Commission File No. 0-15907
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended November 2, 1996
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to ________________.
For Quarter Ended: November 2, 1996
Commission File Number: 0-15907
Exact name of registrant as specified in its charter:
PROFFITT'S, INC.
State of Incorporation: Tennessee
I.R.S. Employer Identification Number: 62-0331040
Address of Principal Executive Offices (including zip code):
P.O. Box 9388, Alcoa, Tennessee 37701
Registrant's telephone number, including area code:
(423) 983-7000
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes (X) No ( )
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.10 Par Value -- 23,834,668 shares as of November 2,
1996
PROFFITT'S, INC.
Index
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -- November 2, 1996,
February 3, 1996, and October 28, 1995 2
Condensed Consolidated Statements of Income -- Three and
Nine Months Ended November 2, 1996 and October 28, 1995 3
Condensed Consolidated Statements of Cash Flows -- Nine
Months Ended November 2, 1996 and October 28, 1995 4
Notes to Condensed Consolidated Financial Statements 5
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<TABLE>
<CAPTION>
PROFFITT'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
November 2, February 3, October 28,
1996 1996 1995
(Unaudited) (Audited) (Unaudited)
------------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $2,644 $26,157 $13,710
Restricted cash and short-term
investments 2,090
Net trade accounts receivable,
less receivables sold to third
parties 62,645 44,878 121,280
Merchandise inventories 530,429 286,474 394,397
Deferred income taxes 32,991 3,750
Other current assets 27,159 17,493 21,378
--------- -------- --------
Total current assets 657,958 378,752 550,765
Property and equipment, net 478,612 381,839 405,040
Goodwill and other intangibles 290,075 52,838 52,772
Other assets 20,770 22,237 26,242
--------- -------- --------
$1,447,415 $835,666 $1,034,819
========== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $199,590 $75,377 $152,507
Accrued liabilities 123,301 73,984 63,243
Current portion of long-term
debt and capital lease
obligations 18,050 17,269 16,528
-------- ------- -------
Total current liabilities 340,941 166,630 232,278
Senior debt 274,709 134,255 241,296
Capital lease obligations 10,453 10,846 10,964
Deferred income taxes 59,703 52,250 60,575
Other long-term liabilities 50,543 14,328 11,566
Subordinated debt 225,634 100,505 100,444
Shareholders' equity 485,432 356,852 377,696
-------- ------- -------
$1,447,415 $835,666 $1,034,819
========== ======== ==========
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
PROFFITT'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------------ ---------------------
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $368,330 $322,972 $936,607 $888,895
Costs and expenses:
Cost of sales 236,612 208,827 603,236 574,319
Selling, general and administrative expenses 87,755 78,013 229,240 220,898
Other operating expenses 28,092 25,566 76,173 74,981
Merger, restructuring and integration costs 670 4,940
Gain on sale of assets (337) (2,597)
Expenses related to hostile takeover defense 1,001 2,913
----------- --------- ---------- ---------
Operating income 15,538 9,565 25,615 15,784
Other income (expense):
Finance charge income 11,512 9,630 33,269 29,262
Finance charge income allocated to purchaser of
accounts receivable (3,663) (2,026) (10,541) (6,316)
Interest expense (6,024) (6,435) (14,632) (19,011)
Other income (expense), net (342) 637 98 2,009
----------- --------- --------- ---------
Income before provision for income taxes 17,021 11,371 33,809 21,728
Provision for income taxes 7,112 4,449 14,107 8,679
----------- -------- --------- ---------
NET INCOME 9,909 6,922 19,702 13,049
Preferred stock dividends 487 796 1,462
Payment for early conversion of Preferred Stock 3,032
----------- ---------- ---------- ----------
Net income available to common
shareholders $9,909 $6,435 $15,874 $11,587
=========== =========== ========== ===========
Earnings per share:
Primary $0.44 $0.33 $0.76 $0.60
=========== =========== ========== ===========
Fully diluted $0.43 $0.33 $0.91 $0.60
=========== =========== ========== ===========
Weighted average common shares:
Primary 22,427 19,433 20,933 19,355
=========== =========== ========== ===========
Fully diluted 24,474 21,453 21,760 19,368
=========== =========== ========== ===========
</TABLE>
Note: On June 28, 1996, the Company converted 600 shares of Series A
Preferred Stock ("Preferred Stock") into 1,422 shares of Proffitt's,
Inc. Common Stock. In order to complete this early conversion of
the Preferred Stock, the Company paid $3,032 to the holder of
the Preferred Stock.
Primary earnings per share are based on earnings available to common
shareholders (net income reduced by preferred stock dividends
and payment for early conversion) and the weighted average number of
common shares and equivalents (stock options) outstanding.
Common Stock issued on June 28, 1996 for the conversion of the Preferred
Stock has been included in the weighted average number
of shares outstanding subsequent to that date.
As a result of the June 28, 1996 Preferred Stock conversion and as required
by generally accepted accounting principles, fully diluted earnings per
share have been presented for the periods shown based upon an "as if the
1,422 shares issued in the conversion were outstanding from the beginning
of the period" basis.
See notes to condensed consolidated financial statements.
<TABLE>
<CAPTION>
PROFFITT'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
----------------
November 2, October 28,
1996 1995
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $19,702 $13,049
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 26,186 25,995
Gain on sale of assets (2,597)
Changes in operating assets and liabilities, net (17,039) (30,886)
--------- ---------
Net cash provided by operating activities 26,252 8,158
INVESTING ACTIVITIES
Purchases of property and equipment, net (41,130) (45,636)
Increase in restricted cash and short-term investments (2,090)
Proceeds from sale of assets 5,337 1,013
Acquisition of Parisian, Inc. (118,739)
Acquisition of Parks-Belk Company (10,436)
Other, net 106
--------- ---------
Net cash used in investing activities (156,622) (54,953)
FINANCING ACTIVITIES
Payments on long-term debt and capital
lease obligations (11,326) (9,049)
Proceeds from long-term borrowings 116,600 56,003
Proceeds from issuance of stock 6,223 320
Payments to preferred shareholders (4,640) (1,950)
--------- ---------
Net cash provided by financing activities 106,857 45,324
Decrease in cash and cash equivalents (23,513) (1,471)
Cash and cash equivalents at beginning of period 26,157 15,181
--------- ---------
Cash and cash equivalents at end of period $2,644 $13,710
=========== ===========
Cash paid during the nine months ended November 2, 1996 for interest and income taxes totaled $13,491 and
$12,997, respectively.
Cash paid during the nine months ended October 28, 1995 for interest and income taxes totaled $17,511 and
$12,045, respectively.
See notes to condensed consolidated financial statements.
</TABLE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of the Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended November 2, 1996
are not necessarily indicative of the results that may be expected
for the year ending February 1, 1997. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for
the year ended February 3, 1996.
The balance sheet at February 3, 1996 has been derived from the
audited financial statements at that date.
NOTE B -- BUSINESS COMBINATIONS
On October 11, 1996, Proffitt's, Inc. ("Proffitt's" or the
"Company") acquired all of the Common Stock of Parisian, Inc.
("Parisian"), a specialty department store chain operating 38
stores in the southeast and midwest. Parisian, headquartered in
Birmingham, Alabama, operates as a separate department store
division of Proffitt's, Inc. Under the terms of the transaction,
the Company paid Parisian's shareholders approximately $110
million in cash and issued approximately 2.947 million shares of
Proffitt's Common Stock . Outstanding options to purchase shares
of Parisian Common Stock were converted into options to purchase
approximately 406,000 shares of Proffitt's Common Stock. In
addition, on that date, the Company assumed approximately $160
million of Parisian indebtedness (which includes $125 million of
9 7/8% Senior Subordinated Notes due 2003) and approximately $80
million of off-balance sheet receivables financing. In conjunction
with the transaction and in order to provide for future working
capital requirements, the Company entered into a new $275 million
revolving credit facility, which replaced the Company's previous
$125 million revolver. The new facility matures in October 1999.
The Parisian transaction was accounted for as a purchase.
Financial results of Proffitt's include Parisian beginning on the
October 11, 1996 acquisition date.
The purchase price of Parisian was allocated first to identifiable
tangible and intangible assets and liabilities based on preliminary
estimates of their fair values, with the remainder allocated to
goodwill and other assets to be identified. The excess of the cost
of acquiring Parisian over the fair value of the acquired tangible
assets (approximately $240 million) is included in "goodwill and
other intangibles" on the balance sheet. Amortization of goodwill
is provided on a straight-line basis over forty years.
The following preliminary unaudited pro forma summary presents the
consolidated results of operations as if the Parisian acquisition
had occurred at the beginning of the periods presented and does not
purport to be indicative of what would have occurred had the
acquisition been made as of these dates or results which may occur
in the future.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
11/2/96 10/2895 11/2/96 10/28/95
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Pro forma:
Net sales $ 491,552 $ 490,168 $ 1,367,783 $ 1,344,643
Net income $ 4,637 $ 5,420 $ 11,877 $ 10,142
Earnings per common share:
Primary $ .19 $ .22 $ .34 $ .39
Fully diluted $ .19 $ .22 $ .49 $ .39
</TABLE>
Effective February 3, 1996, immediately before the Company's fiscal
year end, Proffitt's combined its business with Younkers, Inc.
("Younkers"), a publicly-owned retail department store chain
currently operating 48 stores in the midwest. Younkers,
headquartered in Des Moines, Iowa, operates as a separate
department store division of Proffitt's, Inc. Each outstanding
share of Younkers, Inc. Common Stock was converted into ninety
eight one-hundredths (.98) shares of Proffitt's, Inc. Common Stock,
with approximately 8.8 million shares issued in the transaction.
This combination was accounted for as a pooling of interests, and
accordingly, the consolidated financial statements have been
restated for all periods to include the results of operations and
financial position of Younkers.
In conjunction with the business combination with Younkers, the
Company incurred certain fourth quarter 1995 charges to effect the
merger and other costs to restructure and integrate the combined
operating companies. In the quarter and nine months ended November
2, 1996, the Company incurred certain additional integration costs
(pre-tax) totaling $.7 million and $4.9 million, respectively,
related to such items as the termination of a Younkers pension
plan, the conversion of Younkers' computer systems, and expenses of
consolidating administrative functions.
On April 12, 1995, the Company completed the acquisition of the
Parks-Belk Company, a family-owned department store company with
four stores. Three stores were renovated and opened as Proffitt's
Division stores during 1995; one store was permanently closed. The
operations of Parks-Belk have been included in the results of
operations of the Company subsequent to the purchase date.
NOTE C -- PENDING BUSINESS COMBINATION
On November 8, 1996, the Company announced its planned merger with
G.R. Herberger's, Inc. ("Herberger's"), a 40-unit department store
chain headquartered in St. Cloud, Minnesota. Under the terms of
the transaction, Proffitt's will issue 4.0 million shares of Common
Stock. In addition, the Company will assume Herberger's
indebtedness, which totaled approximately $46.2 million as of
November 2, 1996. Approximately $21 million of this indebtedness
related to short-term seasonal borrowing and is expected to be
repaid by year end. The transaction is expected to close in early
1997 and will be accounted for as a pooling of interests.
NOTE D -- GAIN ON SALE OF ASSETS
For the nine months ended November 2, 1996, the Company realized
pre-tax gains totaling $2.6 million related to the sale of certain
properties. Approximately $2.3 million of this total related to
the Company's sale of two Younkers stores to Carson Pirie Scott &
Co. in March 1996.
NOTE E -- INCOME TAXES
The difference between the actual income tax expense and the amount
expected by applying the statutory federal income tax rate is due
to the inclusion of state income taxes and the amortization of
goodwill, which is not deductible for income tax purposes.
The deferred income tax asset and liability amounts reflect the
impact of temporary differences between values recorded for assets
and liabilities for financial reporting purposes and values
utilized for measurement in accordance with tax laws. The major
components of these amounts result from the allocation of the
purchase price to the assets and liabilities related to the McRae's
acquisition in March 1994 and the Parisian acquisition in October
1996.
NOTE F -- RECENT ACCOUNTING PRONOUNCEMENT
In June 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 125, "Accounting
for Transferring and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 125"). SFAS 125 is
effective January 1, 1997. The Company intends to adopt SFAS 125
on that date and expects the adoption will have an immaterial
impact on the Company's financial position and results from
operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Accounts receivable, inventory, accounts payable, and senior debt
balances fluctuate throughout the year due to the seasonal nature
of the retail industry.
The increase in the November 2, 1996 asset, liability, and
shareholders' equity classifications over prior periods presented
was largely attributable to the acquisition and financing of the
Parisian transaction completed on October 11, 1996. See Note B on
pages 5 and 6 attached.
The November 2, 1996 net trade accounts receivable balance declined
from the October 28, 1995 balance due to the sale of additional
receivables to third parties.
November 2, 1996 merchandise inventories and property and equipment
balances increased over year-end balances primarily due to the
value of acquired Parisian inventories and property and equipment,
respectively.
November 2, 1996 goodwill and other intangibles increased over
prior periods due to goodwill of approximately $240 million
recorded in conjunction with the October 1996 Parisian acquisition.
November 2, 1996 subordinated debt increased due to the assumption
of Parisian's $125 million of 9 7/8% Senior Subordinated Notes due
2003.
November 2, 1996 shareholders' equity has increased over the year-end balance
primarily due to year-to-date earnings and the issuance
of Common Stock in conjunction with the Parisian transaction.
On November 8, 1996, the Company announced its planned merger with
Herberger's, which is expected to close in early 1997. Under the
terms of the transaction, Proffitt's will issue 4.0 million shares
of Common Stock to the shareholders of Herberger's. In addition,
the Company will assume Herberger's indebtedness, which totaled
approximately $46.2 million as of November 2, 1996. The
transaction will be accounted for as a pooling of interests.
Results of Operations
Income statement information below includes the operations of
Parisian and Parks-Belk beginning on their acquisition dates of
October 11, 1996 and April 12, 1995, respectively. These
transactions were accounted for as purchases. Prior year income
statement information below has been restated to reflect the
February 3, 1996 merger with Younkers, which was accounted for as
a pooling of interests.
The following table shows for the periods indicated, certain items
from the Company's Condensed Consolidated Statements of Income
expressed as percentages of net sales.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
11/2/96 10/28/96 11/2/96 10/28/95
<S> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of sales 64.2 64.7 64.4 64.6
Selling, general & admin.
expense 23.8 24.2 24.5 24.9
Other operating expenses 7.7 7.9 8.2 8.4
Merger, restructuring and
integration costs 0.2 0.0 0.5 0.0
Gain on sale of assets (0.1) 0.0 (0.3) 0.0
Expenses related to hostile
takeover defense 0.0 0.3 0.0 0.3
Operating income 4.2 2.9 2.7 1.8
Other income (expense):
Finance charge income 3.1 3.0 3.6 3.3
Finance charge income
allocated to purchaser
of accounts receivable (1.0) (0.6) (1.1) (0.7)
Interest expense (1.6) (2.0) (1.6) (2.1)
Other income (expense),
net (0.1) 0.2 0.0 0.2
Income before provision
for income taxes 4.6 3.5 3.6 2.5
Provision for income taxes 1.9 1.4 1.5 1.0
NET INCOME 2.7% 2.1% 2.1% 1.5%
</TABLE>
For the quarter, total Company sales were $368.3 million, a 14%
increase over $323.0 million in the prior year. Sales for the
quarter included $39.5 million of sales from the newly acquired
Parisian Division. On a comparable stores basis, total Company
sales increased 4% for the quarter. Revenues for the Younkers
Division were $150.9 million, up 1% over $149.5 million last year;
revenues for the McRae's Division totaled $111.0 million, a 2%
increase over $109.4 million in the prior year; and revenues for
the Proffitt's Division were $66.9 million compared to $64.1
million last year, a 4% increase. For the quarter, comparable
store sales increased 7% for the Younkers Division, were flat with
last year for the McRae's Division, and increased 6% for the
Proffitt's Division.
On a year-to-date basis, total Company sales were $936.6 million,
a 5% increase over $888.9 million last year. Total sales of $936.6
million include $39.5 million of sales from the Parisian Division.
On a comparable stores basis, total Company sales increased 4% for
the nine months. Revenues for the Younkers Division were $401.3
million, down 1% from $406.3 million in the prior year; revenues
for the McRae's Division totaled $313.3 million, a 3% increase over
$303.8 million last year; and revenues for the Proffitt's Division
were $182.5 million, a 2% increase over $178.8 million last year.
For the nine months, comparable store sales increased 4%, 2%, and
8% for the Younkers, McRae's, and Proffitt's Divisions,
respectively.
The total store sales performance for the periods indicated
reflects the closing of two Younkers stores and one Proffitt's
store in January 1996, the sale of two Younkers stores in March
1996, and the closing of one Younkers store in August 1996.
For the quarter and nine months, gross margin percentages improved
over the prior year. This improvement resulted from proper
inventory management and markdown control.
Selling, general, and administrative expenses declined as a
percentage of net sales for the quarter and nine months. This
expense leverage was due to the implementation of targeted cost
reductions primarily resulting from the synergy process related to
the Younkers transaction.
Other operating expenses, which consist of rents, depreciation, and
taxes other than income taxes, declined as a percentage of net
sales for the quarter and nine months. This reduction was
primarily due to reduced expenses related to stores recently sold
and closed and lower deprecation due to the reduced carrying value
of certain property as a result of a 1995 impairment write-down.
Finance charge income increased as a percentage of net sales for
both the quarter and nine months primarily due to increased finance
charge rates assessed in certain states and the implementation of
certain late fee penalties on past due balances.
Total financing costs, which include interest expense and finance
charge income allocated to the third party purchasers of accounts
receivable, remained fairly constant as a percentage of net sales
for the quarter and nine months.
Prior to the non-recurring items outlined below, third quarter net
income totaled $10.1 million, or $.44 per share, a 35% increase
over $7.5 million, or $.36 per share last year, and net income for
the nine months totaled $21.1 million, or $.97 per share, a 43%
increase over $14.8 million, or $.69 per share last year.
In conjunction with the Younkers merger, certain non-recurring
merger, restructuring, and integration charges were incurred for
the quarter and nine months ended November 2, 1996. For the
quarter, these charges totaled $.7 million before tax, or 0.2% of
net sales ($.4 million after tax, or $.02 per share). For the nine
months, these charges totaled $4.9 million before tax, or 0.5% of
net sales ($3.0 million after tax, or $.13 per share). These
charges were primarily related to items such as the termination of
a Younkers pension plan, the conversion of Younkers' computer
systems, and expenses of consolidating administrative functions.
For the quarter and nine months ended November 2, 1996, the Company
realized pre-tax gains related to the sale of certain properties of
$.3 million ($.2 million after tax, or $.01 per share) and $2.6
million ($1.6 million after tax, or $.07 per share), respectively.
The majority of the $2.6 million year-to-date gain, or $2.3
million, related to the Company's March 1996 sale of two Younkers
stores.
For the quarter and nine months ended October 28, 1995, the Company
incurred pre-tax expenses of $1.0 million, or 0.3% of net sales,
and $2.9 million, or 0.3% of net sales, respectively, related to
the defense of the attempted hostile takeover of Younkers by Carson
Pirie Scott & Co. On an after-tax basis, these charges totaled $.6
million, or $.03 per share, and $1.7 million, or $.09 per share,
for the quarter and nine months, respectively.
After these non-recurring items, net income for the current year
quarter and nine months totaled $9.9 million, or $.43 per share,
and $19.7 million, or $.91 per share, respectively, compared to
$6.9 million, or $.33 per share, and $13.0 million, or $.60 per
share, respectively, last year. The increase in earnings over the
prior year primarily was due to solid gross margin performance and
leverage on expenses.
Earnings per share figures above assume full dilution.
PROFFITT'S, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Form of Employment Agreement by and between
Proffitt's, Inc. and Robert M. Mosco dated
October 28, 1996
10.2 Form of Restricted Stock Grant Agreement under
the Proffitt's, Inc. 1994 Long-Term Incentive
Plan granted to Robert M. Mosco dated October
28, 1996
10.3 Form of Employment Agreement by and between
Proffitt's, Inc. and John B. Brownson dated
November 8, 1996
10.4 Form of Employment Agreement by and between
Proffitt's, Inc. and Douglas E. Coltharp dated
November 25, 1996
10.5 Form of Restricted Stock Grant Agreement under
the Proffitt's, Inc. 1994 Long-Term Incentive
Plan granted to Douglas E. Coltharp dated
November 25, 1996
10.6 Form of Employment Agreement by and between
Proffitt's, Inc. and Donald E. Hess dated July
8, 1996
10.7 Form of Second Amended and Restated Employment
Agreement by and between Proffitt's, Inc. and
Brian J. Martin dated October 11, 1996
10.8 Form of Restricted Stock Grant Agreement under
the Proffitt's, Inc. 1994 Long-Term Incentive
Plan granted to Brian J. Martin dated October
11, 1996
10.9 Form of Second Amended and Restated Employment
Agreement by and between Proffitt's, Inc. and
James A. Coggin dated October 11, 1996
10.10 Form of Restricted Stock Grant Agreement under
the Proffitt's, Inc. 1994 Long-Term Incentive
Plan granted to James A. Coggin dated October
11, 1996
10.11 Form of Second Amended and Restated Employment
Agreement by and between Proffitt's, Inc. and
R. Brad Martin dated October 11, 1996
10.12 Form of Restricted Stock Grant Agreement under
the Proffitt's, Inc. 1994 Long-Term Incentive
Plan granted to R. Brad Martin dated October
11, 1996
11.1 Statement re: Computation of Earnings per
Common Share
27.1 Financial Data Schedule
(b) Form 8-K Reports.
A report on Form 8-K was filed with the Commission on
October 24, 1996 regarding the acquisition of Parisian, Inc. by
Proffitt's, Inc.
A report on Form 8-K was filed with the Commission on
November 17, 1996 regarding the proposed merger of Proffitt's,
Inc. and G.R. Herberger's, Inc.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PROFFITT'S, INC.
______________________________
Registrant
12/12/96
______________________________
Date
/s/ Douglas E. Coltharp
______________________________
Douglas E. Coltharp
Executive Vice President, Chief
Financial Officer, and Treasurer
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the
28th day of October 1996, by and between Proffitt's, Inc. ("Company"),
and Robert M. Mosco ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as President of
Proffitt's Merchandising or in such other capacity with Company and its
subsidiaries as Company's Board of Directors shall designate.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $500,000 per year through
March 31, 1998, $550,000 per year from April 1, 1998 through March 31,
1999, and $600,000 per year from April 1, 1999 through the balance of
this Agreement's term. In addition, the Company shall pay Executive a
$50,000 relocation bonus upon Executive's moving to Birmingham, Alabama.
Executive's Base Salary shall be paid in installments in accordance with
Company's normal payment schedule for its senior management. All
payments shall be subject to the deduction of payroll taxes and similar
assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 60% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors.
(c) Incentive Compensation. Executive shall be and hereby is
granted a non-qualified option as of October 28, 1996, ("Option") to
purchase ten thousand (10,000) shares of Company common stock at an
option price equal to the closing price of the stock on October 28,
1996, as reported in the Wall Street Journal. The Option is granted
pursuant to Company's 1994 Long-Term Incentive Plan ("1994 LTIP"), and
shall be subject to the terms and conditions thereof. The Option shall
be exercisable on or after October 28, 1996, (the "Grant date") to the
extent of 20% of the shares covered thereby; exercisable to the extent
of an additional 20% of the shares covered thereby on and after the
first anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on and after the second
anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on an after the third
anniversary of the Grant Date; and exercisable to the extent of any
remaining shares on and after the fourth anniversary of the Grant Date;
provided, however, that no portion of the Option shall be exercisable
any earlier than six months from the Grant Date. The Option may be
exercised (as provided in the 1994 LTIP) up to ten (10) years from the
Grant Date. Any portion of the Option not exercised within said ten
(10) year period shall expire.
Notwithstanding the preceding paragraph, the Option granted under
this Agreement shall not be exercisable if Executive has been demoted
from the position stated in paragraph 1 or otherwise been reassigned
duties at a lower level in the Company. In the case of such a demotion
or reassignment of duties at a lower position, Company retains the right
to reduce the number of option shares granted under this Agreement and,
in such a case, vesting will occur as if the reduced number of option
shares had been granted on the Grant Date.
(d) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position.
5. Term. The term of this Agreement shall be from October 28,
1996, through February 5, 2000, provided, however, that Company may
terminate this Agreement at any time upon thirty (30) days' prior
written notice (at which time this Agreement shall terminate except for
Section 9, which shall continue in effect as set forth in Section 9).
In the event of such termination by Company, Executive shall be entitled
to receive his Base Salary (at the rate in effect at the time of
termination) through the end of the term of this Agreement. Such Base
Salary shall be paid thereafter in regular payroll installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects negatively on Company, provided that Executive shall
first be provided with written notice of the claim and with an
opportunity to contest said claim before the Board of Directors; or
(iii) Executive's material breach of his obligations under paragraph 2
of the Agreement, as so determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time during
the term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining term of this Agreement, whichever period is shorter. In the
event that Executive is disabled for more than twelve consecutive months
during the term of this Agreement, Executive shall, at the expiration of
the initial twelve consecutive month period, be entitled to receive
under this Agreement 50% of his Base Salary plus the insurance and
benefits described in Section 4 of this Agreement for the remaining term
of this Agreement. For purposes of this Agreement, the term "disabled"
shall mean the inability of Executive (as the result of a physical or
mental condition) to perform the duties of his position under this
Agreement with reasonable accommodation and which inability is
reasonably expected to last at least one (1) full year.
9. Non-competition; Unauthorized Disclosure.
(a) During the period Executive is employed under this Agreement,
and for a period of one year thereafter, Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of one year
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 9:
(i) the covenants contained in paragraph (i) and (ii) of
Section 9(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 9, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 9, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 10 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Robert M. Mosco
Proffitt's, Inc.
750 Lakeshore Parkway
Birmingham, AL 35211
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of
options, restricted stock, or other forms of incentive compensation
evidenced by a written instrument or by an action of the Board or
Directors, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment.
Notwithstanding the foregoing sentence, Executive and Company will reach
agreement on fairly compensating Executive for Executive's forgoing his
rights under the last sentence of Section 3.1(d) of the Employment
Agreement dated October 22, 1995 between Company and Executive. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ______________________________
James A. Coggin
President, Proffitt's, Inc.
______________________________
Robert M. Mosco
Executive
Date of Grant: October 28, 1996
Grantee: Robert M. Mosco
Number of shares: 12,500
RESTRICTED STOCK GRANT AGREEMENT
UNDER THE PROFFITT'S, INC.
1994 LONG-TERM INCENTIVE PLAN
PROFFITT'S, INC., a Tennessee corporation (the "Company"), hereby
grants to the person named above (the "Grantee") a conditional grant
(the "Grant") of the number of shares of common stock of the Company
listed above (the "Shares"), subject in all respects to the terms of
this agreement (the "Agreement") and the Company's 1994 LONG-TERM
INCENTIVE PLAN (the "Plan"), which is incorporated herein.
1. Restrictions and Return Provisions. The Shares shall be
subject to the following restrictions:
(a) Except as permitted in paragraph 5 of this Agreement,
neither this Grant nor the Shares issued hereunder may be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered prior to delivery of a certificate for unrestricted Shares to
the Grantee pursuant to paragraph 3(b) of this Agreement.
(b) The restricted Shares shall be returned to the Company,
and all rights of the Grantee to such restricted Shares shall terminate
without any payment by the Company to the Grantee, if (I) the Grantee
voluntarily terminates employment with the Company, or (ii) the Company
terminates the Grantee's employment for "cause," as defined in the
Grantee's employment contract.
2. Lapsing of Restrictions. The Restrictions on the Shares
covered hereby shall lapse in the following ways:
(a) Restrictions shall lapse as a function of the Company's
achieving certain performance goals, as determined by the Stock Option
Committee of the Board of Directors (the "Committee"). Shares shall be
earned on the basis of achievement of those goals for fiscal years 1996,
1997, and 1998. Those performance goals, as currently formulated, are
attached as an addendum to this agreement. The Committee shall have the
unilateral authority to modify or change those goals and to determine
whether the goals have been achieved. In the exercise of such
discretion, the Committee may consider any matter relevant to those
performance goals, including but not limited to, extraordinary gains or
losses, mergers and acquisitions, changes in accounting methods, and
changes in company policies. Within 90 days after the end of each
fiscal year, the Committee shall inform the Grantee as to the number of
Shares earned for that fiscal year. The Committee's decision is
conclusive and binding upon the Grantee.
(b) With regard to Shares earned in accordance with paragraph
2(a) ("Earned Shares"), restrictions shall be removed from 25% of such
Earned Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end of each
of the following three fiscal years.
(c) Upon a "Change in Control" as defined in the Plan, all
restrictions on all Shares shall be removed.
(d) Upon the Grantee's death or disability, all remaining
restrictions on Earned Shares shall be removed.
(e) The Committee shall have the discretionary authority to
remove any and all restrictions at any time.
(f) Any remaining restrictions on the Shares shall
automatically lapse ten (10) years after the date of this Grant.
3. Certificates. In order to enforce the restrictions, the
following procedures shall apply:
(a) The certificate issued for the Shares subject to this
Grant shall be registered in the name of the Grantee and deposited by
him or her, with the Company. The grantee shall also deposit with the
Company, at its request, a stock power endorsed in blank covering
restricted shares. Unless and until Shares are returned to the Company
as provided herein, the Grantee shall be entitled to vote all Shares,
receive all cash dividends with respect thereto, and otherwise be
treated as a shareholder with respect to such Shares. All other
distributions with respect to the Shares, including, without limitation,
shares received as a result of a stock dividend, stock split,
combination of shares or otherwise, shall be retained by the Company in
escrow or, if delivered to the Grantee, the Grantee shall deposit such
distribution with the Company in escrow pursuant to this paragraph 3(a).
(b) When all restrictions lapse with regard to a number of
Shares, the Company shall promptly cancel the stock certificate and
issue two certificates representing the remaining restricted Shares and
the unrestricted Shares (without a restrictive legend). The certificate
for unrestricted Shares shall be delivered to the Grantee, and the
certificate for the remaining restricted Shares shall remain on deposit
with the Company.
(c) Each certificate issued in respect of the Shares subject
to this Grant shall bear the following legend until the restrictions
lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING RETURN OF THE SHARES TO PROFFITT'S, INC.)
CONTAINED IN A RESTRICTED STOCK GRANT AGREEMENT UNDER THE PROFFITT'S,
INC. 1994 LONG-TERM INCENTIVE PLAN, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE CORPORATION.
4. General Provisions.
(a) The Grantee acknowledges that the he or she shall comply
with this Agreement and applicable securities laws if he or she decides
to offer or dispose of any Shares. The Company may require the Grantee
to make any other representation and warranty to the Company as may be
appropriate or required by any law or regulation.
(b) Nothing in this Agreement shall confer upon the Grantee
any right to continued employment with the Company. Any such right must
be found in a separate written employment contract.
(c) The Committee's determinations on all matters arising out
of this Agreement are subject to the approval or disapproval of the
Company's Board of Directors.
5. Non-transferability of Grant. This Grant may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, other than by will or by the laws of descent and
distribution.
6. Withholding.
(a) Prior to the delivery of certificates representing
unrestricted Shares under paragraph 3(b), the Grantee shall remit to the
Company an amount sufficient to satisfy any federal, state or local
tax-withholding requirements. The Grantee may satisfy the withholding
requirement in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be withheld. The
value of the Shares to be withheld shall be the fair market value, as
determined by the Committee, of the stock on the date that the amount of
tax to be withheld is determined (the "Tax Date"). Such election must
be made prior to the Tax Date and must comply with all applicable
securities laws and other legal requirements, as interpreted by the
Committee.
(b) The Company reserves the right to make whatever further
arrangements it deems appropriate for the withholding of any taxes in
connection with any transaction contemplated by this Agreement.
7. Adjustments in Shares. In the event of any change in the
outstanding common stock by reason of a stock dividend or distribution,
recapitalization, merger, consolidation, stock split, combination of
shares, exchange of shares, or the like, the Committee shall make
equitable adjustments to the restricted Shares.
8. Tax Elections. The Grantee agrees not to make an election in
accordance with Section 83(b) of the Internal Revenue Code to include in
the Grantee's gross income the value of the Shares in the year of this
agreement.
9. Merger and Amendment. This Agreement supersedes any other
agreement, written or oral, between the parties with respect to the
subject matter hereof. This Agreement may only be amended with the
consent of the Committee and a written instrument executed by the
Company and the Grantee.
10. Grantee Acknowledgment. Grantee acknowledges receipt of a
copy of the Plan, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Grant subject to
all the terms and provisions thereof. Grantee hereby agrees to accept
as binding the decisions and interpretations of the Committee upon any
question arising under this Agreement or the Plan.
PROFFITT'S, INC.
By: ______________________________
James A. Coggin
Its: President
______________________________
Robert M. Mosco, Grantee
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the
8th day of November, by and between Proffitt's, Inc. ("Company"), and
John B. Brownson ("Executive").
Company and Executive agree as follows:
1. Employment. At the Effective Time as set forth in the
Agreement and Plan of Merger dated November 8, 1996 (the "Effective
Time"), Company will employ Executive as a senior executive of G.R.
Herberger's, Inc. with such title and duties as determined by the
Company's Board of Directors or Chief Executive Officer.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Initial Bonus. Immediately following the Effective Time,
the Company shall pay Executive $50,000 as an incentive to continue his
employment with the Company.
(b) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $200,000 per year beginning at
the Effective Time through fiscal year 1997, then at a minimum rate of
$250,000 per year through fiscal year 1998, and then at a minimum rate
of $260,000 per year through the balance of the term of this Agreement.
Executive's Base Salary shall be paid in installments in accordance with
Company's normal payment schedule for its senior management. All
payments shall be subject to the deduction of payroll taxes and similar
assessments as required by law.
(c) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 50% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors; provided, however,
Executive's minimum bonus for fiscal year 1997 shall be $50,000 in the
event Executive continues to be employed by Company at the end of fiscal
year 1997.
(d) Incentive Compensation. Executive shall be and hereby is
granted a non-qualified option as of the Effective Time ("Option") to
purchase twenty thousand (20,000) shares of Company common stock at an
option price equal to the closing price of the stock on the next day the
market is open after the Effective Time, as reported in the Wall Street
Journal. The Option is granted pursuant to Company's 1994 Long-Term
Incentive Plan ("1994 LTIP"), and shall be subject to the terms and
conditions thereof. The Option shall be exercisable on or after the
next day the market is open after the Effective Time (the "Grant Date")
to the extent of 20% of the shares covered thereby; exercisable to the
extent of an additional 20% of the shares covered thereby on and after
the first anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on and after the second
anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on an after the third
anniversary of the Grant Date; and exercisable to the extent of any
remaining shares on and after the fourth anniversary of the Grant Date;
provided, however, that no portion of the Option shall be exercisable
any earlier than six months from the Grant Date. The Option may be
exercised (as provided in the 1994 LTIP) up to ten (10) years from the
Grant Date. Any portion of the Option not exercised within said ten
(10) year period shall expire.
(e) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest and become exercisable.
(f) Forgiveness of Loan. Company shall also cause G.R.
Herberger's, Inc. to forgive over three years the $102,500 loan
previously made to Executive. The forgiveness of such loan shall become
effective over the stated three years in all instances (including
Executive's death, disability, demotion or reassignment at lower level
within Company, or termination of employment), except that the Company
may cease the continued forgiveness of any balance owed on the loan if
Executive is terminated for "cause" in accordance with clause (1) or
(ii) in Section 6(a).
(g) Location Within St. Cloud Area. During the Term of
Executive's Employment, he will continue to be located within the St.
Cloud metropolitan area. In the event Executive decides to consent to
relocation, such relocation will be made pursuant to Company's
relocation policy.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position, including, but not limited to, use of a Company
automobile consistent with past practices. Executive shall have the
right to participate in the Company's health and dental plans for the
entire three years in all instances (including Executive's disability,
demotion or reassignment at lower level within Company, or termination
of employment), provided that Executive pays the normal employee's share
of such benefits; provided further, however, that the Company may
terminate such benefits if Executive is terminated for "cause" in
accordance with clause (i) or (ii) in Section 6(a).
5. Term. The term of this Agreement shall be for three (3) years,
beginning at the Effective Time (the "Term"), provided, however, that
Company may terminate this Agreement at any time upon thirty (30) days'
prior written notice ("Discretionary Termination"). Upon such a
Discretionary Termination, (i) Executive shall be entitled to receive
his Base Salary thereafter in regular payroll installments through the
remaining Term in accordance with Section 3(b); (ii) the balance of
Executive's loan shall become immediately forgiven, (iii) the Executive
shall continue to be eligible to participate in Company's health and
dental plans in accordance with Section 4 for the balance of the Term;
and (iv) Executive shall continue to be subject to the restrictive
covenants set forth in Section 9.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
This Agreement may be terminated for Good Reason (as hereinafter
defined) upon 30 days prior written notice from Executive to Company.
In the event this Agreement is terminated by Executive for Good Reason,
the Executive shall continue to be paid his Base Salary and realize the
other benefits which would be available if he had been subject to a
Discretionary Termination by the Company. As used in the Agreement, the
term "Good Reason" shall mean only (i) a significant reduction or
demotion in the position, duties, and responsibilities of Executive, or
a reduction in Base Salary, unless such reduction or demotion or
reduction in Base Salary is the result of Executive's failure to perform
satisfactorily the duties assigned to him; provided that Executive shall
have received written notice and an opportunity to cure his
non-performance within 30 days of receipt of such notice; (ii) failure
to pay any installment of the Base Salary within thirty (30) days of its
due date; (iii) a mandatory relocation of Executive outside of the St.
Cloud, Minnesota area; or (iv) any material breach by the Company of its
duties and obligations to Executive, provided, that the Company shall
first have received written notice from Executive which sets forth in
reasonabledetail the breach by the Company and the Company shall have a
period of thirty (30) days after receipt of such notice to cure such
breach, unless the same cannot be reasonably cured within said thirty
(30) day period, in which event, the Company shall have up to an
additional ninety (90) days to cure the same."
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects negatively on Company, provided that Executive shall
first be provided with written notice of the claim and with an
opportunity to contest said claim before the Board of Directors; or
(iii) Executive's material breach of his obligations under paragraph 2
of the Agreement.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in accordance with Section 3(b)) for a
period of two years or through the end of the Term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time during
the Term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining Term of this Agreement, whichever period is shorter. In the
event that Executive is disabled for more than twelve consecutive months
during the Term of this Agreement, Executive shall, at the expiration of
the initial twelve consecutive month period, be entitled to receive
under this Agreement 50% of his Base Salary plus the insurance and
benefits described in Section 4 of this Agreement for the remaining Term
of this Agreement. For purposes of this Agreement, the term "disabled"
shall mean the inability of Executive (as the result of a physical or
mental condition) to perform the duties of his position under this
Agreement with reasonable accommodation and which inability is
reasonably expected to last at least one (1) full year.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is
employed under this Agreement, and for a period of one year thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of two years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 9:
(i) the covenants contained in paragraph (i) and (ii) of
Section 9(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 9, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 9, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 10 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: John B. Brownson
G.R. Herberger's, Inc.
518 Mall Germain
St. Cloud, MN 56302
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto
with respect to employment of Executive by Company and contains all of
the covenants and agreements between the parties with respect to such
employment. Each party to this Agreement acknowledges that no
representations, inducements or agreements, oral or otherwise, that have
not been embodied herein, and no other agreement, statement or promise
not contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: _____________________
James A. Coggin
President
_____________________
John B. Brownson
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the
25th day of November 1996, by and between Proffitt's, Inc. ("Company"),
and Douglas E. Coltharp ("Executive")").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Executive Vice
President and Chief Financial Officer of Company or in such other
capacity with Company and its subsidiaries as Company's Board of
Directors shall designate.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $275,000 per year through
April 1, 1998, $300,000 per year from April 1, 1998 through March 31,
1999, and $315,000 per year from April 1, 1999 through the balance of
this Agreement's term. Executive's Base Salary shall be paid in
installments in accordance with Company's normal payment schedule for
its senior management. All payments shall be subject to the deduction
of payroll taxes and similar assessments as required by law.
(b) Initial Bonus. As soon as practicable after November 25,
1996, Company shall pay Executive $150,000 and issue him 2,500 shares of
Company stock as an initial bonus; provided, however, Executive has the
option of deferring all or a portion of the cash bonus into 1997, and
Executive may cause Company to withhold some shares of the Company stock
to satisfy Executive's and Company's tax-withholding obligations.
(c) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 50% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors; provided, however,
Executive shall receive a minimum bonus of $50,000 for his performance
during fiscal year 1997.
(d) Incentive Compensation. Executive shall be and hereby is
granted a non-qualified option as of November 25, 1996, ("Option") to
purchase thirty-five thousand (35,000) shares of Company common stock at
an option price equal to the closing price of the stock on November 25,
1996, as reported in the Wall Street Journal. The Option is granted
pursuant to Company's 1994 Long-Term Incentive Plan ("1994 LTIP"), and
shall be subject to the terms and conditions thereof. The Option shall
be exercisable on or after November 25, 1996, (the "Grant Date") to the
extent of 20% of the shares covered thereby; exercisable to the extent
of an additional 20% of the shares covered thereby on and after the
first anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on and after the second
anniversary of the Grant Date; exercisable to the extent of an
additional 20% of the shares covered thereby on an after the third
anniversary of the Grant Date; and exercisable to the extent of any
remaining shares on and after the fourth anniversary of the Grant Date;
provided, however, that no portion of the Option shall be exercisable
any earlier than six months from the Grant Date. The Option may be
exercised (as provided in the 1994 LTIP) up to ten (10) years from the
Grant Date. Any portion of the Option not exercised within said ten
(10) year period shall expire.
(e) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest.
4. Service Award. As compensation for his service, Company shall
issue 7,500 shares of Company stock to Executive as soon as practicable
after he completes three years of uninterrupted service with Company.
Executive shall be entitled to such 7,500 shares of Company stock prior
to the completion of three years of service in the event that his
employment is terminated by Company, and in that event, the award shall
be made as soon as practicable after termination.
5. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position, including the revised relocation package agreed to
by Executive and Company.
6. Term. The term of this Agreement shall be for three years,
provided, however, that Company may terminate this Agreement at any time
upon thirty (30) days' prior written notice (at which time this
Agreement shall terminate except for Section 10, which shall continue in
effect as set forth in Section 10). In the event of such termination by
Company, Executive shall be entitled to receive his Base Salary (at the
rate in effect at the time of termination) through the end of the term
of this Agreement. Such Base Salary shall be paid thereafter in regular
payroll installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
7. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects negatively on Company, provided that Executive shall
first be provided with written notice of the claim and with an
opportunity to contest said claim before the Board of Directors; or
(iii) Executive's material breach of his obligations under paragraph 2
of the Agreement, as so determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
8. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (in accordance with the schedule in Section 3(a)) for a
period of three years or through the end of the term of this Agreement,
whichever is longer, in addition to the minimum bonus set forth in
Section 3(c) if it has not previously been paid.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
9. Disability. If Executive becomes disabled at any time during
the term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining term of this Agreement, whichever period is longer. For
purposes of this Agreement, the term "disabled" shall mean the inability
of Executive (as the result of a physical or mental condition) to
perform the duties of his position under this Agreement with reasonable
accommodation and which inability is reasonably expected to last at
least one (1) full year.
10. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is employed
under this Agreement, and for a period of one year thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of one year
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 10:
(i) the covenants contained in paragraph (i) and (ii) of
Section 10(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 10, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 10, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 10 shall
survive the conclusion of Executive's employment by Company.
11. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 11 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Douglas Coltharp
Proffitt's, Inc.
750 Lakeshore Parkway
Birmingham, AL 35211
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of
options, restricted stock, or other forms of incentive compensation
evidenced by a written instrument or by an action of the Board or
Directors, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ______________________________
James A. Coggin
President
______________________________
Douglas Coltharp
Executive
Date of Grant: November 25, 1996
Grantee: Douglas Coltharp
Number of shares: 7,500
RESTRICTED STOCK GRANT AGREEMENT
UNDER THE PROFFITT'S, INC.
1994 LONG-TERM INCENTIVE PLAN
PROFFITT'S, INC., a Tennessee corporation (the "Company"), hereby
grants to the person named above (the "Grantee") a conditional grant
(the "Grant") of the number of shares of common stock of the Company
listed above (the "Shares"), subject in all respects to the terms of
this agreement (the "Agreement") and the Company's 1994 LONG-TERM
INCENTIVE PLAN (the "Plan"), which is incorporated herein.
1. Restrictions and Return Provisions. The Shares shall be
subject to the following restrictions:
(a) Except as permitted in paragraph 5 of this Agreement,
neither this Grant nor the Shares issued hereunder may be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered prior to delivery of a certificate for unrestricted Shares to
the Grantee pursuant to paragraph 3(b) of this Agreement.
(b) The restricted Shares shall be returned to the Company,
and all rights of the Grantee to such restricted Shares shall terminate
without any payment by the Company to the Grantee, if (I) the Grantee
voluntarily terminates employment with the Company, or (ii) the Company
terminates the Grantee's employment for "cause," as defined in the
Grantee's employment contract.
2. Lapsing of Restrictions. The Restrictions on the Shares
covered hereby shall lapse in the following ways:
(a) Restrictions shall lapse as a function of the Company's
achieving certain performance goals, as determined by the Stock Option
Committee of the Board of Directors (the "Committee"). Shares shall be
earned on the basis of achievement of those goals for fiscal years 1997,
1998, and 1999. Those performance goals, as currently formulated, are
attached as an addendum to this agreement. The Committee shall have the
unilateral authority to modify or change those goals and to determine
whether the goals have been achieved. In the exercise of such
discretion, the Committee may consider any matter relevant to those
performance goals, including but not limited to, extraordinary gains or
losses, mergers and acquisitions, changes in accounting methods, and
changes in company policies. Within 90 days after the end of each
fiscal year, the Committee shall inform the Grantee as to the number of
Shares earned for that fiscal year. The Committee's decision is
conclusive and binding upon the Grantee.
(b) With regard to Shares earned in accordance with paragraph
2(a) ("Earned Shares"), restrictions shall be removed from 25% of such
Earned Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end of each
of the following three fiscal years.
(c) Upon a "Change in Control" as defined in the Plan, all
restrictions on all Shares shall be removed.
(d) Upon the Grantee's death or disability, all remaining
restrictions on Earned Shares shall be removed.
(e) The Committee shall have the discretionary authority to
remove any and all restrictions at any time.
(f) Any remaining restrictions on the Shares shall
automatically lapse ten (10) years after the date of this Grant.
3. Certificates. In order to enforce the restrictions, the
following procedures shall apply:
(a) The certificate issued for the Shares subject to this
Grant shall be registered in the name of the Grantee and deposited by
him or her, with the Company. The grantee shall also deposit with the
Company, at its request, a stock power endorsed in blank covering
restricted shares. Unless and until Shares are returned to the Company
as provided herein, the Grantee shall be entitled to vote all Shares,
receive all cash dividends with respect thereto, and otherwise be
treated as a shareholder with respect to such Shares. All other
distributions with respect to the Shares, including, without limitation,
shares received as a result of a stock dividend, stock split,
combination of shares or otherwise, shall be retained by the Company in
escrow or, if delivered to the Grantee, the Grantee shall deposit such
distribution with the Company in escrow pursuant to this paragraph 3(a).
(b) When all restrictions lapse with regard to a number of
Shares, the Company shall promptly cancel the stock certificate and
issue two certificates representing the remaining restricted Shares and
the unrestricted Shares (without a restrictive legend). The certificate
for unrestricted Shares shall be delivered to the Grantee, and the
certificate for the remaining restricted Shares shall remain on deposit
with the Company.
(c) Each certificate issued in respect of the Shares subject
to this Grant shall bear the following legend until the restrictions
lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING RETURN OF THE SHARES TO PROFFITT'S, INC.)
CONTAINED IN A RESTRICTED STOCK GRANT AGREEMENT UNDER THE PROFFITT'S,
INC. 1994 LONG-TERM INCENTIVE PLAN, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE CORPORATION.
4. General Provisions.
(a) The Grantee acknowledges that he or she shall comply with
this Agreement and applicable securities laws if he or she decides to
offer or dispose of any Shares. The Company may require the Grantee to
make any other representation and warranty to the Company as may be
appropriate or required by any law or regulation.
(b) Nothing in this Agreement shall confer upon the Grantee
any right to continued employment with the Company. Any such right must
be found in a separate written employment contract.
(c) The Committee's determinations on all matters arising out
of this Agreement are subject to the approval or disapproval of the
Company's Board of Directors.
5. Non-transferability of Grant. This Grant may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, other than by will or by the laws of descent and
distribution.
6. Withholding.
(a) Prior to the delivery of certificates representing
unrestricted Shares under paragraph 3(b), the Grantee shall remit to the
Company an amount sufficient to satisfy any federal, state or local
tax-withholding requirements. The Grantee may satisfy the withholding
requirement in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be withheld. The
value of the Shares to be withheld shall be the fair market value, as
determined by the Committee, of the stock on the date that the amount of
tax to be withheld is determined (the "Tax Date"). Such election must
be made prior to the Tax Date and must comply with all applicable
securities laws and other legal requirements, as interpreted by the
Committee.
(b) The Company reserves the right to make whatever further
arrangements it deems appropriate for the withholding of any taxes in
connection with any transaction contemplated by this Agreement.
7. Adjustments in Shares. In the event of any change in the
outstanding common stock by reason of a stock dividend or distribution,
recapitalization, merger, consolidation, stock split, combination of
shares, exchange of shares, or the like, the Committee shall make
equitable adjustments to the restricted Shares.
8. Tax Elections. The Grantee agrees not to make an election in
accordance with Section 83(b) of the Internal Revenue Code to include in
the Grantee's gross income the value of the Shares in the year of this
agreement.
9. Merger and Amendment. This Agreement supersedes any other
agreement, written or oral, between the parties with respect to the
subject matter hereof. This Agreement may only be amended with the
consent of the Committee and a written instrument executed by the
Company and the Grantee.
10. Grantee Acknowledgment. Grantee acknowledges receipt of a
copy of the Plan, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Grant subject to
all the terms and provisions thereof. Grantee hereby agrees to accept
as binding the decisions and interpretations of the Committee upon any
question arising under this Agreement or the Plan.
PROFFITT'S, INC.
By: ______________________________
James A. Coggin
Its: President
__________________________________
Douglas Coltharp
Grantee
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the
8th day of July 1996, by and between Proffitt's, Inc. ("Company"), and
Donald E. Hess ("Executive"), and will become effective at the
"Effective Time" as that term is used in the Agreement and Plan of
Merger between the Company and Parisian, Inc.
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Chief
Executive Officer and President of Parisian or in such other capacity
with Company and its subsidiaries as Company's Board of Directors shall
designate.
2. Duties. During his employment, Executive shall devote a
substantial amount of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $427,000 per year. In
addition, the Board of Directors of Company shall, in good faith,
consider granting increases in such Base Salary based upon such factors
as Executive's performance and the growth and/or profitability of
Company. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of payroll
taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 50% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors.
4. Insurance and Benefits. During his employment, Company shall
allow Executive to participate in each employee benefit plan and to
receive each executive benefit that Company provides for senior
executives at the level of Executive's position.
5. Term. The term of this Agreement shall be for four (4) years,
beginning at the Effective Time, provided, however, that, beginning one
year after the Effective Time, Company or Executive may terminate
Executive's Employment under this Agreement at any time upon thirty (30)
days' prior written notice -- at which time this Agreement shall
terminate except for Section 8, which shall continue in effect as set
forth in Section 8, and Executive's right to receive his Base Salary (at
the rate in effect at the time of termination of employment) through the
end of the term of this Agreement, as well as Executive's benefits to
the extent not prohibited by law or Company's benefits plans; provided,
however, that Executive's compensation after termination of employment
shall not exceed the maximum amount that can be paid without imposition
of an excise tax under the Internal Revenue Code for "parachute"
payments. Such Base Salary shall be paid thereafter in regular payroll
installments.
In the event of Executive's disability or death, Company shall
continue to pay Executive's Base Salary to Executive or his estate
through the end of the term of this Agreement.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; or (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects negatively on Company, provided that Executive shall
first be provided with written notice of the claim and with an
opportunity to contest said claim before the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is
employed under this Agreement, and for a period of two years thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
the department store business conducted at the date hereof by Company or
any subsidiary or affiliate at any time during the term of this
Agreement (the "business");
(ii) shall not solicit, in competition with Company, any
person who is a customer of the business; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of two years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 8:
(i) the covenants contained in paragraph (i) and (ii) of
Section 8(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 8, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 8, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 8 shall
survive the conclusion of Executive's employment by Company.
9. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 9 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Donald Hess
c/o Parisian
750 Lakeshore Parkway
Birmingham, AL 35211
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of options
or other forms of incentive compensation evidenced by a written
instrument, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ____________________________
R. Brad Martin
Chairman and CEO
____________________________
Donald E. Hess
Executive
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement ("Agreement")
is entered into as of the 11th day of October 1996, by and between
Proffitt's, Inc. ("Company"), and Brian J. Martin ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Senior Vice
President and General Counsel of Company or in such other capacity with
Company and its subsidiaries as Company's Board of Directors shall
designate.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $250,000 per year (beginning
on April 1, 1997). In addition, the Board of Directors of Company
shall, in good faith, consider granting increases in such Base Salary
based upon such factors as Executive's performance and the growth and/or
profitability of Company. Executive's Base Salary shall be paid in
installments in accordance with Company's normal payment schedule for
its senior management. All payments shall be subject to the deduction
of payroll taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 30% of Base Salary based upon his
performance in accordance with
specific annual objectives, set in advance, all as approved by the Board
of Directors.
(c) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position.
5. Term. The term of this Agreement shall be for three (3) years,
beginning October 11, 1996, provided, however, that Company may
terminate this Agreement at any time upon thirty (30) days' prior
written notice (at which time this Agreement shall terminate except for
Section 9, which shall continue in effect as set forth in Section 9).
In the event of such termination by Company, Executive shall be entitled
to receive his Base Salary (at the rate in effect at the time of
termination) through the end of the term of this Agreement. Such Base
Salary shall be paid thereafter in regular payroll installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects
negatively on Company, provided that Executive shall first be provided
with written notice of the claim and with an opportunity to contest said
claim before the Board of Directors; or (iii) Executive's material
breach of his obligations under paragraph 2 of the Agreement, as so
determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time during
the term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining term of this Agreement, whichever period is shorter. In the
event that Executive is disabled for more than twelve consecutive months
during the term of this Agreement, Executive shall, at the expiration of
the initial twelve consecutive month period, be entitled to receive
under this Agreement 50% of his Base Salary plus the insurance and
benefits described in Section 4 of this Agreement for the remaining term
of this Agreement. For purposes of this Agreement, the term "disabled"
shall mean the inability of Executive (as the result of a physical or
mental condition) to perform the duties of his position under this
Agreement with reasonable accommodation and which inability is
reasonably expected to last at least one (1) full year.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is employed
under this Agreement, and for a period of one year thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of two years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 9:
(i) the covenants contained in paragraph (i) and (ii) of
Section 9(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 9, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 9, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall beaddressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 10 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Brian J. Martin
2025 Rhymes Road
Crystal Springs, MS 39059
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of
options, restricted stock, or other forms of incentive compensation
evidenced by a written instrument or by an action of the Board or
Directors, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ____________________________
James A. Coggin
President
____________________________
Brian J. Martin
Executive
Date of Grant: October 11, 1996
Grantee: Brian J. Martin
Number of shares: 9,000
RESTRICTED STOCK GRANT AGREEMENT
UNDER THE PROFFITT'S, INC.
1994 LONG-TERM INCENTIVE PLAN
PROFFITT'S, INC., a Tennessee corporation (the "Company"), hereby
grants to the person named above (the "Grantee") a conditional grant
(the "Grant") of the number of shares of common stock of the Company
listed above (the "Shares"), subject in all respects to the terms of
this agreement (the "Agreement") and the Company's 1994 LONG-TERM
INCENTIVE PLAN (the "Plan"), which is incorporated herein.
1. Restrictions and Return Provisions. The Shares shall be
subject to the following restrictions:
(a) Except as permitted in paragraph 5 of this Agreement,
neither this Grant nor the Shares issued hereunder may be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered prior to delivery of a certificate for unrestricted Shares to
the Grantee pursuant to paragraph 3(b) of this Agreement.
(b) The restricted Shares shall be returned to the Company,
and all rights of the Grantee to such restricted Shares shall terminate
without any payment by the Company to the Grantee, if (i) the Grantee
voluntarily terminates employment with the Company, or (ii) the Company
terminates the Grantee's employment for "cause," as defined in the
Grantee's employment contract.
2. Lapsing of Restrictions. The Restrictions on the Shares
covered hereby shall lapse in the following ways:
(a) Restrictions shall lapse as a function of the Company's
achieving certain performance goals, as determined by the Stock Option
Committee of the Board of Directors (the "Committee"). Shares shall be
earned on the basis of achievement of those goals for fiscal years 1996,
1997, and 1998. Those performance goals, as currently formulated, are
attached as an addendum to this agreement. The Committee shall have the
unilateral authority to modify or change those goals and to determine
whether the goals have been achieved. In the exercise of such
discretion, the Committee may consider any matter relevant to those
performance goals, including but not limited to, extraordinary gains or
losses, mergers and acquisitions, changes in accounting methods, and
changes in company policies. Within 90 days after the end of each
fiscal year, the Committee shall inform the Grantee as to the number of
Shares earned for that fiscal year. The Committee's decision is
conclusive and binding upon the Grantee.
(b) With regard to Shares earned in accordance with paragraph
2(a) ("Earned Shares"), restrictions shall be removed from 25% of such
Earned Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end of each
of the following three fiscal years.
(c) Upon a "Change in Control" as defined in the Plan, all
restrictions on all Shares shall be removed.
(d) Upon the Grantee's death or disability, all remaining
restrictions on Earned Shares shall be removed.
(e) The Committee shall have the discretionary authority to
remove any and all restrictions at any time.
(f) Any remaining restrictions on the Shares shall
automatically lapse ten (10) years after the date of this Grant.
3. Certificates. In order to enforce the restrictions, the
following procedures shall apply:
(a) The certificate issued for the Shares subject to this
Grant shall be registered in the name of the Grantee and deposited by
him or her, with the Company. The grantee shall also deposit with the
Company, at its request, a stock power endorsed in blank covering
restricted shares. Unless and until Shares are returned to the Company
as provided herein, the Grantee shall be entitled to vote all Shares,
receive all cash dividends with respect thereto, and otherwise be
treated as a shareholder with respect to such Shares. All other
distributions with respect to the Shares, including, without limitation,
shares received as a result of a stock dividend, stock split,
combination of shares or otherwise, shall be retained by the Company in
escrow or, if delivered to the Grantee, the Grantee shall deposit such
distribution with the Company in escrow pursuant to this paragraph 3(a).
(b) When all restrictions lapse with regard to a number of
Shares, the Company shall promptly cancel the stock certificate and
issue two certificates representing the remaining restricted Shares and
the unrestricted Shares (without a restrictive legend). The certificate
for unrestricted Shares shall be delivered to the Grantee, and the
certificate for the remaining restricted Shares shall remain on deposit
with the Company.
(c) Each certificate issued in respect of the Shares subject
to this Grant shall bear the following legend until the restrictions
lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING RETURN OF THE SHARES TO PROFFITT'S, INC.)
CONTAINED IN A RESTRICTED STOCK GRANT AGREEMENT UNDER THE PROFFITT'S,
INC. 1994 LONG-TERM INCENTIVE PLAN, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE CORPORATION.
4. General Provisions.
(a) The Grantee acknowledges that the he or she shall comply
with this Agreement and applicable securities laws if he or she decides
to offer or dispose of any Shares. The Company may require the Grantee
to make any other representation and warranty to the Company as may be
appropriate or required by any law or regulation.
(b) Nothing in this Agreement shall confer upon the Grantee
any right to continued employment with the Company. Any such right must
be found in a separate written employment contract.
(c) The Committee's determinations on all matters arising out
of this Agreement are subject to the approval or disapproval of the
Company's Board of Directors.
5. Non-transferability of Grant. This Grant may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, other than by will or by the laws of descent and
distribution.
6. Withholding.
(a) Prior to the delivery of certificates representing
unrestricted Shares under paragraph 3(b), the Grantee shall remit to the
Company an amount sufficient to satisfy any federal, state or local
tax-withholding requirements. The Grantee may satisfy the withholding
requirement in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be withheld. The
value of the Shares to be withheld shall be the fair market value, as
determined by the Committee, of the stock on the date that the amount of
tax to be withheld is determined (the "Tax Date"). Such election must
be made prior to the Tax Date and must comply with all applicable
securities laws and other legal requirements, as interpreted by the
Committee.
(b) The Company reserves the right to make whatever further
arrangements it deems appropriate for the withholding of any taxes in
connection with any transaction contemplated by this Agreement.
7. Adjustments in Shares. In the event of any change in the
outstanding common stock by reason of a stock dividend or distribution,
recapitalization, merger, consolidation, stock split, combination of
shares, exchange of shares, or the like, the Committee shall make
equitable adjustments to the restricted Shares.
8. Tax Elections. The Grantee agrees not to make an election in
accordance with Section 83(b) of the Internal Revenue Code to include in
the Grantee's gross income the value of the Shares in the year of this
agreement.
9. Merger and Amendment. This Agreement supersedes any other
agreement, written or oral, between the parties with respect to the
subject matter hereof. This Agreement may only be amended with the
consent of the Committee and a written instrument executed by the
Company and the Grantee.
10. Grantee Acknowledgment. Grantee acknowledges receipt of a
copy of the Plan, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Grant subject to
all the terms and provisions thereof. Grantee hereby agrees to accept
as binding the decisions and interpretations of the Committee upon any
question arising under this Agreement or the Plan.
PROFFITT'S, INC.
By: ____________________________
Its: President
Brian J. Martin
Grantee
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement ("Agreement")
is entered into as of the 11th day of October 1996, by and between
Proffitt's, Inc. ("Company"), and James A. Coggin ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as President of
Company or in such other capacity with Company and its subsidiaries as
Company's Board of Directors shall designate.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $467,000 per year. In
addition, the Board of Directors of Company shall, in good faith,
consider granting increases in such Base Salary based upon such factors
as Executive's performance and the growth and/or profitability of
Company. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of payroll
taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 60% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors.
(c) Stock Grant. Up to two thousand five hundred (2,500)
shares of Company stock shall be issued to Executive as soon as possible
after the end of each fiscal year of Company, based upon targeted annual
growth in earnings per share of Company, as determined by the Board of
Directors in its sole discretion.
(d) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position.
5. Term. The term of this Agreement shall be for three (3) years,
beginning October 11, 1996, provided, however, that Company may
terminate this Agreement at any time upon thirty (30) days' prior
written notice (at which time this Agreement shall terminate except for
Section 9, which shall continue in effect as set forth in Section 9).
In the event of such termination by Company, Executive shall be entitled
to receive his Base Salary (at the rate in effect at the time of
termination) through the end of the term of this Agreement. Such Base
Salary shall be paid thereafter in regular payroll installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects
negatively on Company, provided that Executive shall first be provided
with written notice of the claim and with an opportunity to contest said
claim before the Board of Directors; or (iii) Executive's material
breach of his obligations under paragraph 2 of the Agreement, as so
determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time during
the term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining term of this Agreement, whichever period is shorter. In the
event that Executive is disabled for more than twelve consecutive months
during the term of this Agreement, Executive shall, at the expiration of
the initial twelve consecutive month period, be entitled to receive
under this Agreement 50% of his Base Salary plus the insurance and
benefits described in Section 4 of this Agreement for the remaining term
of this Agreement. For purposes of this Agreement, the term "disabled"
shall mean the inability of Executive (as the result of a physical or
mental condition) to perform the duties of his position under this
Agreement with reasonable accommodation and which inability is
reasonably expected to last at least one (1) full year.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is employed
under this Agreement, and for a period of one year thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of two years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 9:
(i) the covenants contained in paragraph (i) and (ii) of
Section 9(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 9, it is expressly agreed by
Executive and Company that such other remedies cannot fullycompensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 9, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be ddressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 10 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: James A. Coggin
114 Meadowbrook North
Jackson, MS 39211
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of
options, restricted stock, or other forms of incentive compensation
evidenced by a written instrument or by an action of the Board or
Directors, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to
employment of Executive by Company and contains all of the covenants and
agreements between the parties with respect to such employment. Each
party to this Agreement acknowledges that no representations,
inducements or agreements, oral or otherwise, that have not been
embodied herein, and no other agreement, statement or promise not
contained in this Agreement, shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ____________________________
R. Brad Martin
Chairman and CEO
____________________________
James A. Coggin
Executive
Date of Grant: October 11, 1996
Grantee: James A. Coggin
Number of shares: 15,000
RESTRICTED STOCK GRANT AGREEMENT
UNDER THE PROFFITT'S, INC.
1994 LONG-TERM INCENTIVE PLAN
PROFFITT'S, INC., a Tennessee corporation (the "Company"), hereby
grants to the person named above (the "Grantee") a conditional grant
(the "Grant") of the number of shares of common stock of the Company
listed above (the "Shares"), subject in all respects to the terms of
this agreement (the "Agreement") and the Company's 1994 LONG-TERM
INCENTIVE PLAN (the "Plan"), which is incorporated herein.
1. Restrictions and Return Provisions. The Shares shall be
subject to the following restrictions:
(a) Except as permitted in paragraph 5 of this Agreement,
neither this Grant nor the Shares issued hereunder may be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered prior to delivery of a certificate for unrestricted Shares to
the Grantee pursuant to paragraph 3(b) of this Agreement.
(b) The restricted Shares shall be returned to the Company,
and all rights of the Grantee to such restricted Shares shall terminate
without any payment by the Company to the Grantee, if (I) the Grantee
voluntarily terminates employment with the Company, or (ii) the Company
terminates the Grantee's employment for "cause," as defined in the
Grantee's employment contract.
2. Lapsing of Restrictions. The Restrictions on the Shares
covered hereby shall lapse in the following ways:
(a) Restrictions shall lapse as a function of the Company's
achieving certain performance goals, as determined by the Stock Option
Committee of the Board of Directors (the "Committee"). Shares shall be
earned on the basis of achievement of those goals for fiscal years 1996,
1997, and 1998. Those performance goals, as currently formulated, are
attached as an addendum to this agreement. The Committee shall have the
unilateral authority to modify or change those goals and to determine
whether the goals have been achieved. In the exercise of such
discretion, the Committee may consider any matter relevant to those
performance goals, including but not limited to, extraordinary gains or
losses, mergers and acquisitions, changes in accounting methods, and
changes in company policies. Within 90 days after the end of each
fiscal year, the Committee shall inform the Grantee as to the number of
Shares earned for that fiscal year. The Committee's decision is
conclusive and binding upon the Grantee.
(b) With regard to Shares earned in accordance with paragraph
2(a) ("Earned Shares"), restrictions shall be removed from 25% of such
Earned Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end of each
of the following three fiscal years.
(c) Upon a "Change in Control" as defined in the Plan, all
restrictions on all Shares shall be removed.
(d) Upon the Grantee's death or disability, all remaining
restrictions on Earned Shares shall be removed.
(e) The Committee shall have the discretionary authority to
remove any and all restrictions at any time.
(f) Any remaining restrictions on the Shares shall
automatically lapse ten (10) years after the date of this Grant.
3. Certificates. In order to enforce the restrictions, the
following procedures shall apply:
(a) The certificate issued for the Shares subject to this
Grant shall be registered in the name of the Grantee and deposited by
him or her, with the Company. The grantee shall also deposit with the
Company, at its request, a stock power endorsed in blank covering
restricted shares. Unless and until Shares are returned to the Company
as provided herein, the Grantee shall be entitled to vote all Shares,
receive all cash dividends with respect thereto, and otherwise be
treated as a shareholder with respect to such Shares. All other
distributions with respect to the Shares, including, without limitation,
shares received as a result of a stock dividend, stock split,
combination of shares or otherwise, shall be retained by the Company in
escrow or, if delivered to the Grantee, the Grantee shall deposit such
distribution with the Company in escrow pursuant to this paragraph 3(a).
(b) When all restrictions lapse with regard to a number of
Shares, the Company shall promptly cancel the stock certificate and
issue two certificates representing the remaining restricted Shares and
the unrestricted Shares (without a restrictive legend). The certificate
for unrestricted Shares shall be delivered to the Grantee, and the
certificate for the remaining restricted Shares shall remain on deposit
with the Company.
(c) Each certificate issued in respect of the Shares subject
to this Grant shall bear the following legend until the restrictions
lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING RETURN OF THE SHARES TO PROFFITT'S, INC.)
CONTAINED IN A RESTRICTED STOCK GRANT AGREEMENT UNDER THE PROFFITT'S,
INC. 1994 LONG-TERM INCENTIVE PLAN, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE CORPORATION.
4. General Provisions.
(a) The Grantee acknowledges that the he or she shall comply
with this Agreement and applicable securities laws if he or she decides
to offer or dispose of any Shares. The Company may require the Grantee
to make any other representation and warranty to the Company as may be
appropriate or required by any law or regulation.
(b) Nothing in this Agreement shall confer upon the Grantee
any right to continued employment with the Company. Any such right must
be found in a separate written employment contract.
(c) The Committee's determinations on all matters arising out
of this Agreement are subject to the approval or disapproval of the
Company's Board of Directors.
5. Non-transferability of Grant. This Grant may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, other than by will or by the laws of descent and
distribution.
6. Withholding.
(a) Prior to the delivery of certificates representing
unrestricted Shares under paragraph 3(b), the Grantee shall remit to the
Company an amount sufficient to satisfy any federal, state or local
tax-withholding requirements. The Grantee may satisfy the withholding
requirement in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be withheld. The
value of the Shares to be withheld shall be the fair market value, as
determined by the Committee, of the stock on the date that the amount of
tax to be withheld is determined (the "Tax Date"). Such election must
be made prior to the Tax Date and must comply with all applicable
securities laws and other legal requirements, as interpreted by the
Committee.
(b) The Company reserves the right to make whatever further
arrangements it deems appropriate for the withholding of any taxes in
connection with any transaction contemplated by this Agreement.
7. Adjustments in Shares. In the event of any change in the
outstanding common stock by reason of a stock dividend or distribution,
recapitalization, merger, consolidation, stock split, combination of
shares, exchange of shares, or the like, the Committee shall make
equitable adjustments to the restricted Shares.
8. Tax Elections. The Grantee agrees not to make an election in
accordance with Section 83(b) of the Internal Revenue Code to include in
the Grantee's gross income the value of the Shares in the year of this
agreement.
9. Merger and Amendment. This Agreement supersedes any other
agreement, written or oral, between the parties with respect to the
subject matter hereof. This Agreement may only be amended with the
consent of the Committee and a written instrument executed by the
Company and the Grantee.
10. Grantee Acknowledgment. Grantee acknowledges receipt of a
copy of the Plan, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Grant subject to
all the terms and provisions thereof. Grantee hereby agrees to accept
as binding the decisions and interpretations of the Committee upon any
question arising under this Agreement or the Plan.
PROFFITT'S, INC.
By: ____________________________
Its: Chairman and CEO
____________________________
James A. Coggin
Grantee
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement ("Agreement")
is entered into as of the 11th day of October 1996, by and between
Proffitt's, Inc. ("Company"), and R. Brad Martin ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Chief
Executive Officer of Company or in such other capacity with Company and
its subsidiaries as Company's Board of
Directors shall designate. It is anticipated that Executive will be
elected Chairman of the Board.
2. Duties. During his employment, Executive shall devote
substantially all of his working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of his ability and to use his best efforts to
follow the policies and directions of Company's Board of Directors.
3. Compensation. Executive's compensation and benefits under
this Agreement shall be as follows:
(a) Base Salary. Company shall pay Executive a base salary
("Base Salary") at a rate of no less than $552,000 per year. In
addition, the Board of Directors of Company shall, in good faith,
consider granting increases in such Base Salary based upon such factors
as Executive's performance and the growth and/or profitability of
Company. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. All payments shall be subject to the deduction of payroll
taxes and similar assessments as required by law.
(b) Bonus. In addition to the Base Salary, Executive shall
be eligible, as long as he holds the position stated in paragraph 1, for
a yearly cash bonus of up to 75% of Base Salary based upon his
performance in accordance with specific annual objectives, set in
advance, all as approved by the Board of Directors.
(c) End of Five-Years Service Stock Grants. In accordance
with Executive's prior employment agreements, Company shall issue to
Executive twenty-five thousand (25,000) shares of common stock as soon
as possible after July 1, 1998 provided Executive has served the Company
continuously for five years following July 1, 1993. Company shall also
issue to Executive an additional twenty-five (25,000) shares of common
stock to Executive as soon as possible after October 11, 2001, provided
Executive has served the Company continuously for five years following
October 11, 1996, the date of this Second Amended and Restated
Employment Agreement. In the event of Executive's death prior to July
1, 1998, or October 11, 2001, Executive's estate shall be issued a pro
rata potion of the shares, on the basis of 5,000 shares per year for
each grant.
(d) Stock Grant Five thousand (5,000) shares of Company
common stock shall be issued to Executive as soon as possible after the
end of each fiscal year of Company, based upon annual targeted growth in
intrinsic value of the Company, as determined by the Board of Directors.
The Board of Directors shall have sole and exclusive discretion to grant
or withhold any portion of such yearly stock grant.
(e) Effect of Change of Control on Options. In the event of
a Change of Control (as defined in the Company's 1994 Long-Term
Incentive Plan), any Options granted to Executive prior to such Change
of Control shall immediately vest.
4. Insurance and Benefits. Company shall allow Executive to
participate in each employee benefit plan and to receive each executive
benefit that Company provides for senior executives at the level of
Executive's position.
5. Term. The term of this Agreement shall be for five (5) years,
beginning October 11, 1996, provided, however, that Company may
terminate this Agreement at any time upon thirty (30) days' prior
written notice (at which time this Agreement shall terminate except for
Section 9, which shall continue in effect as set forth in Section 9).
In the event of such termination by Company, Executive shall be entitled
to receive his Base Salary (at the rate in effect at the time of
termination) through the end of the term of this Agreement. Such Base
Salary shall be paid thereafter in regular payroll installments.
In addition, this Agreement shall terminate upon the death of
Executive, except as to: (a) Executive's estate's right to exercise any
unexercised stock options pursuant to Company's stock option plan then
in effect, (b) other entitlements under this contract that expressly
survive death, and (c) any rights which Executive's estate or dependents
may have under COBRA or any other federal or state law or which are
derived independent of this Agreement by reason of his participation in
any plan maintained by Company.
6. Termination by Company for Cause. (a) Company shall have the
right to terminate Executive's employment under this Agreement for
cause, in which event no salary or bonus shall be paid after termination
for cause. Termination for cause shall be effective immediately upon
notice sent or given to Executive. For purposes of this Agreement, the
term "cause" shall mean and be strictly limited to: (i) conviction of
Executive, after all applicable rights of appeal have been exhausted or
waived, for any crime that materially discredits Company or is
materially detrimental to the reputation or goodwill of Company; (ii)
commission of any material act of fraud or dishonesty by Executive
against Company or commission of an immoral or unethical act that
materially reflects
negatively on Company, provided that Executive shall first be provided
with written notice of the claim and with an opportunity to contest said
claim before the Board of Directors; or (iii) Executive's material
breach of his obligations under paragraph 2 of the Agreement, as so
determined by the Board of Directors.
(b) In the event that Executive's employment is terminated,
Executive agrees to resign as an officer and/or director of Company (or
any of its subsidiaries or affiliates), effective as of the date of such
termination, and Executive agrees to return to Company upon such
termination any of the following which contain confidential information:
all documents, instruments, papers, facsimiles, and computerized
information which are the property of Company or such subsidiary or
affiliate.
7. Change in Control. If Executive's employment is terminated
primarily as a result of a Change in Control of Company or a Potential
Change in Control of Company, as defined below, Executive shall receive
his Base Salary (at the rate in effect at the time of termination) for
a period of two years or through the end of the term of this Agreement,
whichever is longer.
As used herein, the term "Change in Control" means the happening of
any of the following:
(a) Any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
other than Company, a subsidiary of Company, or any employee benefit
plan of Company or its subsidiaries, becomes the beneficial owner of
Company's securities having 25 percent or more of the combined voting
power of the then outstanding securities of Company that may be cast for
the election for directors of Company (other than as a result of an
issuance of securities initiated by Company in the ordinary course of
business); or
(b) As the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions,
less than a majority of the combined voting power of the then
outstanding securities of Company or any successor corporation or entity
entitled to vote generally in the election of directors of Company or
such other corporation or entity after such transaction, are held in the
aggregate by holders of Company's securities entitled to vote generally
in the election of directors of Company immediately prior to such
transactions; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by
Company's stockholders, of each director of Company first elected during
such period was approved by a vote of at least two-thirds of the
directors of Company then still in office who were directors of Company
at the beginning of any such period.
As used herein, the term "Potential Change in Control" means the
happening of any of the following:
(a) The approval by stockholders of an agreement by Company,
the consummation of which would result in a Change of Control of
Company; or
(b) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than Company, a
wholly-owned subsidiary thereof or any employee benefit plan of Company
or its subsidiaries (including any trustee of such plan acting as
trustee)) of securities of Company representing 5 percent or more of the
combined voting power of Company's outstanding securities and the
adoption by the Board of Directors of Company of a resolution to the
effect that a Potential Change in Control of Company has occurred for
purposes of this Agreement.
8. Disability. If Executive becomes disabled at any time during
the term of this Agreement, he shall after he becomes disabled continue
to receive all payments and benefits provided under the terms of this
Agreement for a period of twelve consecutive months, or for the
remaining term of this Agreement, whichever period is shorter. In the
event that Executive is disabled for more than twelve consecutive months
during the term of this Agreement, Executive shall, at the expiration of
the initial twelve consecutive month period, be entitled to receive
under this Agreement 50% of his Base Salary plus the insurance and
benefits described in Section 4 of this Agreement for the remaining term
of this Agreement. For purposes of this Agreement, the term "disabled"
shall mean the inability of Executive (as the result of a physical or
mental condition) to perform the duties of his position under this
Agreement with reasonable accommodation and which inability is
reasonably expected to last at least one (1) full year.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is employed
under this Agreement, and for a period of three years thereafter,
Executive:
(i) shall not engage in any activities, whether as
employer, proprietor, partner, stockholder (other than the holder of
less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee or otherwise, in competition with
(i) the businesses conducted at the date hereof by Company or any
subsidiary or affiliate, or (ii) any business in which Company or any
subsidiary or affiliate is substantially engaged at any time during the
employment period;
(ii) shall not solicit, in competition with Company, any
person who is a customer of the businesses conducted by Company at the
date hereof or of any business in which Company is substantially engaged
at any time during the term of this Agreement; and
(iii) shall not induce or attempt to persuade any
employee of Company or any of its divisions, subsidiaries or then
present affiliates to terminate his or her employment relationship in
order to enter into competitive employment.
(b) Unauthorized Disclosure. During the period Executive is
employed under this Agreement, and for a further period of three years
thereafter, Executive shall not, except as required by any court or
administrative agency, without the written consent of the Board of
Directors, or a person authorized thereby, disclose to any person, other
than an employee of Company or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by Executive
of his duties as an executive for Company, any confidential information
obtained by him while in the employ of Company; provided, however, that
confidential information shall not include any information now known or
which becomes known generally to the public (other than as a result of
unauthorized disclosure by Executive).
(c) Scope of Covenants; Remedies. The following provisions
shall apply to the covenants of Executive contained in this Section 9:
(i) the covenants contained in paragraph (i) and (ii) of
Section 9(a) shall apply within all the territories in which Company is
actively engaged in the conduct of business while Executive is employed
under this Agreement, including, without limitation, the territories in
which customers are then being solicited;
(ii) without limiting the right of Company to pursue all
other legal and equitable remedies available for violation by Executive
of the covenants contained in this Section 9, it is expressly agreed by
Executive and Company that such other remedies cannot fully compensate
Company for any such violation and that Company shall be entitled to
injunctive relief to prevent any such violation or any continuing
violation thereof;
(iii) each party intends and agrees that if, in any
action before any court or agency legally empowered to enforce the
covenants contained in this Section 9, any term, restriction, covenant
or promise contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such
court or agency; and
(iv) the covenants contained in this Section 9 shall
survive the conclusion of Executive's employment by Company.
10. General Provisions.
(a) Notices. Any notice to be given hereunder by either
party to the other may be effected by personal delivery, in writing or
by mail, registered or certified, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address
by written notice in accordance with this Section 10 (a). Notices shall
be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: R. Brad Martin
5810 Shelly Oaks Drive
Memphis, TN 38134
If to Company: Proffitt's, Inc.
Post Office Box 9388
Alcoa, TN 37701
(b) Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in
full force and without being impaired or invalidated in any way.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
(d) Entire Agreement. Except for any prior grants of
options, restricted stock, or other forms of incentive compensation
evidenced by a written instrument -- some of which are attached hereto
as Exhibit A -- or by an action of the Board or Directors, this
Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to employment of
Executive by Company and contains all of the covenants and agreements
between the parties with respect to such employment. Each party to this
Agreement acknowledges that no representations, inducements or
agreements, oral or otherwise, that have not been embodied herein, and
no other agreement, statement or promise not contained in this
Agreement, shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing signed by the party
to be charged.
(e) No Conflicting Agreement. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant,
agreement or contract which limits the performance of his duties and
responsibilities under this Agreement or under which such performance
would constitute a breach.
(f) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define or
limit the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PROFFITT'S, INC.
BY: ____________________________
James A. Coggin
President
____________________________
Brian J. Martin
General Counsel
____________________________
R. Brad Martin
Executive
Date of Grant: October 11, 1996
Grantee: R. Brad Martin
Number of shares: 25,000
RESTRICTED STOCK GRANT AGREEMENT
UNDER THE PROFFITT'S, INC.
1994 LONG-TERM INCENTIVE PLAN
PROFFITT'S, INC., a Tennessee corporation (the "Company"), hereby
grants to the person named above (the "Grantee") a conditional grant
(the "Grant") of the number of shares of common stock of the Company
listed above (the "Shares"), subject in all respects to the terms of
this agreement (the "Agreement") and the Company's 1994 LONG-TERM
INCENTIVE PLAN (the "Plan"), which is incorporated herein.
1. Restrictions and Return Provisions. The Shares shall be
subject to the following restrictions:
(a) Except as permitted in paragraph 5 of this Agreement,
neither this Grant nor the Shares issued hereunder may be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered prior to delivery of a certificate for unrestricted Shares to
the Grantee pursuant to paragraph 3(b) of this Agreement.
(b) The restricted Shares shall be returned to the Company,
and all rights of the Grantee to such restricted Shares shall terminate
without any payment by the Company to the Grantee, if (I) the Grantee
voluntarily terminates employment with the Company, or (ii) the Company
terminates the Grantee's employment for "cause," as defined in the
Grantee's employment contract.
2. Lapsing of Restrictions. The Restrictions on the Shares
covered hereby shall lapse in the following ways:
(a) Restrictions shall lapse as a function of the Company's
achieving certain performance goals, as determined by the Stock Option
Committee of the Board of Directors (the "Committee"). Shares shall be
earned on the basis of achievement of those goals for fiscal years 1996,
1997, and 1998. Those performance goals, as currently formulated, are
attached as an addendum to this agreement. The Committee shall have the
unilateral authority to modify or change those goals and to determine
whether the goals have been achieved. In the exercise of such
discretion, the Committee may consider any matter relevant to those
performance goals, including but not limited to, extraordinary gains or
losses, mergers and acquisitions, changes in accounting methods, and
changes in company policies. Within 90 days after the end of each
fiscal year, the Committee shall inform the Grantee as to the number of
Shares earned for that fiscal year. The Committee's decision is
conclusive and binding upon the Grantee.
(b) With regard to Shares earned in accordance with paragraph
2(a) ("Earned Shares"), restrictions shall be removed from 25% of such
Earned Shares at the time they are earned, and restrictions shall be
removed from an additional 25% of such Earned Shares at the end of each
of the following three fiscal years.
Upon a "Change in Control" as defined in the Plan, all
restrictions on all Shares shall be removed.
(d) Upon the Grantee's death or disability, all remaining
restrictions on Earned Shares shall be removed.
(e) The Committee shall have the discretionary authority to
remove any and all restrictions at any time.
(f) Any remaining restrictions on the Shares shall
automatically lapse ten (10) years after the date of this Grant.
3. Certificates. In order to enforce the restrictions, the
following procedures shall apply:
(a) The certificate issued for the Shares subject to this
Grant shall be registered in the name of the Grantee and deposited by
him or her, with the Company. The grantee shall also deposit with the
Company, at its request, a stock power endorsed in blank covering
restricted shares. Unless and until Shares are returned to the Company
as provided herein, the Grantee shall be entitled to vote all Shares,
receive all cash dividends with respect thereto, and otherwise be
treated as a shareholder with respect to such Shares. All other
distributions with respect to the Shares, including, without limitation,
shares received as a result of a stock dividend, stock split,
combination of shares or otherwise, shall be retained by the Company in
escrow or, if delivered to the Grantee, the Grantee shall deposit such
distribution with the Company in escrow pursuant to this paragraph 3(a).
(b) When all restrictions lapse with regard to a number of
Shares, the Company shall promptly cancel the stock certificate and
issue two certificates representing the remaining restricted Shares and
the unrestricted Shares (without a restrictive legend). The certificate
for unrestricted Shares shall be delivered to the Grantee, and the
certificate for the remaining restricted Shares shall remain on deposit
with the Company.
Each certificate issued in respect of the Shares subject to
this Grant shall bear the following legend until the restrictions lapse:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING RETURN OF THE SHARES TO PROFFITT'S, INC.)
CONTAINED IN A RESTRICTED STOCK GRANT AGREEMENT UNDER THE PROFFITT'S,
INC. 1994 LONG-TERM INCENTIVE PLAN, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE CORPORATION.
4. General Provisions.
(a) The Grantee acknowledges that the he or she shall comply
with this Agreement and applicable securities laws if he or she decides
to offer or dispose of any Shares. The Company may require the Grantee
to make any other representation and warranty to the Company as may be
appropriate or required by any law or regulation.
(b) Nothing in this Agreement shall confer upon the Grantee
any right to continued employment with the Company. Any such right must
be found in a separate written employment contract.
The Committee's determinations on all matters arising out
of this Agreement are subject to the approval or disapproval of the
Company's Board of Directors.
5. Non-transferability of Grant. This Grant may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, other than by will or by the laws of descent and
distribution.
6. Withholding.
(a) Prior to the delivery of certificates representing
unrestricted Shares under paragraph 3(b), the Grantee shall remit to the
Company an amount sufficient to satisfy any federal, state or local
tax-withholding requirements. The Grantee may satisfy the withholding
requirement in whole or in part by electing to have the Company withhold
Shares having a value equal to the amount required to be withheld. The
value of the Shares to be withheld shall be the fair market value, as
determined by the Committee, of the stock on the date that the amount of
tax to be withheld is determined (the "Tax Date"). Such election must
be made prior to the Tax Date and must comply with all applicable
securities laws and other legal requirements, as interpreted by the
Committee.
(b) The Company reserves the right to make whatever further
arrangements it deems appropriate for the withholding of any taxes in
connection with any transaction contemplated by this Agreement.
7. Adjustments in Shares. In the event of any change in the
outstanding common stock by reason of a stock dividend or distribution,
recapitalization, merger, consolidation, stock split, combination of
shares, exchange of shares, or the like, the Committee shall make
equitable adjustments to the restricted Shares.
8. Tax Elections. The Grantee agrees not to make an election in
accordance with Section 83(b) of the Internal Revenue Code to include in
the Grantee's gross income the value of the Shares in the year of this
agreement.
9. Merger and Amendment. This Agreement supersedes any other
agreement, written or oral, between the parties with respect to the
subject matter hereof. This Agreement may only be amended with the
consent of the Committee and a written instrument executed by the
Company and the Grantee.
10. Grantee Acknowledgment. Grantee acknowledges receipt of a
copy of the Plan, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Grant subject to
all the terms and provisions thereof. Grantee hereby agrees to accept
as binding the decisions and interpretations of the Committee upon any
question arising under this Agreement or the Plan.
PROFFITT'S, INC.
By: ____________________________
Its: President
R. Brad Martin
Grantee
<TABLE>
<CAPTION>
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF HISTORICAL EARNINGS PER COMMON SHARE
PROFFITT'S, INC. AND SUBSIDIARIES
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
---------------------- ---------------------
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
PRIMARY:
Average shares outstanding 21,456 19,046 20,137 18,973
Net effect of dilutive stock options --
based on the treasury stock
method using average market price 971 387 796 382
--------- -------- ------- --------
Total 22,427 19,433 20,933 19,355
========== ========= ========= ========
Net income $9,909 $6,922 $19,702 $13,049
Less Preferred Stock dividends (487) (796) (1,462)
Less payment for early conversion
of Preferred Stock (3,032)
--------- -------- ------- --------
Net income available to common
shareholders $9,909 $6,435 $15,874 $11,587
========== ========= ========= ========
Primary earnings per common share $0.44 $0.33 $0.76 $0.60
========== ========= ========= ========
FULLY DILUTED:
Average shares outstanding 21,456 19,046 20,137 18,973
Net effect of dilutive stock options
-- based on the treasury stock
method using period-end market price
if higher than average price 998 387 868 395
Assumed conversion of Preferred Stock 755
Assumed conversion of 4.75% subordinated
debenture 2,020 2,020
--------- -------- ------- --------
Total 24,474 21,453 21,760 19,368
========== ========= ========= ========
Net income $9,909 $6,922 $19,702 $13,049
Add Subordinated debenture interest,
net of federal income tax effect 625 625
Less Preferred Stock dividends (487) (1,462)
--------- -------- ------- --------
Adjusted net income $10,534 $7,060 $19,702 $11,587
========== ========= ========= ========
Fully diluted earnings per common share $0.43 $0.33 $0.91 $0.60
========== ========= ========= ========
Note: On June 28, 1996, the Company converted 600 shares of Series A Preferred Stock
("Preferred Stock") into 1,422 shares of Proffitt's, Inc. Common Stock. In order to complete
this early conversion of the Preferred Stock, the Company paid $3,032 to the holder of the
Preferred Stock.
Primary earnings per share are based on earnings available to common shareholders (net income
reduced by Preferred Stock dividends and payment for early conversion) and the weighted
average number of common shares and equivalents (stock options) outstanding. Common Stock
issued on June 28, 1996 for the conversion of the Preferred Stock has been included in the
weighted average number of shares outstanding subsequent to that date.
As a result of the June 28, 1996 Preferred Stock conversion and as required by generally
accepted accounting principles, fully diluted earnings per share have been presented for the
periods shown based upon an "as if the 1,422 shares issued in the conversion were outstanding
from the beginning of the period" basis.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000812900
<NAME> PROFFITT'S, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> NOV-02-1996
<CASH> 4,734,000
<SECURITIES> 0
<RECEIVABLES> 62,645,000
<ALLOWANCES> 0
<INVENTORY> 530,429,000
<CURRENT-ASSETS> 657,958,000
<PP&E> 478,612,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,447,415,000
<CURRENT-LIABILITIES> 340,941,000
<BONDS> 510,796,000
0
0
<COMMON> 0
<OTHER-SE> 485,432,000
<TOTAL-LIABILITY-AND-EQUITY> 1,447,415,000
<SALES> 936,607,000
<TOTAL-REVENUES> 962,030,000
<CGS> 603,236,000
<TOTAL-COSTS> 603,236,000
<OTHER-EXPENSES> 81,113,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,632,000
<INCOME-PRETAX> 33,809,000
<INCOME-TAX> 14,107,000
<INCOME-CONTINUING> 19,702,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,702,000
<EPS-PRIMARY> .76
<EPS-DILUTED> .91
</TABLE>