CHANGE IN CONTROL AGREEMENT
BETWEEN THE MEN’S WEARHOUSE, INC.
AND
THIS CHANGE IN
CONTROL AGREEMENT (this “ Agreement ”) is
entered into by and between The Men’s Wearhouse, Inc., a
Texas corporation (the “ Company ”), and
[
] (the “ Executive ”) effective as of
May 15, 2009 (the “ Effective Date
”). Certain capitalized terms used herein are defined in
Section 24.
WHEREAS, the
Company considers it to be in the best interests of the Company and
its Affiliates and stockholders to foster the continuous dedication
and employment of certain key employees of the Company,
notwithstanding the possibility or occurrence of a Change in
Control (as that phrase is defined in Section 2
below);
WHEREAS, the
Executive is a key employee of the Company; and
WHEREAS, the
Company wishes to enter into this Agreement to protect the
Executive if a Change in Control occurs, thereby encouraging the
Executive to remain in the employ of the Company and not to be
distracted from the performance of his duties to the Company by the
possibility of a Change in Control;
NOW, THEREFORE , the parties
agree, effective as stated above, as follows:
Section 1.
Other Employment Arrangements .
(a) This
Agreement does not affect the Executive’s existing or future
employment arrangements with the Company unless a Change in Control
shall have occurred before the expiration of the term of this
Agreement. The Executive’s employment with the Company shall
continue to be governed by the Executive’s existing or future
employment agreements with the Company, if any, or, in the absence
of any employment agreement, shall continue to be at the will of
the Board of Directors or, if the Executive is not an officer of
the Company at the time of the termination of the Executive’s
employment with the Company, the will of the Chief Executive
Officer of the Company, except that if (i) a Change in Control
shall have occurred before the expiration of the term of this
Agreement and (ii) the Executive’s employment with the
Company is terminated (whether by the Executive or the Company or
automatically as provided in Section 3) after the occurrence
of that Change in Control, then the Executive shall be entitled to
receive certain benefits as provided in this Agreement and the
Executive shall not be entitled to receive any severance,
termination or similar payment or benefit set forth in any
employment agreement or arrangement the Executive has with the
Company or any of its subsidiaries that would be duplicative in any
manner of any payment made pursuant to this Agreement.
(b) Notwithstanding
anything contained in this Agreement to the contrary, if following
the commencement of any discussion with a third person (but
excluding any discussions with an investment banker, attorney,
accountant or other advisor engaged by the Company) that ultimately
results in a Change in Control, (i) the Executive’s
employment with
the Company is
terminated, (ii) the Executive’s duties are materially
changed or the Executive’s status and position with the
Company is materially diminished, (iii) the Executive’s
Base Salary is reduced, or (iv) the Executive’s annual
bonus potential is reduced to an amount less than the Benchmark
Bonus, then for all purposes of this Agreement, such Change in
Control shall be deemed to have occurred on the date immediately
prior to the date of such termination, change, diminution, or
reduction.
(c) Nothing
in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or
practice of or provided by the Company or any of its Affiliates and
for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its
Affiliates. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, program,
policy or practice of or provided by, or any contract or agreement
with, the Company or any of its Affiliates at or subsequent to the
date of termination of the Executive’s employment with the
Company shall be payable or otherwise provided in accordance with
such plan, program, policy or practice or contract or agreement
except as explicitly modified by this Agreement.
Section 2.
Change in Control of the Company . For purposes of this
Agreement, a “ Change in Control ” shall
mean the occurrence of any of the following after the Effective
Date and during the term of this Agreement:
(a) the
individuals who are Incumbent Directors cease for any reason to
constitute a majority of the members of the Board of
Directors;
(b) the
consummation of a Merger of the Company with another Entity,
unless :
(i) the
individuals and Entities who were the Beneficial Owners of the
Voting Securities of the Company outstanding immediately prior to
such Merger own, directly or indirectly, more than 50 percent
of the combined voting power of the Voting Securities of either the
surviving Entity or the parent of the surviving Entity outstanding
immediately after such Merger; and
(ii) the
individuals who comprise the Board of Directors immediately prior
to such Merger constitute a majority of the board of directors or
other governing body of either the surviving Entity or the parent
of the surviving Entity;
(c) the
consummation of a Merger of a Wholly-Owned Subsidiary with another
Entity (other than an Entity in which the Company owns, directly or
indirectly, a majority of the voting and equity interests) if the
gross revenues of such Wholly-Owned Subsidiary (including the
Entities wholly-owned directly or indirectly by such Wholly-Owned
Subsidiary) for the twelve-month period immediately preceding the
month in which the Merger occurs equal or exceed 30 percent of
the consolidated gross revenues reported by the Company on the
Company’s consolidated financial statements for such
period;
(d) any
Person, other than a Specified Owner, becomes a Beneficial Owner,
directly or indirectly, of securities of the Company representing
30 percent or more of the combined voting power of the
Company’s then outstanding Voting Securities;
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(e) a sale,
transfer, lease or other disposition of all or substantially all of
the Assets is consummated (an “ Asset Sale
”), unless :
(i) the
individuals and Entities who were the Beneficial Owners of the
Voting Securities of the Company immediately prior to such Asset
Sale own, directly or indirectly, more than 50 percent of the
combined voting power of the Voting Securities of the Entity that
acquires such Assets in such Asset Sale or its parent immediately
after such Asset Sale in substantially the same proportions as
their ownership of the Company’s Voting Securities
immediately prior to such Asset Sale; and
(ii) the
individuals who comprise the Board of Directors immediately prior
to such Asset Sale constitute a majority of the board of directors
or other governing body of either the Entity that acquired such
Assets in such Asset Sale or its parent; or
(f) The
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company.
Section 3.
Term of This Agreement . The term of this Agreement shall
begin on the Effective Date and, unless automatically extended
pursuant to the second sentence of this Section 3, shall expire on
the first to occur of:
(a) the
Executive’s death or the Executive’s Disability, which
events shall also be deemed automatically to terminate the
Executive’s employment by the Company;
(b) the
termination by the Executive or the Company of the
Executive’s employment by the Company; or
(c) the end
of the last day (the “ Expiration Date ”)
of:
(i) the two-year
period beginning on the Effective Date (or any period for which the
term of this Agreement shall have been automatically extended
pursuant to the second sentence of this Section 3) if no
Change in Control shall have occurred during that two-year period
(or any period for which the term of this Agreement shall have been
automatically extended pursuant to the second sentence of this
Section 3); or
(ii) the two-year
period beginning on the date on which a Change in Control occurred
if a Change in Control of the Company shall have occurred during
the two-year period beginning on the Effective Date (or any period
for which the term of this Agreement shall have been automatically
extended pursuant to the second sentence of this
Section 3).
If (a) the
term of this Agreement shall not have expired as a result of the
occurrence of one of the events described in subsections
(a) or (b) of the immediately preceding sentence, and
(b) the Company shall not have given notice to the Executive
at least ninety (90) days before the Expiration Date that the
term of this Agreement will expire on the Expiration Date, then the
term of this Agreement shall be automatically extended for
successive two-year periods (the first such period to begin on the
day immediately following the Expiration Date) unless the Company
shall have given notice to the Executive at least ninety
(90) days before the end of any two-year period
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for which the
term of this Agreement shall have been automatically extended that
such term will expire at the end of that two-year period. The
expiration of the term of this Agreement shall not terminate this
Agreement itself or affect the right of the Executive or the
Executive’s legal representatives to enforce the payment of
any amount or other benefit to which the Executive was entitled
before the expiration of the term of this Agreement or to which the
Executive became entitled as a result of the event (including the
termination, whether by the Executive or the Company or
automatically as provided in this Section 3, of the
Executive’s employment by the Company) that caused the term
of this Agreement to expire.
Section 4.
Event of Termination for Cause . An “ Event of
Termination for Cause ” shall have occurred if, after
a Change in Control, the Executive shall have committed:
(a) gross
negligence or willful misconduct in connection with his duties or
in the course of his employment with the Company or any
Wholly-Owned Subsidiary;
(b) an act of
fraud, embezzlement or theft in connection with his duties or in
the course of his employment with the Company or any Wholly-Owned
Subsidiary;
(c) intentional
wrongful damage to property (other than of a de minimis
nature) of the Company or any Wholly-Owned Subsidiary;
(d) intentional
wrongful disclosure of secret processes or confidential information
of the Company or any Wholly-Owned Subsidiary which the Executive
believes or reasonably should believe will have a material adverse
affect on the Company; or
(e) an act
leading to a conviction of a felony, or a misdemeanor involving
moral turpitude.
For purposes of
this Agreement, no act, or failure to act, on the part of the
Executive shall be deemed “ intentional ” if it
was due primarily to an error in judgment or negligence, but shall
be deemed “ intentional ” only if done, or
omitted to be done, by the Executive not in good faith and without
reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated as a result
of an “Event of Termination for Cause” hereunder unless
and until there shall have been delivered to the Executive a
certified copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters of the members of the Board of
Directors then in office (but excluding the Executive from any such
vote or determination if he is then a member of the Board of
Directors) at a meeting of the Board of Directors called and held
for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be
heard before the Board of Directors), finding that, in the good
faith opinion of the Board of Directors, the Executive had
committed an act set forth above in this Section 4 and
specifying the particulars thereof in detail. Nothing herein shall
limit the right of the Executive or his legal representatives to
contest the validity or propriety of any such
determination.
Section 5.
An Event of Termination for Good Reason . An “
Event of Termination for Good Reason ” shall
mean the occurrence of any of the following on or after a Change in
Control:
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(a) the
Company or the Successor assigns to the Executive any duties
inconsistent with the Executive’s position (including
offices, titles and reporting requirements), authority, duties or
responsibilities with the Company in effect immediately before the
occurrence of the Change in Control or otherwise makes any change
in any such position, authority, duties or
responsibilities;
(b) the
Company or the Successor removes the Executive from, or fails to
re-elect or appoint the Executive to, any duties or position with
the Company that were assigned or held by the Executive immediately
before the occurrence of the Change in Control, except that a
nominal change in the Executive’s title that is merely
descriptive and does not affect rank or status shall not constitute
such an event;
(c) the
Company or the Successor takes any other action that results in a
material diminution in the Executive’s position, authority,
duties or responsibilities or otherwise takes any action that
materially interferes therewith;
(d) the
Company or the Successor reduces the Executive’s annual base
salary as in effect immediately before the occurrence of the Change
in Control or as the Executive’s annual base salary may be
increased from time to time after that occurrence (the “
Base Salary ”);
(e) the
Company or the Successor reduces the Executive’s maximum
annual bonus potential to an amount less than the Executive’s
maximum annual bonus potential for the preceding year (the “
Benchmark Bonus ”) or revises the bonus plan in
any manner that materially adversely affects the Executive’s
ability to achieve the maximum annual bonus potential;
(f) the
Company’s or the Successor’s requiring the Executive
(i) to be based at any office or location more than
thirty-five (35) miles from the office of the Company where
the Executive was principally employed and stationed immediately
prior to the Change in Control, or (ii) to travel on Company
business to a materially greater extent than required immediately
prior to the Change in Control;
(g) the
Company or the Successor requires the Executive to perform a
majority of his duties outside the office of the Company where the
Executive was principally employed and stationed immediately prior
to the Change in Control for a period of more than 21 consecutive
days or for more than 90 days in any calendar year;
(h) the
Company or the Successor fails to (i) continue in effect any
bonus, incentive, profit sharing, performance, savings, retirement
or pension policy, plan, program or arrangement (such policies,
plans, programs and arrangements collectively being referred to
herein as the “ Basic Benefit Plans ”),
including, but not limited to, any deferred compensation,
supplemental executive retirement or other retirement income, stock
option, stock purchase, stock appreciation, restricted stock,
deferred stock unit, employee stock ownership or similar policy,
plan, program or arrangement of the Company, in which the Executive
was a participant immediately before the occurrence of the Change
in Control unless an equitable and reasonably comparable
arrangement (embodied in a substitute or alternative benefit or
plan) shall have been made with respect to such Basic Benefit Plan
promptly following the occurrence of the Change
5
in Control, or
(ii) continue the Executive’s participation in any Basic
Benefit Plan (or any substitute or alternative plan) on
substantially the same basis, both in terms of the amount of
benefits provided to the Executive (which are in any event always
subject to the terms of any applicable Basic Benefit Plan) and the
level of the Executive’s participation relative to other
executives of the Company, as existed immediately before the
occurrence of the Change in Control;
(i) the
Company or the Successor fails to continue to provide the Executive
with benefits substantially similar to those enjoyed by the
Executive under any of the Company’s other executive benefit
plans, policies, programs and arrangements, including, but not
limited to, life insurance, medical, dental, health, hospital,
accident or disability plans, in which the Executive was a
participant immediately before the occurrence of the Change in
Control;
(j) the
Company or the Successor takes any action that would directly or
indirectly materially reduce any other non-contractual benefits
that were provided to the Executive by the Company immediately
before the occurrence of the Change in Control or deprive the
Executive of any material fringe benefit enjoyed by the Executive
immediately before the occurrence of the Change in
Control;
(k) the
Company or the Successor fails to provide the Executive with the
number of paid vacation days to which the Executive was entitled in
accordance with the Company’s vacation policy in effect
immediately before the occurrence of the Change in
Control;
(l) the
Company or the Successor fails to continue to provide the Executive
with office space, related facilities and support personnel
(including, but not limited to, administrative and secretarial
assistance) (i) that are both commensurate with the
Executive’s responsibilities to and position with the Company
immediately before the occurrence of the Change in Control and not
materially dissimilar to the office space, related facilities and
support personnel provided to other executives of the Company
having comparable responsibility to the Executive, or
(ii) that are physically located at the office of the Company
where the Executive was principally employed and stationed
immediately prior to the Change in Control;
(m) the
Company or the Successor fails to honor any provision of any
employment agreement the Executive has or may in the future have
with the Company or fail to honor any provision of this
Agreement;
(n) the
Company or the Successor gives effective notice of an election to
terminate at the end of the term or the extended term of any
employment agreement the Executive has or may in the future have
with the Company or the Successor in accordance with the terms of
any such agreement; or
(o) the
Company or the Successor purports to terminate the
Executive’s employment by the Company unless notice of that
termination shall have been given to the Executive pursuant to, and
that notice shall meet the requirements of,
Section 6.
Section 6.
Notice of Termination If a Change in Control shall have
occurred before the expiration of the term of this Agreement, any
subsequent termination by the Executive or the Company of the
Executive’s employment by the Company, or any determination
of the
6
Executive’s Disability, shall be
communicated by notice to the other party that shall indicate the
specific paragraph of Section 7 pursuant to which the
Executive is to receive benefits as a result of the termination. If
the notice states that the Executive’s employment by the
Company has been automatically terminated as a result of the
Executive’s Disability, the notice shall (a) specifically
describe the basis for the determination of the Executive’s
Disability, and (b) state the date of the determination of the
Executive’s Disability and the date of the termination of his
employment, which date shall be not more than ten (10) days
before the date such notice is given. If the notice is from the
Company and states that the Executive’s employment by the
Company is terminated by the Company as a result of the occurrence
of an Event of Termination for Cause, the notice shall specifically
describe the action or inaction of the Executive that the Company
believes constitutes an Event of Termination for Cause and shall be
accompanied by a certified copy of the resolution satisfying the
requirements of Section 4. If the notice is from the Executive
and states that the Executive’s employment by the Company is
terminated by the Executive as a result of the occurrence of an
Event of Termination for Good Reason, the notice shall specifically
describe the action or inaction of the Company that the Executive
believes constitutes an Event of Termination for Good Reason. Each
notice given pursuant to this Section 6 (other than a notice
stating that the Executive’s employment by the Company has
been automatically terminated as a result of the Executive’s
Disability) shall state a date, which shall be not fewer than
thirty (30) days nor more than sixty (60) days after the date
such notice is given, on which the termination of the
Executive’s employment by the Company is effective. The date
so stated in accordance with this Section 6 shall be the
“ Termination Date ”. If a Change in
Control shall have occurred before the expiration of the term of
this Agreement, any subsequent purported termination by the Company
of the Executive’s employment by the Company, or any
subsequent purported determination by the Company of the
Executive’s Disability, shall be ineffective unless that
termination or determination shall have been communicated by the
Company to the Executive by notice that meets the requirements of
the foregoing provisions of this Section 6 and the provisions
of Section 9.
Section 7.
Benefits Payable on Change in Control and Termination
.
(a) If
(x) a Change in Control shall have occurred before the
expiration of the term of this Agreement, and (y) the
Executive’s employment by the Company is terminated (whether
by the Executive or the Company or automatically as provided in
Section 3) after the occurrence of that Change in Control, the
Executive shall be entitled to the following benefits (except to
the extent limited by Section 7(e)):
(i) If the
Executive’s employment by the Company is terminated
(x) by the Company as a result of the occurrence of an Event
of Termination for Cause, or (y) by the Executive before the
occurrence of an Event of Termination for Good Reason, then the
Company shall pay to the Executive:
(A) at the time
specified in Section 7(b)(i):
(1) the portion of
the Base Salary accrued through the Termination Date for periods
through but not following his Separation From Service and
compensation for earned but unused vacation time, in
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each case to
the extent not theretofore paid (collectively, the “
Accrued Obligations ”); and
(2) the portion of
the Base Salary accrued through the Termination Date for periods
following his Separation From Service to the extent not theretofore
paid; and
(B) any other
amounts or benefits provided under any plan, policy, practice,
program, contract or arrangement of or provided by the Company,
including, but not limited to, the Basic Benefit Plans and the
Other Benefit Plans, which shall be governed by the terms thereof
(except as explicitly modified by this Agreement).
(ii) If the
Executive’s employment by the Company is automatically
terminated as a result of the Executive’s death then the
Company shall pay to the Executive’s estate or beneficiaries,
as applicable, at the time specified in Section 7(b)(ii), the
portion of the Base Salary and compensation for earned but unused
vacation time accrued through the date of the Executive’s
death, in each case to the extent not theretofore paid, and the
Company shall pay any other amounts or benefits provided under any
plan, policy, practice, program, contract or arrangement of or
provided by the Company, including, but not limited to, the Basic
Benefit Plans and the Other Benefit Plans, which shall be governed
by the terms thereof (except as explicitly modified by this
Agreement).
(iii) If the
Executive’s employment by the Company is automatically
terminated as a result of the Executive’s Disability, then
the Company shall pay to the Executive:
(A) at the time
specified in Section 7(b)(iii):
(1) the Accrued
Obligations; and
(2) the portion of
the Base Salary accrued through the Termination Date for periods
following his Separation From Service to the extent not theretofore
paid; and
(B) any other
amounts or benefits provided under any plan, policy, practice,
program, contract or arrangement of or provided by the Company,
including, but not limited to, the Basic Benefit Plans and the
Other Benefit Plans, which shall be governed by the terms thereof
(except as explicitly modified by this Agreement).
(iv) If the
Executive’s employment by the Company is terminated
(x) by the Company otherwise than as a result of the
occurrence of an Event of Termination for Cause, or (y) by the
Executive after the occurrence of an Event of Termination for Good
Reason then the Executive shall be entitled to the
following:
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(A) The Company
shall pay to the Executive, at the time specified in Section
7(b)(iv), the Accrued Obligations;
(B) The Company
shall pay to the Executive, at the time specified in Section
7(b)(v), the portion of the Base Salary accrued through the
Termination Date for periods following his Separation From Service
to the extent not theretofore paid;
(C) The Company
shall pay to the Executive, in a lump sum payment at the time
specified in Section 7(b)(v), an amount equal to two
(2) times the sum of:
(1) the amount
(including any deferred portion thereof) of the Base Salary for the
Fiscal Year in which the Termination Date occurs or for the
immediately preceding Fiscal Year, whichever is higher;
and
(2) an amount
equal to the greater of (a) the Executive’s maximum
annual bonus potential for the Fiscal Year in which the Termination
Date occurs and (b) the Executive’s maximum annual bonus
potential for the Fiscal Year immediately preceding the Fiscal Year
in which the Termination Date occurs.
(D) The Company
shall pay to the Executive, in a lump sum payment at the time
specified in Section 7(b)(v), an amount equal to the product
of (1) the total monthly basic life insurance premium (both
the portion paid by the Company and the portion paid by the
Executive) applicable to the E
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