EXHIBIT 10.65
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective the
27th day of February, 1995 by and between BRENDLE'S INCORPORATED,
a North Carolina corporation ("Brendle's"), and JOSEPH M. McLEISH,
(the "Executive").
W I T N E S S E T H:
WHEREAS, Executive was employed by Brendle's on February 27,
1995, and the parties desire to cause the terms and conditions of
such employment relationship to be reduced to writing as set forth
herein;
WHEREAS, Executive is a very valued Executive employee of
Brendle's, and the parties desire to continue such employment in
accordance with the terms and conditions set forth in this
Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto agree as
follows:
1. Employment and Duties. Brendle's hereby employs
Executive on the terms and conditions contained herein and
Executive accepts such employment with Brendle's in the office and
capacity of President and Chief Executive Officer, or in such other
position of the same or greater stature as Brendle's may direct or
desire, subject at all times to the control of the Brendle's Board
of Directors (the "Board"). Executive shall perform such other or
additional duties as shall reasonably be assigned to him from time
to time by the Board, which duties shall be those customarily
performed by a corporate officer having executive responsibilities
in a business similar to Brendle's.
2. Extent of Services. Executive shall devote his entire
attention and energy to the business and affairs of Brendle's on a
full-time basis and shall not be engaged in any other business
activity, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage, unless the Board
otherwise consents. This provision shall not be construed as
preventing Executive from investing his assets in such form or
manner as will not require any services on the part of Executive in
the operation of the affairs of the companies in which such
investments are made. Executive shall use his best efforts, skills
and abilities to promote the interest of Brendle's, and, subject to
Paragraph 1, will perform such duties as are assigned to him by the
Board. Full-time, as used above, shall mean a minimum forty (40)
hour work week.
3. Term. The term of this Agreement shall commence on
February 27, 1995, and shall thereafter continue until terminated
as herein provided. Unless this Agreement is earlier terminated in
accordance with the terms hereof, the term of this Agreement shall
be renewed for new two (2) year periods on January 1st of each
year, and shall be automatically extended by one additional
calendar quarter successively on the first day of each calendar
quarter thereafter. The term of this Agreement shall be subject to
the following conditions and limitations:
a. Termination by Brendle's for Cause or Material
Breach:
(1) Brendle's may terminate this Agreement at any
time for Cause or Material Breach hereof by Executive.
As used herein, "Cause" is defined to mean:
(i) any act of fraud, misappropriation,
embezzlement or like act of dishonesty;,
(ii) conviction of a felony involving moral
turpitude;
(iii) material failure to perform the services
and duties described herein (except in the case of
death or disability), material violation of any of
the provisions set forth herein, or material breach
of any fiduciary duty to Brendle's, if the material
failure, violation or breach unreasonably continues
after thirty (30) days written notice thereof is
given to Executive by Brendle's;
(iv) if Executive is guilty of gross
misconduct, misfeasance or malfeasance in
connection with his employment hereunder which
shall include, but not be limited to, excessive
absences from work, failure to follow reasonable
directives from the Board, neglect of duty,
negligence, disloyalty, dishonesty, intemperance,
immorality, disobedience of Brendle's rules,
disrespect, unnecessarily endangering, damaging or
destroying life or property, or similar conduct
injurious to Brendle's; or
(v) other behavior which adversely reflects
on the reputation of Brendle's such as substance
abuse, public intoxication, etc.
As used herein "Material Breach" is defined to
mean a material violation of any of the provisions and
conditions set forth herein. In the event of termination
for Cause or Material Breach by Executive, Brendle's
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shall continue to pay Executive his then current salary
for thirty (30) days following the date of the delivery
of the notice of termination, which date shall be for all
purposes of this Agreement, the date of termination of
his employment.
b. Disability: In the event that Executive becomes
unable to perform any essential function of his job duties
with or without reasonable accommodation, Brendle's may
terminate his employment by furnishing him notice of such
termination, and Brendle's shall be obligated to pay Executive
his then existing salary on a monthly basis for a period of
six (6) months from the date that the Executive becomes
disabled as defined herein.
c. Death: If Executive shall die during the term of
this Agreement, thereupon his employment shall terminate, and
Brendle's shall pay to his estate his then current salary on
a monthly basis for a period of three (3) months commencing on
the first of the month following the date of his death and
shall also pay a pro-rated bonus in accordance with paragraph
4(b) below based on the performance of the Company for that
portion of the fiscal year preceding the date of death of
Executive.
d. Early Retirement: Brendle's currently does not have
an early retirement policy, and, therefore, no rights to early
retirement shall obtain for Executive.
e. Severance Payment: In the event Brendle's
terminates or attempts to terminate this Agreement or
Executive's employment with Brendle's or its subsidiaries is
terminated for any reason other than (1) Executive voluntarily
terminating his employment, or (2) as specifically permitted
or delineated in this Agreement, Executive shall be entitled
to a lump sum severance payment equal to two-years' salary as
then in effect. The lump sum payment shall be made within
sixty (60) days of said termination of employment.
Notwithstanding the foregoing, in the event the Company
consummates a transaction (whether by sale, merger or other
business combination) which results in a change in the
majority control of the Company, Executive shall have the
right, at his sole option, to continue his employment or to
terminate this Agreement and receive a lump sum severance
payment equal to two (2) years salary as in effect as of the
date of the consummation of the transaction giving rise to the
change in control. Any such election shall be made by
Executive by giving written notice to the Board of Directors,
at least thirty (30) days in advance of his anticipated
termination date.
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4. Salary, Other Compensation and Benefits. As compensation
for the services to be rendered by Executive to Brendle's pursuant
to this Agreement, Executive shall be paid the following
compensation and shall receive the following benefits:
a. Salary: Executive's annual salary shall be ONE
HUNDRED SEVENTY-FIVE THOUSAND AND 00/100 DOLLARS
($175,000.00), subject to change from time to time as approved
by the Board. Such salary shall be payable in accordance with
Brendle's regular payroll procedures. In the event that
Brendle's adopts a plan whereby all of its executive officers
are required to take pro rata reductions in annual salary,
Executive's annual salary shall be reduced in accordance with
such plan. In the event Executive receives any periodic
payments representing lost compensation under any health,
disability, accident and/or salary continuation insurance
policy, the premiums for which have been paid by Brendle's,
the amount of salary that Executive would be entitled to
receive from Brendle's shall be decreased by the amount of
such payments.
b. Bonus: In addition to Executive's salary as
described above, for each of Brendle's fiscal years during the
term of this Agreement, Executive shall receive incentive
compensation based upon the formula set forth on "Exhibit A"
attached hereto and made a part hereof. Such bonus shall be
paid in cash in a lump sum no later than thirty (30) days
following the determination of the incentive compensation
amount. The formula incentive compensation amount as
determined pursuant to Exhibit A shall be subject to review
and modification for all fiscal years subsequent to the year
in which this Employment Agreement is entered. The Board of
Directors may make such modifications as they deem appropriate
and such modifications shall be in their sole discretion.
c. Relocation Expenses: Executive shall be entitled to
relocation expenses in an amount not to exceed $10,000.00.
Alternatively, the Company may pay a monthly amount to
Executive as a rental allowance which amount shall not exceed
$600.00 per month for a period of twelve (12) months.
d. Automobile Expenses: Executive shall be entitled to
receive an amount equal to $15,300.00, which shall be paid
within in thirty (30) days of the date of execution of this
Employment Agreement for use by Executive of his personal
automobile in furtherance of his duties as President and Chief
Executive Officer of Brendle's. There shall be no future
amounts paid for such use and Brendle's shall not provide a
Company car to Executive, however, Executive shall be entitled
to reimbursement at the rate of 27(cents) per mile (subject to
periodic adjustment by the Board) for automobile expenses
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incurred in the performance of his duties as President and
Chief Executive Officer.
e. Life Insurance: Brendle's shall provide Executive
with a policy of life insurance which provides for $500,000 of
coverage. Executive shall submit to any medical or other
examinations and execute and deliver any application or other
instrument reasonably necessary to effectuate the procurement
of such insurance.
f. Expenses: Executive shall be entitled to
reimbursement for all reasonable travel and other business
expenses incurred by him in the performance of services under
this Agreement upon presentation of expense statements or
vouchers and such other supporting information as Brendle's
may reasonably request.
g. Other Compensation: In the discretion of the Board,
Executive may be entitled to receive additional compensation
in excess of Executive's salary. Subject to the terms of any
of Brendle's employee benefit plans, agreements and
arrangements, Executive shall be entitled to participate in
the major medical, hospitalization, vacation, sick leave or
disability, pension or retirement, profit-sharing, stock-based
incentive and other fringe benefit plans maintained by
Brendle's for the benefit of employees of Brendle's in like
positions of responsibility as Executive.
5. Covenant Not to Compete:
a. Covenant: During the term of this Agreement and for
a two year period after the Executive's employment with the
Corporation has been terminated by either party, the Executive
will not directly or indirectly:
(1) enter into or attempt to enter into the
"Restricted Business" (as defined below) in the states of
North Carolina or South Carolina or within a fifty (50)
mile radius of any Brendle's store location existing as
of the effective date hereof or the date of termination
of employment in any state other than North Carolina or
South Carolina;
(2) induce or attempt to persuade any former,
current or future employee, agent, manager, consultant,
director, or other participant in the Corporation's
business to terminate such employment or other
relationship in order to enter into any relationship with
the Executive, any business organization in which the
Executive is a participant in any capacity whatsoever, or
any other business organization in competition with the
Corporation's business; or
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(3) use contracts, proprietary information, trade
secrets, confidential information, customer lists,
mailing lists, goodwill, or other intangible property
used or useful in connection with the Corporation's
business.
b. Indirect Activity: The term "indirectly," as used
in this paragraph 5, includes acting as a paid or unpaid
director, officer, agent, representative, employee of, or
consultant to any enterprise, or acting as a proprietor of an
enterprise, or holding any direct or indirect participation in
any enterprise as an owner, partner, limited partner, joint
venturer, shareholder, or creditor.
c. Restricted Business: The term "Restricted Business"
means the retail sale of general hard goods merchandise
and/or catalogue-showroom sales of hard good merchandise. In
addition, the Executive may own not more than five percent of
the outstanding equity securities of a corporation that is
engaged in the Restricted Business if the equity securities
are listed for trading on a national stock exchange or are
registered under the Securities Exchange Act of 1934.
6. Confidential Information and Discoveries: Executive
agrees that all information of a technical or business nature such
as know-how, trade secrets, secret business information, plans,
data, processes, techniques, customer information, inventions,
discoveries, formulae, patterns, devices, etc., except such
information and skills generally known in Brendle's trade and
business, information made public by Brendle's or generally of a
public nature, and knowledge of Executive not constituting a trade
secret (the "Confidential Information"), acquired by Executive in
the course of his employment by Brendle's, is a valuable business
property right of Brendle's. Executive agrees that such
Confidential Information, whether in written, verbal or model form,
shall not be disclosed to anyone outside the employment of
Brendle's without the express written authorization of Brendle's.
The Confidential Information shall include, without limitation,
vendor lists and records, customer lists, business policies,
business methods, financial information and any other similar
material of any kind relating to the business of Brendle's.
Any and all improvements, inventions, discoveries, formulae or
processes materially related to Brendle's business which Executive
may conceive or make during his regular working hours or otherwise
shall be the sole and exclusive property of Brendle's and Executive
will disclose the same to Brendle's and will, whenever requested by
Brendle's to do so (either during the term of this Agreement or
thereafter), execute and assign any and all applications,
assignments and/or other instruments and do all things which
Brendle's may deem necessary or appropriate in order to apply for,
obtain, maintain, enforce and defend patents, copyrights,
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trademarks or other forms of protection, or in order to assign and
convey or otherwise make available to Brendle's the sole and
exclusive right, title and interest in and to said improvements,
inventions, discoveries, formulae, processes, applications or
patents.
No provision in this Agreement is intended to require
assignment of any of Executive's rights in an invention if no
equipment, supplies, facilities or trade secret information of
Brendle's was used, the invention was developed entirely on
Executive's own time, the invention does not materially relate to
the business of Brendle's or to Brendle's actual or demonstrably
anticipated research or development, and does not result from any
work performed by Executive for Brendle's.
7. Enforcement: Both parties recognize that the services to
be rendered under this Agreement by Executive are special, unique
and of extraordinary character and that in the event of the breach
by Executive of any of the terms and conditions of this Agreement
to be performed by him, then Brendle's shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of
competent jurisdiction, either at law or in equity, to obtain
damages for any breach hereof, or to enjoin Executive from
performing acts prohibited hereby, but nothing herein contained
shall be construed to prevent such other remedy in the courts as
Brendle's may elect to invoke.
8. Return of Documents and Equipment: Upon the termination
of this Agreement, Executive shall forthwith return and deliver to
Brendle's and shall not retain any original or copies of any books,
papers, price lists or vendor contracts, bids or customer lists,
files, books of account, notebooks and other documents, data
relating to the performance of services rendered by Executive
hereunder or any equipment, all of which materials are hereby
agreed to be the property of Brendle's.
9. Resignation upon Termination: In the event of
termination of this Agreement other than by death, Executive hereby
agrees to resign from all positions held with Brendle's, including
without limitation, any position as a director, officer, agent,
trustee or consultant of Brendle's or any affiliate of Brendle's.
10. Miscellaneous:
a. Notices: Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing
and if sent by registered or certified mail to Executive or
Brendle's at the address set forth below their signatures at
the end of this Agreement or to such other address as they
shall notify each other in writing.
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b. Assignment: This Agreement shall be binding upon
and inure to the benefit of Brendle's and its successors and
assigns and Executive and his personal representatives, heirs,
legatees and beneficiaries, but shall not be assignable by
Executive.
c. Applicable Law: This Agreement shall be construed
in accordance with the laws of the State of North Carolina in
every respect, including without limitation, validity,
interpretation and performance.
d. Headings: Section headings and numbers herein are
included for convenience of reference only and this Agreement
is not to be construed with reference thereto. If there be
any conflict between such numbers and headings and the text
hereof, the text shall control.
e. Severability: If for any reason any portion of this
Agreement shall be held invalid or unenforceable, it is agreed
that the same shall not affect the validity or enforceability
of the remainder hereof.
f. Entire Agreement: This Agreement contains the
entire agreement of the parties with respect to its subject
matter and supersedes all previous agreements between the
parties. No director, officer, employee or representative of
Brendle's has any authority to make any representations or
promises in connection with this Agreement or the subject
matter hereof that is not contained herein, and Executive
represents and warrants that he has not executed this
Agreement in reliance upon any such representation or promise.
No modification of this Agreement shall be valid unless made
in writing and signed by the parties hereto.
g. Waiver of Breach: The waiver by a party hereto of
a breach of any provision of this Agreement by the other party
hereto shall not operate or be construed as a waiver of any
subsequent breach by such party.
h. Counterparts: This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one
agreement.
i. Implied Terms: The terms, conditions, obligations
and duties expressed in this Agreement are in addition to any
duties and obligations implied in law to an employment
relationship except where any expressed condition is contrary
to the implied condition and in which case, the express
condition will apply and control.
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j. Effective Date: For all purposes, this Agreement
shall be effective as of February 27, 1995.
IN WITNESS WHEREOF, Brendle's has caused this Agreement to be
executed by its duly authorized officer and Executive has signed
this Agreement all on the day and year first above written.
BRENDLE'S INCORPORATED EXECUTIVE:
By: By: (Signature of Joseph M. McLeish appears here) (SEAL)
(Signature of David R. Renegar V.P. appears here) Joseph M. McLeish
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EXHIBIT A
Executive shall be entitled to incentive compensation based on
the formula set forth below. This formula shall be subject to
review and modification annually by the Board of Directors.
Executive shall be entitled to incentive compensation for the
fiscal year ending February 2, 1996 ("Fiscal 1996") in an amount
which shall not be less than $25,000 nor more than $75,000 upon the
achievement of "planned profitability." Planned profitability
shall mean for Fiscal 1996 earnings before interest, depreciation
and amortization of $2,300,000 ("EBIDA Earnings"). Upon
determination by the Company's accountants of EBIDA Earnings of
$2,300,000 for Fiscal 1996, the Executive shall be entitled to
incentive compensation in the amount of $25,000. If the
determination of EBIDA Earnings is equal to or greater than Four
Million and 00/100 Dollars ($4,000,000.00), for Fiscal 1996, then
Executive shall be entitled to incentive compensation in the amount
of Seventy-Five Thousand and 00/100 Dollars ($75,000.00). If the
determination of EBIDA Earnings for Fiscal 1996 is greater than
$2,300,000 but less than Four Million and 00/100 Dollars
($4,000,000.00) then Executive shall be entitled to incentive
compensation in a pro rata amount between Twenty-five Thousand and
00/100 ($25,000.00) and Seventy-Five Thousand and 00/100 Dollars
($75,000.00) based on the relation to the amount of EBIDA Earnings
achieved between $2,300,000 and Four Million and 00/100 Dollars
($4,000,000.00).
Each year hereafter, the Board shall set the level of planned
profitability for the fiscal year, which will be reduced to
writing, attached hereto, and shall govern the Executive's
incentive compensation as hereinabove outlined.