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EXHIBIT 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is dated as of March 25, 1993 by and between Jerry M. Socol
(the "Employee") and J. BAKER, INC., a Massachusetts corporation (the
"Company").
WHEREAS, the Employee and the Company desire to set forth in writing the
terms and conditions of the Employee's employment agreement with the Company
from the date hereof;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Employment. Under and subject to the terms and conditions set forth
herein, the Company hereby agrees to employ, or to continue to employ, the
Employee during the Term (as defined in Section 6 hereof) as its President and
Chief Executive Officer and/or in such other senior executive management
position(s) with the Company, or any parent or subsidiary of the Company, as the
Board of Directors of the Company (the "Board") may determine from time to
time, and the Employee hereby accepts such employment.
2. Duties. The Employee agrees, during the Term and any extension of
the Term, faithfully to perform for the Company, and any subsidiary or parent
of the Company, the duties presently being performed by the Employee for the
Company, and/or such other duties as may be assigned to him from time to time
by the Company; to devote his entire business time, attention and energies
exclusively to such employment; and to conform to the rules, regulations,
instructions, personnel practices and policies of the Company and its
subsidiaries, as existing and amended from time to time. The Employee may be
required to relocate his principal residence only to an area in which the
Company or a subsidiary of the Company has or determines to have significant
operations.
3. Compensation.
(a) Base Compensation. The Company shall pay the Employee during
the Term an annual base salary of not less than $425,000, payable no less often
than monthly, in equal installments.
(b) Incentive Compensation. In addition to payments of his annual
base salary made pursuant to Section 3 (a) hereof, during the term hereof, the
Employee shall also participate in the Company's Cash Incentive Compensation
Plan (the "Incentive Plan") with a target incentive award of fifty-four percent
(54%) of the annual base salary. The target award amount shall be payable upon
achievement of the corporate pre-tax profit plan approved by the Board for the
applicable fiscal year and the satisfaction of such
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other conditions as may be established by the Board under the terms of the
Incentive Plan. The actual incentive award may be above or below the target
amount based on relative achievement of the corporate pre-tax profit plan, with
a threshold award of thirteen and one-half percent (13.5%) of base salary
corresponding to eighty percent (80%) achievement of the profit plan and a
maximum award of ninety-four and one-half percent (94.5%) of base salary
corresponding to one hundred twenty percent (120%) or higher achievement of the
profit.
(c) Stock Options. On August 29, 1988, the Board determined to grant
to the Employee, effective upon the commencement of his employment with the
Company, the following options to purchase shares of the Company's Common
Stock, par value $.50 per share (the "Common Stock"):
(1) a non-qualified option to purchase up to 25,000 shares of the
Common Stock for a consideration of $.O1 per share plus
services to be rendered by the Employee pursuant hereto;
(2) a non-qualified option to purchase up to 25,000 shares of the
Common Stock for a consideration of $5.00 per share;
(3) an incentive stock option under the Company's Amended and
Restated 1985 Stock option Plan (the "Plan") to purchase up to
25,000 shares of the common Stock for a consideration per
share equal to the closing sale price of the Common Stock on
the NASDAQ national market system on the date immediately
preceding the date of the commencement of the Employee's
employment; and
(4) an incentive stock option under the plan to purchase up to
25,000 shares of the Common Stock for a consideration per
share equal to the closing sale price of the Common Stock on
the NASDAQ national market system on the date immediately
preceding the date of the commencement of the Employee's
employment.
Each of the options described above in subparagraphs (1) through (3),
inclusive, expires ten (10) years from the date of grant and provides for
vesting in equal installments over a four-year period from the date of grant
(i.e., 25 % of the shares subject to each such option vested after each of the
first and second anniversaries of the date of grant, another 25% will vest
after the third anniversary and so on). The option described in subparagraph
(4) expires ten (10) years from the date of grant and
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provides for vesting in equal installments over a four-year period from the
date the Board elects the Employee to the office of Chief Executive Officer of
the Company (i.e., 25% of the shares subject to such option vested after the
first anniversary of such date, another 25% will vest after the second
anniversary and so on). The parties hereto hereby agree and acknowledge that
such election occurred on March 22, 1990.
The Company will reimburse (the "Reimbursement") the Employee for federal
and state income taxes, if any, payable by the Employee with respect to the
exercise of the options described above in subparagraphs (1) and (2), whether
the Employee elects under Section 83(b) of the Internal Revenue Code of 1986,
as amended, to have the shares of the Common Stock subject to the exercised
option valued (for purposes of determining the income received by the Employee
upon the exercise of such option) on the date of such exercise or chooses not
to make such election (in which case such shares will be valued, for such
purposes, on the date on which the restrictions on transfer of such shares
under Section 16(b) of the Securities Exchange Act of 1934 lapse). The
Reimbursement shall be paid to the Employee no later than April 15 of the year
following the year in which the Employee recognizes such income for tax
purposes and shall be computed on the basis of the marginal tax rates paid by
the Employee on such income. The Company shall not, however, have any
obligation to reimburse the Employee for the federal and state income tax
payable by the Employee with respect to income received by the Employee
pursuant to the Reimbursement.
4. Other Benefits.
(a) Fringe Benefits. The Employee shall be entitled to participate in
all benefit programs that the Company establishes and makes available to
management generally and in any event shall be entitled to receive benefits at
least substantially comparable to those provided pursuant to the present
practices of the Company and its subsidiaries.
(b) Paid Vacations. The Employee shall be entitled to paid vacation
of such duration and at such time or times as deemed reasonable by the Board.
5. Expenses. The Company shall reimburse the Employee for all reasonable
travel, entertainment and other business expenses incurred or paid by the
Employee in performing his duties under this Agreement upon presentation by the
Employee of expense statements or vouchers and such other supporting
information as the Company may from time to time request, provided, however,
that the amount available for such expenses may be fixed in advance by the
Board after consultation with the Employee. The Company shall also pay or
reimburse the reasonable relocation expenses of the Employee (consistent with
the present policy of the Company) in connection
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with a relocation of the Employee's principal residence outside of the greater
Boston area required by the Company pursuant to Section 2 hereof.
6. Effective Date and Term. This Agreement shall become effective as of
the date hereof and the Employee's employment under this Agreement shall
commence on such date and, unless sooner terminated as provided herein or
extended, shall continue for a term (the "Term") ending on April 1, 1995. The
Employee and the Company have obligations hereunder extending past the Term.
7. Noncompetition.
(a) During the Employee's employment under this Agreement or otherwise
and for a period of two years after the date of termination of such employment
(the "Termination Date") , the Employee will not, without the express written
consent of the Company, anywhere in the United States or any territory or
possession thereof or in any foreign country in which the Company was active as
of the Termination Date: (i) compete with the Company or any other entity
directly or indirectly controlled by the Company (each an "Affiliate"), in the
Company's Business (as defined in Section 7 (c) hereof); or (ii) otherwise
interfere with, disrupt or attempt to interfere with or disrupt the
relationship between the Company or an Affiliate and any person or business
that was a customer, supplier, lessor, licensor, manufacturer, contractor,
designer or employee of the Company or such Affiliate on the Termination Date
or within two years prior to the Termination Date.
(b) The term "compete" as used in this Section 7 means directly or
indirectly, or by association with any entity or business, either as a
proprietor, partner, employee, agent, consultant, director, officer,
shareholder (provided that the Employee may make passive investments in
competitive enterprises the shares of which are listed on a national securities
exchange if the Employee at no time owns directly or indirectly more than 2% of
the outstanding equity ownership of such enterprise) or in any other capacity
or manner (i) to solicit, hire, purchase from, sell to, rent from, or otherwise
conduct business related to the Company's Business with any party that is a
customer or supplier of the Company or an Affiliate or (ii) operate any retail
store or leased footwear department ("Leased Department") which sells products
related to the Company's Business (as defined in Section 7(c) hereof).
(c) The term "Company's Business" as used in this Section 7 means the
operation of any of the following specialty retail businesses, as a principal
business unit, either alone or in combination: (i) Leased Departments in
discount or mass
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merchandising department stores; (ii) retail stores offering discount or "off
price" women's footwear; (iii) retail stores offering discount or "off price"
family footwear; (iv) retail stores offering casual clothing for "Big and Tall"
men; or (v) retail stores offering primarily work related clothing and uniforms
for medical and laboratory purposes or the mail order catalog sales thereof.
The term shall also include any additional specialty retail businesses which
the Company may acquire subsequent to the date hereof and which are operated as
principal business units of the Company on the Termination Date.
(d) The term "supplier" as used in this Section 7 shall mean any party
or affiliate of a party from which, on the Termination Date or within two years
prior to the Termination Date, the Company or an Affiliate purchased products
sold by the Company or an Affiliate or was in contact or actively planning to
contact in connection with the purchase of products sold by the Company or an
Affiliate on or before the Termination Date or which the Company or an
Affiliate was contemplating the sale of at some time after the Termination
Date.
(e) The term "customer" as used in this Section 7 shall mean any party
or affiliate of a party, that on the Termination Date or within two years prior
to the Termination Date, was a wholesale vendee or prospective wholesale vendee
of the Company or an Affiliate or in connection with whose business the Company
or an Affiliate operated a Leased Department, a retail store for the sale of
discount or "off price" women's footwear, discount or "off price" family
footwear, casual clothing for "Big and Tall" men, work related clothing and
uniforms for medical and laboratory purposes or any other specialty retail
business which the Company operated as a principal business unit on the
Termination Date, had contacted in connection with the potential operation of
such businesses within two years prior to the Termination Date or which the
Company or an Affiliate was actively planning to contact in connection with the
potential operation of any such businesses on the Termination Date.
8. Confidential Information. The Employee will never use for his own
advantage or disclose any proprietary or confidential information relating to
the business operations or properties of the Company, any Affiliate or any of
their respective customers, suppliers, landlords, licensors or licensees. Upon
termination of the Employee's employment, the Employee will surrender and
deliver to the Company all documents and information of every kind relating to
or connected with the Company and Affiliates and their respective businesses,
customers, suppliers, landlords, licensors and licensees.
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9. Termination.
(a) Death. In any event of the death of the Employee during the Term,
his employment shall terminate and the Company shall pay to the Employee's
surviving spouse, or to the Employee's estate if there is no surviving spouse,
(i) the Employee's base salary until the end of the fiscal year in which his
death occurs, and (ii) amounts under the Incentive Plan, if any, payable with
respect to the fiscal year in which his death occurs which otherwise would have
been paid to the Employee on the basis of the results for such fiscal year,
prorated to the date of his death. Upon the death of the Employee, the rights
of the Employee's surviving spouse or estate hereunder, as the case may be,
shall be limited solely to the benefits set forth in this Section 9(a).
(b) Disability. In the event that the Employee shall become
disabled (as hereinafter defined) during the Term, the Company shall have the
right to terminate the Employee's employment upon written notice, provided,
however, that in such event the Company shall (i) continue to pay the
Employee's base salary until the end of the fiscal year in which such
termination occurs, and (ii) pay to the Employee amounts under the Incentive
Plan, if any, which otherwise would have been paid to the Employee on the basis
of the results for the fiscal year in which such termination occurs, prorated
to the date of such termination. For purposes of this Agreement, the Employee
shall be considered disabled on the date when any physical or mental illness or
other incapacity shall, in the judgment of a majority of the members (other
than the Employee) of the Board, after consulting with or being advised by one
or more physicians (it being understood that one of such physicians may be the
Employee's physician but that the Board shall not be bound by his views), have
prevented the performance in a manner reasonably satisfactory to the Company of
the Employee's duties under this Agreement for a period of six consecutive
months.
(c) For Cause. The Company may by notice terminate the Employee's
employment at any time for cause, which shall mean (i) failure by the Employee
to cure a material breach of this Agreement within 15 days after written notice
thereof by the Company, (ii) the continuation after notice by the Company of
willful misconduct by the Employee in the performance of the Employee's duties
hereunder or (iii) the commission by the Employee of an act constituting a
felony. In such event all obligations of the Company hereunder shall
thereupon terminate, including the obligation to pay any amounts under the
Incentive Plan with respect to the fiscal year in which such termination
occurs, but the Employee shall be entitled to receive any accrued salary and
other amounts under the Incentive Plan accrued with respect to any prior fiscal
years.
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10. Approval of Board. The Company represents that this Agreement has
been duly approved by the Board and is in all respects valid and binding upon
the Company.
11. Key Person Insurance. The Employee agrees to take such actions as may
be reasonably required to permit the Company to maintain key person life
insurance on the Employee's life in such amounts and for such periods of time,
if any, as the Company deems appropriate, with all benefits being payable to
the Company. Upon payment by the Employee of the cash surrender value, if any,
of any such policy and any paid but unearned premiums for such policy, the
Company will assign such policy to the Employee upon termination (other than
because of the Employee's death) of the Employee's employment with the Company,
provided, however, that, in the event the Employee's employment is terminated
by reason of the disability of the Employee and the death of the Employee may
reasonably be expected within one year after such termination as a result of
such disability, the Company shall not be required to assign any such policy.
12. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been given
and received when actually delivered, one business day after dispatch by
telegraphic means, two business days after dispatch by recognized overnight
delivery service, or five days after mailing by certified or registered mail
with proper postage affixed, return receipt requested and addressed as follows
(or to such other address as a party entitled to receive notice hereunder may
have designated by notice pursuant to this Section 12):
(a) If to the Company:
J. Baker, Inc.
555 Turnpike Street
Canton, Massachusetts 02021
Attention: Chairman of the
Board of Directors
(b) If to the Employee:
Jerry M. Socol
190 Marlborough Street
Boston, Massachusetts 02116
13. Severability. If any provision of this Agreement or its application
to any person or circumstances is invalid or unenforceable, then the remainder
of this Agreement or the application of such provision to other persons or
circumstances
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shall not be affected thereby. Further, if any provision or application hereof
is invalid or unenforceable, then a suitable and equitable provision shall be
substituted therefor in order to carry out so far as may be valid or
enforceable the intent and purposes of the invalid and unenforceable provision.
14. Applicable Law. This Agreement shall be interpreted and construed in
accordance with, and shall be governed by, the laws of the Commonwealth of
Massachusetts without giving effect to the conflict of law provisions thereof.
15. Assignment. Neither of the parties hereto shall, without the written
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, provided, however, that in the event that the Company
sells all or substantially all of its assets the Company may assign its rights
and transfer its obligations hereunder to the purchaser of such assets. A
merger of the Company with or into another corporation shall be deemed not to
be an assignment of this Agreement, and, in any such event, this Agreement
shall inure to the benefit of and be binding upon the surviving corporation and
the Employee. Subject to the foregoing, this Agreement shall be binding upon,
and shall inure to the benefit of, the parties and their respective successors,
heirs, administrators, executors, personal representatives and assigns.
16. Headings. This section and paragraph headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
17. Remedies. It is specifically understood and agreed that any breach of
the provisions of Section 7 or 8 of this Agreement is likely to result in
irreparable injury to the Company, that damages at law will be inadequate
remedy for such breach, and that in addition to any other remedy it may have,
the Company shall be entitled to enforce the specific performance of said
Sections and to seek both temporary and permanent injunctive relief therefor
without the necessity of proving actual damages.
18. Waiver of Breach. Any waiver by either the Company or the Employee of
a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
19. Amendment of Agreement. This Agreement may be altered, amended or
modified, in whole or in part, only by a writing signed by both the Employee
and the Company.
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20. Integration. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter thereof and supersedes all prior
agreements with respect to such subject matter between the parties including
without limitation the Executive Employment Agreements dated as of September
26, 1988, March 22, 1990 and March 27, 1991 by and between the Employee and J.
Baker, Inc., a Massachusetts corporation as amended by an amendment dated March
27, 1992.
Intending to be legally bound, the Company and the Employee have signed
this Agreement as if under seal as of the date set forth at the head of the
first page.
J. BAKER, INC.
/s/ Sherman N. Baker
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Sherman N. Baker
Chairman of the Board
/s/ Jerry M. Socol
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Jerry M. Socol
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