EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 5, 1996, between FRANK TWORECKE
("Executive") and JOS. A. BANK CLOTHIERS, INC. ("Employer").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment of Executive
Employer hereby agrees to employ Executive, and Executive hereby agrees to
be and remain in the employ of Employer, upon the terms and conditions
hereinafter set forth. The Agreement is a contract for personal services of
Executive and services pursuant hereto may only be performed by Executive.
2. Employment Period
The term of Executive's employment under this Agreement (the "Employment
Period") shall commence as of February 5, 1996 and shall, subject to earlier
termination as provided in Section 5, continue for a period of three years after
commencement and be automatically renewed thereafter for successive one-year
periods unless, at least 180 days before the end of the initial three-year
period or any subsequent one-year period, either party gives notice to the other
of his or its desire to terminate the Employment Period, in which case the
Employment Period shall terminate as of the end of such period.
3. Duties and Responsibilities
3.1 General. During the Employment Period, Executive (i) shall have the
title of Executive Vice President and Chief Merchandising Officer and (ii) shall
devote substantially all of his business time and expend his best efforts,
energies and skills to the business of the Company. The preceding sentence shall
not be construed to prohibit Executive from continuing to devote more than an
insignificant amount of time, in accordance with his past practice, to
management of his investments, serving on Boards of Directors and participation
in civic and philanthropic activities.
Executive shall perform such duties, consistent with his status as
Executive Vice President and Chief Merchandising Officer of Employer, as he may
be assigned from time to time by Employer's Chief Executive Officer (the "Chief
Executive Officer") or Board of Directors (the "Board of Directors"). Executive
shall have such authority, discretion, power and responsibility, and shall be
entitled to such secretarial and administrative assistance and other facilities
and conditions of employment, as are customary or appropriate to his position.
Upon request of the Board of Directors, Executive shall also serve without
additional compensation as a director of the Company and any of its
subsidiaries. For all purposes of this Agreement, the term "Company" means
Employer and all corporations, associations, companies, partnership, firms and
other enterprises controlled by or under common control with Employer.
3.2 Location of Executive Offices. The Company will maintain its principal
executive offices at a location in any state on the eastern coast of the United
States from and including South Carolina to and including New York. Executive
shall not be required to perform services for the Company at any other location,
except for services rendered in connection with required travel on the Company's
business.
4. Compensation and Related Matters
4.1 Base Salary. Employer shall pay to Executive during the Employment
Period an annual base salary (the "Base Salary") of $200,000 for the first year
of the Employment Period ("Year 1"); $400,000 for the second year of the
Employment Period; and $400,000 for the third year of the Employment Period. The
Base Salary for each year shall be payable in installments in accordance with
the Company's policy on payment of executives in effect from time to time.
4.2 Annual Bonus. For fiscal year 1996 (ending February 4, 1997) and for
each fiscal year that begins during the Employment Period (each such fiscal
year, a "Bonus Year"), Executive shall be entitled to receive a bonus (each, a
"Bonus") as hereinafter set forth. The Bonus for Bonus Year 1996 shall be
$175,000, payable on or before February 1, 1997. For Bonus Year 1997 (ending
January 31, 1998), Executive shall be entitled to receive a Bonus of up to 50%
of Base Salary based upon the attainment of quantitative and qualitative
performance goals established by the Compensation Committee of the Board of
Directors (the "Committee") for such Bonus Year in consultation with Executive,
such performance goals (the "Performance Goals"). For Bonus Year 1998 (ending
January 30, 1999), and for each Bonus Year thereinafter, Executive shall be
entitled to receive a Bonus of up to 75% of Base Salary based upon attainment of
the Performance Goals for such Bonus Year. The relationship between the size of
each Bonus and degree of attainment of performance objectives shall be
discretionary with the Committee. The Performance Goals for each Bonus Year
shall be established as soon as possible following the beginning of such Bonus
Year. The Bonus earned for any Bonus Year shall be payable promptly following
the determination thereof, but in no event later than 90 days following the end
of each Bonus Year. The Bonus payable for the Bonus Year in which the Employment
Period terminates shall equal the Bonus that would have been paid had the
Employment Period not so terminate, multiplied by a fraction, the numerator of
which shall be the number of days of the Employment Period within the Bonus Year
and the denominator of which shall be 365.
4.3 Housing - The Ohio House. Executive is the owner of a house located in
Cincinnati, Ohio (the "Ohio House"). Executive shall use reasonable efforts to
sell the Ohio House for the fair market value thereof. Executive shall not
accept an offer to purchase the Ohio House for less than the fair market value
thereof without the consent of the Company, which consent shall not be
unreasonably withheld. Upon settlement of the Ohio House, the Company shall
reimburse Executive for (a) the Deficiency (as hereinafter defined), but not
more than $100,000 and (b) the reasonable costs and expenses incurred by
Executive in connection with the sale and settlement of the Ohio House, but not
more than $30,000. For the purposes hereof, the "Deficiency" shall mean the
difference (but not less than zero) obtained by subtracting the gross selling
price of the Ohio House from $550,000.00 (the purchase price paid by Executive
for the Ohio House plus the cost of capital improvements).
4.4 Housing - The Mortgage Loan. The Company shall loan to Executive the
sum of $200,000 (the "Mortgage Loan"), repayable over ten years (or less) as
hereinafter set forth, to assist with the purchase of a house to be selected or
built by Executive (the "New House"). The Mortgage Loan shall be evidenced by a
promissory note (the "Note") and secured by, at Employer's option, a mortgage or
deed of trust (the "Mortgage"). The Mortgage Loan shall be funded (a) at
settlement of the New House or (b) if Executive shall elect to build the New
House and purchase the land therefor separately, at settlement of said land;
provided, however, that Employer shall not be responsible for funding more than
80% of the cost of said land. The difference between $200,000 and the amount
funded for said land shall be funded as mutually agreed upon by Employer and
Executive, but not later than settlement on the completed New House. The
Mortgage shall secure no less than a second lien on the New House. The Mortgage
Loan shall bear interest at the applicable "Federal Rate" (as hereinafter
defined) in effect on the date of the Mortgage Loan. For the purposes hereof,
the "Federal Rate" shall mean that rate of interest, determined by Employer's
auditors in accordance with Internal Revenue Service regulations, necessary to
prevent interest on the Mortgage Loan from being imputed to Executive as income
and to Employer as expense. Interest only shall be due and payable on the
Mortgage Loan for the first five years thereof. Thereafter, the Mortgage Loan
shall be repayable in sixty, equal payments of principal, plus accrued and
unpaid interest. All payments shall be due on the first of each month, with
interest payable in arrears. Notwithstanding anything to the contrary contained
herein or in the Note or Mortgage, Executive shall not be required to make the
principal and/or interest payments otherwise due during the Employment Period
and the Employer shall credit the Mortgage Loan account as if such payments had
been timely made. Amounts so credited shall be deemed forgiven and Executive
shall not be liable for repayment thereof. In the event (a) Executive shall
remain in the employ of Employer for at least 10 consecutive years; (b) Employer
shall terminate this Agreement without cause (Section 5.1); (c) Executive
shall terminate this Agreement for good reason (Section 5.3); (d) this Agreement
shall terminate or be terminated as a result of the death (Section 5.5) or
disability (Section 5.4) of Executive; (e) Employer (or any trustee of Employer)
shall reject this Agreement pursuant to powers granted under the United States
Bankruptcy Code (11 U.S.C. ss.ss. 101 et seq.), or any successor statute
thereto, and either (i) Employer and Executive, each acting in his/its sole
and absolute subjective discretion, shall fail to agree upon terms and
conditions for Executive's continued employment with Employer or (ii)
Executive, in his sole and absolute subjective discretion, shall fail to accept,
and thereafter Employer shall fail to withdraw its demand for, any proposed
revision in the terms and conditions of the Mortgage Loan; or (f) Employer shall
give notice of termination pursuant to Section 2 of this Agreement, then, and
in any of such events, the Mortgage Loan, and all interest due thereon, shall
be deemed paid in full. In the event (x) Executive shall terminate this
Agreement without cause (Section 5.1); (y) Executive shall give notice of
termination pursuant to Section 2; or (z) Employer shall terminate this
Agreement for cause (Section 5.2), Executive shall pay to Employer the unpaid
principal balance and all accrued interest on the Mortgage Loan. Upon payment
or deemed payment of the Mortgage Loan, and all interest due thereon, the Note
shall be canceled and returned to Executive and the Mortgage shall be released
of record. In addition to the Mortgage Loan, Employer shall reimburse Executive
for the reasonable costs and expenses incurred by Executive in connection
with the settlement of the New House, but not more than $30,000.
4.5 Life Insurance. Employer shall maintain in effect at all times during
the Employment Period, at Employer's expense, a policy of term life insurance,
or such other type of policy as Executive shall request provided that the cost
to Employer thereof is approximately the same as the cost of such term policy,
on the life of Executive in the amount of not less than $1,000,000 naming such
person as Executive shall designate from time to time as the owner and
beneficiary thereof. Executive agrees that Employer shall have the right to
obtain other life insurance on Executive's life, at Employer's sole expense and
with Employer or an affiliate thereof as the sole beneficiary thereof. Employer
shall also have the right, at its sole cost, to increase the amount of the
aforesaid $1,000,000 policy and Executive shall execute such assignments or
other documents necessary or desirable to assign to Employer the proceeds of the
policy in excess of $1,000,000 . Executive shall (i) cooperate fully with
Employer in obtaining all such insurance, (ii) sign any necessary consents,
applications and other related forms or documents, and (iii) take any required
medical examinations. If such examination(s) shall disclose that Executive is
not eligible for "standard, non-smoking risk" pricing for term life insurance,
the amount of such insurance shall be reduced to an amount which is available
for a premium equal to the premium which would have been charged for $1,000,000
of term life insurance had Executive been so eligible. At Executive's option and
expense, any policy maintained by Employer under this Section 4.5 shall be
transferred to Executive upon the expiration or termination of the Employment
Period, unless such transfer is otherwise prohibited. After such transfer,
Employer shall have no further responsibility with respect to said policy.
4.6 Automobile. Throughout the Employment Period, Employer shall provide to
Executive, at Employer's expense, an automobile in accordance with Employer's
policy in effect from time to time for the leasing of automobiles for use by
Employer's senior management. Employer shall also be responsible for all
expenses of use and operation of such automobile. At Executive's option,
Employer shall assume responsibility for Executive's existing car lease
payments, provided that such payments shall not exceed $800 per month. Upon
termination or expiration of the Employment Period, or upon expiration of any
automobile lease entered into by Employer in satisfaction of its obligations
under this Section 4.6, Executive shall have the right and option to assume the
lease on his then-current car and to exercise any buy-out option contained in
such lease.
4.7 Other Benefits. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such fringe benefits as are, or are from time to time
hereafter, generally provided by Employer to Employer's senior management
employees or other employees (other than those provided under or pursuant to
separately negotiated individual employment agreement or arrangements) under
any pension or retirement plan, disability plan or insurance, group life
insurance, medical and dental insurance, travel accident insurance, stock
option, phantom stock or other similar plan or program of Employer.
Executive's Base Salary shall (where applicable) constitute the compensation
on the basis of which the amount of Executive's benefits under any such plan
or program shall be fixed and determined. The first $200,000 (or such lesser
amount as may be necessary) of benefits under any life insurance policy
provided hereunder (but not the $1,000,000 policy under Section 4.5) shall
be assigned to Employer to pay the remaining principal balance of the Mortgage
Loan upon the death of Executive.
4.8 Expense Reimbursement. Employer shall reimburse Executive for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement upon his presentation, not less frequently than monthly, of
signed, itemized accounts of such expenditures, all in accordance with
Employer's procedures and policies as adopted and in effect from time to time
and applicable to its senior management employees. Without limiting the
generality of the foregoing, Employer shall pay for all of Executive's
reasonable travel expenses incurred in traveling from and to the Ohio House and,
prior to the earlier of settlement upon the New House or September 30, 1996, his
reasonable living expenses (not to exceed $5,000 per month) while the Executive
is residing in the Baltimore, Maryland area, including, without limitation,
hotel or other residential accommodation expenses and meals, all such amounts to
be treated as additional salary for all securities acts reporting purposes.
4.9 Tax Gross-up. In the event that any payments made by Employer to or on
behalf of Executive pursuant to the provisions of Section 4.3 through 4.8 hereof
(other than the Mortgage Loan or principal and interest forgiveness in
connection therewith) result in the payment of additional federal, state or
local income taxes by Executive, Employer shall pay to Executive the amount of
such additional taxes plus such additional amount as shall be necessary to hold
harmless Executive, as nearly as can be, from the obligation to pay such taxes
in respect of amounts payable pursuant to this Section 4.9.
4.10 Stock Options. On the date hereof, the Company shall grant to
Executive the right and option to purchase an aggregate of 60,000 shares (the
"Option Shares") of the Company's common stock, $.01 par value per share, which
option is intended, to the fullest extent permitted by law, to qualify as an
incentive stock option, as defined to Section 422 of the Internal Revenue Code
of 1986. The option to purchase one-half of the Option Shares shall be granted
pursuant to each of the Company's two option plans pursuant to the standard
agreements therefor, copies of which are attached hereto as Exhibits A and B,
respectively. The "Purchase Price" and "Closing Price" shall be determined with
reference to the date hereof in accordance with such agreements.
4.11 Vacations. Executive shall be entitled to 20 days of vacation during
each calendar year, which shall accrue in accordance with the Company's vacation
policy in effect from time to time for its senior executive officers, which
vacations shall be taken at such time or times as shall not unreasonably
interfere with Executive's performance of his duties under this Agreement. The
number of vacation days shall be prorated for any calendar year not wholly
within the Employment Period. Upon termination of Executive's employment
pursuant to Section 5 or non-renewal of the Employment Period pursuant to
Section 2, for any reason whatsoever, Employer shall pay Executive, in addition
to any termination compensation provided for under Section 6, all unused
vacation benefits, including any carry-over, due Executive as of the date of
termination, to be computed at the Executive's then current Base Salary rate.
5. Termination of Employment Period
5.1 Termination Without Cause. Employer or Executive may, by delivery of
not less than 60 days' notice to the other at any time during the Employment
Period, terminate the Employment Period without cause.
5.2 By Employer for Cause. Employer may, at any time during the Employment
Period by notice to Executive in accordance with and only after full compliance
with the procedure set forth herein terminate the Employment Period "for cause"
effective immediately. For the purposes hereof, "for cause" means:
(i) the conviction of Executive in a court of
competent jurisdiction of a crime
constituting a felony in such jurisdiction
involving money or other property of
Employer or any of its affiliates or any
other felony involving moral turpitude; or
(ii) the willful (a) commission of an act not
approved of or ratified by the Board of
Directors involving a series and material
conflict of interest or self-dealing
relating to any material aspects of Employer
or any such subsidiary or affiliate thereof;
or (b) commission of an act of fraud or
misrepresentation (including the omission of
material facts), provided that such acts
relate to the business of Employer and would
materially and negatively impact upon
Employer and its business; or (c) material
failure of Executive to obey directions of
the Board of Directors that are consistent
with Executive's status of Chief
Merchandising Officer; however, for the
purposes of this subsection (ii), the
refusal of Executive to comply with an order
or directive of anyone other than the
majority of the Board of Directors, or the
refusal of Executive to perform an act which
is contrary to his duties, responsibilities
and/or authority as Chief Merchandising
Officer or is unlawful shall not constitute
"for cause". In the event of an act or
omission as provided for in this subsection
5.2(ii), Employer shall provide Executive
with a written notice of intent to terminate
the Employment Period "for cause", setting
forth, with reasonable particularity, the
reasons and acts or omissions constituting
"cause" under this subsection, and shall
provide Executive with at least thirty (30)
calendar days after such notice to cure or
eliminate the problem or violation giving
rise to such cause or any longer period as
reasonably needed by Executive, provided
that it is susceptible to cure or
elimination and Executive is proceeding
diligently and in good faith to cure such
violation. In the event and only after the
Executive fails to cure the problem or
violation within the period provided for
herein, Employer may exercise its right to
terminate the Employment Period in
accordance with the procedure set forth
below.
Termination "for cause" shall be effected only if (A) Employer has
delivered to Executive a written notice of termination "for cause", setting
forth, with reasonable particularity, the reasons for such "for cause"
termination, and (B) has provided Executive with, on at least ten (10) business
days' prior written notice, in the case of a termination pursuant to subsection
5.2(ii) the opportunity, together with Executive's counsel, to be heard before
Employer's Board of Directors, said hearing to occur at such reasonable time and
place that is mutually convenient to Executive, his counsel, and Employer, and
(C) Employer's Board of Directors [after such notice and opportunity to be heard
has been provided to Executive in the case of a termination pursuant to
subsection 5.2(ii)], adopts a resolution concurred in by not less than majority
of all of the directors of Employer then in office, including at least
two-thirds of all of the directors who are not officers of Employer, that
Executive was guilty of conduct constituting "for cause" hereunder, which
conduct has not been cured (if applicable), and specifying the particulars
thereof in detail.
5.3 By Executive for Good Reason. Executive may, at any time during the
Employment Period by notice to Employer, terminate the Employment Period under
this Agreement "for good reason" effective immediately. For the purposes hereof,
"good reason" means (i) any material breach by Employer of any provision of this
Agreement which, if susceptible of being cured, is not cured within 30 days of
delivery of notice thereof to Employer by Executive or (ii) the occurrence of a
change in control (as hereinafter defined) of Employer provided that not more
than 90 days shall have elapsed subsequent to Executive's becoming aware of
the occurrence of the change in control. Without limitation of the generality
of the foregoing, each of the following shall be deemed to be a material
breach of this Agreement by Employer: (x) any failure timely to pay (or any
reduction in) compensation (including benefits) paid or payable to Executive
pursuant to the provisions of Section 4 hereof; (y) any reduction in the
duties, responsibilities or perquisites of Executive as provided in Section
3.1 hereof and (z) any transfer of the Company's principal executive offices
outside the geographic area described in Section 3.2 hereof or requirement that
Executive principally perform his duties outside such geographic area.
For purposes of this Agreement, a "change in control" of the Company shall
be deemed to have occurred if, as a result of a single transaction or a series
of transactions, (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company ( including any nominee corporation that holds
shares of the Company on behalf of the beneficial owners of such corporation),
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the Company's then
outstanding securities; or (B) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under any employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company
(including any nominee corporation that holds shares of the Company on behalf of
the beneficial owners of such corporation), in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities and there are
at least a majority of directors serving on the Board of Directors who were not
serving in such capacity as of the date hereof or who were not elected with the
consent of the Executive; or (C) the shareholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 70% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets;
provided, however, the change in ownership of the Company's securities resulting
from the initial public offering thereof shall not be deemed a "change in
control" for purposes of this Agreement.
5.4 Disability. During the Employment Period, if, as a result of physical
or mental incapacity or infirmity (excluding alcoholism or drug addiction),
Executive shall be unable to perform his material duties under this Agreement
for (i) a continuous period of at least 180 days, or (ii) periods aggregating at
least 270 days during any period of 12 consecutive months (each a "Disability
Period"), and at the end of the Disability Period there is no reasonable
probability that Executive can promptly resume his material duties hereunder
pursuant hereto, Executive shall be deemed disabled ("the Disability") and
Employer, by notice to Executive, shall have the right to terminate the
Employment Period for Disability at, as of or after the end of the Disability
Period. The existence of the Disability shall be determined by a reputable,
licensed physician mutually selected by Employer and Executive, whose
determination shall be final and binding on the parties, provided, that if
Employer and Executive cannot agree upon such physician, such physician shall be
designated by the then acting President of the Baltimore City Medical Society,
and if for any reason such President shall fail or refuse to designate such
physician, such physician shall, at the request of either party, be designated
by the American Arbitration Association. Executive shall cooperate in all
reasonable respects to enable an examination to be made by such physician.
5.5 Death. The Employment Period shall end on the date of Executive's
death.
6. Termination Compensation; Non-Compete
6.1 Termination Without Cause by Employer or for Good Reason by Executive.
If the Employment Period is terminated by Employer pursuant to the provisions of
Section 5.1 hereof or by Executive pursuant to the provisions of Section 5.3
hereof, Employer will pay to Executive (i) the greater of (a) the Base Salary
for the balance of the Employment Period, or (b) Base Salary for one (1) year,
calculated in each case, at the applicable Base Salary rate which would have
been in effect for each year during the balance of Employment Period, assuming
no termination, payable in equal installments at the times Base Salary would
have been paid had the Employment Period not been terminated; and (ii) on the
date due pursuant to the provisions of Section 4.2 hereof, the Bonus for the
then current Bonus Year prorated as provided in Section 4.2; provided, however,
in the event the Employment Period is terminated by Executive because of a
"change in control" pursuant to Section 5.3 (ii), then clause (i) of this
sentence shall be modified to read: "the Base Salary for the period which is the
greater of (a) eighteen (18) months or (b) the balance of the Employment Period
not to exceed twenty-four (24) months (calculated, in each case, at the
applicable Base Salary rate which would have been in effect for each year during
the balance of the Employment Period, assuming no termination) payable in equal
installments at the times Base Salary would have been paid had the Employment
Period not been terminated." All other benefits provided for in Sections 4.5,
4.6, 4.7, 4.8, 4.9 and 4.11 shall be continued at the expense of Employer for
the period that payments are required to be made pursuant to the preceding
provisions of this Section 6.1.
6.2 Certain Other Terminations. If the Employment Period is terminated by
Employer pursuant to the provisions of Section 5.2, by Executive pursuant to
Section 5.1 or by death pursuant to the provisions of Section 5.5, Employer
shall pay to Executive (i) Base Salary (calculated at its then current rate per
year) through the date of termination and (ii) in the case of termination by
death pursuant to the provisions of Section 5.5, when due pursuant to provisions
of Section 4.2 the Bonus for the Bonus Year in which the date of termination
occurred prorated as provided in said Section 4.2. Employer shall have no
obligation to continue any other benefits provided for in Section 4 past the
date of termination.
6.3 Termination for Disability. If the Employment Period is terminated by
Employer pursuant to the provisions of Section 5.4, Employer shall make all
payments and continue all benefits provided for in Section 6.1 for the balance
of the Employment Period (assuming no termination), provided, however, that such
payments shall be reduced by any amounts actually paid to Executive pursuant to
any disability insurance or other such similar program maintained by Employer.
6.4 Termination by Non-Renewal. In the event the Employment Period expires
because of an election by Employer to allow the Employment Period to expire at
the end of its then stated term as provided in Section 2 hereof, Employer shall
pay to Executive (i) Base Salary for the one year period following the date of
termination (calculated at its then current rate per year), payable in equal
installments at the times Base Salary would have been paid had the Employment
Period not been terminated and (ii) when due pursuant to the provisions of
Section 4.2 the Bonus for the Bonus Year in which the Employment Period expired
prorated as provided in said Section 4.2. Employer shall have no obligation to
continue any other benefits provided for in Section 4 past the date of
termination.
6.5 Tax Grossup. [INTENTIONALLY DELETED.]
6.6 No Other Termination Compensation. Executive shall not, except as set
forth in this Section 6 and in Section 4.7, be entitled to any compensation
following termination of the Employment Period, except as otherwise provided in
any stock options granted by Employer to Executive.
6.7 Mitigation. Executive shall not be required to mitigate the amount of
any payments or benefits provided for hereunder upon termination of the
Employment Period by seeking employment with any other person, or otherwise,
nor shall the amount of any such payments or benefits be reduced by any
compensation, benefit or other amount earned by, accrued for or paid to
Executive as the result of Executive's employment by or consultancy or other
association with any other person, provided, that any medical, dental or
hospitalization insurance or benefits provided to Executive with his employment
by or consultancy with an unaffiliated person during such period shall be
primary to the benefits to be provided to Executive pursuant to this Agreement
for the purposes of coordination of benefits.
6.8 Non-Compete. For the 6 month period following the termination of the
Employment Period for any reason whatsoever, including termination by
non-renewal as described in to Section 6.4 (other than a termination by
Executive pursuant to Section 5.1, in which case the applicable period shall be
one year) and for so long as Employer is making and the Executive is accepting
the payments required to be made to Executive pursuant to either Section 6.1 or
6.4 hereof, Executive shall not, directly or indirectly, (i) engage in any
activities that are in competition with the Company in any geographic area where
the Company is engaged in business, (ii) solicit any customer of the Company or
(iii) solicit any person who is then employed by the Company or was employed by
the Company within one year of such solicitation to (a) terminate his or her
employment with the Company, (b) accept employment with anyone other than the
Company, or (c) in any manner interfere with the business of the Company;
provided, however, in the event Executive violates any of the provisions of the
foregoing at any time after the expiration of 6 months (one year, in the case of
a termination by Executive pursuant to Section 5.1) following the termination of
the Employment Period, Employer's sole remedy under this Agreement shall be the
right to terminate any and all severance payments required under Sections 6.1 or
6.4 hereof. Executive acknowledges and agrees that in the event of any violation
or threatened violation by Executive of his obligations under the preceding
sentence during the six month (or, in the case of a termination pursuant to
Section 5.1, the one year) period following the termination of the Employment
Period, Employer shall be entitled to injunctive relief without any necessity to
post bond.
7. Indemnification
The Company shall indemnify and hold Executive harmless from and against
any expenses (including attorneys' fees of the attorneys selected by Executive
to represent him, which shall be advanced as incurred), judgements, fines and
amounts paid in settlement incurred by him by reason of his being made a party
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of any act or omission to act by Executive during the Employment Period
or otherwise by reason of the fact that he is or was a director or officer of
Employer or any subsidiary or affiliate included as a part of the Company, to
the fullest extent and in the manner set forth and permitted by the General
Corporation Law of the State of Delaware and any other applicable law as from
time to time in effect. The provisions of this Section 7 shall survive any
termination of the Employment Period or any deemed termination of this
Agreement.
8. Miscellaneous
8.1 Notices. Any notice, consent or authorization required or permitted to
be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, be
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally or by facsimile transmission (deemed given upon
receipt), or at such other address as either party shall designate by notice
given to the other in the manner provided herein.
If to Employer: Jos. A. Bank Clothiers, Inc.
500 Hanover Pike
Hampstead, Maryland 21074-2095
Attn: Secretary
If to Executive: Mr. Frank Tworecke
Jos. A. Bank Clothiers, Inc.
500 Hanover Pike
Hampstead, Maryland 21074-2095
8.2 Legal Fees. [INTENTIONALLY DELETED.]
8.3 Taxes. Employer is authorized to withhold (from any compensation or
benefits payable hereunder to Executive) such amounts for income tax, social
security, unemployment compensation and other taxes as shall be necessary or
appropriate in the reasonable judgement of Employer to comply with applicable
laws and regulations.
8.4 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland applicable to
agreements made and to be performed therein.
8.5 Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Baltimore,
Maryland in accordance with the rules of the American Arbitration Association
then in effect. Judgement may be entered on the arbitration award in any court
having jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of his right to be paid until expiration of the Employment
Period during the pendency of any arbitration.
8.6 Headings. All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.
8.7 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
8.8 Severability. If any provision of this Agreement, or any part thereof,
is held to be unenforceable, the remainder of such provision and this Agreement,
as the case may be, shall nevertheless remain in full force and effect.
8.9 Entire Agreement and Representation. This Agreement contains the entire
agreement and understanding between Employer and Executive with respect to the
subject matter hereof. No representations or warranties of any kind or nature
relating to the Company or its several businesses, or relating to the Company's
assets, liabilities, operations, future plans or prospects have been made by or
on behalf of Employer to Executive. This Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof.
8.10 Successor and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors,
heirs (in the case of Executive) and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JOS. A. BANK CLOTHIERS, INC.
By: ____________________________________
Timothy F. Finley, Chairman, Chief
Executive Officer and President
________________________________________
FRANK TWORECKE