UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1998
- ------------------------------------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-19526
Goody's Family Clothing, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 62-0793974
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
400 Goody's Lane, Knoxville, Tennessee 37922
(Address of principal executive offices) (Zip Code)
(423) 966-2000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the 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, no par value,
33,330,630 shares outstanding as of December 3, 1998.
<PAGE>
Goody's Family Clothing, Inc.
Index to Form 10-Q
Quarterly Period Ended October 31, 1998
Part I - Financial Information:
Item 1 - Financial Statements
Consolidated Statements of Operations....................... 3
Consolidated Balance Sheets................................. 4
Consolidated Statements of Cash Flows....................... 5
Notes to Consolidated Financial Statements.................. 6 - 7
Independent Accountants' Review Report...................... 8
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations................................ 9 - 14
Item 3 - Quantitative and Qualitative Disclosures about Market Risk 14
Part II - Other Information............................................. 15
-----------------
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. (a) Exhibits
Item 6. (b) Reports on Form 8-K
Signatures.............................................................. 16
<PAGE>
PART 1 - FINANCIAL INFORMATION
- -----------------------------------------------------------------------------
Item 1 - Consolidated Financial Statements
Goody's Family Clothing, Inc. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Thirteen Thirty-nine
Weeks Ended Weeks Ended
October 31, November 1, October 31, November 1,
1998 1997 1998 1997
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Sales $ 251,335 $ 234,908 $ 727,538 $ 637,171
Cost of sales and occupancy expenses 186,789 172,874 523,928 461,990
------------ ------------ ------------ ------------
Gross profit 64,546 62,034 203,610 175,181
Selling, general and administrative
expenses 59,614 53,335 173,150 150,380
------------ ------------ ------------ ------------
Earnings from operations 4,932 8,699 30,460 24,801
Interest expense 99 151 280 370
Investment income 407 308 1,405 1,186
------------ ------------ ------------ ------------
Earnings before income taxes 5,240 8,856 31,585 25,617
Provision for income taxes 1,973 3,321 11,892 9,606
------------ ------------ ------------ ------------
Net earnings $ 3,267 $ 5,535 $ 19,693 $ 16,011
============ ============ ============ ============
Earnings per common share
Basic $ 0.10 $ 0.17 $ 0.59 $ 0.49
============ ============ ============ ============
Diluted $ 0.10 $ 0.16 $ 0.57 $ 0.48
============ ============ ============ ============
Weighted average common
shares outstanding
Basic 33,328 32,651 33,099 32,498
============ ============ ============ ============
Diluted 34,322 33,950 34,393 33,587
============ ============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Independent
Accountants' Review Report.
<PAGE>
Goody's Family Clothing, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
October 31, January 31, November 1,
1998 1998 1997
(unaudited) (unaudited)
----------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 27,371 $ 64,174 $ 28,947
Investments - 1,555 1,518
Inventories 266,384 151,667 215,234
Accounts receivable and other current assets 21,458 10,519 17,153
------------ ------------ ------------
Total current assets 315,213 227,915 262,852
Property and equipment, net 104,193 97,468 96,376
Other assets 3,030 2,933 3,205
------------ ------------ ------------
Total assets $ 422,436 $ 328,316 $ 362,433
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 172,580 $ 105,231 $ 134,845
Accrued expenses 46,678 42,194 46,404
Income taxes payable 544 6,674 -
Current portion of long-term debt 263 263 239
------------ ------------ ------------
Total current liabilities 220,065 154,362 181,488
Long-term debt 608 608 25,871
Other long-term liabilities 3,476 3,023 2,757
Deferred income taxes 10,528 10,266 9,659
------------ ------------ ------------
Total liabilities 234,677 168,259 219,775
------------ ------------ ------------
Commitments and Contingencies
Shareholders' Equity
Preferred stock $1.00 par value;
Authorized - 2,000,000 shares;
Issued and outstanding - none
Class B Common stock no par value;
Authorized - 50,000,000 shares;
Issued and outstanding - none
Common stock no par value;
Authorized - 50,000,000 shares;
Issued and outstanding - 33,330,430, 32,703,716
and 32,691,016 shares, respectively 28,063 25,097 25,037
Paid-in capital 9,764 4,721 4,657
Retained earnings 149,932 130,239 112,964
------------ ------------ ------------
Total shareholders' equity 187,759 160,057 142,658
------------ ------------ ------------
Total liabilities and shareholders' equity $ 422,436 $ 328,316 $ 362,433
============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Independent
Accountants' Review Report.
<PAGE>
Goody's Family Clothing, Inc. and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
(In thousands)
<TABLE>
<CAPTION>
Thirty-nine Weeks Ended
October 31, November 1,
1998 1997
------------ -----------
<S> <C> <C>
Cash Flows from Operating Activities
Net earnings $ 19,693 $ 16,011
Adjustments to reconcile net earnings to net cash used
in operating activities:
Depreciation and amortization 10,140 8,438
Net loss on asset disposals and write-down 719 581
Changes in assets and liabilities:
Inventories (114,717) (107,740)
Accounts payable 42,983 58,609
Income taxes (13,218) (8,619)
Other assets and liabilities 3,617 6,395
------------ -------------
Cash used in operating activities (50,783) (26,325)
------------- -------------
Cash Flows from Investing Activities
Acquisitions of property and equipment (17,622) (16,452)
Proceeds from sale of property and equipment 38 12
------------ ------------
Cash used in investing activities (17,584) (16,440)
------------- -------------
Cash Flows from Financing Activities
Net advances on long-term debt - 25,000
Exercise of stock options 8,009 3,046
Changes in cash management accounts 23,555 350
------------ ------------
Cash provided by financing activities 31,564 28,396
------------ ------------
Cash and cash equivalents
Net decrease for the period (36,803) (14,369)
Balance, beginning of period 64,174 43,316
------------ -------------
Balance, end of period $ 27,371 $ 28,947
============ =============
Supplemental Disclosures
Income tax payments $ 20,022 $ 16,857
Interest payments 212 199
</TABLE>
See accompanying Notes to Consolidated Financial Statements and Independent
Accountants' Review Report.
<PAGE>
Goody's Family Clothing, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The accompanying condensed consolidated financial statements of Goody's
Family Clothing, Inc. and subsidiaries (the "Company") are unaudited and have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been condensed or omitted, the Company believes that the disclosures are
adequate to make the information presented not misleading. In the opinion of the
Company's management, the accompanying unaudited condensed consolidated
financial statements include all adjustments, consisting primarily of normal and
recurring adjustments, necessary for a fair presentation of the Company's
financial position, results of operations and cash flows for the interim periods
presented. Due to the seasonal nature of the Company's business, the results of
operations for the interim periods are not necessarily indicative of the results
that may be achieved for the entire year. The condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto contained in the Company's 1997 Annual Report
on Form 10-K for its fiscal year ended January 31, 1998.
(2) Credit Arrangements
In May 1998, the Company amended its credit agreement with a consortium of banks
for an unsecured revolving line of credit which provides for cash borrowings for
general corporate purposes as well as for the issuance of letters of credit of
up to $130,000,000 and which expires in May 2001. The Company is committed to
pay (i) interest on the cash borrowings at a fluctuating base rate or LIBOR plus
an applicable margin, as defined, (ii) letter of credit fees based on the number
of days a letter of credit is outstanding times the applicable fee and (iii) an
annual commitment fee payable quarterly in advance. The terms of this credit
agreement require, among other things, maintenance of minimum levels of
shareholders' equity, compliance with certain financial ratios and Mr. Robert M.
Goodfriend remaining as Chairman of the Board or Chief Executive Officer of the
Company, and place restrictions on additional indebtedness, asset disposals,
investments and capital expenditures.
(3) Earnings per Share
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share" as required in the fourth quarter of fiscal 1997.
Accordingly, all previously reported earnings per share and related data for the
periods ended November 1, 1997 have been restated to conform to this new
standard. Basic earnings per common share is computed by dividing net earnings
by the weighted average number of common shares outstanding. Diluted earnings
per common share is computed by dividing net earnings by the weighted average
number of common shares outstanding and potentially dilutive common shares
(solely from the effect of stock options outstanding).
In June 1998, the Company's Board of Directors authorized a two-for-one stock
split to be effected as a dividend consisting of one share of the Company's
common stock for each share outstanding. The stock dividend was paid on July 17,
1998 to shareholders of record at the close of business on July 1, 1998. All
previously reported earnings per share and related data for the periods ended
November 1, 1997 have been restated to reflect such two-for-one stock split.
<PAGE>
Goody's Family Clothing, Inc. and Subsidiaries
Notes to Consolidated Financial Statements - continued
(Unaudited)
(4) Recent Accounting Pronouncements
Segment Reporting
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131, which was
effective beginning with the Company's fiscal year 1998, establishes new
standards for reporting information about key segments by public enterprises.
The Company does not expect the implementation of SFAS No. 131 to have an effect
on its current reporting and disclosure practices.
Accounting for Costs of Computer Software
In March 1998, the American Institute of Certified Public Accountants'
Accounting Standards Executive Committee issued Statement of Position No. 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" ("SOP No. 98-1"). SOP No. 98-1, which is effective beginning with
the Company's fiscal year 1999, requires that certain costs incurred to develop
or obtain software for internal use be capitalized. SOP No. 98-1 will be adopted
for the Company's fiscal year ending January 29, 2000 and is not expected to
have a material effect on the Company's financial statements.
(5) Reclassifications
Certain reclassifications have been made to the financial statements of prior
periods to conform to the current period presentation.
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
Goody's Family Clothing, Inc.
Knoxville, Tennessee:
We have reviewed the accompanying condensed consolidated balance sheets of
Goody's Family Clothing, Inc. and subsidiaries as of October 31, 1998 and
November 1, 1997 and the related consolidated statements of operations and cash
flows for the thirteen and thirty-nine week periods then ended. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to such financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Goody's Family Clothing, Inc. and
subsidiaries as of January 31, 1998 and the related consolidated statements of
operations, shareholders' equity and cash flows for the year then ended (not
presented herein); and in our report dated March 18, 1998, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of January 31, 1998 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
/s/Deloitte & Touche LLP
Atlanta, Georgia
November 17, 1998
<PAGE>
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking Statements
This Quarterly Report contains certain forward-looking statements which are
based upon current expectations, plans and estimates and involve material risks
and uncertainties including, but not limited to, weather conditions, customer
demand and trends in the apparel and retail industry and acceptance of
merchandise acquired for sale by the Company, the effectiveness of advertising
and promotional events, the impact of competitors' pricing and promotional
activity and store expansion, the ability to enter into leases for new store
locations, individual store performance, including new stores, employee
relations, the general economic conditions within the Company's markets and the
effect of the Year 2000 issue on the Company and third parties who provide goods
and services to the Company. Any "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which generally can be identified
by the use of forward-looking terminology such as "may," "will," "expect,"
"estimate," "anticipate," "believe," "target," "plan," "project" or "continue"
or the negatives thereof or other variations thereon or similar terminology, are
made on the basis of management's plans and current analysis of the Company, its
business and the industry as a whole. The Company does not undertake to publicly
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
will not be realized. Additional information on risk factors that could
potentially affect the Company's financial results may be found in the Company's
public filings with the Securities and Exchange Commission. Certain of such
filings may be accessed through the Securities and Exchange Commission's web
site, http://www.sec.gov.
Results of Operations
The following table sets forth unaudited results of operations, as a percent of
sales, for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-nine Weeks Ended
October 31, November 1, October 31, November 1,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and occupancy expenses 74.3 73.6 72.0 72.5
--------- -------- ------- ---------
Gross profit 25.7 26.4 28.0 27.5
Selling, general, and administrative expenses 23.7 22.7 23.8 23.6
--------- -------- ------- ---------
Earnings from operations 2.0 3.7 4.2 3.9
Interest expense 0.1 - 0.1 0.1
Investment income 0.2 0.1 0.2 0.2
--------- -------- ------- ---------
Earnings before income taxes 2.1 3.8 4.3 4.0
Provision for income taxes 0.8 1.4 1.6 1.5
--------- -------- ------- ---------
Net earnings 1.3% 2.4% 2.7% 2.5%
========= ======== ======= =========
</TABLE>
Thirteen Weeks Ended October 31, 1998, Compared with Thirteen Weeks Ended
November 1, 1997
Overview - During the third quarter of fiscal 1998, the Company opened nine new
stores, relocated one store and remodeled one store. In addition, the Company
opened four temporary stores in four new test markets during the third quarter
of fiscal 1998, bringing the total number of stores in operation at October 31,
1998 to 246, compared with 218 at November 1, 1997. During the third quarter of
fiscal 1997, the Company opened eight new stores, relocated four stores,
remodeled two stores and closed two stores. Net earnings for the third quarter
of fiscal 1998 were $3,267,000, or 1.3% of sales, compared with $5,535,000, or
2.4% of sales, for the third quarter of fiscal 1997.
Sales - Sales for the third quarter of fiscal 1998 were $251,335,000, a 7.0%
increase over the $234,908,000 in sales for the third quarter of fiscal 1997.
This increase of $16,427,000 primarily consisted of additional sales from new
and transition stores of $24,805,000 which were offset by a 3.9% decrease in
comparable store sales of $8,378,000. Comparable store sales by month in the
third quarter of fiscal 1998 reflected an increase of 3.8% in August and
decreases of 8.0% in September and 7.3% in October compared with the
corresponding months in the third quarter of fiscal 1997. The Company believes
that the decrease in the comparable store sales for the third quarter of fiscal
1998 compared with the third quarter of fiscal 1997 was primarily due to
unseasonably hot weather conditions which prevailed in its markets.
Gross Profit - Gross profit for the third quarter of fiscal 1998 was
$64,546,000, or 25.7% of sales, a $2,512,000 increase over the $62,034,000 in
gross profit, or 26.4% of sales, generated for the third quarter of fiscal 1997.
The 0.7% decrease in gross profit, as a percent of sales, in the third quarter
of fiscal 1998 compared with the third quarter of fiscal 1997 primarily consists
of (i) a 0.4% increase in cost of sales driven by an increase in the mix of
products sold of lower margin bottoms merchandise compared with the
corresponding period of the previous fiscal year and (ii) a 0.3% increase in
occupancy costs which were not leveraged due to the shortfall in comparable
store sales.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the third quarter of fiscal 1998 were $59,614,000,
or 23.7% of sales, an increase of $6,279,000 from $53,335,000, or 22.7% of
sales, for the third quarter of fiscal 1997. The 1.0% increase in selling,
general and administrative expenses, as a percent of sales, for the third
quarter of fiscal 1998 compared with the third quarter of fiscal 1997 resulted
primarily from increases in (i) store salaries of 0.6%, (ii) advertising and
promotional expenses of 0.5%, (iii) employee benefits of 0.3% and (iv)
depreciation and amortization expenses of 0.2%. These increases were offset by a
0.6% decrease in the Company's Short-Term Incentive Plan bonus expense for the
third quarter of fiscal 1998 compared with the third quarter of fiscal 1997.
Interest Expense - Interest expense for the third quarter of fiscal 1998
decreased by $52,000 compared with the third quarter of fiscal 1997 primarily as
a result of lower borrowings during the third quarter of fiscal 1998 compared
with the third quarter of fiscal 1997.
Investment Income - Investment income for the third quarter of fiscal 1998
increased by $99,000 compared with the third quarter of fiscal 1997 primarily as
a result of an increase in invested funds during the period.
Income Taxes - The provision for income taxes for the third quarter of fiscal
1998 was $1,973,000, an effective tax rate of 37.7% of earnings before income
taxes, compared with $3,321,000, an effective tax rate of 37.5% of earnings
before income taxes, for the third quarter of fiscal 1997. The increase in the
effective tax rate is primarily due to a modest increase in the combined state
income tax rates.
Thirty-Nine Weeks Ended October 31, 1998 Compared with Thirty-Nine Weeks Ended
November 1, 1997
Overview - During the thirty-nine weeks ended October 31, 1998, the Company
opened 21 new stores, relocated five stores, remodeled three stores and closed
two stores. In addition, the Company opened four temporary stores in four new
test markets during the third quarter of fiscal 1998, bringing the total number
of stores in operation at October 31, 1998 to 246, compared with 218 at November
1, 1997. During the corresponding period of the previous fiscal year, the
Company opened 19 new stores, relocated eight stores, remodeled two stores and
closed four stores. Net earnings for the thirty-nine weeks ended October 31,
1998 were $19,693,000, or 2.7% as a percent of sales, compared with $16,011,000,
or 2.5% as a percent of sales, for the thirty-nine weeks ended November 1, 1997.
Sales - Sales for the thirty-nine weeks ended October 31, 1998 were
$727,538,000, a 14.2% increase over the $637,171,000 in sales for the
corresponding period of the previous fiscal year. This increase of $90,367,000
consisted of (i) an increase in comparable store sales of $18,072,000, or 3.0%,
over such sales for the corresponding period of the previous fiscal year and
(ii) additional sales from new and transition stores of $72,295,000. Sales for
the thirty-nine weeks ended October 31, 1998 were driven by customer acceptance
of certain brand-name and private label merchandise during the first six months
of fiscal 1998 and were offset by the comparable store sales decrease in the
third quarter of fiscal 1998.
Gross Profit - Gross profit for the thirty-nine weeks ended October 31, 1998 was
$203,610,000, or 28.0% of sales, a $28,429,000 increase over the $175,181,000 in
gross profit, or 27.5% of sales, generated for the corresponding period of the
previous fiscal year. The 0.5% increase in gross profit, as a percent of sales,
for the thirty-nine weeks ended October 31, 1998 compared with the thirty-nine
weeks ended November 1, 1997 resulted primarily from an increase in gross
margins during the first six months of fiscal 1998 and was offset by the
decrease in gross margins in the third quarter of fiscal 1998.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the thirty-nine weeks ended October 31, 1998 were
$173,150,000, or 23.8% of sales, an increase of $22,770,000 from $150,380,000,
or 23.6% of sales, for the corresponding period of the previous fiscal year. The
0.2% increase in selling, general and administrative expenses, as a percent of
sales, for the thirty-nine weeks ended October 31, 1998 compared with the
thirty-nine weeks ended November 1, 1997 resulted primarily from increases in
(i) store relocation expenses of 0.1%, (ii) depreciation and amortization
expenses of 0.1% and (iii) other selling, general and administrative expenses of
0.2% which were not leveraged due to the shortfall in comparable store sales.
These increases were offset by a 0.2% decrease in the Company's Short-Term
Incentive Plan bonus expense for the thirty-nine weeks ended October 31, 1998
compared with the thirty-nine weeks ended November 1, 1997.
Interest Expense - Interest expense for the thirty-nine weeks ended October 31,
1998 decreased by $90,000 compared with the corresponding period of the previous
fiscal year primarily as a result of lower borrowings during the thirty-nine
weeks ended October 31, 1998 compared with the corresponding period of the
previous fiscal year.
Investment Income - Investment income for the thirty-nine weeks ended October
31, 1998 increased by $219,000 compared with the corresponding period of the
previous fiscal year primarily as a result of an increase in invested funds
during the period.
Income Taxes - The provision for income taxes for the thirty-nine weeks ended
October 31, 1998 was $11,892,000, an effective tax rate of 37.7% of earnings
before income taxes, compared with $9,606,000, an effective tax rate of 37.5% of
earnings before income taxes, for the corresponding period of the previous
fiscal year. The increase in the effective tax rate is primarily due to a modest
increase in the effective state income tax rates.
Liquidity and Capital Resources
Financial Position - The Company's primary sources of liquidity are cash flows
from operations, including credit terms from vendors and borrowings under its
credit agreement. At October 31, 1998, the Company's working capital was
$95,148,000 compared with $81,364,000 at November 1, 1997. For the thirty-nine
week period ended October 31, 1998 compared with the corresponding period of the
previous year, (i) cash, cash equivalents and investment securities decreased by
$3,094,000, (ii) net property and equipment increased by $7,817,000, (iii)
inventories increased by $51,150,000 and (iv) accounts payable increased by
$37,735,000. The increase in inventories was primarily due to (i) a shortfall in
comparable store sales during the third quarter of fiscal 1998, (ii) the early
receipt of private label merchandise and (iii) inventories for new and
transition stores. Trade payables as a percent of inventories increased to 64.8%
at October 31, 1998 as compared with 62.7% at November 1, 1997.
At October 31, 1998, the Company had an unsecured revolving line of credit
from a consortium of banks, which provides for cash borrowings for general
corporate purposes as well as for the issuance of letters of credit of up to
$130,000,000 and which expires on May 31, 2001. The terms of this credit
agreement require, among other things, maintenance of minimum levels of
shareholders' equity, compliance with certain financial ratios and Mr. Robert M.
Goodfriend remaining as Chairman of the Board or Chief Executive Officer of the
Company, and place restrictions on additional indebtedness, asset disposals,
investments and capital expenditures. At October 31, 1998, the Company had no
cash borrowings under this credit agreement and $61,423,000 was in use for
outstanding letters of credit, compared with $25,000,000 outstanding for cash
borrowings and $48,812,000 utilized for outstanding letters of credit at
November 1, 1997. In addition, there were no cash borrowings during the
thirty-nine weeks ended October 31, 1998 compared with an average cash
borrowings of $1,484,000 during the thirty-nine weeks ended November 1, 1997
(with the highest balance of $25,000,000 in October 1997). Letters of credit
outstanding averaged $69,477,000 during the thirty-nine weeks ended October 31,
1998 compared with $56,075,000 during the thirty-nine weeks ended November 1,
1997. The increase in the outstanding average balance of letters of credit is
due to the increased emphasis on private label import merchandise programs and
new stores. The highest balance of letters of credit outstanding during the
thirty-nine weeks ended October 31, 1998 was $84,090,000 (in September 1998)
compared with $71,937,000 (in June 1997) during the thirty-nine weeks ended
November 1, 1997.
Cash Flows - Operating activities used cash of $50,783,000 in the thirty-nine
weeks ended October 31, 1998 compared with $26,325,000 used in the corresponding
period of the previous fiscal year. Cash used for increases in inventory during
the thirty-nine weeks ended October 31, 1998 and November 1, 1997 were
$114,717,000 and $107,740,000, respectively. Accounts payable provided cash of
$42,983,000 and $58,609,000 in the thirty-nine weeks ended October 31, 1998 and
November 1, 1997, respectively. Depreciation and amortization expenses were
$10,140,000 and $8,438,000 for the thirty-nine weeks ended October 31, 1998 and
November 1, 1997, respectively.
Cash flows from investing activities reflected a $17,584,000 and $16,440,000 net
use of cash for the thirty-nine weeks ended October 31, 1998 and November 1,
1997, respectively. Cash was used primarily to fund capital expenditures for new
and existing stores as well as relocated and remodeled stores during the first
thirty-nine weeks of fiscal 1998 and 1997.
Cash provided by financing activities for the thirty-nine weeks ended October
31, 1998 was $31,564,000 compared with $28,396,000 for the corresponding period
of the previous fiscal year. Cash management programs maintained by the Company
provided cash of $23,555,000 in the thirty-nine weeks ended October 31, 1998
compared with $350,000 for the corresponding period of the previous fiscal year.
During the thirty-nine weeks ended October 31, 1998, the Company received
$2,966,000 in cash and realized a tax benefit of $5,043,000, compared with
$1,649,000 in cash and a tax benefit of $1,397,000 during the corresponding
period of the previous year from the issuance of common stock upon the exercise
of stock options.
Outlook - The Company's comparable store sales decreased by 8.0% in
September 1998, 7.3% in October 1998 and 10.0% in November 1998 as compared with
the corresponding months of the previous fiscal year and, as a result, the
Company has more inventories on hand than anticipated at the end of November
1998. The Company believes that these sales declines are due primarily to the
unseasonably hot weather conditions which prevailed in its markets. The Company,
where possible, is reducing future commitments for merchandise purchases. The
Company also made the strategic decision to warehouse certain unopened
merchandise, purchased for sale during the 1998 fall season and costing
approximately $10,000,000 to $12,000,000, until the beginning of the 1999 fall
season. For the balance of the 1998 winter season, the Company will be much more
aggressive in its merchandise pricing and promotional activities, which will
have a negative effect on gross margins and selling, general and administrative
expenses. Accordingly, fourth quarter fiscal 1998 results are expected to be
significantly lower than last year's fourth quarter results.
None the less, management continues to believe in its long-term strategies
which generally include (i) increasing its store square footage a minimum of 10%
a year, (ii) improving its merchandise margins by reducing its dependence on low
margin products, such as basic denim and emphasizing higher margin products,
(iii) modestly expanding its private label import program providing quality
products with designer looks to its customers at value prices and (iv)
leveraging selling, general and administrative expenses through comparable store
sales growth, new store sales growth and expense management programs.
During fiscal November 1998, the Company completed its plans to open 31 new
stores, five temporary stores in five new test markets, relocate or remodel 10
stores and close two stores. As noted earlier, the Company opened 21 new stores,
four temporary stores, relocated five stores, remodeled three stores and closed
two stores during the thirty-nine weeks ended October 31, 1998. During the
fourth quarter to date, the Company has opened ten new stores, one temporary
store in a new test market and relocated two stores. Management estimates that
capital expenditures for fiscal 1998 will total approximately $30,000,000
primarily for opening new and temporary stores, relocating or remodeling
existing stores, purchasing computer systems and equipment and for other capital
expenditure requirements.
During fiscal 1999, the Company plans to open a minimum of 30 new stores.
Management estimates that capital expenditures will total approximately
$35,000,000 to $37,000,000 during fiscal 1999 for opening new stores, relocating
or remodeling existing stores, purchasing computer systems and equipment and for
other capital expenditure requirements.
The Company's primary needs for capital resources are for the purchase of store
inventories, capital expenditures and normal operating expenses. Management
believes that cash flows from operations, including credit terms from vendors
and the borrowings available under the credit agreement, will be sufficient to
meet the Company's operating and capital expenditure requirements through at
least the remainder of fiscal 1998 and 1999.
Impact of the Year 2000 Issue
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions or engage in similar
normal business activities.
The State of Readiness
In the normal course of business, the Company initiated plans for replacements
or enhancements to its core business systems in fiscal 1996, which would also be
Year 2000 compliant. During fiscal 1998, the Company established an oversight
committee, consisting of individuals from each of its functional areas, to
review all of the Company's computer systems and programs, as well as the
computer systems of the third parties upon whose data or functionality the
Company relies in any material respect, and to assess their ability to process
transactions in the year 2000. This committee meets regularly to review the
progress of the Company's Year 2000 compliance issues. Based on this review, the
Company has determined that a significant portion of its computer systems and
programs still needs to be modified or replaced and tested to ensure that they
are Year 2000 compliant. The Company is currently utilizing significant internal
and external resources to modify or replace and test its various software
programs and systems for Year 2000 compliance. The Company plans to complete the
Year 2000 project during the first half of fiscal 1999 and believes that all of
its Year 2000 compliance issues will be adequately addressed with the planned
modifications, replacements and testing. However, if such modifications,
replacements and testing are not completed before the year 2000, there could be
a material adverse impact on the Company.
In addition, the Company has contacted its significant suppliers and other
service providers to determine the extent to which the Company is vulnerable to
those third parties' failure to remediate their own Year 2000 issues. There can
be no guarantee that the computer systems of these third parties on which the
Company's systems rely will be timely converted, or that a failure to convert by
another company, or a conversion that is incompatible with the Company's
systems, would not have material adverse effect on the Company. The Company is
not yet in a position to assess any third party's compliance efforts with the
Year 2000 issues or the impact on the Company if any third party's Year 2000
compliance efforts fail.
Costs to Address Year 2000 Issues
During the thirty-nine weeks ended October 31, 1998, the costs incurred by
the Company for Year 2000 issues amounted to approximately $278,000 for external
and existing internal resources that were expensed as incurred, including
$21,000 for the purchase of software and hardware. The remaining costs of
compliance for the Company are estimated at $940,000, which primarily consist of
(i) $30,000 for the purchase of software and hardware and (ii) $910,000
representing external and existing internal resources that will be expensed as
incurred. The Company does not believe that the costs relating to the Year 2000
issues will have a material adverse impact on the Company.
Risks of Year 2000 Issues
The costs of the project and the date on which the Company plans to complete the
Year 2000 modifications and replacements to its systems are based on
management's best estimates, utilizing numerous assumptions of future events
including the continued availability of certain resources, third party
modification plans and other factors. However, there can be no guarantee that
these estimates will be achieved and actual results could differ materially from
those plans. Specific factors that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer codes, the
failure of third parties on which the Company relies and similar uncertainties.
Contingency Plans
In an attempt to mitigate the above risks, the Company is in the process of
developing contingency plans for its core systems applications and any unplanned
interruptions arising from the date change as well as from the failure of any
third party's compliance.
Seasonality and Inflation
The Company's business is seasonal by nature. The Christmas season (beginning
the Sunday before Thanksgiving and ending on the first Saturday after
Christmas), the back-to-school season (beginning approximately the first week of
August and continuing through the first week of September) and the Easter season
(beginning approximately two weeks before Easter Sunday and ending on the
Saturday preceding Easter) collectively accounted for approximately 34.5% of the
Company's annual sales based on the Company's last three fiscal years ended
January 31, 1998. In general, sales volume varies directly with customer
traffic, which is heaviest during the third and fourth quarters of a fiscal
year. Because of the seasonality of the Company's business, results for any
quarter are not necessarily indicative of the results that may be achieved for
the full year.
Inflation can affect the costs incurred by the Company in the purchase of its
merchandise, the leasing of its stores and certain components of its selling,
general, and administrative expenses. During the last three fiscal years ended
January 31, 1998, inflation has not adversely affected the Company's business,
although there can be no assurance that inflation will not have a material
adverse effect in the future.
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
The Company has no material investments or risks in market risk sensitive
instruments.
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings - None
- ----------------------------
Item 2. - Changes in Securities - None
Item 3. - Defaults Upon Senior Securities - None
Item 4. - Submission of Matters to a Vote of Security Holders - None
- ---------------------------------------------------------------
Item 5. - Other Information - None
Item 6. - Exhibits and Reports on Form 8-K
a) Exhibits -
10.56 Employment Agreement between Goody's Family Clothing, Inc.
and Bruce E. Halverson dated September 16, 1998.
10.57 Employment Agreement between Goody's Family Clothing, Inc.
and Stanley B. Latacha dated September 16, 1998.
10.58 Employment Agreement between Goody's Family Clothing, Inc.
and John J. Okvath, III dated September 16, 1998.
10.59 Employment Agreement between Goody's Family Clothing, Inc.
and Jay D. Scussel dated September 16, 1998.
10.60 Employment Agreement between Goody's Family Clothing, Inc.
and Marcus H. Smith, Jr. dated September 16, 1998.
10.61 Employment Agreement between Goody's Family Clothing, Inc.
and Bobby Whaley dated September 16, 1998.
10.62 Severance Agreement between Goody's Family Clothing, Inc.
and Regis J. Hebbeler dated September 16, 1998.
10.63 Severance Agreement between Goody's Family Clothing, Inc.
and Hazel Ann Moxim dated September 16, 1998.
10.64 Severance Agreement between Goody's Family Clothing, Inc.
and David G. Peek dated September 16, 1998.
11 Statement re: Computation of Per Share Earnings
15 Accountants' Awareness Letter
27 Financial Data Schedule
b) Reports on Form 8-K - None
<PAGE>
GOODY'S FAMILY CLOTHING, INC.
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.
GOODY'S FAMILY CLOTHING, INC.
(Registrant)
Date: December 3, 1998 /s/ Robert M. Goodfriend
---------------- ----------------------------------
Robert M. Goodfriend
Chairman of the Board
and Chief Executive Officer
Date: December 3, 1998 /s/ Harry M. Call
---------------- -----------------------------------
Harry M. Call
Director, President and
Chief Operating Officer
Date: December 3, 1998 /s/ Edward R. Carlin
---------------- ----------------------------------
Edward R. Carlin
Executive Vice President,
Chief Financial Officer and
Secretary
(Principal Financial Officer)
Date: December 3, 1998 /s/ David G. Peek
---------------- -----------------------------------
David G. Peek
Vice President, Corporate Controller
and Chief Accounting Officer
(Principal Accounting Officer)
<PAGE>
Exhibit - 10.56
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
BRUCE E. HALVERSON
<PAGE>
TABLE OF CONTENTS
1. Definitions..................................................1
2. Employment...................................................3
3. Term.........................................................3
4. Position and Duties; Business Time...........................3
5. Compensation.................................................3
6. Termination of Employment....................................5
7. Obligations of the Company Upon Termination..................6
8. Change of Control............................................8
9. Non-exclusivity of Rights....................................8
10. Full Settlement..............................................8
11. Arbitration of Disputes......................................8
12. Confidential Information and Nonsolicitation.................9
13. Successors...................................................9
14. Miscellaneous...............................................10
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and BRUCE E. HALVERSON (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Planning and Allocation of the Company. The Company and the Executive have
entered into an Employment Agreement dated October 14, 1994 (the "Existing
Employment Contract").
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall
be deemed to have occurred if (i) any person or group (within the meaning of
Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Robert M.
Goodfriend, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Robert M. Goodfriend, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.
(f) "Change of Control Date" shall mean (i) the closing date
on which a Change of Control shall have occurred, (ii) in the case of a sale of
all or substantially all of the Company's assets, the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete liquidation or dissolution of the Company, the
date on which shareholder approval is obtained.
<PAGE>
(g) "Date of Termination" shall have the meaning set forth in
Section 6(e).
(h) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(i) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(j) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(k) "Notice of Termination" shall have the meaning as set
forth in Section 6(d).
(l) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(m) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
(n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Planning and Allocation of the Company. The Executive has held the
title of Senior Vice President, Planning and Allocation of the Company since
February 1, 1998.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Planning and Allocation of the Company or
another position which shall be either of comparable rank or a promotion and
shall continue to have such responsibilities and duties as assigned to him by
the Chief Executive Officer of the Company, the Chief Operating Officer of the
Company or the Board from time to time.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Existing Employment Contract. The Executive and Company
acknowledge that all the terms of the existing employment contract (the
"Existing Employment Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.
<PAGE>
(b) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $160,000.00. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(c) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(d) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto given in accordance with Section 14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a termination for Cause which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the receipt of such notice).
(e) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, the
Company shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Termination or termination without Cause,
and the denominator of which is the total number of days of the applicable
fiscal year for such Incentive Plan.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination (the "Supplemental Payment Date"), commencing on the Supplemental
Payment Date the Company shall pay the Executive an amount equal to fifty
percent (50%) of his monthly Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly installment; or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company immediately upon his acceptance of any such
new employment if secured prior to the payment by the Company of such six (6)
additional monthly installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company (including, without
limitation, the Existing Employment Contract) shall have no further effect;
provided, however, that except as specifically provided herein, the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under any stock option or profit sharing program of the Company except as
specifically set forth in Section 7(a) with respect to the vesting and
exercisability of stock options.
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By:___/s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
_____/s/_Regis J. Hebbeler___________
Title:__Assistant Secretary_________
(CORPORATE SEAL)
EXECUTIVE: Bruce E. Halverson
/s/ Bruce E. Halverson
Name: Bruce E. Halverson
Address:
<PAGE>
SCHEDULE A - BRUCE HALVERSON
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $160,000
......... High Option $160,000
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $5,000
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.57
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
STANLEY B. LATACHA
<PAGE>
TABLE OF CONTENTS
1. Definitions.................................................1
2. Employment..................................................3
3. Term........................................................3
4. Position and Duties; Business Time..........................3
5. Compensation................................................3
6. Termination of Employment...................................5
7. Obligations of the Company Upon Termination.................6
8. Change of Control...........................................8
9. Non-exclusivity of Rights...................................8
10. Full Settlement.............................................8
11. Arbitration of Disputes.....................................8
12. Confidential Information and Nonsolicitation................9
13. Successors..................................................9
14. Miscellaneous...............................................10
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and STANLEY B. LATACHA (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Marketing and Advertising of the Company. The Company and the Executive have
entered into an Employment Agreement dated June 9, 1997 (the "Existing
Employment Contract").
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall
be deemed to have occurred if (i) any person or group (within the meaning of
Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Robert M.
Goodfriend, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Robert M. Goodfriend, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.
(f) "Change of Control Date" shall mean (i) the closing date
on which a Change of Control shall have occurred, (ii) in the case of a sale of
all or substantially all of the Company's assets, the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete liquidation or dissolution of the Company, the
date on which shareholder approval is obtained.
<PAGE>
(g) "Date of Termination" shall have the meaning set forth in
Section 6(e).
(h) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(i) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(j) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(k) "Notice of Termination" shall have the meaning as set
forth in Section 6(d).
(l) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(m) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
(n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Marketing and Advertising of the Company. The Executive has held the
title of Senior Vice President, Marketing and Advertising of the Company since
July 7, 1997.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Marketing and Advertising of the Company or
another position which shall be either of comparable rank or a promotion and
shall continue to have such responsibilities and duties as assigned to him by
the Chief Executive Officer of the Company, the Chief Operating Officer of the
Company or the Board from time to time.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Existing Employment Contract. The Executive and Company
acknowledge that all the terms of the existing employment contract (the
"Existing Employment Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.
<PAGE>
(b) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $205,000.00. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(c) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(d) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto given in accordance with Section 14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a termination for Cause which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the receipt of such notice).
(e) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, the
Company shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Termination or termination without Cause,
and the denominator of which is the total number of days of the applicable
fiscal year for such Incentive Plan.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination (the "Supplemental Payment Date"), commencing on the Supplemental
Payment Date the Company shall pay the Executive an amount equal to fifty
percent (50%) of his monthly Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly installment; or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company immediately upon his acceptance of any such
new employment if secured prior to the payment by the Company of such six (6)
additional monthly installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company (including, without
limitation, the Existing Employment Contract) shall have no further effect;
provided, however, that except as specifically provided herein, the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under any stock option or profit sharing program of the Company except as
specifically set forth in Section 7(a) with respect to the vesting and
exercisability of stock options.
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
______/s/ Regis J. Hebbeler___________
Regis J. Hebbeler
Title:__Assistant Secretary_________
(CORPORATE SEAL)
EXECUTIVE: Stanley B. Latacha
/s/ Stanley B. Latacha
Name: Stanley B. Latacha
Address: 843 Weatherly Hills Blvd.
Knoxville, TN 37922
<PAGE>
SCHEDULE A - STAN LATACHA
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $205,000
......... High Option $0
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $0
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.58
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
John J. Okvath, III
<PAGE>
TABLE OF CONTENTS
1. Definitions..............................................1
2. Employment...............................................3
3. Term.....................................................3
4. Position and Duties; Business Time.......................3
5. Compensation.............................................3
6. Termination of Employment................................5
7. Obligations of the Company Upon Termination..............6
8. Change of Control........................................8
9. Non-exclusivity of Rights................................8
10. Full Settlement..........................................8
11. Arbitration of Disputes..................................8
12. Confidential Information and Nonsolicitation.............9
13. Successors...............................................9
14. Miscellaneous...........................................10
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and JOHN J. OKVATH, III (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Product Development of the Company. The Company and the Executive have entered
into an Employment Agreement dated August 7, 1994 (the "Existing Employment
Contract").
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall
be deemed to have occurred if (i) any person or group (within the meaning of
Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Robert M.
Goodfriend, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Robert M. Goodfriend, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.
(f) "Change of Control Date" shall mean (i) the closing date
on which a Change of Control shall have occurred, (ii) in the case of a sale of
all or substantially all of the Company's assets, the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete liquidation or dissolution of the Company, the
date on which shareholder approval is obtained.
<PAGE>
(g) "Date of Termination" shall have the meaning set forth in
Section 6(e).
(h) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(i) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(j) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(k) "Notice of Termination" shall have the meaning as set
forth in Section 6(d).
(l) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(m) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
(n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Product Development of the Company. The Executive has held the title
of Senior Vice President, Product Development of the Company since February 1,
1998.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Product Development of the Company or another
position which shall be either of comparable rank or a promotion and shall
continue to have such responsibilities and duties as assigned to him by the
Chief Executive Officer of the Company, the Chief Operating Officer of the
Company or the Board from time to time.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Existing Employment Contract. The Executive and Company
acknowledge that all the terms of the existing employment contract (the
"Existing Employment Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.
<PAGE>
(b) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $215,000.00. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(c) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(d) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto given in accordance with Section 14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a termination for Cause which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the receipt of such notice).
(e) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, the
Company shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Termination or termination without Cause,
and the denominator of which is the total number of days of the applicable
fiscal year for such Incentive Plan.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination (the "Supplemental Payment Date"), commencing on the Supplemental
Payment Date the Company shall pay the Executive an amount equal to fifty
percent (50%) of his monthly Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly installment; or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company immediately upon his acceptance of any such
new employment if secured prior to the payment by the Company of such six (6)
additional monthly installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company (including, without
limitation, the Existing Employment Contract) shall have no further effect;
provided, however, that except as specifically provided herein, the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under any stock option or profit sharing program of the Company except as
specifically set forth in Section 7(a) with respect to the vesting and
exercisability of stock options.
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
_____/s/ Regis J. Hebbeler ____________
Regis J. Hebbeler
Title:_Assistant Secretary___________
(CORPORATE SEAL)
EXECUTIVE: John J. Okvath, III
/s/ John J. Okvath, III
Name: John J. Okvath, III
Address:
<PAGE>
SCHEDULE A - JOHN OKVATH
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $215,000
......... High Option $215,000
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $5,000
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.59
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
JAY D. SCUSSEL
<PAGE>
TABLE OF CONTENTS
1. Definitions..................................................1
2. Employment...................................................3
3. Term.........................................................3
4. Position and Duties; Business Time...........................3
5. Compensation.................................................3
6. Termination of Employment....................................5
7. Obligations of the Company Upon Termination..................6
8. Change of Control............................................8
9. Non-exclusivity of Rights....................................8
10. Full Settlement..............................................8
11. Arbitration of Disputes......................................8
12. Confidential Information and Nonsolicitation.................9
13. Successors...................................................9
14. Miscellaneous...............................................10
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and JAY D. SCUSSEL (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Management Information Systems of the Company. The Company and the Executive
have entered into an Employment Agreement dated October 20, 1995 (the "Existing
Employment Contract").
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall
be deemed to have occurred if (i) any person or group (within the meaning of
Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Robert M.
Goodfriend, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Robert M. Goodfriend, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.
(f) "Change of Control Date" shall mean (i) the closing date
on which a Change of Control shall have occurred, (ii) in the case of a sale of
all or substantially all of the Company's assets, the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete liquidation or dissolution of the Company, the
date on which shareholder approval is obtained.
<PAGE>
(g) "Date of Termination" shall have the meaning set forth in
Section 6(e).
(h) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(i) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(j) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(k) "Notice of Termination" shall have the meaning as set
forth in Section 6(d).
(l) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(m) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
(n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Management Information Systems of the Company. The Executive has held
the title of Senior Vice President, Management Information Systems of the
Company since February 1, 1998.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Management Information Systems of the Company
or another position which shall be either of comparable rank or a promotion and
shall continue to have such responsibilities and duties as assigned to him by
the Chief Executive Officer of the Company, the Chief Operating Officer of the
Company or the Board from time to time.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Existing Employment Contract. The Executive and Company
acknowledge that all the terms of the existing employment contract (the
"Existing Employment Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.
<PAGE>
(b) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $185,000.00. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(c) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(d) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto given in accordance with Section 14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a termination for Cause which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the receipt of such notice).
(e) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, the
Company shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Termination or termination without Cause,
and the denominator of which is the total number of days of the applicable
fiscal year for such Incentive Plan.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination (the "Supplemental Payment Date"), commencing on the Supplemental
Payment Date the Company shall pay the Executive an amount equal to fifty
percent (50%) of his monthly Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly installment; or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company immediately upon his acceptance of any such
new employment if secured prior to the payment by the Company of such six (6)
additional monthly installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company (including, without
limitation, the Existing Employment Contract) shall have no further effect;
provided, however, that except as specifically provided herein, the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under any stock option or profit sharing program of the Company except as
specifically set forth in Section 7(a) with respect to the vesting and
exercisability of stock options.
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
______/s/ Regis J. Hebbeler___________
Regis J. Hebbeler
Title:__Assistant Secretary_________
(CORPORATE SEAL)
EXECUTIVE: Jay D. Scussel
/s/ Jay D. Scussel
Name: Jay D. Scussel
Address:
<PAGE>
SCHEDULE A - JAY SCUSSEL
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $185,000
......... High Option $185,000
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $5,000
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.60
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
MARCUS H. SMITH, JR.
<PAGE>
TABLE OF CONTENTS
1. Definitions......................................................1
2. Employment.......................................................3
3. Term.............................................................3
4. Position and Duties; Business Time...............................3
5. Compensation.....................................................3
6. Termination of Employment........................................5
7. Obligations of the Company Upon Termination......................6
8. Change of Control................................................8
9. Non-exclusivity of Rights........................................8
10. Full Settlement..................................................8
11. Arbitration of Disputes..........................................8
12. Confidential Information and Nonsolicitation.....................9
13. Successors.......................................................9
14. Miscellaneous...................................................10
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING, INC., a
Tennessee corporation (the "Company"), and MARCUS H. SMITH, JR. (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Real Estate of the Company. The Company and the Executive have entered into an
Employment Agreement dated April 17, 1995 (the "Existing Employment Contract").
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
11
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall
be deemed to have occurred if (i) any person or group (within the meaning of
Rule 13d-3 of the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act Rules")), other than Robert M.
Goodfriend, members of his immediate family, his affiliates, trusts or private
foundations established by or on his behalf, and the heirs, executors or
administrators of Robert M. Goodfriend, shall acquire in one or a series of
transactions, whether through sale of stock or merger, more than 50% of the
outstanding voting securities of the Company or any successor entity of the
Company, (ii) all or substantially all of the Company's assets are sold or (iii)
the shareholders of the Company approve a complete liquidation or dissolution of
the Company.
(f) "Change of Control Date" shall mean (i) the closing date
on which a Change of Control shall have occurred, (ii) in the case of a sale of
all or substantially all of the Company's assets, the closing date on which a
Change of Control shall have occurred after shareholder approval is obtained, or
(iii) in the case of complete liquidation or dissolution of the Company, the
date on which shareholder approval is obtained.
<PAGE>
(g) "Date of Termination" shall have the meaning set forth in
Section 6(e).
(h) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(i) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(j) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(k) "Notice of Termination" shall have the meaning as set
forth in Section 6(d).
(l) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(m) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
(n) "Supplemental Payment Date" shall have the same meaning as
set forth in Section 7(c).
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Real Estate of the Company. The Executive has held the title of
Senior Vice President, Real Estate of the Company since April 17, 1995.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Real Estate of the Company or another position
which shall be either of comparable rank or a promotion and shall continue to
have such responsibilities and duties as assigned to him by the Chief Executive
Officer of the Company, the Chief Operating Officer of the Company or the Board
from time to time.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
(a) Existing Employment Contract. The Executive and Company
acknowledge that all the terms of the existing employment contract (the
"Existing Employment Contract") are in full force and effect and there has not
been any breach of such Existing Employment Contract.
<PAGE>
(b) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $170,000.00. The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(c) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(d) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(e) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
In addition the Company shall continue to pay and provide to the Executive:
(i) An individual life insurance policy of $250,000.00.
(ii) An individual disability insurance policy
providing a monthly benefit of no less than
$7,500.00 per month.
The Executive shall pay $25.00 per month toward the premium for such
coverages and policies and the Company shall be responsible for paying the
remaining balance for each month.
If required, the Company shall replace any such policy currently in effect
with a policy or policies containing terms and conditions (including amounts of
coverage) which are not materially less favorable to the Executive and/or his
designated beneficiaries provided such replacement policy or policies may be
obtained at reasonable rates consistent with past practice.
(f) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model
currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Executive shall be communicated by a written Notice of
Termination to the other party hereto given in accordance with Section 14(c).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given in the case of a termination for Cause which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the receipt of such notice).
(e) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, the
Company shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of
the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Termination or termination without Cause,
and the denominator of which is the total number of days of the applicable
fiscal year for such Incentive Plan.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination (the "Supplemental Payment Date"), commencing on the Supplemental
Payment Date the Company shall pay the Executive an amount equal to fifty
percent (50%) of his monthly Base Salary at the rate in effect as of the date
when the Notice of Termination was given in equal monthly installments until the
earlier of (i) the payment of the sixth (6th) monthly installment; or (ii) the
date of the Executive's acceptance of employment from a subsequent employer. The
Executive shall notify the Company immediately upon his acceptance of any such
new employment if secured prior to the payment by the Company of such six (6)
additional monthly installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company (including, without
limitation, the Existing Employment Contract) shall have no further effect;
provided, however, that except as specifically provided herein, the terms of
this Agreement do not supersede the terms of any grant or award to the Executive
under any stock option or profit sharing program of the Company except as
specifically set forth in Section 7(a) with respect to the vesting and
exercisability of stock options.
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
____/s/ Regis J. Hebbeler___________
Regis J. Hebbeler
Title:___Assistant Secretary_________
(CORPORATE SEAL)
EXECUTIVE: Marcus H. Smith, Jr.
/s/ Marcus H. Smith, Jr.
Name: Marcus H. Smith, Jr.
Address: 1000 Nokomis Circle West
Knoxville, TN 37919
<PAGE>
SCHEDULE A - MARC SMITH
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $170,000
......... High Option $0
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $0
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.61
EMPLOYMENT AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
BOBBY WHALEY
<PAGE>
TABLE OF CONTENTS
1. Definitions...................................................1
2. Employment....................................................3
3. Term..........................................................3
4. Position and Duties; Business Time............................3
5. Compensation..................................................4
6. Termination of Employment.....................................5
7. Obligations of the Company Upon Termination...................6
8. Change of Control.............................................9
9. Non-exclusivity of Rights.....................................9
10. Full Settlement...............................................9
11. Arbitration of Disputes.......................................9
12. Confidential Information and Nonsolicitation..................9
13. Successors....................................................10
14. Miscellaneous.................................................11
<PAGE>
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, by and between GOODY'S FAMILY CLOTHING,
INC., a Tennessee corporation (the "Company"), and BOBBY WHALEY (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Senior Vice President,
Distribution, Transportation and Logistics of the Company.
B. The Company wishes to assure the continued service of the Executive.
The Company desires to recognize the Executive's commitment to the Company and
to confirm the right of the Executive to certain employment, compensation and
severance benefits. To attain that end, the Company and the Executive wish to
enter into this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a) "Accrued Obligations" shall mean (i) the Executive's Base
Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company described in Section 5(f).
<PAGE>
12
97295-11 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(b) "Base Salary" shall have the meaning set forth in Section
5(b).
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that the Executive has, in the judgment
of a majority of the Board (i) committed a felony, or committed an act of fraud,
embezzlement or theft in connection with his duties with the Company or in the
course of his employment with the Company; (ii) willfully caused damage to
property of the Company; (iii) been convicted of a criminal offense (either a
misdemeanor involving acts of dishonesty, theft or moral turpitude, or a
felony); or (iv) engaged in a willful and material breach of his obligations
under Section 4 of this Agreement which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Board within a reasonable
period of time, which shall not be less than ten (10) days, nor more than thirty
(30) days, following receipt of such written notice by the Executive. The Board
shall provide the Executive with an opportunity to meet with the Board in order
to provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this Section, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(e) A "Change of Control" of the Company shall mean and shall be deemed to
have occurred if (i) any person or group (within the meaning of Rule 13d-3 of
the rules and regulations promulgated under the Securities Exchange Act of 1934,
as amended (the "1934 Act Rules")), other than Robert M. Goodfriend, members of
his immediate family, his affiliates, trusts or private foundations established
by or on his behalf, and the heirs, executors or administrators of Robert M.
Goodfriend, shall acquire in one or a series of transactions, whether through
sale of stock or merger, more than 50% of the outstanding voting securities of
the Company or any successor entity of the Company, (ii) all or substantially
all of the Company's assets are sold or (iii) the shareholders of the Company
approve a complete liquidation or dissolution of the Company.
(f) "Change of Control Date" shall mean (i) the closing date on which a
Change of Control shall have occurred, (ii) in the case of a sale of all or
substantially all of the Company's assets, the closing date on which a Change of
Control shall have occurred after shareholder approval is obtained, or (iii) in
the case of complete liquidation or dissolution of the Company, the date on
which shareholder approval is obtained.
<PAGE>
(g) "Constructive Termination" shall mean a material breach by
the Company of its obligations under Section 4(a) or another material obligation
of the Company under this Agreement which failure has been communicated to the
Company with specificity by written notice, and which has not been cured within
a reasonable period of time, which shall not be less than ten (10) days, nor
more than thirty (30) days, following receipt of such written notice by the
Company.
(h) "Date of Termination" shall have the meaning set forth in
Section 6(f).
(i) "Disability" shall mean disability whereby the Executive
is unable to render the services provided for by this Agreement by reason of
illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(j) "Incentive Bonus" shall have the meaning as set forth in
Section 5(c).
(k) "Incentive Plan" shall have the meaning as set forth in
Section 5(c).
(l) "Notice of Termination" shall have the meaning as set
forth in Section 6(e).
(m) "Qualified Plan" shall mean any retirement plan maintained
by the Company which is intended to meet the requirements of the Internal
Revenue Code of 1986, as amended.
(n) "Subsidiary" shall mean any majority-owned subsidiary of
the Company.
2. Employment. The Company has employed the Executive, and the
Executive has agreed to continue to be employed by the Company, as Senior Vice
President, Distribution, Transportation and Logistics of the Company. The
Executive has held the title of Senior Vice President, Distribution,
Transportation and Logistics of the Company since February 1, 1998.
3. Term. The Executive shall be considered an at-will employee
and his employment may be terminated by either party subject to the obligations
of the parties upon such termination as set forth in this Agreement.
4. Position and Duties; Business Time.
<PAGE>
(a) Position and Duties. The Executive shall continue his
service as Senior Vice President, Distribution, Transportation and Logistics of
the Company or another position which shall be either of comparable rank or a
promotion and shall continue to have such responsibilities and duties as
assigned to him by the Chief Executive Officer of the Company, the Chief
Operating Officer of the Company or the Board from time to time, provided: (i)
such assignment of such responsibilities and duties are those which are
customarily associated with the responsibilities of an senior vice president;
(ii) the position in which the Executive shall serve, if different from the
position specified in this Subsection (a), shall not have materially diminished
responsibilities or authority as compared with those of the position expressly
set forth in this Subsection (a); provided, that the expansion into other store
concepts, whether acquired or developed, and the staffing of such concepts by
other employees shall not be deemed a breach of this provision; and (iii) the
Executive shall not be required to relocate by reason of a change in the
location of the Company's principal executive offices of more than fifty (50)
miles from its then current location.
(b) Business Time. The Executive agrees to devote his full
business time to the business and affairs of the Company and to use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for:
(i) time spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees, in each case
only if and to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation to which he is entitled, periods of illness and
other absences beyond his control.
It is expressly understood and agreed that the continued service by the
Executive on any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the date hereof, or his service on
any other boards and committees shall not be deemed to interfere with the
performance of the Executive's services to the Company; provided, that in the
case of boards or committees on which the Executive is not currently serving the
Executive provides written notice of his intention to serve and the Board
thereafter approves such service (other than non-compensatory positions with
local boards or committees e.g. charitable, chamber of commerce or homeowner
associations which shall not require approval).
5. Compensation. The Executive shall be entitled to the
following compensation and benefits for as long as the Executive remains an
employee of the Company:
<PAGE>
(a) Base Salary. The Executive shall receive a base salary
(the "Base Salary") payable in equal bi-weekly installments (or such other
installments as are provided by the Company for employees generally) at an
annual rate of $158,000.00 . The Company shall review the Base Salary
periodically and in light of such review may, in its sole discretion, increase
(but not decrease) the Base Salary taking into account any change in the
Executive's responsibilities, increases in compensation of other executives with
comparable responsibilities, performance of the Executive and other pertinent
factors, and such adjusted Base Salary shall then constitute the "Base Salary"
for purposes of this Agreement.
(b) Short Term Incentive Plan Bonus. The Company has
established a "Short Term Incentive Plan" (the "Incentive Plan") under which the
Executive shall be eligible to participate for each fiscal year he holds the
position stated in Section 2 and shall be eligible to receive an annual
incentive target bonus of not less than 40% of Base Salary based on performance
and other specific objectives adopted by the Compensation Committee of the Board
(the "Incentive Bonus").
(c) Incentive and Savings Plans; Retirement and Death Benefit
Programs. The Executive shall be entitled to participate in all incentive and
savings plans and programs, including stock option plans and other equity-based
compensation plans, and in all employee retirement, executive retirement and
executive death benefit plans on a basis no less favorable than that basis
generally available to executives of the Company holding comparable positions or
having comparable responsibilities.
(d) Other Benefit Plans. The Executive, his spouse and their
eligible dependents (as defined in, and to the extent permitted by, the
applicable plan), as the case may be, shall be entitled to participate in or be
covered under all medical, dental, group disability, group life, severance,
accidental death and travel accident insurance plans and programs of the Company
to the extent such plans and programs are generally available to executives of
the Company holding comparable positions or having comparable responsibilities.
In addition, the Company shall pay for and provide to the Executive the
following additional benefits:
<PAGE>
(i) An individual term life insurance policy of $83,000.00 (with a cash
surrender value of $7,020.75 as of May 7, 1998), the annual premium for such
policy is to be shared equally between the Company and the Executive; and
(ii) An individual disability insurance policy providing a monthly benefit
of no less than $3,700.00 per month [at a cost to the Executive of $25.00 per
month.]
If required, the Company shall replace any such policy currently in effect
with a policy or policies containing terms and conditions (including amounts of
coverage) which are not materially less favorable to the Executive and/or his
designated beneficiaries provided such replacement policy or policies may be
obtained at reasonable rates consistent with past practice.
(e) Other Perquisites. The Executive shall also be
entitled to:
(i) prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies and procedures of the Company;
(ii) three (3) weeks paid vacation, such paid
vacation time to be increased
(but not decreased) in accordance with Company policy;
(iii) an automobile at least comparable to the model
currently furnished by
the Company shall be provided by the Company with expenses to be paid in
accordance with the Company's policies and procedures with respect thereto; and
(iv) an office or offices suitable for an executive officer with
secretarial and other assistance as shall reasonably be required by the
Executive.
6. Termination of Employment.
(a) Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b) Voluntary Termination by the Executive. Notwithstanding
anything in this Agreement to the contrary, the Executive may, upon not less
than thirty (30) days' written notice to the Company, voluntarily terminate
employment for any reason (including retirement under the terms of the Company's
retirement plan as in effect from time to time), provided that any termination
by the Executive pursuant to Section 6(d) on account of Constructive Termination
shall not be treated as a voluntary termination under this Section 6(b).
<PAGE>
(c) Termination by the Company. The Company at any time may
terminate the Executive's employment for Cause or without Cause.
(d) Constructive Termination. The Executive may terminate his
employment for Constructive Termination.
(e) Notice of Termination. Any termination by the Company for
Cause or by the Executive for Constructive Termination shall be communicated by
a written Notice of Termination to the other party hereto given in accordance
with Section 14(c). For purposes of this Agreement, a "Notice of Termination"
means a written notice given in the case of a termination for Cause and in the
case of Constructive Termination which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty (30) days after the
receipt of such notice).
(f) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates.
7. Obligations of the Company Upon Termination. Upon
termination of the Executive's employment with the Company, the Company shall
have the following obligations:
<PAGE>
(a) Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination. In the event of the termination of the
Executive by reason of retirement on or after the attainment of age sixty-five
(65), death or Disability, he and/or his named beneficiaries, as the case may
be, shall be entitled to the benefits available through the Company sponsored
plans and programs designated for such category of termination on Schedule A.
With regard to the termination of the Executive's employment by reason of
retirement on or after the attainment of age sixty-five (65) or Disability, the
Company shall pay the premiums (to the same extent paid prior to the termination
of employment) for the continued participation of the Executive for a period of
six (6) months after the Date of Termination in any individual life insurance
policy on the same terms as the Executive and the Company were participating
prior to the Date of Termination. Further, with regard to the termination of the
Executive's employment by reason of the Executive's death, retirement on or
after the attainment of age sixty-five (65) or Disability, the Company shall,
for a period of six (6) months after the Executive's Date of Termination, pay
the entire COBRA premium under any Company medical and dental program that the
Executive (and his spouse and eligible dependents) was participating in prior to
the termination of employment. The Company's premium obligations in the
preceding two sentences shall exclude normal employee contributions paid by the
Executive prior to the Date of Termination. In addition to the foregoing, in the
event of termination of the Executive's employment by reason of the death or
Disability of the Executive, all unvested stock options held by the Executive
shall become fully vested, effective on the Date of Termination, and shall
thereafter be exercisable in accordance with the provisions of the applicable
Option Plan (including, without limitation, Sections 5 and 6 thereof) and Option
Agreement.
(b) Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive (other than on account of
Constructive Termination), the Company shall pay the Executive the Accrued
Obligations. The Executive shall be paid all such Accrued Obligations in a lump
sum in cash within thirty (30) days of the Date of Termination and the Company
shall have no further obligations to the Executive under this Agreement, unless
otherwise required by a Qualified Plan or specified pursuant to a valid election
to defer the receipt of all or a portion of such payments made in accordance
with any plan of deferred compensation sponsored by the Company.
(c) Other Termination of Employment. If the Company terminates
the Executive's employment other than for Cause, death or Disability, or the
Executive terminates his employment for Constructive Termination, the Company
shall pay and provide to the Executive the following:
<PAGE>
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to six (6) months of the Executive's Base Salary at
the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive
Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such Constructive Termination or termination
without Cause, and the denominator of which is the total number of days of the
applicable fiscal year for such Incentive Plan.
(ii) Acceleration of Option Vesting. In the case of a Constructive
Termination, all unvested stock options held by the Executive shall become fully
vested, effective on the Date of Termination, and shall be thereafter
exercisable in accordance with the provisions of the applicable Option Plan
(including, without limitation, Sections 5 and 6 thereof) and Option Agreement.
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is seven (7) months from the Date of
Termination, commencing on the Date of Termination the Company shall pay the
Executive an amount equal to fifty percent (50%) of [his] [her] monthly Base
Salary at the rate in effect as of the date when the Notice of Termination was
given in equal monthly installments until the earlier of (i) the payment of the
sixth (6th) monthly installment; or (ii) the date of the Executive's acceptance
of employment from a subsequent employer. The Executive shall notify the Company
immediately upon [his][her] acceptance of any such new employment if secured
prior to the payment by the Company of such six (6) additional monthly
installments.
(d) Release. As a condition precedent to the receipt of any
termination benefits payable to the Executive under this Section 7, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
7, 8, 9, 10, 11, 13 and 14 hereof, to the extent an obligation under any such
section arose at or prior to the Date of Termination and remains unfulfilled).
Such release shall exclude the Executive's rights under any Qualified Plan.
(e) Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 7, 8, 9, 10, 11, 13 and 14 (and
then, only to the extent an obligation under any such section arose at or prior
to the Date of Termination and remains unfulfilled), the Company shall have no
further obligations to the Executive under this Agreement in respect of any
termination of employment.
<PAGE>
8. Change of Control. Upon the occurrence of a Change of
Control, the Company shall pay the Executive, as consideration for assisting the
Company in bringing about a successful transaction, an amount equal to twelve
(12) months of the Executive's Base Salary at the rate in effect as of the
Change of Control Date. Such amount shall be payable in a lump sum in cash or
certified check within five (5) days after the Change of Control Date.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company, including, but not limited to stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan or program.
10. Full Settlement. The Executive shall not be obligated to
seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. In the event that the
Executive shall in good faith give a Notice of Termination for Constructive
Termination and it shall thereafter be determined that Constructive Termination
did not take place, the employment of the Executive shall, unless the Company
and the Executive otherwise mutually agree, be deemed to have terminated, at the
date of giving such purported Notice of Termination, by mutual consent of the
Company and the Executive and the Executive shall be entitled to receive only
those payments and benefits which he would have been entitled to receive at such
date had he terminated his employment voluntarily at such date under this
Agreement.
11. Arbitration of Disputes. In the event that a claim for
payment or benefits under this Agreement is disputed, the Company and the
Executive agree to submit such dispute to final and binding arbitration with
United States Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee
or such other arbitration firm as the Company and the Executive shall mutually
agree. Either party wishing to arbitrate any claim hereunder shall notify the
other party and USAM in writing whereupon USAM shall select a neutral arbitrator
and shall schedule an arbitration hearing within thirty (30) days of receipt of
such notice of arbitration. The arbitration shall be conducted in accordance
with the rules and procedures of USAM. The parties agree that any arbitrator's
award may be presented to a court of competent jurisdiction and judgment entered
thereon.
12. Confidential Information and Nonsolicitation.
<PAGE>
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b) Upon termination of the Executive's employment for any
reason, the Executive, for the twelve (12) month period following the Notice of
Termination, shall not, on his own behalf or on behalf of any person or entity,
directly or indirectly solicit or aid in the solicitation of any employees of
the Company to leave their employment. In the event the Executive violates the
terms of Section 12(a) or this Section 12(b), the Employee shall forfeit the
right to all salary and benefits that the Executive and/or his family members
were otherwise entitled pursuant to the terms of Section 7. Also, in the event
that this Section 12 is determined to be unenforceable in part, it shall be
construed to be enforceable to the maximum extent permitted by law.
(c) The Executive agrees that the covenants of confidentiality
and non-solicitation contained in this Section 12 are reasonable covenants under
the circumstances and necessary to protect the business interests and properties
of the Company. The Executive agrees that irreparable loss and damage will be
suffered by the Company should the Executive breach any of the covenants
contained in this Section 12. Accordingly, the Executive agrees that the
Company, in addition to all remedies provided at law or in equity, shall be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 12.
13. Successors.
(a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
14 Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party, by
overnight delivery or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last
page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: Regis J. Hebbeler
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
<PAGE>
(g) Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company) shall have no further
effect; provided, however, that except as specifically provided herein, the
terms of this Agreement do not supersede the terms of any grant or award to the
Executive under any stock option or profit sharing program of the Company except
as specifically set forth in Sections 7(a) and 7(c)(ii) with respect to the
vesting and exercisability of stock options.
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
_____/s/ Regis J. Hebbeler__________
Regis J. Hebbeler
Title:__Assistant Secretary__________
(CORPORATE SEAL)
EXECUTIVE:
/s/ Bobby Whaley
Name: Bobby Whaley
Address:
<PAGE>
SCHEDULE A -- BOB WHALEY
The following is a summary list of benefits available to the Executive
upon termination of the Executive's employment by reason of retirement on or
after the attainment of age sixty-five (65), death or Disability through Company
sponsored plans and programs as of the date of this Agreement. Nothing herein
shall preclude the Company from amending, altering, suspending, discontinuing or
terminating any of such plans and programs in compliance with applicable law and
regulation.
COVERAGE TYPE ......... BENEFIT AMOUNT
Group Life Insurance....... -- Basic $158,000
......... High Option $0
Group Disability Insurance.-- Basic 2 year $5,000
......... High Option $0
......... (benefit for 5 years)
Coverage by group life and disability insurance policies terminates upon
termination of the Executive's employment for any reason, except death (in the
case of life insurance) and disability (in the case of disability insurance).
The Executive's beneficiaries are entitled to benefits under the group life
insurance policy if the Executive dies during the period he is receiving
disability payments as a result of such disability.
In addition, the Company has a 401(k) plan in which the Executive may
participate on a voluntary basis. Company contributions therein on his behalf
vest in accordance with the terms of the 401(k) plan, which provides that such
contributions become immediately vested in the event of death during the term of
employment. Upon termination for any reason, the Executive must withdraw his
vested funds by the end of the following fiscal quarter.
<PAGE>
Exhibit - 10.62
SEVERANCE AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
REGIS J. HEBBELER
<PAGE>
TABLE OF CONTENTS
1. Definitions....................................................1
2. Termination of Employment......................................2
3. Obligations of the Company Upon Termination....................3
4. Non-exclusivity of Rights.......................................5
5. No Duty to Mitigate.............................................5
6. Arbitration of Disputes.........................................5
7. Confidential Information and Nonsolicitation....................6
8. Successors......................................................6
9. Miscellaneous...................................................7
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT, by and between GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation (the "Company"), and REGIS J. HEBBELER (the
"Executive"), shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Vice President, General
Counsel and Assistant Secretary of the Company.
B. The Company desires to recognize the Executive's commitment to the
Company and to confirm the right of the Executive to certain severance benefits.
To attain that end, the Company and the Executive wish to enter into this
Severance Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a)......"Accrued Obligations" shall mean (i) the Executive's
Base Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company.
(b)......"Board" shall mean the Board of Directors of the Company.
<PAGE>
8
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(c)......"Cause" shall mean that the Executive has, in the
judgment of a majority of the Senior Executive Officer Group (i) committed a
felony, or committed an act of fraud, embezzlement or theft in connection with
his duties with the Company or in the course of his employment with the Company;
(ii) willfully caused damage to property of the Company; (iii) been convicted of
a criminal offense (either a misdemeanor involving acts of dishonesty, theft or
moral turpitude, or a felony); or (iv) engaged in a willful and material breach
of his obligations to the Company (including without limitation, his obligation
to devote his full business time to the business and affairs of the Company and
to use his best efforts to perform faithfully and efficiently the
responsibilities assigned to him) which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Senior Executive Officer
Group within a reasonable period of time, which shall not be less than ten (10)
days, nor more than thirty (30) days, following receipt of such written notice
by the Executive. The Senior Executive Officer Group shall provide the Executive
with an opportunity to meet with the Senior Executive Officer Group in order to
provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this paragraph, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(d)......"Date of Termination" shall have the meaning set forth in Section
2(e).
(e)......"Disability" shall mean disability whereby the
Executive is unable to render the services provided for by this Agreement by
reason of illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(f)......"Incentive Bonus" shall mean the annual incentive target bonus
payable under the Incentive Plan.
(g)......"Incentive Plan" shall mean the Company's "Short Term
Incentive Plan" under which certain employees are eligible to receive an annual
incentive target bonus based on performance and other specific objectives
adopted by the Compensation Committee of the Board.
(h)......"Notice of Termination" shall have the meaning as set forth in
Section 2(d).
(i)......"Qualified Plan" shall mean any retirement plan maintained by the
Company which is intended to meet the requirements of the Internal Revenue Code
of 1986, as amended.
(j)......"Senior Executive Officer Group" shall mean the
Company's senior vice presidents, executive vice presidents, president and/or
chief operating officer, and chief executive officer, and any other senior
executives of the Company holding similar positions with the Company as may be
appointed by the Board from time to time.
(k)......"Subsidiary" shall mean any majority-owned subsidiary of the
Company.
(l)......"Supplemental Payment Date" shall have the meaning as set forth in
Section 3(c).
2. Termination of Employment.
<PAGE>
(a)......Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b)......Voluntary Termination by the Executive.
Notwithstanding anything in this Agreement to the contrary, the Executive may,
upon not less than thirty (30) days' written notice to the Company, voluntarily
terminate employment for any reason (including retirement under the terms of the
Company's retirement plan as in effect from time to time).
(c)......Termination by the Company. The Company at any time may terminate
the Executive's employment for Cause or without Cause.
(d)......Notice of Termination. Any termination by the Company
for Cause shall be communicated by a written Notice of Termination to the other
party hereto given in accordance with Section 9(c). For purposes of this
Agreement, a "Notice of Termination" means a written notice given in the case of
a termination for Cause which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment, and (iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than thirty (30) days after the receipt of such notice).
(e)......Date of Termination. For the purpose of this
Agreement, the term "Date of Termination" means (i) in the case of a termination
for Cause, the date of receipt of a Notice of Termination or, if later, the date
specified therein, and (ii) in all other cases, the actual date on which the
Executive's employment terminates.
3. Obligations of the Company Upon Termination. Upon termination of the
Executive's employment with the Company, the Company shall have the following
obligations:
<PAGE>
(a)......Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination.
(b)......Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive, the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c)......Other Termination of Employment. If the Company
terminates the Executive's employment other than for Cause, death or Disability,
the Company shall pay and provide to the Executive the following:
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to three (3) months of the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such termination without Cause, and the
denominator of which is the total number of days of the applicable fiscal year
for such Incentive Plan.
<PAGE>
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is four (4) months from the Date of Termination
(the "Supplemental Payment Date"), commencing on the Supplemental Payment Date
the Company shall pay the Executive an amount equal to fifty percent (50%) of
his monthly Base Salary at the rate in effect as of the date when the Notice of
Termination was given in equal monthly installments until the earlier of (i) the
payment of the third (3rd) monthly installment or (ii) the date of the
Executive's acceptance of employment from a subsequent employer. The Executive
shall notify the Company immediately upon his acceptance of any such new
employment if secured prior to the payment by the Company of such three (3)
additional monthly installments.
(d)......Release. As a condition precedent to the receipt of
any termination benefits payable to the Executive under this Section 3, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
3, 6, 8 and 9 hereof, to the extent an obligation under such section arose at or
prior to the Date of Termination and remains unfulfilled). Such release shall
exclude the Executive's rights under any Qualified Plan.
(e)......Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 3, 6, 8 and 9 (and then, only to
the extent an obligation under such section arose at or prior to the Date of
Termination and remains unfulfilled), the Company shall have no further
obligations to the Executive under this Agreement in respect of any termination
of employment.
4. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other agreements with
the Company, including, but not limited to stock option agreements. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
5. No Duty to Mitigate. The Executive shall not be obligated to seek
other employment by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement.
6. Arbitration of Disputes. In the event that a claim for payment or
benefits under this Agreement is disputed, the Company and the Executive agree
to submit such dispute to final and binding arbitration with United States
Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee or such other
arbitration firm as the Company and the Executive shall mutually agree. Either
party wishing to arbitrate any claim hereunder shall notify the other party and
USAM in writing whereupon USAM shall select a neutral arbitrator and shall
schedule an arbitration hearing within thirty (30) days of receipt of such
notice of arbitration. The arbitration shall be conducted in accordance with the
rules and procedures of USAM. The parties agree that any arbitrator's award may
be presented to a court of competent jurisdiction and judgment entered thereon.
7. Confidential Information and Nonsolicitation.
<PAGE>
(a)......The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b)......Upon termination of the Executive's employment for
any reason, the Executive, for the twelve (12) month period following the Notice
of Termination, shall not, on his own behalf or on behalf of any person or
entity, directly or indirectly solicit or aid in the solicitation of any
employees of the Company to leave their employment. In the event the Executive
violates the terms of Section 7(a) or this Section 7(b), the Employee shall
forfeit the right to all salary and benefits that the Executive and/or his
family members were otherwise entitled pursuant to the terms of Section 3. Also,
in the event that this Section 7 is determined to be unenforceable in part, it
shall be construed to be enforceable to the maximum extent permitted by law.
(c)......The Executive agrees that the covenants of
confidentiality and non-solicitation contained in this Section 7 are reasonable
covenants under the circumstances and necessary to protect the business
interests and properties of the Company. The Executive agrees that irreparable
loss and damage will be suffered by the Company should the Executive breach any
of the covenants contained in this Section 7. Accordingly, the Executive agrees
that the Company, in addition to all remedies provided at law or in equity,
shall be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 7.
8. Successors.
(a)......This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b)......This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
9. Miscellaneous.
(a)......Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee, applied
without reference to principles of conflict of laws.
(b)......Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(c)......Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party, by overnight delivery or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: President
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d)......Tax Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(e)......Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f)......Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
<PAGE>
(g)......Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company shall have no further
effect; provided, however, that except as specifically provided herein, the
terms of this Agreement do not supersede the terms of any grant or award to the
Executive under any stock option or profit sharing program of the Company.
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all
effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By:___/s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
_____/s/ Becky H. Halsey____________
Becky H. Halsey
Title:___Associate General Counsel
Assistant Secretary________
(CORPORATE SEAL)
EXECUTIVE: Regis J. Hebbeler
/s/ Regis J. Hebbeler
Name: Regis J. Hebbeler
Address:
<PAGE>
Exhibit - 10.63
SEVERANCE AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
HAZEL ANN MOXIM
<PAGE>
TABLE OF CONTENTS
1. Definitions....................................................1
2. Termination of Employment......................................2
3. Obligations of the Company Upon Termination....................3
4. Non-exclusivity of Rights.......................................5
5. No Duty to Mitigate.............................................5
6. Arbitration of Disputes.........................................5
7. Confidential Information and Nonsolicitation....................6
8. Successors......................................................6
9. Miscellaneous...................................................7
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT, by and between GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation (the "Company"), and HAZEL ANN MOXIM (the "Executive"),
shall be effective as of the 16th day of September, 1998.
RECITALS:
A. The Executive has for some time served as Vice President, Human
Resources of the Company.
B. The Company desires to recognize the Executive's commitment to the
Company and to confirm the right of the Executive to certain severance benefits.
To attain that end, the Company and the Executive wish to enter into this
Severance Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a)......"Accrued Obligations" shall mean (i) the Executive's
Base Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company.
(b)......"Board" shall mean the Board of Directors of the Company.
<PAGE>
8
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(c)......"Cause" shall mean that the Executive has, in the
judgment of a majority of the Senior Executive Officer Group (i) committed a
felony, or committed an act of fraud, embezzlement or theft in connection with
her duties with the Company or in the course of her employment with the Company;
(ii) willfully caused damage to property of the Company; (iii) been convicted of
a criminal offense (either a misdemeanor involving acts of dishonesty, theft or
moral turpitude, or a felony); or (iv) engaged in a willful and material breach
of her obligations to the Company (including without limitation, her obligation
to devote her full business time to the business and affairs of the Company and
to use her best efforts to perform faithfully and efficiently the
responsibilities assigned to her) which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Senior Executive Officer
Group within a reasonable period of time, which shall not be less than ten (10)
days, nor more than thirty (30) days, following receipt of such written notice
by the Executive. The Senior Executive Officer Group shall provide the Executive
with an opportunity to meet with the Senior Executive Officer Group in order to
provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this paragraph, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(d)......"Date of Termination" shall have the meaning set forth in Section
2(e).
(e)......"Disability" shall mean disability whereby the
Executive is unable to render the services provided for by this Agreement by
reason of illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(f)......"Incentive Bonus" shall mean the annual incentive target bonus
payable under the Incentive Plan.
(g)......"Incentive Plan" shall mean the Company's "Short Term
Incentive Plan" under which certain employees are eligible to receive an annual
incentive target bonus based on performance and other specific objectives
adopted by the Compensation Committee of the Board.
(h)......"Notice of Termination" shall have the meaning as set forth in
Section 2(d).
(i)......"Qualified Plan" shall mean any retirement plan maintained by the
Company which is intended to meet the requirements of the Internal Revenue Code
of 1986, as amended.
(j)......"Senior Executive Officer Group" shall mean the Company's senior
vice presidents, executive vice presidents, president and/or chief operating
officer, and chief executive officer, and any other senior executives of the
Company holding similar positions with the Company as may be appointed by the
Board from time to time.
(k)......"Subsidiary" shall mean any majority-owned subsidiary of the
Company.
(l)......"Supplemental Payment Date" shall have the meaning as set forth in
Section 3(c).
2. Termination of Employment.
<PAGE>
(a)......Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate her
employment, and her employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of her duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, her employment
hereunder shall be deemed to cease as of the date of her death.
(b)......Voluntary Termination by the Executive.
Notwithstanding anything in this Agreement to the contrary, the Executive may,
upon not less than thirty (30) days' written notice to the Company, voluntarily
terminate employment for any reason (including retirement under the terms of the
Company's retirement plan as in effect from time to time).
(c)......Termination by the Company. The Company at any time may terminate
the Executive's employment for Cause or without Cause.
(d)......Notice of Termination. Any termination by the Company
for Cause shall be communicated by a written Notice of Termination to the other
party hereto given in accordance with Section 9(c). For purposes of this
Agreement, a "Notice of Termination" means a written notice given in the case of
a termination for Cause which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment, and (iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than thirty (30) days after the receipt of such notice).
(e)......Date of Termination. For the purpose of this
Agreement, the term "Date of Termination" means (i) in the case of a termination
for Cause, the date of receipt of a Notice of Termination or, if later, the date
specified therein, and (ii) in all other cases, the actual date on which the
Executive's employment terminates.
3. Obligations of the Company Upon Termination. Upon termination of the
Executive's employment with the Company, the Company shall have the following
obligations:
<PAGE>
(a)......Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, her
beneficiaries or her estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination.
(b)......Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive, the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c)......Other Termination of Employment. If the Company
terminates the Executive's employment other than for Cause, death or Disability,
the Company shall pay and provide to the Executive the following:
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to three (3) months of the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such termination without Cause, and the
denominator of which is the total number of days of the applicable fiscal year
for such Incentive Plan.
<PAGE>
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is four (4) months from the Date of Termination
(the "Supplemental Payment Date"), commencing on the Supplemental Payment Date
the Company shall pay the Executive an amount equal to fifty percent (50%) of
her monthly Base Salary at the rate in effect as of the date when the Notice of
Termination was given in equal monthly installments until the earlier of (i) the
payment of the third (3rd) monthly installment or (ii) the date of the
Executive's acceptance of employment from a subsequent employer. The Executive
shall notify the Company immediately upon her acceptance of any such new
employment if secured prior to the payment by the Company of such three (3)
additional monthly installments.
(d)......Release. As a condition precedent to the receipt of
any termination benefits payable to the Executive under this Section 3, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
3, 6, 8 and 9 hereof, to the extent an obligation under such section arose at or
prior to the Date of Termination and remains unfulfilled). Such release shall
exclude the Executive's rights under any Qualified Plan.
(e)......Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 3, 6, 8 and 9 (and then, only to
the extent an obligation under such section arose at or prior to the Date of
Termination and remains unfulfilled), the Company shall have no further
obligations to the Executive under this Agreement in respect of any termination
of employment.
4. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other agreements with
the Company, including, but not limited to stock option agreements. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
5. No Duty to Mitigate. The Executive shall not be obligated to seek
other employment by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement.
6. Arbitration of Disputes. In the event that a claim for payment or
benefits under this Agreement is disputed, the Company and the Executive agree
to submit such dispute to final and binding arbitration with United States
Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee or such other
arbitration firm as the Company and the Executive shall mutually agree. Either
party wishing to arbitrate any claim hereunder shall notify the other party and
USAM in writing whereupon USAM shall select a neutral arbitrator and shall
schedule an arbitration hearing within thirty (30) days of receipt of such
notice of arbitration. The arbitration shall be conducted in accordance with the
rules and procedures of USAM. The parties agree that any arbitrator's award may
be presented to a court of competent jurisdiction and judgment entered thereon.
7. Confidential Information and Nonsolicitation.
<PAGE>
(a)......The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during her employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b)......Upon termination of the Executive's employment for
any reason, the Executive, for the twelve (12) month period following the Notice
of Termination, shall not, on her own behalf or on behalf of any person or
entity, directly or indirectly solicit or aid in the solicitation of any
employees of the Company to leave their employment. In the event the Executive
violates the terms of Section 7(a) or this Section 7(b), the Employee shall
forfeit the right to all salary and benefits that the Executive and/or her
family members were otherwise entitled pursuant to the terms of Section 3. Also,
in the event that this Section 7 is determined to be unenforceable in part, it
shall be construed to be enforceable to the maximum extent permitted by law.
(c)......The Executive agrees that the covenants of
confidentiality and non-solicitation contained in this Section 7 are reasonable
covenants under the circumstances and necessary to protect the business
interests and properties of the Company. The Executive agrees that irreparable
loss and damage will be suffered by the Company should the Executive breach any
of the covenants contained in this Section 7. Accordingly, the Executive agrees
that the Company, in addition to all remedies provided at law or in equity,
shall be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 7.
8. Successors.
(a)......This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b)......This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
9. Miscellaneous.
(a)......Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee, applied
without reference to principles of conflict of laws.
(b)......Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(c)......Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party, by overnight delivery or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d)......Tax Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(e)......Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f)......Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
<PAGE>
(g)......Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company shall have no further
effect; provided, however, that except as specifically provided herein, the
terms of this Agreement do not supersede the terms of any grant or award to the
Executive under any stock option or profit sharing program of the Company.
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set her hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all
effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Harry M. Call
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
______/s/ Regis J. Hebbeler___________
Regis J. Hebbeler
Title:__Assistant Secretary_________
(CORPORATE SEAL)
EXECUTIVE: Hazel Ann Moxim
/s/ Hazel Ann Moxim
Name: Hazel Ann Moxim
Address:
<PAGE>
Exhibit - 10.64
SEVERANCE AGREEMENT
BETWEEN
GOODY'S FAMILY CLOTHING, INC.
AND
DAVID G. PEEK
<PAGE>
TABLE OF CONTENTS
1. Definitions....................................................1
2. Termination of Employment......................................2
3. Obligations of the Company Upon Termination....................3
4. Non-exclusivity of Rights.......................................5
5. No Duty to Mitigate.............................................5
6. Arbitration of Disputes.........................................5
7. Confidential Information and Nonsolicitation....................6
8. Successors......................................................6
9. Miscellaneous...................................................7
<PAGE>
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT, by and between GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation (the "Company"), and DAVID G. PEEK (the "Executive"),
shall be effective as of the _16th_ day of _September, 1998.
RECITALS:
A. The Executive has for some time served as Vice President, Corporate
Controller and Chief Accounting Officer of the Company.
B. The Company desires to recognize the Executive's commitment to the
Company and to confirm the right of the Executive to certain severance benefits.
To attain that end, the Company and the Executive wish to enter into this
Severance Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the Company and the
Executive do hereby agree as follows:
1. Definitions.
(a)......"Accrued Obligations" shall mean (i) the Executive's
Base Salary through the Date of Termination, (ii) any amounts deferred by the
Executive and not yet paid by the Company pursuant to a valid election to defer
the receipt of all or a portion of such payments made in accordance with any
plan of deferred compensation sponsored by the Company and any earned but unpaid
vacation pay for the current year, (iii) any amounts or benefits owing to the
Executive or to the Executive's beneficiaries under the then applicable employee
benefit plans or policies of the Company and (iv) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive
through the Date of Termination and which are reimbursable in accordance with
the reimbursement policy of the Company.
(b)......"Board" shall mean the Board of Directors of the Company.
<PAGE>
8
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
(c)......"Cause" shall mean that the Executive has, in the
judgment of a majority of the Senior Executive Officer Group (i) committed a
felony, or committed an act of fraud, embezzlement or theft in connection with
his duties with the Company or in the course of his employment with the Company;
(ii) willfully caused damage to property of the Company; (iii) been convicted of
a criminal offense (either a misdemeanor involving acts of dishonesty, theft or
moral turpitude, or a felony); or (iv) engaged in a willful and material breach
of his obligations to the Company (including without limitation, his obligation
to devote his full business time to the business and affairs of the Company and
to use his best efforts to perform faithfully and efficiently the
responsibilities assigned to him) which breach (under this clause iv) has been
communicated to the Executive with specificity by written notice, and which has
not been cured to the reasonable satisfaction of the Senior Executive Officer
Group within a reasonable period of time, which shall not be less than ten (10)
days, nor more than thirty (30) days, following receipt of such written notice
by the Executive. The Senior Executive Officer Group shall provide the Executive
with an opportunity to meet with the Senior Executive Officer Group in order to
provide the Executive an opportunity to refute or explain acts or omissions
referred to in such written notice. For the purpose of this paragraph, no act or
omission shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that such act or omission was done in the
best interest of the Company.
(d)......"Date of Termination" shall have the meaning set forth in Section
2(e).
(e)......"Disability" shall mean disability whereby the
Executive is unable to render the services provided for by this Agreement by
reason of illness, injury or incapacity (whether physical, mental, emotional or
psychological) for a period of either (i) ninety (90) consecutive days or (ii)
one hundred eighty (180) days in any consecutive three hundred sixty-five (365)
day period.
(f)......"Incentive Bonus" shall mean the annual incentive target bonus
payable under the Incentive Plan.
(g)......"Incentive Plan" shall mean the Company's "Short Term
Incentive Plan" under which certain employees are eligible to receive an annual
incentive target bonus based on performance and other specific objectives
adopted by the Compensation Committee of the Board.
(h)......"Notice of Termination" shall have the meaning as set forth in
Section 2(d).
(i)......"Qualified Plan" shall mean any retirement plan maintained by the
Company which is intended to meet the requirements of the Internal Revenue Code
of 1986, as amended.
(j)......"Senior Executive Officer Group" shall mean the
Company's senior vice presidents, executive vice presidents, president and/or
chief operating officer, and chief executive officer, and any other senior
executives of the Company holding similar positions with the Company as may be
appointed by the Board from time to time.
(k)......"Subsidiary" shall mean any majority-owned subsidiary of the
Company.
(l)......"Supplemental Payment Date" shall have the meaning as set forth in
Section 3(c).
2. Termination of Employment.
<PAGE>
(a)......Disability; Death. The Company may terminate the
Executive's employment after having established the Executive's Disability, by
giving to the Executive written notice of its intention to terminate his
employment, and his employment with the Company shall terminate effective on the
thirtieth (30th) day after receipt of such notice if the Executive shall fail to
return to full-time performance of his duties within thirty (30) days after such
receipt. If the Executive dies during the term of this Agreement, his employment
hereunder shall be deemed to cease as of the date of his death.
(b)......Voluntary Termination by the Executive.
Notwithstanding anything in this Agreement to the contrary, the Executive may,
upon not less than thirty (30) days' written notice to the Company, voluntarily
terminate employment for any reason (including retirement under the terms of the
Company's retirement plan as in effect from time to time).
(c)......Termination by the Company. The Company at any time may terminate
the Executive's employment for Cause or without Cause.
(d)......Notice of Termination. Any termination by the Company
for Cause shall be communicated by a written Notice of Termination to the other
party hereto given in accordance with Section 9(c). For purposes of this
Agreement, a "Notice of Termination" means a written notice given in the case of
a termination for Cause which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment, and (iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than thirty (30) days after the receipt of such notice).
(e)......Date of Termination. For the purpose of this
Agreement, the term "Date of Termination" means (i) in the case of a termination
for Cause, the date of receipt of a Notice of Termination or, if later, the date
specified therein, and (ii) in all other cases, the actual date on which the
Executive's employment terminates.
3. Obligations of the Company Upon Termination. Upon termination of the
Executive's employment with the Company, the Company shall have the following
obligations:
<PAGE>
(a)......Death, Disability and Retirement. If the Executive's
employment is terminated by reason of the Executive's death, Disability, or
retirement on or after the attainment of age sixty-five (65), the Company shall
have no further obligations to the Executive's legal representatives under this
Agreement other than payment of the Accrued Obligations. If the Executive's
employment is terminated by reason of the Executive's death or Disability, the
Company shall have the additional obligation, subject to the terms of the
Incentive Plan and further provided that the Executive has been employed by the
Company for the first six (6) months of the then applicable fiscal year, to pay
a cash amount equal to a portion of the Incentive Bonus, the product of a
fraction, the numerator of which is the number of days elapsed since the date
the Incentive Plan began for the applicable fiscal year through the date of the
Disability or the date of death of the Executive, and the denominator of which
is the total number of days of the applicable fiscal year for such Incentive
Plan. Unless otherwise directed by the Executive (or, in the case of the
Incentive Plan or a Qualified Plan, as may be required by such Incentive Plan or
Qualified Plan) all Accrued Obligations shall be paid to the Executive, his
beneficiaries or his estate, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination.
(b)......Termination by the Company for Cause and Voluntary
Termination by the Executive. If the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive, the Company shall pay the
Executive the Accrued Obligations. The Executive shall be paid all such Accrued
Obligations in a lump sum in cash within thirty (30) days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement, unless otherwise required by a Qualified Plan or specified
pursuant to a valid election to defer the receipt of all or a portion of such
payments made in accordance with any plan of deferred compensation sponsored by
the Company.
(c)......Other Termination of Employment. If the Company
terminates the Executive's employment other than for Cause, death or Disability,
the Company shall pay and provide to the Executive the following:
(i) Severance Payment. The Company shall pay to the Executive in a lump sum
in cash or certified check within fifteen (15) days after the Date of
Termination a severance payment equal to the sum of the following amounts (other
than amounts payable from the Incentive Plan or Qualified Plans, non-qualified
retirement plans and deferred compensation plans, which amounts shall be paid in
accordance with the terms of such plans):
(A) all Accrued Obligations;
(B) a cash amount equal to three (3) months of the Executive's Base Salary
at the rate in effect as of the date when the Notice of Termination was given;
(C) subject to the terms of the Incentive Plan and further provided that
the Executive has been employed by the Company for the first six (6) months of
the then applicable fiscal year, a cash amount equal to a portion of the
Incentive Bonus, the product of a fraction, the numerator of which is the number
of days elapsed since the date the Incentive Plan began for the applicable
fiscal year through the date of such termination without Cause, and the
denominator of which is the total number of days of the applicable fiscal year
for such Incentive Plan.
<PAGE>
In addition, if the Executive has not accepted employment from a subsequent
employer prior to the date which is four (4) months from the Date of Termination
(the "Supplemental Payment Date"), commencing on the Supplemental Payment Date
the Company shall pay the Executive an amount equal to fifty percent (50%) of
his monthly Base Salary at the rate in effect as of the date when the Notice of
Termination was given in equal monthly installments until the earlier of (i) the
payment of the third (3rd) monthly installment or (ii) the date of the
Executive's acceptance of employment from a subsequent employer. The Executive
shall notify the Company immediately upon his acceptance of any such new
employment if secured prior to the payment by the Company of such three (3)
additional monthly installments.
(d)......Release. As a condition precedent to the receipt of
any termination benefits payable to the Executive under this Section 3, the
Executive agrees to execute a general release among other things releasing the
Company from any obligation or liability (other than those contained in Sections
3, 6, 8 and 9 hereof, to the extent an obligation under such section arose at or
prior to the Date of Termination and remains unfulfilled). Such release shall
exclude the Executive's rights under any Qualified Plan.
(e)......Discharge of Company's Obligations. Subject to the
performance of its obligations under Sections 3, 6, 8 and 9 (and then, only to
the extent an obligation under such section arose at or prior to the Date of
Termination and remains unfulfilled), the Company shall have no further
obligations to the Executive under this Agreement in respect of any termination
of employment.
4. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other agreements with
the Company, including, but not limited to stock option agreements. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
5. No Duty to Mitigate. The Executive shall not be obligated to seek
other employment by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement.
6. Arbitration of Disputes. In the event that a claim for payment or
benefits under this Agreement is disputed, the Company and the Executive agree
to submit such dispute to final and binding arbitration with United States
Arbitration and Mediation, Inc. ("USAM") in Knoxville, Tennessee or such other
arbitration firm as the Company and the Executive shall mutually agree. Either
party wishing to arbitrate any claim hereunder shall notify the other party and
USAM in writing whereupon USAM shall select a neutral arbitrator and shall
schedule an arbitration hearing within thirty (30) days of receipt of such
notice of arbitration. The arbitration shall be conducted in accordance with the
rules and procedures of USAM. The parties agree that any arbitrator's award may
be presented to a court of competent jurisdiction and judgment entered thereon.
7. Confidential Information and Nonsolicitation.
<PAGE>
(a)......The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or
data, including without limitation all trade secrets, relating to the Company,
and its business, (i) obtained by the Executive during his employment by the
Company, and (ii) which is not otherwise publicly known (other than by reason of
an unauthorized act by the Executive) and is subject to efforts that are
reasonable under the circumstances to maintain its secrecy. After termination of
the Executive's employment with the Company, the Executive shall not, without
the prior written consent of the Company, unless compelled pursuant to an order
of a court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
(b)......Upon termination of the Executive's employment for
any reason, the Executive, for the twelve (12) month period following the Notice
of Termination, shall not, on his own behalf or on behalf of any person or
entity, directly or indirectly solicit or aid in the solicitation of any
employees of the Company to leave their employment. In the event the Executive
violates the terms of Section 7(a) or this Section 7(b), the Employee shall
forfeit the right to all salary and benefits that the Executive and/or his
family members were otherwise entitled pursuant to the terms of Section 3. Also,
in the event that this Section 7 is determined to be unenforceable in part, it
shall be construed to be enforceable to the maximum extent permitted by law.
(c)......The Executive agrees that the covenants of
confidentiality and non-solicitation contained in this Section 7 are reasonable
covenants under the circumstances and necessary to protect the business
interests and properties of the Company. The Executive agrees that irreparable
loss and damage will be suffered by the Company should the Executive breach any
of the covenants contained in this Section 7. Accordingly, the Executive agrees
that the Company, in addition to all remedies provided at law or in equity,
shall be entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a breach or contemplated breach of any of the covenants
contained in this Section 7.
8. Successors.
(a)......This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b)......This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
<PAGE>
9. Miscellaneous.
(a)......Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee, applied
without reference to principles of conflict of laws.
(b)......Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(c)......Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party, by overnight delivery or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: at the address listed on the last page hereof
If to the Company: Goody's Family Clothing, Inc.
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37933-2000
Attention: General Counsel
(with a copy to the attention of the Secretary or to such other address as
either party shall have furnished to the other in writing in accordance
herewith). Communications delivered by hand or by overnight delivery shall be
deemed received on the date of delivery and communications sent by registered or
certified mail shall be deemed received three (3) business days after the
sending thereof.
(d)......Tax Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(e)......Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f)......Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
<PAGE>
(g)......Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing the Executive's employment with the Company, and all prior agreements
governing the Executive's employment with the Company shall have no further
effect; provided, however, that except as specifically provided herein, the
terms of this Agreement do not supersede the terms of any grant or award to the
Executive under any stock option or profit sharing program of the Company.
<PAGE>
9
106482-4 ~ 03833-0 ~ 12/02/98 ~ 09:26AM
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all
effective as of the day and year first above written.
GOODY'S FAMILY CLOTHING, INC.
By:____/s/ Harry M. Call________________
Harry M. Call
Title: President and Chief Operating Officer
ATTEST:
_______/s/ Regis J. Hebbeler____________
Regis J. Hebbeler
Title:___Assistant Secretary_____________
(CORPORATE SEAL)
EXECUTIVE: David G. Peek
_____/s/ David G. Peek____________
Name: David G. Peek
Address:
GOODY'S FAMILY CLOTHING, INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Thirteen Thirty-nine
Weeks Ended Weeks Ended
October 31, November 1, October 31, November 1,
1998 1997 1998 1997
------------ ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
Net earnings $3,267,000 $5,535,000 $19,693,000 $16,011,000
========== ========== =========== ===========
Weighted average common shares
outstanding - Basic (a) 33,328,000 32,651,000 33,099,000 32,498,000
Common equivalent shares for outstanding stock
options 994,000 1,299,000 1,294,000 1,089,000
---------- ---------- ---------- ----------
Weighted average common shares
outstanding - Diluted (a) 34,322,000 33,950,000 34,393,000 33,587,000
========== ========== ========== ==========
Earnings per common share (a)
Basic $ 0.10 $ 0.17 $ 0.59 $ 0.49
========== =========== ========== ==========
Diluted $ 0.10 $ 0.16 $ 0.57 $ 0.48
========== =========== ========== ==========
</TABLE>
(a) The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share" as required in the fourth quarter of fiscal 1997.
Accordingly, earnings per share and related data for the periods ended November
1, 1997 have been restated to conform to this new standard.
Earnings per share and related data for the periods ended November 1, 1997 have
also been restated to reflect a two-for-one stock split effected in July 1998.
Goody's Family Clothing, Inc.
Knoxville, Tennessee
We have made reviews, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim consolidated
financial information of Goody's Family Clothing, Inc. and subsidiaries for the
periods ended October 31, 1998 and November 1, 1997 as indicated in our report
dated November 17, 1998; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended October 31, 1998, is
incorporated by reference in Registration Statements Nos. 33-32357, 33-51210,
33-68520, 333-00052 and 333-09595 on Form S-8 and 333-32409 on Form S-3.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statements prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
December 3, 1998
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF OCTOBER 31, 1998 AND THE RELATED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THIRTY-NINE WEEKS ENDED ON OCTOBER 31, 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000879123
<NAME> Goody's Family Clothing, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jan-30-1999
<PERIOD-START> Feb-01-1998
<PERIOD-END> Oct-31-1998
<CASH> 27,371
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 266,384
<CURRENT-ASSETS> 315,213
<PP&E> 165,627
<DEPRECIATION> 61,434
<TOTAL-ASSETS> 422,436
<CURRENT-LIABILITIES> 220,065
<BONDS> 608
0
0
<COMMON> 28,063
<OTHER-SE> 159,696
<TOTAL-LIABILITY-AND-EQUITY> 422,436
<SALES> 727,538
<TOTAL-REVENUES> 727,538
<CGS> 523,928
<TOTAL-COSTS> 173,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 280
<INCOME-PRETAX> 31,585
<INCOME-TAX> 11,892
<INCOME-CONTINUING> 19,693
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,693
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.57
</TABLE>
