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EXHIBIT 10.6
STANDARD EXECUTIVE EMPLOYMENT AGREEMENT
BETWEEN
DSW INC.
AND
DEREK UNGLESS
This Standard Executive Employment Agreement ("Agreement") by and
between DSW
Inc. ("Company") and Derek Ungless ("Executive"), collectively, the
"Parties,"
is effective as of the date signed ("Effective Date") and
supercedes and
replaces any other oral or written employment-related agreement
between the
Executive and the Company.
1.00 DURATION
This Agreement will remain in effect from the Effective Date until
it terminates
as provided in Section 5.00. Any notice of termination required to
be given
under this Agreement must be given as provided in Section 6.00 and
will be
effective on the date prescribed in Section 5.00.
2.00 EXECUTIVE'S
EMPLOYMENT FUNCTION
2.01 POSITION. The Executive agrees to serve as the Company's
Executive Vice
President, Chief Marketing Officer with the authority and duties
customarily
associated with this position and to discharge any other duties
and
responsibilities assigned by the President, Chief Merchandising
Officer. The
Executive will report directly to and be subject to the
supervision, advice and
direction of the President, Chief Merchandising Officer, or her
designate. The
Executive agrees at all times to observe and be bound by all
Company rules,
policies, practices, procedures and resolutions that generally
apply to Company
employees of comparable status and which do not conflict with the
specific terms
of this Agreement.
2.02 PLACE OF PERFORMANCE. The Executive's duties will principally
be performed
in Columbus, Ohio, except for required travel on the Company's
business, unless
the President, Chief Merchandising Officer requires the Executive
to perform
duties at another location.
3.00 COMPENSATION
The Company will pay the Executive the amounts described in Section
3.00 as
compensation for the services described in this Agreement and in
exchange for
the duties and responsibilities described in Section 4.00.
3.01 BASE SALARY. The Company will pay to the Executive an
annualized base
salary of $350,000 which may be adjusted at the Company's
discretion ("Base
Salary"). The Executive's Base Salary will be paid in installments
that
correspond with the Company's normal payroll practices.
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3.02 CASH INCENTIVE BONUS.
[1] The
Executive will be eligible to receive a Cash Incentive Bonus
under
the terms
of the Retail Ventures, Inc. Incentive Compensation Plan
("Incentive Plan"), as modified by the Company. The Company intends
to
provide
the Executive with a cash bonus of 50 percent of Base Salary
based
on the
Executive's achievement of the incentive goals established by
the
Company.
Subsequent annual cash bonuses will be based, in the Company's
discretion, on Incentive Goals and percentages of Base Salary
determined
under the
Incentive Plan that is then in effect.
[2]
PAYMENT OF CASH BONUS. Any Cash Incentive Bonus will be payable,
in
cash,
consistent with the Company's normal bonus payment policy.
3.03 EQUITY INCENTIVE. The Company shall negotiate in good faith
with Executive
concerning Executive's equity incentive compensation to provide
equity incentive
compensation to a level that is commensurate with Executive's new
position. It
is agreed that these enhancements may include grants of stock
appreciation
rights and/or restricted stock units and other equity or
equity-based
compensation awards. Any award provided will subtract from the
agreed-upon
vesting schedule the time the Executive has already served in his
position.
[1]
STANDARD STOCK OPTIONS. Subject to the terms of the DSW Inc.
2005
Equity
Incentive Plan and any applicable stock option agreement, the
Company
will grant to the Executive options to purchase shares of the
Company's
common stock at a per share exercise price as approved by the
Board of
Directors. These options would typically become exercisable
pursuant
to the terms set forth in the Company's standard 5-year
schedule.
[2]
RESTRICTED STOCK OPTIONS. Subject to the terms of the DSW Inc.
2005
Equity
Incentive Plan and any applicable Restricted Stock grant
agreement,
Executive
is eligible to receive Restricted Stock equity grants as
approved
by the Board of Directors.
[3]
ADDITIONAL EQUITY INCENTIVE. Subject to the Company's discretion,
the
Executive
will be eligible for additional discretionary grants of stock
options.
3.04 BENEFIT PLANS. Subject to their terms, the Executive may
participate in any
Company sponsored employee pension or welfare benefit plan at a
level
commensurate with the Executive's title and position.
3.05 VACATIONS. Subject to the terms of the Company's vacation
policy, the
Executive is entitled to four weeks of vacation each calendar year
to be taken
during periods approved by the President, Chief Merchandising
Officer.
3.06 EXPENSES. The Executive is entitled to receive prompt
reimbursement for all
normal and reasonable expenses incurred while performing services
under this
Agreement, including all
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reasonable travel expenses. Reimbursement for these expenses will
be made as
soon as administratively feasible after the date the Executive
submits
appropriate evidence of the expenditure and otherwise complies with
the
Company's business expense reimbursement policy.
3.07 CAR. The Company will provide Executive with the applicable
car allowance
under the Company's executive car allowance program, and with a
fuel card. The
allowance will be grossed-up for taxes at the 45 percent tax rate.
(The term
"grossed up" as used in this Agreement refers to a payment to
Executive that,
after reduction for any income or excise taxes due, is equal to the
net amount
payable.)
3.08 TERMINATION BENEFITS. The Company also will provide the
Executive with the
termination benefits described in Section 5.00.
4.00
EXECUTIVE'S OBLIGATIONS
The amounts described in Sections 3.00 and 5.00 are provided by the
Company in
exchange for (and have a value to the Company equivalent to) the
Executive's
performance of the obligations described in this Agreement,
including
performance of the duties and the covenants and releases made and
entered into
by and between the Executive and the Company in this Agreement.
4.01 SCOPE OF DUTIES. The Executive will:
[1] Devote
all available business time, best efforts and undivided
attention
to the Company's business and affairs; and
[2] Not
engage in any other business activity, whether or not for gain,
profit or
other pecuniary benefit.
[3]
However, the restriction described in Section 4.01[1] and [2] will
not
preclude
the Executive from:
[A] Making or holding passive investments in outstanding shares
in
the securities of publicly-owned companies or other businesses
[other than organizations described in Section 4.05], regardless
of
when and how that investment was made; or
[B] Serving on corporate, civic, religious, educational and/or
charitable boards or committees but only if this activity [I]
does
not interfere with the performance of duties under this
Agreement
and [II] is approved by the President, Chief Merchandising
Officer.
4.02 CONFIDENTIAL INFORMATION.
[1]
OBLIGATION TO PROTECT CONFIDENTIAL INFORMATION. The Executive
acknowledges that the Company and its subsidiaries, parent
corporation and
affiliated
entities (collectively, "Group" and separately, "Group Member")
have a
legitimate and continuing proprietary interest in the protection
of
Confidential Information (as defined
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in Section
4.02[2]) and have invested, and will continue to invest,
substantial sums of money to develop, maintain and protect
Confidential
Information. The Executive agrees [A] during and after employment
with all
Group
Members [I] that any Confidential Information will be held in
confidence
and treated as proprietary to the Group, [II] not to use or
disclose
any Confidential Information except to promote and advance the
Group's
business interests and [B] immediately upon separation from
employment
with all Group Members, to return to the Company any
Confidential Information.
[2]
DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement,
Confidential Information includes any confidential data,
figures,
projections, estimates, pricing data, customer lists, buying
manuals or
procedures, distribution manuals or procedures, other policy
and
procedure manuals or handbooks, supplier information, tax
records,
personnel
histories and records, information regarding sales, information
regarding
properties and any other Confidential Information regarding the
business,
operations, properties or personnel of the Group (or any Group
Member)
which are disclosed to or learned by the Executive as a result
of
employment
with any Group Member, but will not include [A] the Executive's
personal
personnel records or [B] any information that [I] the Executive
possessed
before the date of initial employment (including periods before
the
Effective Date) with any Group Member that was a matter of
public
knowledge,
[II] became or becomes a matter of public knowledge through
sources
independent of the Executive, [III] has been or is disclosed by
any Group
Member without restriction on its use or [IV] has been or is
required
to be disclosed by law or governmental order or regulation. The
Executive
also agrees that, if there is any reasonable doubt whether an
item is
public knowledge, to not regard the item as public knowledge
until
and unless
the Vice President of Human Resources confirms to the Executive
that the
information is public knowledge or an arbitrator, acting under
Section
9.00, finally decides that the information is public knowledge.
[3]
INTELLECTUAL PROPERTY. The Executive expressly acknowledges that
all
right,
title and interest to all inventions, designs, discoveries,
works
of
authorship, and ideas conceived, produced, created, discovered,
authored,
or reduced to practice during the Executive's performance of
services under
this Agreement, whether individually or jointly with any
Group
Member (the "Intellectual Property") shall be owned solely by
the
Group, and
shall be subject to the restrictions set forth in Section
4.02[1]
above. All Intellectual Property which constitutes
copyrightable
subject
matter under the copyright laws of the United States shall,
from
the
inception of creation, be deemed to be a "work made for hire"
under
the United
States copyright laws and all right, title and interest in and
to such
copyrightable works shall vest in the Group. All right, title
and
interest
in and to all Intellectual Property developed or produced under
this
Agreement by the Executive, whether constituting patentable
subject
matter or
copyrightable subject matter (to the extent deemed not to be a
"work made
for hire") or otherwise, shall be assigned and is hereby
irrevocably assigned to the Group by the Executive. The Executive
shall,
without
any additional consideration, execute all documents and take
all
other
actions needed to convey the Executive's complete ownership
interest
in any
Intellectual Property to the Group so that the Group may own
and
protect
such Intellectual Property and obtain patent, copyright and
trademark
registrations for it. The Executive agrees that
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any Group
Member may alter or modify the Intellectual Property at the
Group
Member's sole discretion, and the Executive waives all right to
claim or
disclaim authorship.
4.03 SOLICITATION OF EMPLOYEES. The Executive agrees that during
employment, and
for the longer of any period of salary continuation or for two
years after
terminating employment with all Group Members [1] not, directly or
indirectly,
to solicit any employee of any Group Member to leave employment
with the Group,
[2] not, directly or indirectly, to employ or seek to employ any
employee of any
Group Member and [3] not to cause or induce any of the Group's (or
Group
Member's) competitors to solicit or employ any employee of any
Group Member.
4.04 SOLICITATION OF THIRD PARTIES. The Executive agrees that
during employment,
and for the longer of any period of salary continuation or for two
years after
terminating employment with all Group Members not, directly or
indirectly, to
recruit, solicit or otherwise induce or influence any customer,
supplier, sales
representative, lender, lessor, lessee or any other person having a
business
relationship with the Group (or any Group Member) to discontinue or
reduce the
extent of that relationship except in the course of discharging the
duties
described in this Agreement and with the good faith objective of
advancing the
Group's (or any Group Member's) business interests.
4.05 NON-COMPETITION. The Executive agrees that for the longer of
any period of
salary continuation or for one year after terminating employment
with all Group
Members not, directly or indirectly, to accept employment with, act
as a
consultant to, or otherwise perform services that are substantially
the same or
similar to those for which the Executive was compensated by any
Group Member
(this comparison will be based on job-related functions and
responsibilities and
not on job title) for any business that directly competes with the
Group's (or
any Group Member's) business, which is understood by the Parties to
be the sale
of off-price and discount merchandise, including discount and
off-price shoes
and accessories. Illustrations of businesses that compete with the
Group's
business include, but are not limited to, The TJX Companies, Inc.
(T.J. Maxx;
Marshall's; HomeGoods; A.J. Wright; Marmaxx; Winners); Shoe
Carnival; MJM
Designer Shoes; Ross Stores, Inc; Payless ShoeSource; Off-Broadway
Shoes; Famous
Footwear; Footstar; Big Lots Stores, Inc.; and Burlington Coat
Factory Warehouse
Corporation and any of its affiliates. This restriction applies to
any parent,
division, affiliate, newly formed or purchased business(es) and/or
successor of
a business that competes with the Group's (or any Group Member's)
business.
4.06 POST-TERMINATION COOPERATION. As is required of the Executive
during
employment, the Executive agrees that during and after employment
with any Group
Members and without additional compensation (other than
reimbursement for
reasonable associated expenses), to cooperate with the Group (and
with each
Group Member) in the following areas:
[1]
COOPERATION WITH THE COMPANY. The Executive agrees [A] to be
reasonably
available to answer questions for the Group's (and any Group
Member's)
officers regarding any matter, project, initiative or effort
for
which the
Executive was responsible while employed by any Group Member
and
[B] to
cooperate with the Group (and with each Group Member) during
the
course of
all third-party proceedings arising out of the Group's (and any
Group
Member's) business about which the Executive has knowledge or
information. For purposes of this Agreement, [C] "proceedings"
includes
internal
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investigations, administrative investigations or proceedings and
lawsuits
(including
pre-trial discovery and trial testimony) and [D] "cooperation"
includes
[I] the Executive's being reasonably available for interviews,
meetings,
depositions, hearings and/or trials without the need for
subpoena
or assurances by the Group (or any Group Member), [II]
providing
any and
all documents in the Executive's possession that relate to the
proceeding, and [III] providing assistance in locating any and
all
relevant
notes and/or documents.
[2]
COOPERATION WITH THIRD PARTIES. Unless compelled to do so by
lawfully-served subpoena or court order, the Executive agrees not
to
communicate with, or give statements or testimony to, any
opposing
attorney,
opposing attorney's representative (including private
investigator) or current or former employee relating to any
matter
(including
pending or threatened lawsuits or administrative
investigations) about
which the Executive has knowledge or information
(other
than knowledge or information that is not Confidential
Information
as defined
in Section 4.02[2]) as a result of employment with the Group
(or any
Group Member) except in cooperation with the Company. The
Executive
also agrees to notify the Vice President of Human Resources
immediately after being contacted by a third party or receiving a
subpoena
or court
order to appear and testify with respect to any matter affected
by this
section.
[3]
COOPERATION WITH MEDIA. The Executive agrees not to communicate
with,
or give
statements to, any member of the media (including print,
television
or radio media) relating to any matter (including pending or
threatened
lawsuits or administrative investigations) about which the
Executive
has knowledge or information (other than knowledge or
information that is not Confidential Information as defined in
Section
4.02[2])
as a result of employment with the Group (or any Group Member).
The
Executive also agrees to notify the Vice President of Human
Resources
immediately after being contacted by any member of the media with
respect
to any
matter affected by this section.
4.07 NON-DISPARAGEMENT. The Executive and the Company (on its
behalf and on
behalf of the Group and each Group Member) agree that neither will
make any
disparaging remarks about the other and the Executive will not make
any
disparaging remarks about the Company's Chairman, Chief Executive
Officer or any
of the Group's senior executives. However, this section will not
preclude [1]
any remarks that may be made by the Executive under the terms of
Section 4.06[2]
or that are required to discharge the duties described in this
Agreement or [2]
the Company from making (or eliciting from any person) disparaging
remarks about
the Executive concerning any conduct that may lead to a termination
for Cause,
as defined in Section 5.04[5] (including initiating an inquiry or
investigation
that may result in a termination for Cause), but only to the extent
reasonably
necessary to investigate the Executive's conduct and to protect the
Group's (or
any Group Member's) interests.
4.08 NOTICE OF SUBSEQUENT EMPLOYMENT. The Executive agrees to
immediately notify
the Company of any subsequent employment during the period of
salary
continuation after employment terminates.
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[5]
DEFINITION OF CAUSE. For these purposes, Cause means the
Executive's
[A]
failure to substantially perform the duties associated with
employment
under this
Agreement; [B] willful, illegal or grossly negligent conduct
that is
materially injurious to the Company or any Group Member
monetarily
or
otherwise; [C] violation of laws or regulations governing the
Company
or to any
Group Member; [D] breach of any fiduciary duty owed to the
Company or
any Group Member; [E] misrepresentation or dishonesty which the
Company
determines has had or
