any, of Employee's compensation
accrued for the period up to the date of termination of Employee's employment.
(e) Dissatisfaction by Employer Without Cause. If Employer is
at any time and for any reason dissatisfied with Employee's performance
hereunder, Employer shall have the right to terminate the employment of
Employee upon at least thirty (30) days written notice to Employee. If
Employer shall terminate the employment of Employee pursuant to this Section 7
(e), the Employment Period shall end at the expiration of the notice period and
Employer shall not have any further obligations or liability hereunder except
(i) to pay Employee the
5
unpaid portion, if any, of Employee's compensation accrued for the
period up to the date of termination of Employee's employment, together with an
additional amount of two (2) years of base salary as severance in accordance
with Employer's normal payroll schedule, to commence immediately following the
effective date of the termination of Employee's employment hereunder; and (ii)
to pay to Employee in a lump sum an amount equal to the number of days of
accrued and unused vacation and sick leave times the Employee's base salary in
effect on the date of termination. If at anytime following Employee's
termination, Employee obtains employment with a base salary equal to at least
75% of the base salary received from Employer at the time of termination,
Employer shall not be required to make any further severance payments for any
period of time after the later of the first anniversary date of termination AND
the commencement of Employee's new employment. In addition, for purposes of the
Employer's medical, disability, and life insurance programs, Employee shall be
considered and deemed eligible for two (2) years following such termination or
until Employee attains the age of 65 or until similar benefits are paid or
extended by a new employer, whichever first occurs, to be eligible to
participate in such programs of the Employer on the same basis as other officers
or employees. Lastly, Employee shall be entitled to utilize the services of a
professional out placement service, the reasonable cost of which shall be borne
by Employer.
(f). Dissatisfaction by Employee. If Employee at any time is
for any reason dissatisfied with the terms and conditions of his or her
employment hereunder, Employee shall have the right to terminate his employment
upon at least thirty (30) days written notice to Employer. If Employee shall
terminate his employment pursuant to this Section 7 (f), the Employment Period
shall end at the expiration of the notice period and Employer shall have no
further obligations or liability hereunder except to pay to Employee the unpaid
portion, if any, of Employee's compensation accrued for the period up to the
date of termination.
8. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by
the laws of the State of Delaware applicable to agreements made by and to be
performed by Delaware corporations.
(b) Amendment of Agreement. No amendment or variation of
the terms of this Agreement, with or without consideration, shall be valid
unless made in writing and signed by the Employee and a duly authorized
representative of the Employer (other than Employee).
(c) Waiver of Conditions. Any waiver agreed to between
Employer and Employee of any provision should not be construed as a general
waiver of the provision, or any other provision of this agreement.
(d) Entire Agreement. This Agreement, and Employee's
Bonus Agreement, constitutes the entire agreement between the parties and
supersedes all prior oral and written agreements, understandings, commitments,
and practices between the parties, whether or not fully performed by Employee
before the date of this Agreement.
(e) Headings. The section headings of this Agreement are
for reference purposes only and are to be given no effect in the construction
or interpretation of this Agreement.
(f) Notice. All notices, requests and other
communications under
6
this Agreement shall be in writing and shall be deemed given when
delivered personally or upon receipt when sent by an express mail service,
provided that in each case a copy is mailed by first-class, registered mail,
return receipt requested, addressed as follows (or as may otherwise have been
specified by the intended recipient by notice as herein provided);
If to Employee:
Robert Brann
5105 Sheppard Lane
Ellicott City, Maryland 21042
If to Employer:
Chief Executive Officer
Trak Auto Corporation
3300 75th Avenue
Landover, Maryland 20785
(g) Severability. If any provision of this Agreement is
held invalid or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect. If any provision is held invalid
or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.
(h) Merger or Consolidation. This Agreement shall not be
terminated by any merger, consolidation, transfer of any or all of the assets
of the Employer or voluntary or involuntary dissolution of the Employer. In
the event of a merger or consolidation or upon the transfer of assets, the
surviving or resulting corporation or the transferee of the Employer's assets
shall be bound by and shall have the benefit of the provisions of this
Agreement, and the Employer shall take all actions necessary to ensure that
such corporation or transferee is bound by the provisions of this Agreement.
This Agreement shall be binding upon the Employer notwithstanding any change in
the composition of the Board of Directors or change in ownership of the
Employer.
(I) No Covenants. Employee hereby represents and
warrants that he or she is not subject to or bound by any employment contract,
restrictive covenant or other agreement or any order or decree that prevents
him or her from entering into this Agreement or from performing his or her
responsibilities as contemplated by this Agreement.
(j) Attorney's Fees. If a dispute arises with respect to
the Employer's obligations or the Employee's rights under this Agreement, or if
any legal proceedings shall be brought to enforce or interpret any provisions
contained herein, or to recover damages for breach hereof, or in the event of
any other litigation involving this Agreement, Employee shall recover from the
Employer all reasonable attorney's fees and costs and disbursements incurred
as a result of such dispute. In addition, Employee shall recover from Employer
all reasonable attorney's fees and costs and disbursements incurred as a result
of legal proceeding, unless the Employee's pursuit of legal proceedings is
deemed frivolous or in bad faith as determined by the court in any such action.
(k) Assignment; Binding Effect. This Agreement shall be
binding upon, and shall inure to the benefit of, and be enforceable by , the
parties hereto and their respective successors and assigns, provided, that (i)
this
7
Agreement is a personal service agreement and no right hereunder may be
assigned by Employee, except that it shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors or
administrators; and (ii) unless Employer shall have complied with Section 8 (h)
hereof, no right hereunder may be assigned or transferred by Employer by
operation of law or otherwise. Any purported assignment or transfer in
violation of this Section 8 (k) shall be null and void..
IN WITNESS WHEREOF, this Agreement has been signed by a duly
authorized officer of Employer and by Employee as of the date first
above-written
TRAK AUTO CORPORATION
By: /s/ Herbert H. Haft
--------------------------------
HERBERT H. HAFT, Chairman
BY:/s/ L.G. Schafran
--------------------------------
L.G. SCHAFRAN, Chairman
Executive Committee of the Board of
Directors
/s/ Robert Brann
-----------------------------------
Name of Employee: Robert Brann