SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: DECEMBER 31, 1998
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Date of earliest event reported: DECEMBER 30, 1998
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WEINER'S STORES, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-23671 76-0355003
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
6005 WESTVIEW DRIVE, HOUSTON, TEXAS 77055
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (713) 688-1331
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
HO1:\130815\01\2SXR01!.DOC\80289.0001
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
On December 30, 1998, Weiner's Stores, Inc., a Delaware corporation (the
"Company"), issued a press release announcing that the Company's Board of
Directors had extended the employment contract of Herbert R. Douglas, President
and Chief Executive Officer of the Company, for two additional years. The
agreement between the Company and Mr. Douglas that effects such extension and
contains other terms and conditions of Mr. Douglas's employment (the "Employment
Agreement") is effective for the period commencing as of February 1, 1999 and
ending on January 31, 2001, unless earlier terminated as provided in the
Employment Agreement. Mr. Douglas also continues to serve as the Chairman of the
Board of Directors of the Company.
Filed herewith are the Employment Agreement and such press release.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit number Description
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10.1 Employment Agreement
99.1 Press release
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Weiner's Stores, Inc.
By: /s/ Raymond J. Miller
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Raymond J. Miller
Vice President and
Chief Financial Officer
Dated: December 31, 1998
4
<PAGE>
EXHIBIT INDEX
Exhibit number Description
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10.1 Employment Agreement
99.1 Press release
5
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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Agreement, dated as of February 1, 1999, between Weiner's
Stores, Inc., a Delaware corporation (the "Company"), and Herbert Douglas (the
"Executive").
W I T N E S S E T H :
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WHEREAS, the Company desires to continue the employment of the
Executive as its President and Chief Executive Officer and the Executive desires
to accept such employment, on all the terms and conditions specified herein; and
WHEREAS, the Executive and the Company desire to set forth in
writing all of their respective duties, rights and obligations with respect to
the Executive's employment by the Company; and
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and obligations hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment and Term. The Company hereby continues the
employment of the Executive, and the Executive hereby accepts such employment by
the Company, in the capacity and upon the terms and conditions hereinafter set
forth. The term of employment under this Agreement shall be for the period
commencing as of February 1, 1999 and ending on January 31, 2001, unless earlier
terminated as herein provided (the "Term of Employment").
2. Duties. During the Term of Employment the Executive shall
continue to serve as the Company's President, Chief Executive Officer and as a
member of the Company's Board of Directors (the "Board"). As the Company's
Exhibit 10.1-1
<PAGE>
President and Chief Executive Officer, the Executive shall direct and manage the
affairs of the Company with such duties, functions and responsibilities
(including the right to hire and dismiss employees (subject to approval of the
Board in the case of corporate officers)) as are customarily associated with and
incident to the position of President and Chief Executive Officer and as the
Company may, from time to time, require of him, subject to the direction of the
Company's Board. The Executive shall serve the Company faithfully,
conscientiously and to the best of the Executive's ability and shall promote the
interests and reputation of the Company. Unless prevented by sickness or
disability, the Executive shall devote all of the Executive's time, attention,
knowledge, energy and skills, during normal working hours, and at such other
times as the Executive's duties may reasonably require, to the duties of the
Executive's employment, provided, however, that it shall not be a breach of this
Agreement for the Executive to manage his own private financial investments; or
with the consent of the Board (which consent shall not be unreasonably withheld)
to be a member of the board of directors of other companies which do not compete
with the Company, so long as, in either case, such activities do not require the
Executive to spend a material amount of time away from his performance of his
duties hereunder, do not otherwise interfere with the Executive's performance of
his duties hereunder, or otherwise violate this Agreement (including, but not
limited to, Section 4 hereof) or the Company's other policies. The principal
place of employment of the Executive shall be the principal executive offices of
the Company. The Executive acknowledges that in the course of his employment he
may be required, from time to time, to travel on behalf of the Company.
Exhibit 10.1-2
<PAGE>
3. Compensation, Benefits and Business Expenses. As full and
complete compensation for the Executive's execution and delivery of this
Agreement and performance of any services hereunder, and as the Company's policy
with respect to the reimbursement or payment of the Executive's business
expenses, the Company shall pay, grant or provide the Executive, and the
Executive agrees to accept, the following:
a. Base Salary: The Company shall pay the Executive a base
salary at an annual rate of $450,000 payable at such times and in accordance
with the Company's standard payroll practices for senior executives of the
Company.
b. Signing Bonus: The Company shall, within ten (10) days
after February 1, 1999, pay a signing bonus to the Executive in the amount of
$300,000.
c. Medical, Dental and Disability Insurance: The Company shall
afford the Executive the opportunity to participate during the Term of
Employment in any medical, dental and disability insurance plans or programs
which the Company maintains for its senior executives. Nothing in this Agreement
shall require the Company to establish, maintain or continue any of the benefit
programs already in existence or hereafter adopted for employees of the Company
and nothing in the Agreement shall restrict the right of the Company to amend,
modify or terminate any such benefit program.
d. Expenses: The Executive shall be entitled to reimbursement
or payment of reasonable business expenses (in accordance with the Company's
policies as amended from time to time in the Company's sole discretion),
following the Executive's submission of appropriate receipts and/or vouchers to
the Company. In accordance with such policies, the Company agrees to make all
lease and insurance payments for the Executive's existing BMW 740 (or a
Exhibit 10.1-3
<PAGE>
replacement thereof by an automobile in an equivalent class and price range at
the Executive's option) during the Term of Employment and shall reimburse the
Executive for all maintenance and fuel expenses associated with the use of such
automobile.
e. Vacations, Holidays or Temporary Leave: The Executive shall
be entitled to take annual vacation without loss or diminution of compensation,
not exceeding four (4) weeks, such vacation to be taken at such time or times,
and as a whole or in increments, as the Executive shall elect, consistent with
the reasonable needs of the Company's business and such vacation policies as may
be established by the Board. The Executive shall further be entitled to the
number of paid holidays, and leaves for illness or temporary disability in
accordance with the policies of the Company for its senior executives, as the
Company may amend or terminate such policies from time to time in its sole
discretion.
f. No other Compensation or Benefits: The Executive agrees
that he will not be entitled to and he shall not request or receive any
compensation or benefits with respect to his services during the Term of
Employment, that is in addition to or different from the compensation and
benefits set forth in this paragraph 3 and in paragraph 6 of this Agreement.
4. Non-Competition and Protection of Confidential Information:
a. Restrictive Covenants:
(1) During the Term of Employment and for one (1) year
following the termination of the Executive's employment with the Company ("Date
of Termination"), the Executive shall not directly or indirectly engage,
participate, own or make any financial investments in, or become employed by or
Exhibit 10.1-4
<PAGE>
render (whether or not for compensation) any consulting, advisory or other
services to or for the benefit of, any person, firm or corporation, or otherwise
engage in any business activity which directly or indirectly competes with any
of the business operations or activities in which the Company has engaged within
one (1) year prior to the Date of Termination; provided, however, that it shall
not be a violation of this Agreement for the Executive to have beneficial
ownership of less than 3% of the outstanding amount of any class of securities
listed on a national securities exchange or quoted on an inter-dealer quotation
system.
(2) During the Term of Employment and for one (1) year
following the Date of Termination, the Executive shall not, directly or
indirectly, solicit, in competition with the Company, any person who is a
customer of any business conducted by the Company.
(3) During the Term of Employment and for one (1) year
following the Date of Termination, the Executive shall not, directly or
indirectly, solicit or induce any employee of the Company to terminate his or
her employment for any purpose, including without limitation, in order to enter
into employment with any entity which competes with any business conducted by
the Company.
(4) During the Term of Employment and for all time following
the Date of Termination, the Executive shall not, directly or indirectly,
furnish or make accessible to any person, firm, or corporation or other business
entity, whether or not he, she, or it competes with the business of the Company,
any trade secret, technical data, or know-how acquired by the Executive during
his employment by the Company which relates to the business practices, methods,
Exhibit 10.1-5
<PAGE>
processes, equipment, or other confidential or secret aspects of the business of
the Company without the prior written consent from the Company, unless such
information is or hereafter may become in the public domain other than by being
divulged or made accessible by the Executive in breach of this provision, or
which is demonstrated by the Executive to the Company's reasonable satisfaction
to be known by him prior to the disclosure to him by the Company, or which is or
may hereafter be disclosed by the Company to third parties without similar
restrictions on disclosure or use, or which is required to be disclosed pursuant
to governmental or judicial process or procedure.
b. Geographic Scope: The provisions of this Section 4 shall be
in full force and effect in each state in the United States where the Company
carries on business at any time during the Term of Employment and for one (1)
year following the Date of Termination.
c. Remedies: The Executive acknowledges that his services are
of a special, unique and extraordinary character and, his position with the
Company places him in a position of confidence and trust with the clients and
employees of the Company, and that in connection with his services to the
Company, the Executive will have access to confidential information vital to the
Company's businesses. The Executive further acknowledges that in view of the
nature of the business in which the Company is engaged, the foregoing
restrictive covenants in this Section 4 hereof are reasonable and necessary in
order to protect the legitimate interests of the Company and that violation
thereof would result in irreparable injury to the Company. Accordingly, the
Executive consents and agrees that if the Executive violates or threatens to
violate any of the provisions of this Section 4 hereof the Company would sustain
irreparable harm and, therefore, the Company shall be entitled to obtain from
Exhibit 10.1-6
<PAGE>
any court of competent jurisdiction, without the posting any bond or other
security, preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits and other benefits arising from
such violation, which rights shall be cumulative and in addition to any other
rights or remedies in law or equity to which the Company may be entitled.
d. Termination Without Cause or Resignation For Good Reason:
The Executive's covenants under Section 4a(1) and 4a(2) shall be of no force or
effect in the event that the Company terminates the Executive's employment
Without Cause pursuant to Section 5a(5) hereof or the Executive resigns for Good
Reason as defined in Section 5a(6) hereof. All other covenants hereunder shall
remain in full force and effect in the event of a termination of the Executive's
employment pursuant to either Section 5a(5) or Section 5a(6) hereof.
5. Termination of Employment:
a. The Executive's employment with the Company shall terminate
upon the occurrence of any of the following events:
(1) The completion of the Executive's Term of Employment on
January 31, 2001;
(2) the death of the Executive during the Term of Employment;
(3) the Disability (as defined below) of Executive during the
Term of Employment;
Exhibit 10.1-7
<PAGE>
(4) during the Term of Employment upon not less than fourteen
(14) days' written notice to the Executive from the Company of the termination
of his employment for Cause (as defined below) ("Notice of Termination");
(5) during the Term of Employment, upon not less than fourteen
(14) days' written notice to the Executive from the Company of termination of
his employment Without Cause (as defined below);
(6) during the Term of Employment upon not less than fourteen
(14) days' written notice to the Company of the resignation by the Executive for
Good Reason (as defined below) ("Notice of Resignation"), provided however,
notwithstanding Section 10 hereof relating to waivers, in the case of a
resignation by the Executive due to a Change of Control, the Executive's
resignation shall be deemed to have been for Good Reason hereunder only if such
resignation occurs more than three (3) months following such Change of Control,
but less than six (6) months following such Change of Control; or
(7) During the Term of Employment upon not less than fourteen
(14) days' written notice to the Company of the resignation by the Executive
Without Good Reason (as defined below) during the Term of Employment.
b. For purposes of this Agreement, the "Disability" of the
Executive shall mean his inability, because of mental or physical illness or
incapacity, whether total or partial, to perform his duties under this Agreement
for a continuous period of 120 days or for shorter periods aggregating 120 days
out of any 180-day period.
Exhibit 10.1-8
<PAGE>
c. For purposes of this Agreement "Cause" shall mean conduct
by the Executive constituting (i) fraud; (ii) material dishonesty relating to
the conduct of the business of the Company or dishonesty which does not relate
to the conduct of the business of the Company which adversely affects the
Company or the Executive's ability to manage the business of the Company; (iii)
willful and material breach of any of the provisions or covenants of this
Agreement; embezzlement; (v) chronic alcoholism or chronic drug dependency that
in either case precludes his performing his duties contemplated herein; or (vi)
the conviction of or plea or guilty or nolo contendere to a felony, or any crime
involving securities or commodities laws violations or moral turpitude, except
that Cause as defined in clause (iii) shall not mean
(1) conduct which is the result of the Executive's exercise of
reasonable business judgment which merely differs from the business judgment of
the Board; nor
(2) any act or omission which in the Executive's reasonable
and good faith belief was in or not opposed to the best interests of the
Company.
d. For purposes of this Agreement, "Without Cause" shall mean
any reason other than that defined in this Agreement as constituting Cause. The
parties expressly agree that a termination of employment Without Cause pursuant
to Section 5a(5) hereof may be for any reason whatsoever, or for no reason, in
the sole discretion of the Company.
Exhibit 10.1-9
<PAGE>
e. For purposes of this Agreement, "Good Reason" shall mean
(i) willful and material breach of the Agreement by the Company; (ii) assignment
of duties or responsibilities materially inconsistent with those described in
Section 2 hereof without the consent of the Executive; (iii) any Change in
Control (as defined below) or (iv) the Company's failure to maintain during the
Term of Employment and through the last date on which any payment earned during
the Term of Employment becomes payable either (a) a letter of credit as provided
for in Section 6f hereof, or (b) within thirty (30) days prior to expiration of
any letter of credit, to obtain replacement letter of credit or, in the
alternative, to provide cash collateral that gives the Executive equivalent
protection. Good Reason as defined in subdivision (ii) of this Section 5e
includes:
(1) The cessation of the Executive's membership on the
Company's, or its successor's, Board and/or his removal from the position of
Chief Executive Officer of the Company or its successor;
(2) any change in the Executive's reporting responsibility
being solely to the Board;
(3) the election of any other officer having the right to
report directly to the Board, provided however, that it shall not constitute
Good Reason if (a) another officer is elected to the Board, (b) another officer
reports to the Board with the consent of the Executive, or (c) any officer
reports to the Board as may be required by law; or
(4) the Company's requiring, without the written consent of
the Executive, the Executive to be based at any office or location more than 50
miles from the current offices of the Company in Houston, Texas.
Exhibit 10.1-10
<PAGE>
f. For purposes of this Agreement, "Without Good Reason" shall
mean any reason other than that defined in this Agreement as constituting Good
Reason.
g. For purposes of this Agreement, "Change of Control" shall
mean (a) the disposition, whether by sale, merger, consolidation, etc. of all or
substantially all of the Company's assets, unless in advance of any such
disposition the Executive waives this provision in writing; (b) any person,
entity or group (as the term "group" is defined in the rules and regulations
relating to Section 13D of the Securities Exchange Act of 1934), other than
Chase Bank of Texas, acquires 50% or more of the voting common stock of the
Company; or (c) a contested proxy solicitation of Company shareholders that
results in the contesting party obtaining the ability to cast 25% or more of the
votes entitled to be cast in electing directors of the Company.
h. Upon the termination of the Executive's employment for any
reason, the Executive shall, upon the request of the Company, promptly resign
from all officerships and directorships held by the Executive in the Company or
any other business enterprise in which the Executive is serving at the Company's
request. If the Executive refuses to resign in accordance herewith within seven
(7) days of such request, the Executive agrees that the Executive shall be
deemed to have resigned all of such officerships and directorships as of the
date requested by the Company.
i. A Notice of Termination described in Section 5a(4) shall
state the Date of Termination and the basis for the Company's determination that
the Executive's actions establish Cause hereunder. Upon the Executive's receipt
of a Notice of Termination, the Executive may, prior to the Date of Termination,
seek to cure any conduct identified in the Notice of Termination as establishing
Cause (to the extent susceptible to cure) and shall, upon his written request,
Exhibit 10.1-11
<PAGE>
be accorded the right to address the Board, with or without counsel to the
Executive present at the Executive's option, for the purpose of responding to
the Notice of Termination. Following such meeting between the Executive and the
Board, if the Board does not withdraw or modify the Notice of Termination, the
Executive's employment shall terminate on the Date of Termination stated in the
Notice of Termination.
j. A Notice of Resignation described in Section 5a(6) shall
state the Date of Termination and the basis for the Executive's determination
that the Company's actions establish Good Reason hereunder. Upon the Company's
receipt of a Notice of Resignation, the Company may, prior to the Date of
Termination, seek to cure any conduct identified in the Notice of Resignation as
establishing Good Reason (to the extent susceptible to cure) and shall, upon the
Company's request, be accorded the right to address the Executive, with or
without counsel to the Executive present at the Executive's option, for the
purpose of responding to the Notice of Resignation. Following such meeting
between the Executive and the Board, if the Executive does not withdraw or
modify the Notice of Resignation, the Executive's employment shall terminate on
the Date of Termination stated in the Notice of Resignation.
6. Payments Upon Termination of Employment: Death or
Disability:
a. If the Executive's employment hereunder is terminated due
to the Executive's death or Disability pursuant to Sections 5a(2) or (3) hereof,
the Company shall pay or provide to the Executive, his designated beneficiary or
to his estate (i) all base salary pursuant to Section 3a hereof and any vacation
pay pursuant to Section 3e hereof, in each case which has been earned but which
remains unpaid as of the Date of Termination, such payments to be made at such
Exhibit 10.1-12
<PAGE>
times as will be in accordance with the Company's normal payroll practices; (ii)
any benefits to which the Executive may be entitled under any medical, dental or
disability plan or program pursuant to Section 3c hereof in which he is a
participant in accordance with the terms of such plan or program up to and
including the Date of Termination; and (iii) (a) if the Company terminates the
Executive's employment due to the Executive's death or Disability at any time
during the period from February 1, 1999 through and including January 31, 2000,
then the Company shall continued the Executive's base salary at the rate set
forth in paragraph 3a hereof until January 31, 2001, or (b) if the Company
terminates the Executive's employment due to the Executive's death or Disability
at any time after January 31, 2000 but before January 31, 2001, then the Company
shall continue the Executive's base salary at the annual rate of $617,000 until
January 31, 2001 and, in addition, the Company shall make a payment within
twenty (20) days after the Date of Termination in an amount equal to the product
of (x) the salary rate of $1,731 per day and (y) the number of completed
weekdays from and including February 1, 2000 up to and including the Date of
Termination. As an alternative to the salary continuation payments described in
Section 6a(iii) immediately above, the Company shall, at the election of the
Executive, make within twenty (20) days after the Termination Date, a single
lump sum payment equal to the sum of all salary continuation payments payable
under Section 6a(iii) as of the Date of Termination. An example of how the
amount(s) payable under Section 6a(iii) will be computed is included in Exhibit
A to this Agreement. Any payments due and owing pursuant to Section 6a(iii)
immediately above shall be reduced to the extent that the Executive, his estate
or designated beneficiary receives any payments pursuant to any disability
Exhibit 10.1-13
<PAGE>
insurance plan or arrangement or any life insurance policy maintained by the
Company. Should the Company wish to purchase insurance to cover the costs
associated with the Executive's termination of employment pursuant to Sections
5a(2) or (3), the Executive agrees to execute any and all necessary documents
necessary to effectuate said insurance. Upon termination of the Executive's
employment due to the Executive's Disability, the Executive shall continue to
have the obligations provided for in Section 4 hereof. The Executive may
designate in writing to the Chief Financial Officer of the Company from time to
time a beneficiary to whom payments shall be made hereunder in the event of the
Executive's death. In the absence of such a designation payments shall be made
to the Executive's estate in the event of the Executive's death. The Company's
obligation to make any payment pursuant to Section 6a(iii) shall be conditioned
upon the Company's prior receipt and the effective date of an executed general
release of claims and covenant not to sue.
b. Termination for Cause or Resignation Without Good Reason:
If the Executive's employment hereunder is terminated due to the termination of
the Executive's employment by the Company for Cause pursuant to Section 5a(4) or
due to the Executive's resignation Without Good Reason pursuant to Section
5a(7), the Company shall pay or provide to the Executive (i) all base salary
pursuant to Section 3a hereof, and any vacation pay pursuant to Section 3e
hereof, in each case which has been earned but which remains unpaid as of the
Date of Termination, such payments to be made at such times as will be in
accordance with the Company's normal payroll practices; and (ii) any benefits to
which the Executive may be entitled under any medical, dental or disability plan
Exhibit 10.1-14
<PAGE>
or program pursuant to Section 3c hereof in which he is a participant in
accordance with the terms of such plan or program up to and including the Date
of Termination.
c. Termination Without Cause or Resignation For Good Reason:
If the Executive's employment hereunder is terminated due to the termination of
the Executive's employment by the Company Without Cause pursuant to Section
5a(5) or due to the Executive's resignation for Good Reason pursuant to Section
5a(6), the Company shall pay or provide to the Executive (i) all base salary
pursuant to Section 3a hereof and any vacation pay pursuant to Section 3e
hereof, in each case which has been earned but which remains unpaid as of the
Date of Termination, such payments to be made at such times as will be in
accordance with the Company's normal payroll practices; (ii) any benefits to
which the Executive may be entitled under any medical, dental or disability plan
or program pursuant to Section 3c hereof in which he is a participant in
accordance with the terms of such plan or program up to and including the Date
of Termination; and (iii)(a) if the Company terminates the Executive's
employment Without Cause pursuant to Section 5a(5) or due to the Executive's
resignation for Good Reason pursuant to Section 5a(6) at any time during the
period from February 1, 1999 through and including January 31, 2000, then the
Company shall continue the Executive's base salary at the rate set forth in
paragraph 3a hereof until January 31, 2001, or (b) if the Company terminates the
Executive's employment Without Cause pursuant to Section 5a(5) or due to the
Executive's resignation for Good Reason pursuant to Section 5a(6) at any time
after January 31, 2000 but before January 31, 2001, then the Company shall
continue the Executive's base salary at the annual rate of $617,000 until
January 31, 2001 and, in addition, the Company shall make a payment within
twenty (20) days after the Date of Termination in an amount equal to the product
Exhibit 10.1-15
<PAGE>
of (x) the salary rate of $1,731 per day (y) the number of completed weekdays
from and including February 1, 2000 up to and including the Date of Termination.
As an alternative to the salary continuation payments described in Section
6c(iii) immediately above, the Company shall, at the election of the Executive,
make within twenty (20) days after the Termination Date, a single lump sum
payment equal to the sum of all salary continuation payments payable under
Section 6c(iii) as of the Date of Termination. An example of how the amounts
payable under Section 6c(iii) will be computed is included in Exhibit A to this
Agreement. The Company's obligation to make the payment pursuant to Section
6c(iii) shall be conditioned upon the Company's prior receipt and the effective
date of an executed general release of claims and covenant not to sue.
d. Expiration of Term of Employment Without Renewal: If the
Executive's employment terminates on January 31, 2001 pursuant to Section 1 of
this Agreement, the Company shall pay or provide to the Executive (i) all base
salary pursuant to Section 3a hereof and any vacation pay pursuant to Section 3e
hereof, in each case which has been earned but which remains unpaid as of the
date of termination of the Executive's employment, such payments to be made at
such times as will be in accordance with the Company's normal payroll practices;
(ii) any benefits to which the Executive may be entitled under any medical,
dental or disability plan or program pursuant to Section 3c hereof in which he
is a participant in accordance with the terms of such plan or program up to and
including the Date of Termination; and (iii) continuation of the Executive's
base salary at the annual rate of $617,000 for one calendar year following the
date on which the Executive's employment with the Company terminates. As an
Exhibit 10.1-16
<PAGE>
alternative to the salary continuation described in Section 6d(iii) immediately
above, the Company shall, at the election of the Executive, make within twenty
(20) days after the Termination Date, a single lump sum payment equal to the
present value of all salary continuation payments payable under Section 6d(iii)
as of the Date of Termination. The Company's obligation to make the payment
pursuant to Section 6d(iii) shall be conditioned upon the Company's prior
receipt and the effective date of an executed general release of claims and
covenant not to sue. The interest rate which shall be used in making any present
value calculations pursuant to Section 6d(iii) shall be the 30-year treasury
rate prevailing on the close of business on the Date of Termination.
e. No Other Payments: Except as provided in this Section 6,
the Executive shall not be entitled to receive any other payments or benefits
from the Company due to the termination of his employment by the Company,
including but not limited to, any employee benefits under any of the Company's
employee benefits plans or programs (other than at the Executive's expense under
the Consolidated Omnibus Budget Reconciliation Act of 1985 or pursuant to the
terms of any pension plan which the Company may have in effect from time to
time) or any right to be paid severance pay.
f. Letter of Credit: The payments provided in Sections
6a(iii), 6c(iii) or 6d(iii) and any other compensation which the Executive has
earned and which is due to the Executive and unpaid as of the Date of
Termination shall be secured during the Term of Employment and through the last
date on which any payment earned during the Term of Employment is payable by:
(a) a clean, irrevocable letter of credit in an amount sufficient to make the
maximum payment possible under Section 6 which the Company shall procure by the
later of ten (10) days after the execution of this Agreement or (b) within
Exhibit 10.1-17
<PAGE>
thirty (30) days prior to expiration of any letter of credit during the Term of
Employment and through the last date on which any payment earned during the Term
of Employment is payable, a replacement letter of credit or, in the alternative,
cash collateral that gives the Executive protection equivalent to the letter of
credit described in subdivision 6f(a) hereof.
7. No Conflicting Agreements. The Executive hereby represents
and warrants that he is not a party to any agreement, or non-competition or
other covenant or restriction contained in any agreement, commitment,
arrangement or understanding (whether oral or written), which would in any way
conflict with or limit his ability to continue to work for the Company during
the Term of Employment or would otherwise limit his ability to perform all
responsibilities in accordance with the terms and subject to the conditions of
this Agreement.
8. Deductions and Withholding. The Executive agrees that the
Company shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect and all
amounts required to be deducted in respect of the Executive's coverage under
applicable employee benefit plans.
9. Entire Agreement. This Agreement embodies the entire
agreement of the parties with respect to the Executive's employment and
supersedes any other prior oral or written agreements between the Executive and
the Company including, but not limited to the Employment Agreement between the
Company and the Executive dated December 1, 1995 (except for the Executive's
representation and warranty contained in the last two sentences of paragraph 7
Exhibit 10.1-18
<PAGE>
of that agreement which shall remain in full force and effect) and all
amendments thereto (including the amendment to the Employment Agreement dated
May 1, 1997). This Agreement may not be changed or terminated orally but only by
an agreement in writing signed by the parties hereto.
10. Waiver. The waiver by the Company of a breach of any
provision of this Agreement by the Executive shall not operate or be construed
as a waiver of any subsequent breach by the Executive. The waiver by the
Executive of a breach of any provision of this Agreement by the Company shall
not operate or be construed as a waiver of any subsequent breach by the Company.
11. Governing Law. This Agreement shall be subject to, and
governed by, the laws of the State of Delaware applicable to contracts made and
to be performed in the State of Delaware, regardless of where the Executive is
in fact required to work.
12. Assignability. The obligations of the Executive may not be
delegated and, except as expressly provided in Section 6a relating to the
designation of beneficiaries, the Executive may not, without the Company's
written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate
or otherwise dispose of this Agreement or any interest therein. Any such
attempted delegation or disposition shall be null and void and without effect.
The Company and the Executive agree that this Agreement and all of the Company's
rights and obligations hereunder may be assigned or transferred by the Company
to and shall be assumed by and binding upon and shall inure to the benefit of
any successor to the Company. The term "successor" shall mean, with respect to
the Company or any of its subsidiaries, any corporation or other business entity
Exhibit 10.1-19
<PAGE>
which, by merger, consolidation, purchase of the assets, or otherwise, acquires
all or a material part of the assets of the Company.
13. Severability. If any provision of this Agreement as
applied to either party or to any circumstances shall be adjudged by a court of
competent jurisdiction to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or enforceability
of this Agreement. If any court construes any of the provisions of Section 4
hereof, or any part thereof, to be unreasonable because of the duration of such
provision or the geographic or other scope thereof, such court may reduce the
duration or restrict the geographic or other scope of such provision and enforce
such provision as so reduced or restricted.
14. Notices. All notices to the Executive hereunder shall be
in writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, to:
Herbert Douglas
1531 Nantucket Drive
Houston, TX 77057
All notices to the Company hereunder shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested,
to:
Weiner's Stores, Inc.
6005 Westview Drive
Houston, Texas 77055
Attn: Chief Financial Officer
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party.
Exhibit 10.1-20
<PAGE>
15. Effective Date. This Agreement shall be effective
following (i) execution of four originals of this Agreement by both parties; and
(ii) approval by the Board.
16. Paragraph Headings. The paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
17. 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 taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
/s/ Herbert Douglas Weiner's Stores, Inc.
- -----------------------------------
Herbert Douglas
By: /s/ Raymond Miller
-----------------------------
Raymond Miller
Vice President,
Chief Financial Officer
Exhibit 10.1-21
<PAGE>
EXHIBIT A
---------
Example of Computations Described In Paragraphs 6a(iii) and 6c(iii)
-------------------------------------------------------------------
If the Executive's employment is terminated on May 12, 2000
due to the Executive's death or Disability pursuant to sections 5a(2) or (3) or
due to a termination of employment by the Company Without Cause pursuant to
Section 5a(5) or due to the Executive's resignation for Good Reason pursuant to
Section 5a(6), then subject to the Executive's compliance with the
aforementioned contractual provisions, the Executive shall be entitled to the
following payments:
1. Continuation of the Executive's base salary from May 15, 2000
(the first weekday after the Date of Termination) through and
including January 31, 2001 at the annual rate of $617,000; and
2. A lump sum payment of $128,094, less tax withholdings required by
law (i.e., the product of (a) $1,731 per day and (b) 74 completed
weekdays from and including February 1, 2000 through and
including May 12, 2000.)
Alternatively, the Company shall, at the election of the
Executive, pay the Executive a single lump sum payment equal to the sum of (a)
the total of all the salary continuation payments described in paragraph 1 of
this Exhibit A, and (b) $128,094 as described in paragraph 2 of this Exhibit A,
less tax withholdings required by law.
Exhibit 10.1-22
EXHIBIT 99.1
PRESS RELEASE
-------------
WEINER'S STORES, INC. ANNOUNCES HERBERT R. DOUGLAS'S CONTRACT
-------------------------------------------------------------
AS PRESIDENT AND CHIEF EXECUTIVE OFFICER EXTENDED
-------------------------------------------------
Houston, Texas (Business Wire).....Weiner's Stores, Inc. (OTCBB: WEIR) announced
that the Board of Directors has extended the employment contract of Herbert R.
Douglas, President and Chief Executive Officer of Weiner's Stores, Inc., for two
additional years. Mr. Douglas's employment contract will expire on January 31,
2001. Mr. Douglas also continues to serve as the Chairman of the Board of
Directors.
Mr. Douglas's retailing career has spanned 35 years, beginning as a
trainee at Abraham & Straus, a division of Federated Department Stores, and
continuing at senior level merchandising positions at a number of companies
including Meier & Frank, a division of the May Company, Bradlees Discount Stores
and Jamesway Discount Stores. The extension of Mr. Douglas's employment contract
allows the Company, which emerged from Chapter 11 reorganization on August 26,
1997, to continue to be led by a seasoned retail executive who was instrumental
in leading the Company through its restructuring.
Weiner's is a convenient neighborhood family apparel retailer that
offers a complete assortment of name brand and private label clothing to value
conscious consumers. Currently, approximately 3,500 associates are employed at
the 133 stores that are operated in Texas and Louisiana.
This press release contains forward-looking statements. Such statements
inherently are subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others, general economic and business conditions,
changes in foreign, political, social and economic conditions, regulatory
initiatives and compliance with governmental regulations, the ability of the
Company and its competitors to predict fashion trends and customer preferences
and achieve further market penetration and additional customers, consumer
apparel buying patterns, adverse weather conditions, inventory risks due to
shifts in market demand and various other matters, many of which are beyond the
Company's control. These forward-looking statements speak only as of the date of
this press release. The Company expressly disclaims any obligations or
undertaking to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which such statement is based.
For Immediate Release Contact: Joe Kassa
Wednesday, December 30, 1998 713/688-1331, Ext. 252
Exhibit 99.1-1
