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 May 3, 1997
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: May 3, 1997
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 20080, Jackson, Mississippi 39289
Registrant's telephone number, including area code:
(601) 968-4400
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 -- 28,201,674 shares as of May 3, 1997
PROFFITT'S, INC.
Index
PART I. FINANCIAL INFORMATION Page No.
----------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -- May 3, 1997,
February 1, 1997, and May 4, 1996 3
Condensed Consolidated Statements of Income -- Three
Months Ended May 3, 1997 and May 4, 1996 4
Condensed Consolidated Statements of Cash Flows -- Three
Months Ended May 3, 1997 and May 4, 1996 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
PROFFITT'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
May 3, February 1, May 4,
1997 1997 1996
-------- ------- -------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $15,011 $3,382 $4,907
Residual interest in trade accounts
receivable 79,711 85,400 32,038
Merchandise inventories 499,396 447,164 373,663
Deferred income taxes 18,663 11,700 4,953
Other current assets 42,373 48,317 21,421
------- ------- -------
Total current assets 655,154 595,963 436,982
Property and equipment, net 505,413 510,502 408,238
Goodwill and tradenames, net 275,658 277,472 52,450
Other assets 20,569 19,859 23,936
------- ------- -------
$1,456,794 $1,403,796 $921,606
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $157,123 $116,434 $105,041
Accrued expenses and other current
liabilities 110,813 122,604 74,806
Current portion of long-term debt 11,870 12,515 30,774
------- ------- -------
Total current liabilities 279,806 251,553 210,621
Senior debt 279,268 276,810 146,969
Deferred income taxes 66,501 62,000 54,878
Other long-term liabilities 50,220 47,768 15,008
Subordinated debt 225,840 225,767 100,568
Redeemable common stock held in ESOP 59,168
Shareholders' equity 555,159 539,898 334,394
------- ------- -------
$1,456,794 $1,403,796 $921,606
========= ========= ========
</TABLE>
See notes to condensed consolidated financial statements.
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
May 3, 1997 May 4, 1996
------------- -------------
<S> <C> <C>
Net sales $526,370 $365,179
Costs and expenses
Cost of sales 335,882 237,201
Selling, general and administrative
expenses 127,079 88,485
Other operating expenses 42,568 30,719
Store pre-opening costs 824 279
Merger, restructuring and integration
costs 1,468 2,763
Loses (gains) from long-lived assets 27 (2,260)
ESOP expenses 726 188
---------- ----------
Operating income 17,796 7,804
Other income (expense):
Finance charge income 15,237 10,634
Finance charge income allowed to
purchaser of accounts receivables (4,359) (3,474)
Interest expense (10,692) (4,706)
Other income, net 136 498
---------- ----------
Income before provision for
income taxes 18,118 10,756
Provision for income taxes 7,574 4,448
---------- ----------
NET INCOME 10,544 6,308
Preferred stock dividends 488
---------- ----------
Net income available to common
shareholders $10,544 $5,820
========== ==========
Earnings per share:
Primary $0.37 $0.25
========== ==========
Fully diluted $0.37 $0.25
========== ==========
Weighted average common shares:
Primary 28,451 23,466
========== ==========
Fully diluted 30,539 23,655
========== ==========
</TABLE>
PROFFITT'S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
May 3, May 4,
1997 1996
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $10,544 $6,308
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 10,898 10,174
Deferred income taxes (2,462) 1,715
Losses (gains) from long-lived assets 27 (2,260)
Amortization of deferred compensation 316 287
Other non-cash charges 491
Changes in operating assets and liabilities,
net (8,390) (23,277)
-------- --------
Net cash provided by (used in) operating
activities 11,424 (7,053)
INVESTING ACTIVITIES
Purchases of property and equipment, net (24,090) (9,944)
Proceeds from sale of assets 21,347 5,000
Other, net (876) (42)
-------- --------
Net cash used in investing activities (3,619) (4,986)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 8,663 11,025
Payments on long-term debt (6,850) (22,337)
Proceeds from issuance of stock 3,135 1,202
Dividends paid to shareholders (1,124) (2,122)
-------- --------
Net cash provided by (used in) financing
activities 3,824 (12,232)
Increase (decrease) in cash and cash
equivalents 11,629 (24,271)
Cash and cash equivalents at beginning
of period 3,382 29,178
-------- --------
Cash and cash equivalents at end of period $15,011 $4,907
======== ========
</TABLE>
Cash paid (refunded) during the three months ended May 3, 1997 for
interest and income taxes totaled $7,241 and ($1,930), respectively.
Cash paid during the three months ended May 4, 1996 for interest and
income taxes totaled $6,168 and $2,662, respectively.
See notes to condensed consolidated financial statements.
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
month period ended May 3, 1997 are not necessarily indicative of the
results that may be expected for the year ending January 31, 1998.
The financial statements include the accounts of Proffitt's, Inc. and
its subsidiaries, including its special purpose receivables financing
subsidiaries. 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 1, 1997.
The accompanying balance sheet at February 1, 1997 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 Parisian, Inc. ("Parisian"), a specialty department store
chain currently operating 40 stores in the southeast and midwest. The
Parisian transaction was accounted for as a purchase, and accordingly,
financial results of the operations of Parisian have been included in
the Company's results of operations since the acquisition date.
The following unaudited pro forma summary presents the consolidated
results of operations as if the Parisian acquisition had occurred at
the beginning of the period presented and does not purport to be
indicative of what would have occurred had the acquisition been made
as of this date or results which may occur in the future.
<TABLE>
<CAPTION>
Three Months Ended
May 4, 1996
-------------------
(in thousands, except
per share amounts)
<S> <C>
Pro forma:
Net sales $ 531,226
Net income $ 8,977
Earnings per common share:
Primary $ .32
Fully diluted $ .32
</TABLE>
Effective February 1, 1997, immediately before the Company's fiscal
year end, Proffitt's combined its business with G.R. Herberger's, Inc.
("Herberger's"), a retail department store chain currently operating
39 stores in the midwest. The merger has been accounted for as a
pooling of interests, and accordingly, the consolidated financial
statements have been restated for the prior year to include the
results of operations and financial position of Herberger's.
In the quarters ended May 3, 1997 and May 4, 1996, the Company
incurred certain integration costs related to its business
combinations with Younkers, Parisian, and Herberger's. These pre-tax
charges totaled $1.5 million and $2.8 million, respectively, for the
quarters ended May 3, 1997 and May 4, 1996, respectively.
A reconciliation of the aforementioned charges to the amounts of
merger, restructuring, and integration costs remaining unpaid at May
3, 1997 was as follows (in thousands):
Amounts unpaid at February 1, 1997 $ 9,391
Adjustments to amounts unpaid at
February 1, 1997 0
Amounts related to continuing integration
efforts during the quarter 1,468
Amounts paid during the quarter (5,067)
----------
Amounts unpaid at May 3, 1997 $ 5,792
NOTE C -- 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
and tradenames, 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 D -- RECENT FINANCING
On May 21, 1997, the Company completed the sale of $125 million of
8.125% Senior Notes, due 2004 (the "Senior Notes"). The Senior Notes
were offered in a private placement to qualified institutional buyers.
Proceeds from the Senior Notes were used to repay existing mortgage
notes and other unsecured obligations and to reduce amounts
outstanding under the Company's revolving credit facility. The
Company also intends to increase its existing $275 million revolving
credit facility and issue approximately $200 million of term asset-backed
securities against the Company's proprietary credit card
receivables, replacing existing commercial paper-based financing.
In May and June 1997, the Company repurchased approximately $32
million of the existing 9-7/8% Parisian Senior Subordinated Notes
which will result in an extraordinary loss from the early
extinguishment of debt of approximately $.9 million after tax.
In connection with the Company's Senior Notes offering and the
anticipated issuance of the term asset-backed securities, the Company
entered into forward interest rate lock agreements in an aggregate
notional amount of $95 million as of May 3, 1997. The agreements are
settled contemporaneously with the completion of the financing. The
Company's policy is to use financial derivatives only to reduce risk
in conjunction with specific financing arrangements. Gains and losses
on these hedges are included in the respective debt and deferred
financing cost amounts. Gains and losses related to the hedges of
firm commitments or anticipated transactions are deferred and
recognized in operating results over the lives of the related assets
or liabilities.
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 May 3, 1997 and February 1, 1997 asset, liability,
and shareholders' equity classifications over the May 4, 1996 balances
presented was largely attributable to the acquisition and financing of
the Parisian transaction completed on October 11, 1996. See Note B on
page 6 attached. For example, May 3, 1997 merchandise inventories and
property and equipment balances increased over May 4, 1996 balances
primarily due to the value of the acquired Parisian inventories and
property and equipment.
May 3, 1997 goodwill and tradenames increased over the balance at May
4, 1996 due to goodwill of approximately $225 million recorded in
conjunction with the October 1996 Parisian acquisition.
May 3, 1997 subordinated debt increased over the balance at May 4,
1996 due to the addition of Parisian's $125 million of 9-7/8 % notes
due 2003.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Prior year income statement information below has been restated to
reflect the February 1, 1997 merger with Herberger's, which was
accounted for as a pooling of interests. Prior year income statement
information below has not been restated to reflect the October 11,
1996 merger with Parisian, which was accounted for as a purchase.
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
----------------------
5/3/97 5/4/96
-------- --------
<S> <C> <C>
Net sales 100.0% 100.0%
Costs and expenses:
Cost of sales 63.8 65.0
Selling, general & administrative expenses 24.1 4.2
Other operating expenses 8.1 8.4
Store pre-opening costs 0.2 0.1
Merger, restructuring and integration costs 0.3 0.7
Loss (gain) from long-lived assets 0.0 ( 0.6)
ESOP expenses 0.1 0.1
------- -------
Operating income 3.4 2.1
Other income (expense):
Finance charge income 2.9 2.9
Finance charge income allocated to purchasers
of accounts receivable (0.8) (0.9)
Interest expense (2.0) (1.3)
Other income, net 0.0 0.1
------- -------
Income before provision for income taxes 3.5 2.9
Provision for income taxes 1.5 1.2
------- -------
NET INCOME 2.0% 1.7%
</TABLE>
For the quarter, total Company sales were $526.4 million, a 44%
increase over $365.2 million in the prior year. Sales for the quarter
included $166.4 million of sales from the newly acquired Parisian
Division. On a comparable stores basis (excluding Parisian), total
Company sales increased 3% for the quarter. Total and comparable
store sales by division were as follows:
<TABLE>
<CAPTION>
Quarter Quarter Total Comparable
ended ended increase increase
5/3/97 5/4/96 (decrease) (decrease)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Proffitt's $ 53.9 $ 60.5 (11%) 7%
McRae's 110.9 109.5 1% 1%
Younkers 128.7 126.6 2% 7%
Herberger's 66.5 68.6 ( 3%) ( 1%)
------- -------
Divisions in comp base $360.0 $365.2 ( 1%) 3%
Parisian 166.4 - - ( 2%)
------- -------
Total Company $526.4 $365.2 44% -
</TABLE>
The total store sales performance for the periods indicated reflects
the sale of two Younkers stores in March 1996, the closing of one
Younkers store in August 1996, the sale of the inventory of seven
Proffitt's Division stores in December 1996 in connection with the
later sale of those stores, and the closing of one Herberger's store
in January 1997. Total store sales performance also reflects the
opening of one McRae's store in March 1996, one new Proffitt's
Division store in October 1996, and new Parisian stores in February
1997 and April 1997 (one each).
For the quarter, gross margin percentages increased over the prior
year. This improvement resulted from improved inventory management,
reduced markdowns, and the effects of inventory repositioning at both
the Parisian and Herberger's businesses, which was initiated in late
1996.
Selling, general, and administrative expenses declined as a percentage
of net sales for the quarter. This expense leverage primarily
resulted from the early stages of targeted cost reductions related to
each of the Company's recent business combinations.
Other operating expenses, which consist of rents, depreciation and
amortization, and taxes other than income taxes, declined as a
percentage of net sales for the quarter. This reduction was primarily
due to the effect of closed underperforming stores.
Total financing costs, which include interest expense and finance
charge income allocated to the third party purchasers of accounts
receivable, increased as a percentage of net sales for the quarter due
to additional borrowings related to the October 1996 purchase of
Parisian.
Prior to the non-recurring items and ESOP charges outlined below, net
income totaled $11.9 million, or $.41 per share, a 77% increase over
$6.7 million, or $.26 per share last year.
In conjunction with the Company's mergers with Younkers (completed
February 3, 1996), Parisian, and Herberger's, the Company incurred
certain non-recurring integration charges in the first quarter of each
year presented. For the quarter ended May 3, 1997, these charges
totaled $1.5 million before tax, or 0.3% of net sales ($.9 million
after tax, or $.03 per share). For the quarter ended May 4, 1996,
these charges totaled $2.8 million before tax, or 0.8% of net sales
($1.7 million after tax, or $.07 per share).
For the quarter ended May 4, 1996, the Company realized pre-tax gains
of $2.3 million ($1.4 million after tax, or $.06 per share) related
to the Company's March 1996 sale of two Younkers stores to Carson
Pirie Scott & Co.
For the quarters ended May 3, 1997 and May 4, 1996, the Company
incurred pre-tax expenses of $0.7 million, or 0.1% of net sales, and
$0.2 million, or 0.1% of net sales, respectively, related to the
Company's Employee Stock Ownership Plan (ESOP) maintained at the newly
acquired Herberger's Division. On an after-tax basis, these charges
totaled $.5 million, or $.01 per share, and $.1 million, or less than
$.01 per share, for the quarters ended May 3, 1997 and May 4, 1996,
respectively.
After these non-recurring items and ESOP charges, net income for the
quarter ended May 3, 1997 totaled $10.5 million, or $.37 per share,
compared to $6.3 million, or $.25 per share, for the quarter ended May
4, 1996. The increase in earnings over the prior year primarily was
due to solid gross margin performance and leverage on operating
expenses netted against increased financing costs.
PROFFITT'S, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Form of Second Amended and Restated Employment
Agreement by and between Proffitt's, Inc. and David
Baker dated April 1, 1997
10.2 Form of Employment Agreement by and between Proffitt's,
Inc. and R. Thomas Coan dated April 28, 1997
10.3 Form of Employment Agreement by and between Proffitt's,
Inc. and John Parros dated April 28, 1997
10.4 Form of Third Amended and Restated Employment Agreement
by and between Proffitt's, Inc. and R. Brad Martin
dated May 9, 1997
10.5 Form of Employment Agreement by and between Proffitt's,
Inc. and Dawn H. Robertson dated May 19, 1997
10.6 Form of Employment Agreement by and between Proffitt's,
Inc. and Mark Shulman dated June 16, 1997
10.7 Form of Employment Agreement by and between Proffitt's,
Inc. and Toni E. Browning dated June 16, 1997
10.8 Form of Employment Agreement by and between Proffitt's,
Inc. and Mark Goldstein dated June 16, 1997
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 May 2,
1997 regarding a proposed senior note offering.
A report on Form 8-K was filed with the Commission on May
21, 1997 regarding the completion of the senior note
offering.
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
6/12/97
--------------------
Date
/s/ Douglas E. Coltharp
-----------------------
Douglas E. Coltharp
Executive Vice President
and Chief Financial Officer
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 1st day of April 1997, by and between Proffitt's, Inc. and
McRae's, Inc. (collectively the "Company"), and David Baker
"Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Senior
Vice President of Operations 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 $222,000 per year.
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) Incentive Compensation. Executive shall be and
hereby is granted a non-qualified option as of April 9, 1997,
("Option") to purchase two thousand five hundred (2,500) shares of
Company common stock at an option price equal to the closing price
of the stock on April 9, 1997, as reported in the Wall Street
Journal. The Option is granted pursuant to Company's 1997
Stock-Based Incentive Plan ("1997 Plan"), and shall be subject to
the terms and conditions thereof. The Option shall be exercisable
on or after April 9, 1997, (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 1997 Plan) up to
ten (10) years from the Grant Date. Any portion of the Option not
exercised within said ten (10) year period shall expire.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1997
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 one year,
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 then in effect 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 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.
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 do business with any vendor that is
one of the top 100 vendors of the businesses conducted by Company
or its affiliates at the date hereof or 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 or its affiliates or subsidiaries are 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; provided, however,
Company shall be entitled to injunctive relief only to protect
itself from unfair competition of the type protected under
Tennessee law.
(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: David Baker
3455 Highway 80 West
Jackson, MS 39209
If to Company: Brian J. Martin
750 Lakeshore Parkway
Birmingham, AL 35211
(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: /s/ James A. Coggin
_____________________
James A. Coggin
President
/s/ David Baker
_____________________
David Baker
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 28th day of April 1997, by and between Proffitt's, Inc. and
McRae's, Inc. (collectively the "Company"), and R. Thomas Coan
("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Vice
President of Human Resources 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 $185,000 per year.
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) Incentive Compensation. Executive shall be and
hereby is granted a non-qualified option ("Option") to purchase
twenty thousand (20,000) shares of Company common stock at an
option price equal to the closing price of the stock at the end of
the current fiscal quarter, as reported in the Wall Street Journal.
The Option is granted pursuant to Company's 1997 Stock-Based
Incentive Plan ("1997 Plan"), and shall be subject to the terms and
conditions thereof. The Option shall be exercisable on or after
April 28, 1997, (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 1997 Plan) up to
ten (10) years from the Grant Date. Any portion of the Option not
exercised within said ten (10) year period shall expire.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1997
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 two 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 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 then in effect 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 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.
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 do business with any vendor that is
one of the top 100 vendors of the businesses conducted by Company
or its affiliates at the date hereof or 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.
(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 or its affiliates or subsidiaries are 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; provided, however,
Company shall be entitled to injunctive relief only to protect
itself from unfair competition of the type protected under
Tennessee law.
(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. Thomas Coan
750 Lakeshore Parkway
Birmingham, AL 35211
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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: /s/ James A. Coggin
_____________________
James A. Coggin
President
/s/ R. Thomas Coan
__________________________
R. Thomas Coan
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 28th day of April 1997, by and between
Proffitt's, Inc. (the "Company"), and John Parros ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Executive
Vice President of Merchandising of Proffitt's
Merchandising Group 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 $350,000 per year.
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 40% 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 is hereby granted
a non-qualified option ("Option") to purchase thirty-six thousand,
one hundred eighty (36,180) shares of Company common stock at an
option price equal to the closing price of the stock at the end of
the Company's fiscal quarter, as reported in the Wall Street
Journal. The Option is granted pursuant to either the Company's
1994 Long-Term Incentive Plan or the Company's 1997 Stock-Based
Incentive Plan ("1997 Plan"), and shall be subject to the terms and
conditions thereof. The Option shall be exercisable on or after
Executive's first day of employment (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 up to ten (10) years
from the Grant Date. Any portion of the Option not exercised
within said ten (10) year period shall expire.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1997
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 two 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 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.
Notwithstanding the foregoing, if Company terminates Executive's
employment without cause (as defined below) within the last year of
this Agreement, or while Executive is employed without an
employment agreement, then Company shall pay Executive one year's
Base Salary as severance.
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 then in effect 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. 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 do business with any vendor that is
one of the top 100 vendors of the businesses conducted by Company
or its affiliates at the date hereof or 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.
(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 or its affiliates or subsidiaries are 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 Parros
750 Lakeshore Parkway
Birmingham, AL 35211
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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: /s/ Brian J. Martin
_____________________
Brian J. Martin
Executive Vice President
/s/ John Parros
_____________________
John Parros
Executive
THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Third Amended and Restated Employment Agreement
("Agreement") is entered into as of the 9th day of May 1997, 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 $625,000 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 Executive's 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. An amount up to ten thousand (10,000)
shares of Company common stock may 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 or
other discretionary factors, as determined by the Human Resources
Committee of the Board of Directors. The Human Resources
Committee, subject to approval from the Board of Directors, shall
have sole and exclusive discretion to grant or withhold any portion
of such yearly stock grant.
(e) Stock Bonus. Company shall award Executive a bonus
of 10,000 shares of Company stock for each fiscal year in which
Company's earnings per share increase 20% or more over the prior
year's earnings. The Human Resources Committee of the Board of
Directors shall have sole and exclusive discretion to determine
whether that objective has been met, and the Committee may consider
matters such as non-recurring and extraordinary items.
(f) Incentive Compensation. Executive was granted on
April 9, 1997, a non-qualified option ("Option") to purchase two
hundred thousand (200,000) shares of Company common stock at an
option price equal to the closing price of the stock at the close
of business on April 9, 1997, as reported in the Wall Street
Journal. The Option as to 125,000 shares was granted pursuant to
the Company's 1994 Long-Term Incentive Plan ("1994 LTIP"), and
shall be subject to the terms and conditions thereof. The Option
as to 75,000 shares was granted under the Company's 1997
Stock-Based Incentive Plan and shall be subject to the terms and
conditions thereof. The Option shall be exercisable on or after
April 9, 1997 (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 up to ten (10) years from the Grant Date. Any portion of
the Option not exercised within said ten (10) year period shall
expire.
(g) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1994
LTIP), any Options granted to Executive prior to such Change of
Control shall immediately vest.
(h) Forgiveness of Loan. Company shall forgive the
$500,000 interest-free loan due January 31, 1999, in 1/5th
increments, at the end of each fiscal year; provided, however, that
Executive must continue to be employed by Company for any portion
of the loan to be forgiven, and provided further that Executive
must repay any outstanding balance if he terminates employment.
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. In addition, Company shall pay
the reasonable costs for Executive's tax and financial planning,
and shall continue to buy split-dollar life insurance for
Executive.
5. Term. The term of this Agreement shall be for five (5)
years, beginning May 9, 1997, 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 Shelby 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
PROFFITT'S, INC.
BY: /s/ James A. Coggin
_____________________
James A. Coggin
President
/s/ Brian J. Martin
_____________________
Brian J. Martin
General Counsel
/s/ R. Brad Martin
_____________________
R. Brad Martin
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 19th day of May 1997, by and between McRae's, Inc. (the
"Company"), and Dawn Robertson ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby agrees to employ Executive as
President and Chief Executive Officer of Company or in such other
comparable capacity with Company and its affiliates as mutually
agreeable by Company and Executive. Executive's first date of
employment ("Start Date") will be the earlier of: (a) May 1, 1998,
(b) the day after the May Company terminates or otherwise releases
Executive from her current employment, (c) the date a court of
competent jurisdiction determines that Executive may lawfully work
for Company or (d) the date that Company's General Counsel informs
Executive in writing that she may work for Company without
violating her agreement with her current employer.
2. Duties. During her employment, Executive shall devote
substantially all of her working time, energies, and skills to the
benefit of Company's business. Executive shall have duties,
responsibilities and authority commensurate with those of a
president and chief executive officer of a similarly sized company.
Executive agrees to follow the legal and ethical policies and
directions of Company's Board of Directors. The foregoing shall not
prevent Executive from participating in charitable, community or
industry affairs or from managing her passive personal investments
provided that those activities do not materially interfere with her
obligations under this Agreement.
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 not less than $375,000 per
year. Executive's Base Salary shall be paid in installments in
accordance with Company's normal payment schedule for its senior
management. Executive's Base Salary shall be subject to annual
review by the Proffitt's, Inc. Board of Directors (the "Proffitt's
Board") and may be increased, but not decreased, from time to time.
All payments shall be subject to the deduction of payroll taxes and
similar assessments as required by law.
(b) Cash and Stock Bonus. In addition to the Base
Salary, Executive shall be eligible, as long as she holds the
position stated in Section 1, for a yearly cash bonus of up to 50%
of Base Salary based upon her performance in accordance with
specific annual objectives, set in advance, all as approved by the
Board of Directors of Proffitt's, Inc. or its Human Resources
Committee. Executive shall also be eligible during the term of
this Agreement to earn a yearly stock-grant bonus of up to three
thousand (3,000) restricted shares of Proffitt's common stock,
which will vest and no longer be subject to restrictions in equal
one-third segments (one-third on the award date, one-third on the
first anniversary of the award date, and one-third on the second
anniversary of the award date); provided, however, that Executive
must continue to be employed by Company on the relevant vesting
date for the unvested shares to vest. Proffitt's, Inc.'s Board of
Directors shall have complete discretion to award or not to award
such bonus shares in light or predetermined objectives.
Notwithstanding the foregoing, in the event of the termination of
Executive's employment during, at the end of, or after the Term, by
Company without Cause, by Executive for Good Reason, or due to
Executive's death or Disability, any restricted shares of common
stock that would have vested during the twelve (12) month period
immediately following the date of such termination shall
immediately vest.
(c) Initial Bonus. Company shall as soon as practicable
after the Start Date, but in no event later than twenty (20) days
thereafter, pay Executive $155,000 and award Executive 3,000
shares of restricted Proffitt's common stock, which will vest and
no longer be subject to restrictions in equal one-third segments
(one-third on the award date, one-third on the first anniversary of
the award date, and one-third on the second anniversary of the
award date); provided, however, that Executive must be employed
by Company on the relevant vesting date for the unvested shares to
vest. Notwithstanding the foregoing, in the event of termination
of Executive's employment during, at the end of, of after the Term,
by Company without Cause, by Executive for Good Reason, or due to
Executive's death or disability, any restricted shares of common
stock that would have vested during the twelve (12) month period
immediately following the date of such termination shall
immediately vest.
(d) Incentive Compensation. Executive shall be granted
a non-qualified option ("Option") to purchase forty thousand
(40,000) shares of Proffitt's common stock at an option price equal
to the closing price of the stock on the Start Date (or if the
market was not open on that date, the closing price on the last day
the market was open), as reported in the Wall Street Journal;
provided, however, Proffitt's Board of Directors' Human Resources
Committee shall retain its discretion to grant or not to grant such
Option The Option will be granted pursuant to either the
Proffitt's 1994 Long-Term Incentive Plan or the Proffitt's 1997
Stock-Based Incentive Plan , and shall be subject to the terms and
conditions thereof as well as the terms of this Agreement. The
Option shall be exercisable on or after Executive's first day of
employment (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
covered thereby 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 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 foregoing, in the event
of the termination of Executive's employment during, at the end of,
or after the Term, by Company without Cause, by Executive for Good
Reason, or due to Executive's death or disability, that portion of
the Option that would have become exercisable during the twelve
(12) month period immediately following the date of such
termination shall immediately vest and become exercisable.
(e) Effect of Change of Control on Options And
Restricted Shares. In the event of a Change of Control of
Proffitt's or a Change of Control of Company during, at the end of,
or after the Term, any Options granted to Executive prior to such
Change of Control shall immediately vest and become exercisable and
any vesting conditions and restrictions on any shares of Proffitt's
common stock granted to Executive prior to such Change of Control
shall immediately lapse.
4. Insurance, Benefits, and Expenses. Company shall allow
Executive to participate in each employee benefit plan and to
receive each executive benefit that Company provides for any senior
executive at the level of Executive's position, including, but not
limited to any life, medical and disability insurance plans and
pension, incentive, profit-sharing, deferred compensation and other
similar plans, practices and policies. In addition, Company shall
reimburse Executive for all reasonable and necessary business
expenses incurred by Executive in connection with her duties and
shall reimburse her for her relocation costs pursuant to Company's
policy as modified by Company's side letter.
5. Term. The term of Executive's employment under this
Agreement shall be for three years commencing at the Start Date
(the "Term"), provided, however, that Company or Executive may
terminate Executive's employment at any time upon thirty (30) days'
prior written notice. In the event of such termination by Company
without Cause, Executive shall be entitled to receive unused
vacation pay and her Base Salary (at the rate in effect at the time
of termination) through the end of the term of this Agreement or
twenty months, whichever is longer. This payment will be made in
a lump sum within ten (10) business days after termination without
Cause. In addition, after termination without Cause, Company shall
pay Executive any earned but unpaid Base Salary, reimbursement of
all incurred business expenses prior to termination, and all
benefits or fringes due under any benefit or fringe plan or
arrangement in accordance with the terms of said plan or
arrangement due for the period prior to such termination
(collective, "Accrued Benefits"). In such case of termination
without Cause, Company shall further offer Executive and her
dependents COBRA coverage under the Company's health plan for
eighteen (18) months without cost to Executive ("COBRA Coverage")
but only so long as Executive or her dependents are eligible for
COBRA Coverage. If Executive continues employment with Company up
to the end of the Term of this Agreement, which is then not
extended or replaced by another employment agreement, and Company
at the end thereof or thereafter terminates her employment without
Cause or Executive terminates her employment for Good Reason,
Company shall pay Executive's Base Salary then in effect for twenty
(20) months, in addition to providing Accrued Benefits and COBRA
Coverage. The preceding sentence shall survive the termination of
this Agreement. Company's obligation to make any payments under
this paragraph shall not be subject to claims or offsets other than
those claims or offsets such as loans or other obligations that are
documented. Executive also shall have no duty to mitigate with
respect to the payments and the amounts shall not be reduced by any
amounts received from other employment. Executive shall also be
entitled to all other rights under this Agreement that survive
termination of employment.
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 and pursuant to the terms of this Agreement,
(b) other entitlements under this contract that expressly survive
death, (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 her
participation in any plan maintained by Company, and (d)
Executive's estate's right to receive Accrued Benefits.
6. Termination.
(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 felony 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 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 refusal to attempt to perform her duties
under Section 2 of the Agreement, provided that Executive has at
least fifteen (15) days to cure such failure after receipt of
written notice thereof from the Company, and provided further that
Executive shall be entitled to such notice and opportunity to cure
only once in any twelve (12) month period.
(b) Executive shall have the right to terminate her
employment for "Good Reason" if such "Good Reason" is not cured
within ten (10) business days after Company receives notice from
Executive. "Good Reason" shall mean only: (i) any material
reduction in Executive's authority, duties or responsibilities,
(ii) any reduction in, or demotion from, Executive's position as,
or title of, Chief Executive Officer of Company, (iii) the
relocation of Executive's principal office to a location more than
fifty (50) miles from Executive's then present location without
Executive's written consent, (iv) Company's non-payment of Base
Salary, (v) failure to grant the Option set forth in Section 3(c),
(vi) Company's material breach of any of its obligations under this
Agreement, or (vii) failure of any successor to Company to assume
this Agreement in writing. If Executive terminates her employment
for Good Reason, she shall be entitled to her then current Base
Salary through then end of the term of this Agreement or twenty
(20) months, whichever is longer, and all other rights under this
Agreement that survive termination of employment for "Good Reason."
This payment will be made in a lump sum within ten (10) business
days after termination for Good Reason. In addition, after
termination for Good Reason, Company shall pay Executive "Accrued
Benefits" and offer Executive COBRA Coverage. Company's obligation
to make any payments under this paragraph shall not be subject to
claims or offsets other than those claims or offsets such as loans
or other obligations that are documented. Executive also shall
have no duty to mitigate with respect to the payments and the
amounts shall not be reduced by any amounts received from other
employment.
(c) 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, provided that
in no event shall Executive be obligated to return her personal
Rolodexes, phone books, calendars, or similar materials
7. Change of Control. If Executive's employment is
terminated during, at the end of, or after the Term by the Company
without Cause or by Executive for Good Reason during the two (2)
year period immediately following the date of a Change of Control
of Proffitt's or a Change of Control of Company, each as defined
below, Executive shall receive, in one lump sum payment within ten
(10) days after termination of employment, three times her Base
Salary then in effect, plus Accrued Benefits and Company shall
offer Executive COBRA Coverage. In addition, in the event
Executive is terminated by Company without Cause or Executive
terminates her employment for Good Reason within one hundred twenty
(120) days prior to a Change of Control of Proffitt's or a Change
in Control of Company, upon the occurrence of such Change of
Control, Executive shall be entitled to the amounts set forth in
the preceding sentence. The maximum payments under this Section,
however, shall not exceed the maximum amount that could be paid
without imposition of an excise tax under Internal Revenue Code
Section 4999. The determination of this limit and the reduction
of any payments hereunder shall be determined by Company's
Accounting Firm prior to the Change of Control.
(a) As used herein, the term "Change of Control" of
Proffitt's means the happening of any of the following:
(i) 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 Proffitt's, a subsidiary of Proffitt's, or
any employee benefit plan of Proffitt's or its subsidiaries,
becoming the beneficial owner of securities having 25 percent or
more of the combined voting power of the then outstanding
securities of Proffitt's that may be cast for the election for
directors of Proffitt's (other than as a result of an issuance of
securities initiated by Proffitt's in the ordinary course of
business); or
(ii) 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
Proffitt's or any successor corporation or entity entitled to vote
generally in the election of directors of Proffitt's or such other
corporation or entity after such transaction, are held in the
aggregate by holders of Proffitt's securities entitled to vote
generally in the election of directors of Proffitt's immediately
prior to such transactions in approximately the same proportions;
or
(iii) During any period of two (2) consecutive
years, individuals who at the beginning of any such period
constitute the members of the Proffitt's Board of Directors cease
for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by Proffitt'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 Proffitt's then still in office who were directors of
Proffitt's at the beginning of any such period, or
(iv) The approval by stockholders of Proffitt's of
a plan of complete liquidation or an agreement which would result
in a Change of Control of Proffitt's or a Change of Control of
Company.
(b) As used herein, a "Change of Control of Company"
shall occur if Proffitt's ceases to directly or indirectly own at
least 51% of the then outstanding voting securities of the Company.
8. Disability. Company shall have the right to terminate
Executive's employment if Executive becomes "Disabled." For
purposes of this Agreement, "Disabled" means Executive's failure to
perform her material duties hereunder by reason of mental or
physical illness or incapacity for a period of ninety (90)
consecutive days. If Executive's employment is terminated during,
at the end of, of after the Term because she is Disabled, she shall
then be entitled to continue to receive her Base Salary and Accrued
Benefits for a period of twelve consecutive months.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During Executive's employment by
Company and for a period of one (1) year thereafter, Executive:
(i) shall not engage in any supervisory or
managerial activities with or for any of the companies designated
on Exhibit A hereto specifically (rather than incidental to broader
responsibilities) with respect to any of their operations or
activities in the states of Alabama, Mississippi, Louisiana, or the
northern Florida area.; and
(ii) 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.
Notwithstanding the foregoing, if requested by any entity with
which Executive is not affiliated, Executive may serve as a
reference for any person who at the time of the request is not an
employee of the Company.
(b) Unauthorized Disclosure. During Executive's
employment by Company 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 her duties as an executive for Company
as so determined in her good faith judgment, 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) 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.
(ii) 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
(iii) the covenants contained in this Section 9
shall survive the conclusion of Executive's employment by Company.
10. Indemnification; D&O Insurance. The Company shall
indemnify and hold harmless Executive to the full extent permitted
by law with regard to her activities as an officer or director of
Company and in other capacities pursuant to which Company may
indemnify Executive. Company shall cover Executive under directors
and officers liability insurance both during and, while potential
liability exists, after Executive's employment by Company in the
same amount and to the same extent, if any, as Company covers its
other officers and directors, including coverage with regard to
matters involving predecessor entities. The obligations of this
Section shall survive any termination of employment or this
Agreement with regard to the Executive's actions or inactions taken
while an officer or director.
11. Additional Indemnification. The Company agrees to
indemnify Executive and hold her harmless with respect to any
liability, cost, damage or expense (including reasonable attorneys'
fees and any loss of compensation Executive would have earned
prior to the Start Date from the May Company under her prior
employment agreement with May Company, less any amounts paid by May
Company or its affiliates) arising from or relating to any claim
against Executive by the May Company or its affiliates: (i) as a
result of her entering into this Agreement; or (ii) in connection
with claims under the noncompetition provision in the Executive's
prior employment agreement with the May Company or its affiliates
as a result of Executive commencing employment with Company,
provided that Executive gives Company prompt notice of any such
claim and the opportunity to assume and control the defense of any
such claim (including settlement of any such claim), at Company's
expense and through counsel of its choice. Executive and Company
consent to joint representation by Proskauer Rose Goetz and
Mendelsohn LLP in the event such a claim is asserted.
12. 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
her or its address by written notice in accordance with this
Section 12 (a). Notices shall be deemed communicated as of the
actual receipt or refusal of receipt.
If to Executive: Dawn Robertson
McRae's
3455 Highway 80 West
Jackson, MS 39209
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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
Mississippi without regard to rules relating to conflicts of law.
(d) Headings. The Section, paragraph, and subparagraph
headings are for convenience or reference only and shall not define
or limit the provisions hereof.
(e) Entire Agreement. This Agreement and the side
letter constitute the entire agreement with respect to employment
or retention of the Executive by Company. It cannot be change or
terminated orally, but only by a writing executed by the party to
be charged.
(f) Legal Fees. If Executive asserts her rights under
this Agreement in a legal proceeding and Executive prevails, then
Company shall reimburse Executive's reasonable costs of bringing
that action, including reasonable legal fees and expenses.
(g) Assignment. This Agreement shall not be assignable
by Executive. This Agreement shall be assignable by Company only
with all or substantially all of the assets of Company, provided
that any such assignee shall assume this Agreement in a writing
delivered to Executive. This Agreement shall inure to the benefit
and be binding upon the personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees, legatees and permitted assignees of the parties hereto.
(h) Waiver. The waiver of any breach of any term or
condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or
condition.IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
MCRAE'S, INC.
BY: /s/ Brian J. Martin
_____________________
Brian J. Martin
Executive Vice President
/s/ Dawn Robertson
_____________________
Dawn Robertson
Executive
Exhibit A -- Competitive Companies
The Gayfers and Caster Knott Divisions of Mercantile Department Stores
Dillard Department Stores
The Macy's East and Rich's Divisions of Federated Department Stores
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 16th day of June 1997, by and between Proffitt's, Inc.
(collectively the "Company"), and Mark Shulman ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as President
and Chief Executive Officer of its Younkers Division 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 $440,000 per year.
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) Cash and Stock 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. Executive shall also be eligible during the
term of this Agreement to earn a yearly stock-grant bonus of up to
4,500 shares, which will vest in equal one-third segments
(one-third on the award date, one-third on the first anniversary of
the award, and one-third on the second anniversary of the award);
provided, however, that Executive must continue to be employed by
Company for the shares to vest. The Company's Board of Directors
shall have complete discretion to award or not to award such bonus
shares in light or predetermined objectives.
(c) Initial Bonus. Company shall as soon as practicable
after Executive's first date of employment award Executive 5,000
shares of Company common stock and $100,000 as an initial bonus to
begin employment with the Company.
(d) Incentive Compensation. Executive shall be granted
a non-qualified option ("Option") to purchase fifty thousand
(50,000) shares of Company common stock at an option price equal to
the closing price of the stock on the Executive's first date of
employment, as reported in the Wall Street Journal. The Option is
granted pursuant to either the Company's 1994 Long-Term Incentive
Plan or the Company's 1997 Stock-Based Incentive Plan ("1997
Plan"), and shall be subject to the terms and conditions thereof.
The Option shall be exercisable on or after Executive's first day
of employment (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 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 1997
Plan), any Options granted to Executive prior to such Change of
Control shall immediately vest.
(f) Service Grant. Company shall award Executive 5,000
shares of common stock at the end of three continuous and
uninterrupted years of service, with 2,500 payable immediately on
the Executive's third anniversary of employment, and 2,500 payable
in the following calendar year.
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
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 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. Notwithstanding the foregoing, if Company terminates
Executive's employment without cause (as defined below) within the
last year of this Agreement, or while Executive is employed without
an employment agreement, then Company shall pay Executive one
year's Base Salary as severance.
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 then in effect 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. 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 do business with any vendor that is
one of the top 100 vendors of the businesses conducted by Company
or its affiliates at the date hereof or 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.
(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 or its affiliates or subsidiaries are 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; provided, however,
Company shall be entitled to injunctive relief only to protect
itself from unfair competition of the type protected under
Tennessee law.
(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: Mark Shulman
Younkers
701 Walnut Street
Des Moines, IA 50397
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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: /s/ Brian J. Martin
_____________________
Brian J. Martin
Executive Vice President
/s/ Mark Shulman
_____________________
Mark Shulman
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 16th day of June 1997, by and between Proffitt's, Inc. (the
"Company"), and Toni E. Browning ("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as President
and Chief Executive Officer of its Proffitt's Division or in such
other capacity with Company and its subsidiaries as Company's Board
of Directors shall designate.
2. Duties. During her employment, Executive shall devote
substantially all of her working time, energies, and skills to the
benefit of Company's business. Executive agrees to serve Company
diligently and to the best of her ability and to use her 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 $270,000 per year.
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 she holds the position stated in
paragraph 1, for a yearly cash bonus of up to 50% of Base Salary
based upon her performance in accordance with specific annual
objectives, set in advance, all as approved by the Board of
Directors.
(c) Incentive Compensation. Subject to final approval
and ratification of by the Human Resources Committee of the
Proffitt's Board of Directors, Executive is hereby granted a
non-qualified option ("Option") to purchase twenty-five thousand
(25,000) shares of Company common stock at an option price equal to
the closing price of the stock on June 16, 1997, as reported in the
Wall Street Journal. The Option is granted pursuant to Company's
1997 Stock-Based Incentive Plan ("1997 Plan"), and shall be subject
to the terms and conditions thereof. The Option shall be
exercisable on or after June 16, 1997, (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
1997 Plan) up to ten (10) years from the Grant Date. Any portion
of the Option not exercised within said ten (10) year period shall
expire.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1997
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 two 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 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
her 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 her 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 her 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 her Base Salary then in effect 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, she shall after she 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
her 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 do business with any vendor that is
one of the top 100 vendors of the businesses conducted by Company
or its affiliates at the date hereof or 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 her or her employment relationship.
(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 her duties as an
executive for Company, any confidential information obtained by her
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 or its affiliates or subsidiaries are actively
engaged in the conduct of business while Executive is employed
under this Agreement;
(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; provided, however,
Company shall be entitled to injunctive relief only to protect
itself from unfair competition of the type protected under
Tennessee law.
(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
her 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: Toni E. Browning
115 North Calderwood
Alcoa, Tennessee 37701
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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 she is not a party to any
restrictive covenant, agreement or contract which limits the
performance of her 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: /s/ Brian J.Martin
_____________________
Brian J. Martin
Executive Vice President
/s/ Toni E. Browning
_____________________
Toni E. Browning
Executive
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
the 16th day of June 1997, by and between Proffitt's, Inc. and
McRae's, Inc. (collectively the "Company"), and Mark A. Goldstein
("Executive").
Company and Executive agree as follows:
1. Employment. Company hereby employs Executive as Senior
Vice President of Information Technologies 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 $225,000 per year.
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) Incentive Compensation. Subject to final approval
and ratification of by the Human Resources Committee of the
Proffitt's Board of Directors, Executive is hereby granted a
non-qualified option ("Option") to purchase thirty thousand
(30,000) shares of Company common stock at an option price equal to
the closing price of the stock on June 16, 1997, as reported in the
Wall Street Journal. The Option is granted pursuant to Company's
1997 Stock-Based Incentive Plan ("1997 Plan"), and shall be subject
to the terms and conditions thereof. The Option shall be
exercisable on or after June 16, 1997, (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
1997 Plan) up to ten (10) years from the Grant Date. Any portion
of the Option not exercised within said ten (10) year period shall
expire.
(d) Effect of Change of Control on Options. In the
event of a Change of Control (as defined in the Company's 1997
Plan), any Options granted to Executive prior to such Change of
Control shall immediately vest.
(e) Service Grant. Company shall award Executive 5,000
shares of Company common stock as soon as practicable after
Executive completes three continuous and uninterrupted years of
service to Company. These shares shall be awarded to Executive's
estate in the event of Executive's death while in Company's
employment before the scheduled award date.
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
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 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. Notwithstanding the foregoing, if Executive begins
work for a competitor after termination by Company and expiration
of the six-month non-competition period in Section 9 below, he
shall not receive any further Base Salary due under this Agreement.
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 then in effect 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 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.
9. Non-competition; Unauthorized Disclosure.
(a) Non-competition. During the period Executive is
employed under this Agreement, and for a period of six months
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; and
(ii) 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 his employment relationship.
(b) Unauthorized Disclosure. Executive shall be
responsible for developing and maintaining systems that are
critical to the functioning of Company and that are, or will be,
the confidential and proprietary information of Company. It is
imperative that this information remain confidential. Thus, 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 his 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) of
Section 9(a) shall apply within all the territories in which
Company or its affiliates or subsidiaries are actively engaged in
the conduct of business while Executive is employed under this
Agreement;
(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; provided, however,
Company shall be entitled to injunctive relief only to protect
itself from unfair competition of the type protected under
Tennessee law.
(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: Mark A. Goldstein
3455 Highway 80 West
Jackson, Mississippi 37701
If to Company: Brian J. Martin
Executive Vice President of Law
750 Lakeshore Parkway
Birmingham, AL 35211
(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: /s/ James A. Coggin
_____________________
James A. Coggin
President
/s/ Mark A. Goldstein
_____________________
Mark A. Goldstein
Executive
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF HISTORICAL EARNINGS PER COMMON SHARE
PROFFITT'S, INC. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
May 3, May 4,
1997 1996
------- -------
<S> <C> <C>
PRIMARY:
Average shares outstanding 27,723 22,878
Net effect of dilutive stock options
- based on the treasury stock method
using average market price 728 588
------- -------
Primary weighted average common shares 28,451 23,466
======= =======
Net income $ 10,544 $ 6,308
Less preferred dividends (488)
------- -------
Net income available to common
shareholders $ 10,544 $ 5,820
======= =======
Primary earnings per share $ 0.37 $ 0.25
======= =======
FULLY DILUTED:
Average shares outstanding 27,723 $ 22,878
Net effect of dilutive stock options
- based on the treasury stock method
using period-end market price if higher
than average price 796 777
Assumed conversion of 4.75% subordinated
debenture 2,020
------- -------
Fully diluted weighted average common
shares 30,539 23,655
======= =======
Net income before interest adjustments $ 10,544 $ 6,308
Less preferred dividends (488)
Add 4.75% convertible subordinated
debenture interest,net of federal
income tax effect 625
------- -------
Adjusted net income $ 11,169 $ 5,820
======= =======
Fully diluted earnings per share $ 0.37 $ 0.25
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> MAY-03-1997
<CASH> 15,011,000
<SECURITIES> 0
<RECEIVABLES> 79,711,000
<ALLOWANCES> 0
<INVENTORY> 499,396,000
<CURRENT-ASSETS> 655,154,000
<PP&E> 505,413,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,456,794,000
<CURRENT-LIABILITIES> 279,806,000
<BONDS> 505,108,000
0
0
<COMMON> 0
<OTHER-SE> 555,159,000
<TOTAL-LIABILITY-AND-EQUITY> 1,456,794,000
<SALES> 526,370,000
<TOTAL-REVENUES> 537,357,000
<CGS> 335,882,000
<TOTAL-COSTS> 335,882,000
<OTHER-EXPENSES> 45,586,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,692,000
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