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Exhibit
10.1
MARK A.
HOFFMAN
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
ARTICLE 1
GENERAL PROVISIONS
Section 1.01
Employment Agreement. This Amended and Restated Employment
Agreement (“Agreement”) is entered into as of
January 4, 2008 by and between Charlotte Russe Holding, Inc.,
a Delaware Corporation (the “Company”), and
Mr. Mark A. Hoffman (“Mr. Hoffman”). This
Agreement amends and restates in its entirety that certain
Employment Agreement by and between the Company and
Mr. Hoffman dated July 9, 2003, as amended
August 31, 2005 and February 14, 2007 (the “Prior
Agreement”). Upon execution of this Agreement, the Prior
Agreement shall be of no further force or effect.
ARTICLE 2
POSITION AND
DUTIES
Section 2.01
Position. Company shall employ Mr. Hoffman as its Chief
Executive Officer. During the term of his employment by the
Company, Mr. Hoffman shall also serve as a member of the
Company’s Board of Directors (the
“Board”).
Section 2.02
Duties. Mr. Hoffman shall have such authority and
duties which are customary for the position of Chief Executive
Officer and shall perform such executive-level duties as may be
assigned to him by Company or its Board of Directors which
reasonably serve the purpose of this Agreement and/or meet the
needs of Company and its affiliates. Mr. Hoffman shall be
based in San Diego at Company’s headquarters (except as
otherwise consented to by Mr. Hoffman) and shall report only
to the Board of Directors of the Company. All other officers and
employees of the Company shall report directly or indirectly to
Mr. Hoffman.
Section 2.03 Full
Attention to Business. During said employment, except for sick
leave, reasonable vacations and excused leaves of absence,
Mr. Hoffman shall devote his full business time energies,
interest, abilities and productive efforts to the business of the
Company and its affiliates and shall not, without the
Company’s written consent, render any kind of services to
others for compensation and, in addition, shall not engage in any
activity which conflicts or interferes with the performance of
Mr. Hoffman’s duties hereunder.
Section 2.04
Covenants Not to Compete During Term. During the Term of
this Agreement and while receiving any severance payouts hereunder,
Mr. Hoffman shall not participate in any capacity in any
business engaged in the retail sale of women’s junior apparel
or accessories.
ARTICLE 3
TERM OF EMPLOYMENT
Section 3.01
Term. Subject to earlier termination as provided in this
Agreement, Mr. Hoffman shall be employed through the last day
of the Company’s 2009 fiscal year (the “Term”).
Neither party is under any obligation to renew or extend this
Agreement. Any new employment agreement shall only be effective
after having been reduced to writing and executed by both parties
hereto. In the absence of earlier termination as provided herein,
this Agreement shall terminate automatically on such date. In the
event Mr. Hoffman continues to perform services after this
Agreement has terminated, and pending execution of a new employment
agreement, if any, such services shall constitute employment for an
unspecified term, terminable at will, with or without cause or
reason, with or without advance notice, and with or without pay in
lieu of advance notice.
ARTICLE 4
COMPENSATION
Section 4.01
Salary. Company shall pay Mr. Hoffman an annualized
base salary of $735,000, to be paid in accordance with
Company’s pay policy and subject to an annual increase of 5%
during the Term of this Agreement commencing in fiscal
2009.
Section 4.02 Stock
Options. On July 9, 2003, Mr. Hoffman was granted
options to purchase 150,000 shares of the Company’s common
stock under the Charlotte Russe Holding, Inc. 1999 Equity Incentive
Plan at an exercise price of $11.42.
Section 4.03
Performance Bonus. For work performed during each of fiscal
2008 and 2009, Mr. Hoffman shall be eligible to receive an
annual bonus pursuant to the Company’s Executive Officer
Compensation Program.
Section 4.04
Performance Bonus Conditions. The Performance Bonus shall be
paid by check no later than 75 days following fiscal year end.
Mr. Hoffman must be actively employed as of fiscal year end to
be eligible for this bonus. If Mr. Hoffman quits or is fired
“for cause” as herein defined in Section 6.04,
there shall be no bonus to Mr. Hoffman in respect of the year
of such termination. If Mr. Hoffman’s employment is
terminated prior to fiscal year end without cause or by reason of
Mr. Hoffman’s disability or death or if Mr. Hoffman
terminates his employment for “good reason” (as defined
in Section 6.08 below), Mr. Hoffman shall receive a
pro-rata bonus based on actual performance, to be figured by
pro-rating any bonus that would have been paid for the full fiscal
year on a daily basis, to the date of termination.
Section 4.05 Health
Insurance. Mr. Hoffman and his family shall be entitled to
participate in any Company-provided group medical, vision or dental
insurance plans. Company shall pay the entire cost of premiums for
the group medical insurance. Mr. Hoffman may elect to purchase
coverage for himself and his family for vision care and dental
insurance.
Section 4.06 Auto
Allowance. Mr. Hoffman shall be entitled to an allowance
of $15,000 for the leasing, insurance, and maintenance of an
automobile.
Section 4.07
Vacation. Mr. Hoffman shall be entitled to three weeks
of paid vacation per year.
Section 4.08
Reimbursement of Legal Fees. Mr. Hoffman shall receive
reimbursement for reasonable attorney fees incurred in connection
with this employment agreement. Mr. Hoffman shall submit to
Company the legal bills for reimbursement.
Section 4.09 Business
Expense Reimbursement. The Company shall reimburse
Mr. Hoffman for all reasonable business expenses incurred and
documented pursuant to the Company’s expense reimbursement
policies and practices.
Section 4.10
Liability Insurance and Indemnification. Mr. Hoffman
shall be added as an additional named insured under all liability
insurance policies now in force or hereafter obtained covering any
officer or director of the Company or Parent in his or her capacity
as an officer or director. The Company and Parent shall also
indemnify Mr. Hoffman in his capacity as an officer or
director and hold him harmless from any cost, expense or liability
arising out of or relating to any act or decisions made by him on
behalf of or in the course of performing services for the Company
and Parent to the fullest extent permitted by Delaware law to the
same extent as provided to other officers or directors of the
Company and Parent.
Section 4.11 Life
Insurance. The Company shall pay for, or promptly reimburse
Mr. Hoffman for, insurance premiums incurred by
Mr. Hoffman with respect to a life insurance policy, provided
that the amount of such payments shall in no event exceed $25,000
per year.
Section 4.12 Certain
Additional Payments. The Company shall pay to Mr. Hoffman
such additional amounts (the “Gross-Up Payment”) as are
necessary to reimburse Mr. Hoffman, on an after-tax basis, for
all federal, state and local income and employment taxes (the
“Taxes”) payable by Mr. Hoffman with respect to
the payments or benefits received by Mr. Hoffman pursuant to
Sections 4.05, 4.06 and 4.11 hereof (the “Payments”),
such that the net amount retained by Mr. Hoffman, after
deduction of any Taxes on the Payments and on the Gross-Up Payment,
shall be equal to the Payments.
ARTICLE 5
UNFAIR COMPETITION
Section 5.01 Conflict
of Interest. The Company relies on the integrity and good
judgment of all employees to observe ethical, professional and
legal standards, and good business practices, in the conduct of the
Company’s business. In keeping with ethical business
practice, it is critical that Mr. Hoffman refrain from
activities which conflict with the best interest of the
Company.
Section 5.02 Covenant
Not to Misuse Information. Mr. Hoffman previously executed
and agrees to abide by the Trade Secret and Confidentiality
Agreement set forth in Exhibit “A”, which is
incorporated herein by reference and made a part hereof.
Mr. Hoffman’s compliance with the terms of Exhibit
“A” is a material requirement of this
Agreement.
ARTICLE 6
TERMINATION OR
RESIGNATION
Section 6.01
Termination Without Cause. The Company may terminate this
Agreement at any time, without notice, without cause. In such an
event, Company shall comply with the severance compensation
provisions set forth in Sections 6.02 and 6.03.
Section 6.02
Termination Without Cause Severance Compensation. In the
event Mr. Hoffman’s employment is terminated by the
Company without cause, he shall be entitled to severance equal to
100% of his annual base salary for one year, payable on a monthly
basis, less required payroll taxes. If Mr. Hoffman breaches
any of his obligations hereunder including, without limitation,
Exhibit A hereto, the company shall be relieved of any obligation
hereunder to make severance payments to
Mr. Hoffman.
From date of notification by
the Company that it has elected to terminate his employment,
Mr. Hoffman will be free to discuss a position with other
prospective employers. Mr. Hoffman may continue with current
title and responsibilities after the termination notice date, upon
mutual consent of Company and Mr. Hoffman. During the period
after notification, but prior to leaving Company, Mr. Hoffman
will be entitled to all compensation and employee benefits under
Section 4 of this Agreement until the actual
termination.
Section 6.03 No
Offset or Duty to Mitigate . Mr. Hoffman’s severance
benefits hereunder shall not be offset by any income or earnings
from any other employment he may obtain and Mr. Hoffman shall
be under no duty to mitigate the Company’s damages under this
Agreement by obtaining or attempting to obtain successor
employment.
Section 6.04
Severance Distribution. The severance compensation payable
to Mr. Hoffman under Section 6.02 of this Agreement will
be paid to Mr. Hoffman. Company shall be entitled to cease
making any severance compensation payments required under this
Agreement in the event Mr. Hoffman breaches any provision of
this Agreement or Exhibit “A”.
Section 6.05
Termination For Cause . The Company may terminate this
Agreement at any time, without notice, for cause. In such an event,
no severance compensation whatsoever shall be paid to
Mr. Hoffman under Section 6.02 or otherwise. For the
purposes of this Agreement, termination for cause shall mean that
Mr. Hoffman was terminated because of:
(i) Mr. Hoffman’s willful breach of duty, gross
neglect of duty, gross carelessness or gross misconduct in the
performance of Mr. Hoffman’s duties;
(ii) Mr. Hoffman’s conviction of a
crime involving moral turpitude;
(iii) Mr. Hoffman’s commission of any act of
dishonesty involving the Company;
(iv) Mr. Hoffman’s unauthorized disclosure of
material privileged or confidential information related to the
Company or its employees except as may be compelled by legal
process or court order or the violation of any provision of Exhibit
“A”; (v) Mr. Hoffman’s commission of
some willful act or omission which violates material Company policy
or procedures, or otherwise constitutes unethical or detrimental
business conduct; or (vi) any other willful act or omission by
Mr. Hoffman which, in the reasonable good faith opinion of the
Company has, or is reasonably likely to have, a material adverse
impact upon the Company or its reputation, provided,
however, that with regard to clauses (i), (v) and
(vi) above, Mr. Hoffman’s employment may not be
terminated for cause unless and until the Board has given him
reasonable written notice of its intended actions and specifically
describing the alleged events, activities or omissions giving rise
thereto and with respect to those events, activities or omissions
for which a cure is possible, a reasonable opportunity to cure such
breach. In the event that this Agreement is terminated for cause
pursuant to this Section, neither the Company nor Mr. Hoffman
shall have any remaining duties or obligations hereunder except as
set forth in Section 6.07 or Exhibit A hereto, and the Company
shall pay to Mr. Hoffman, or his estate,
Mr. Hoffman’s base salary pursuant to Section 4.01,
prorated through the date of termination of this Agreement, and any
performance bonus earned for prior pursuant to Section 4.03
and unpaid as of the date of such termination.
Section 6.06
Automatic Termination . (a) This Agreement shall
automatically terminate on the expiration of the Term of the
Agreement, unless the parties expressly agree in writing to renew
the Agreement as set forth in Section 3.01. No severance
compensation whatsoever shall be paid to Mr. Hoffman under
Section 6.02 or otherwise in the event of a termination
pursuant to this Section 6.06(a).
(b) In the event that
Mr. Hoffman’s employment with the Company is terminated
by reason of his death or disability, the Company shall continue to
pay his base salary to him (or to his beneficiary, in the event of
his death) for 12 months.
Section 6.07
Resignation. Mr. Hoffman may terminate this Agreement
by giving the Company written notice of resignation thirty
(30) days in advance of the date of resignation. Company may,
at its sole discretion, upon receiving such notice of resignation,
waive any or all of Mr. Hoffman’s 30 days’ notice
period. No severance compensation whatsoever shall be paid to
Mr. Hoffman under Section 6.02 or otherwise in the event
of a termination pursuant to this Section.
Section 6.08
Termination for Good Reason . Mr. Hoffman may, at any
time, terminate his employment with the Company for “good
reason” (as defined below). In such ev
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