Exhibit 10.4
EMPLOYMENT CONTINUATION
AGREEMENT
EMPLOYMENT CONTINUATION AGREEMENT
(“Agreement”) is made and entered into
September 22, 2005, by and between CHRISTOPHER &
BANKS CORPORATION, a Delaware corporation (the
“Company”) and RALPH C. NEAL
(“Neal”).
WITNESSETH:
WHEREAS, Neal and the Company are
parties to that certain Executive Employment Agreement dated as of
March 1, 2002, as amended by that certain agreement dated
September 22, 2005 (collectively, the “Employment
Agreement”); and
WHEREAS, Neal has been an employee
and officer of the Company; and
WHEREAS, Neal and the Company each
wish to agree to terms of a continued employment with the Company
for a specified period and the terms and conditions of the
termination of his service as an officer of the Company (including
any and all rights and obligations of the parties under the
Employment Agreement except as outlined herein) and Neal desires to
release the Company from any and all existing claims, subject to
the terms and conditions stated herein; and
WHEREAS, the Company desires to
provide certain continuation of employment benefits to Neal;
and
WHEREAS, the Company desires to have
Neal continue to remain subject to certain nondisclosure
restrictions and nonsolicitation obligations in order to protect
the Company’s legitimate business interests and Neal is
willing to agree to same; and
WHEREAS, the parties desire to
delineate their respective rights, duties, and obligations, and
desire complete accord.
NOW, THEREFORE, in consideration of
the premises, and the agreements of the parties set forth in this
Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as
follows:
1.
Recitals . The recitals set forth above are true
and correct in every respect and are incorporated herein by
reference.
2.
Resignations by Neal
. Effective as of the close of
business on April 30, 2006, Neal resigns from his position as
Executive Vice President of Store Operations, and the Company
hereby accepts this resignation. It is agreed that effective
as of the close of business on April 30, 2006, Neal has no
further privileges, duties or obligations in such
capacity.
EXECUTION COPY — NEAL
3.
Continuation of Employment and
Termination of Employment Agreement .
(a)
Effective as of the close of
business on April 30, 2006, the parties agree that consistent
with Section 2 of this Agreement, Neal’s position with
the Company as Executive Vice President of Store Operations, is
terminated. Further, effective as of the close of business on
April 30, 2006 and except as otherwise expressly provided for
in this Agreement, the Employment Agreement is terminated and of no
further force and effect and Neal relinquishes any and all
continuing rights and benefits he may have under the Employment
Agreement. The close of business on April 30, 2006 shall
be referred to as the “Effective Time” under this
Agreement.
(b)
As provided in Section 7 of
this Agreement, Neal shall nevertheless continue as an employee of
the Company in the capacity described below until the close of
business on February 28, 2007 (the “Termination
Date”). On the Termination Date, Neal’s
employment by the Company and its subsidiaries shall terminate and,
except as otherwise required by applicable law or as provided for
in this Agreement, Neal relinquishes all remaining rights and
benefits, if any, he may then have as an employee of the
Company.
4.
Consideration; Continuation of
Compensation and Benefits .
(a)
From May 1, 2006 to the
Termination Date (the “Employment Continuation
Period”), so long as Neal has not breached any of his
obligations under this Agreement, Neal shall receive an aggregate
of $180,000, payable at those intervals as the Company pays its
employees.
(b)
During the Employment Continuation
Period, except as provided in Section 4(c) and
4(d) below, Neal shall not be entitled to any other
compensation or fringe benefits, including but not limited to,
(i) no participation in bonus or incentive programs,
(ii) no eligibility for stock or option awards and
(iii) no car allowance.
(c)
Except as provided in
Section 4(d) of this Agreement, any and all other health
care benefits or payments shall cease on the Termination
Date. After the Termination Date, Neal shall be entitled to
continue to be covered by the Company’s group health
insurance plan subject to the terms of such policy as presently
maintained, or as maintained in the future, as a member of the
group, the cost of which shall be paid by Neal, which coverage
shall be continued until eligibility for Medicare exists for
Neal.
(d)
In exchange for Neal’s
agreement to enter into the release set forth in Section 11 of
this Agreement, the Company agrees to (i) employ Neal during
the Employment Continuation Period and (ii) continue to pay
all the remaining premiums to Allianz Life Insurance Company of
North America under the Future Select Policy (policy number
50044331) in connection with Neal’s long-term health care
coverage.
(e)
All base salary payments made to
Neal pursuant to this Agreement shall be subject to any and all
applicable income tax withholding, FICA taxes and any other
required deductions and withholdings.
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5.
Stock Options
. Because Neal will be
continuing as an employee of the Company during the Employment
Continuation Period, the last tranche of 45,000 options, in
accordance with and subject to the terms of the Stock Option
Agreement dated January 6, 2004 (the “2004 Stock
Option”), is expected to (i) vest in full on
January 6, 2007 and (ii) be exercisable in accordance
with the terms and conditions of the 2004 Stock Option at any time
commencing on January 6, 2007 and ending May 31, 2007
(i.e., three months after the termination of Neal’s
employment with the Company on the Termination Date).
Further, Neal’s other outstanding stock options as reflected
on Exhibit A attached hereto shall be exercisable in
accordance with their respective terms and ending on May 31,
2007. If Neal’s employment terminates prior to the
Termination Date, (a) any options that are unvested shall
cease to vest and (b) all options must be exercised within
ninety days of such earlier termination date.
6.
Return of Company Assets and
Property . As
promptly as possible following the Termination Date, Neal will
return to the Company (1) all Company credit cards in
Neal’s possession, (2) all keys and security badges
providing access to any of the Company’s facilities and all
Company owned equipment in Neal’s possession, and
(3) all documents, papers and other Company
information.
7.
Employment During Employment
Continuation Period .
(a)
During the Employment Continuation
Period, and for no additional compensation other than provided in
this Agreement, Neal shall continue as an employee of the Company
and, as such, shall make himself available to provide such advice
and assistance as the Company may reasonably request during such
period in order to effectuate a smooth transition of management
associated with Neal’s departure from the Company on the
Termination Date; provided that such services are expected to
consist of a minimum of forty (40) hours a month; and provided
further, the parties acknowledge that such services will generally
consist of those activities set forth on Exhibit B
attached hereto.
(b)
The Company anticipates that the
services to be rendered by Neal during the Employment Continuation
Period will be performed from away from the Company’s
headquarters in Minneapolis with communications provided
principally by way of telephone; provided however, Neal agrees to a
minimum of one (1) visit to the Company’s headquarters
each month and to otherwise provide such services at the
Minneapolis offices of the Company or other locations if requested
to do so by senior executives of the Company and if his reasonable
costs of travel are paid by the Company in accordance with the
Company’s expense reimbursement policies.
8.
Governance
. During the Employment
Continuation Period, Neal shall continue to be bound in all
respects by all applicable provisions of the Company’s
Insider Trading Policy, Code of Business Conduct and Ethics and
Conflict of Interest Policy. Such continuing obligation shall
be in addition to Neal’s obligation arising under this
Agreement and applicable law.
9.
Property Rights and Use or
Disclosure of Confidential Information; Noncompete and
Nonsolicitation .
Neal shall continue to be bound in all respects by the provisions
of the
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Employment Agreement relating to Confidentiality
as contained in Article 8 thereof and the provisions of the
Employment Agreement relating to Noncompetition and Nonsolicitation
as contained in Article 7 thereof; and notwithstanding the
termination of the Employ
