|
Exhibit
10.1
AMENDED AND RESTATED EMPLOYMENT AND
NONCOMPETITION AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AND NONCOMPETITION AGREEMENT (the "Agreement") is an amendment and
complete restatement of the Employment and Noncompetition Agreement
made and entered into as of the 31 st day of December,
2006, by and between SHOE CARNIVAL, INC ., an Indiana
corporation with its principal offices located at 7500 East
Columbia Street, Evansville, Indiana (the "Company"), and MARK
L. LEMOND , an individual residing at 2477 Hidden Oak Ct.,
Newburgh, Indiana (the "Employee"). This restatement is intended to
conform the Agreement to the applicable provisions of the final
regulations interpreting Section 409A of the Internal Revenue Code
of 1986, as amended ("Code") and Revenue Ruling 2008-13.
RECITALS
WHEREAS , the Company is one
of the leading retailers of family shoes in the United
States;
WHEREAS , the Company desires
to retain the services of the Employee upon the terms and
conditions set forth herein; and
WHEREAS , the Employee
desires to be so employed by the Company, to be eligible for
potential compensation increases and the potential payments
provided for herein; and
WHEREAS , the Company and the
Employee desire to enter into this Agreement to set forth the terms
and conditions of the employment relationship between the Company
and the Employee; and
WHEREAS , in connection with
its business, the Company has expended a substantial amount of
time, money, and effort to develop and maintain its confidential,
proprietary and trade secret information, and that this
information, if misused or disclosed, could be very harmful to the
Company’s business and its competitive position in the
marketplace.
AGREEMENT
1. Term of
Employment . The Company hereby agrees to employ Employee
and Employee hereby agrees to be employed by the Company, in
accordance with the terms and conditions of this Agreement. This
Agreement shall become effective on December 31, 2006, and shall
end on January 31, 2011. The term shall be extended automatically
for one (1) year on each February 1 ("Anniversary Date") beginning
February 1, 2009, unless either party hereto gives written notice
to the other party not more than ninety (90) days and not less than
thirty (30) days prior to an Anniversary Date, in which case no
further automatic extension shall occur and the term of this
Agreement shall end three (3) years
subsequent to the
Anniversary Date immediately following such written notice (such
term, including any extension is referred to as the "Term").
Notwithstanding the foregoing, the Term shall end on the date of
Employee's voluntary retirement from the Company as provided for in
Section 5.5.
2.
Duties . The Employee is engaged by the Company as
its President and Chief Executive Officer. Unless otherwise
consented to by the Employee, the Employee's positions with the
Company shall be as its President and Chief Executive Officer. The
Employee shall have all the powers and agrees to perform all of the
duties associated with those positions, subject to the direction of
the Chairman of the Board and the Board of Directors of the
Company, and to the provisions of the Articles of Incorporation and
Bylaws of the Company. The Employee shall have general executive
charge of the Company with all such powers as may be reasonably
incident to such responsibilities; and he shall have such other
powers and duties as designated in accordance with the Company's
Bylaws and as may be assigned to him from time to time by the
Chairman of the Board and the Board of Directors. The Employee
shall report directly to the Company's Chairman of the Board and
the Board of Directors and any executive committee of the Board.
The Company agrees to provide the Employee with such accommodations
as are suitable to the character of his positions with the Company
and adequate for the performance of his duties.
During his employment under this
Agreement, the Employee agrees to devote substantially his full
time, attention and energies to the Company's business. This
Agreement shall not be construed as preventing the Employee from
investing assets in such form or manner as will not require his
services in the daily operations of the affairs of the companies in
which such investments are made. This Agreement shall also not be
construed as preventing the Employee from serving as an outside
director of up to two other for-profit companies (and such
additional companies as the Board of Directors may hereafter
approve) or from participating in charitable or other
not-for-profit activities as long as such activities do not
materially interfere with his work for the Company.
3. Compensation of
Employee . For all services rendered by the Employee under this
Agreement, the Company shall compensate the Employee as
follows:
3.1 Base Salary .
The base salary payable to the Employee under this Agreement shall
be that amount set forth in the minutes of the Compensation
Committee of the Company’s Board of Directors dated March 13,
2006 for the period beginning January 29, 2006 and ending February
3, 2007 ("Base Salary"), payable in accordance with the Company's
usual payroll procedures, and subject to all taxes, withholdings
and deductions as required by law and as the Employee may
authorize. The Compensation Committee of the Company’s Board
of Directors will review the Base Salary on an annual basis during
the Term to determine whether the Base Salary should be adjusted
upward. Any such upward adjustment shall take effect at the
beginning of each fiscal year. The Employee’s Base Salary may
not be adjusted downward at any time during the Term.
3.2 Incentive
Bonus . The Employee is entitled to participate in the
Company’s 2006 Executive Incentive Compensation Plan in
accordance with the terms contained therein, and in any successor
plan adopted by the Company from time to time.
- 2 -
However, Employee agrees that the
failure of the Company to award any such bonus and/or other
incentive compensation shall not give rise to any claim against the
Company.
4. Additional
Compensation, Benefits, and Obligations . During his employment
under this Agreement, Employee is entitled to participate in any
and all employee welfare and health benefit plans (including, but
not limited to, life insurance, health and medical, dental and
disability plans, and executive supplemental medical coverage) and
other employee benefit plans, including but not limited to,
qualified pension plans, stock purchase plans, and nonqualified
deferred compensation plans, established by the Company from time
to time; provided, however, the Employee's participation in such
plans is subject to the eligibility requirements and other terms of
such plans. The Company may change, amend or discontinue any of its
employee welfare and health benefit plans at any time during the
Term, and nothing in this Agreement shall obligate the Company to
institute, maintain or refrain from changing, amending or
discontinuing any such plans or programs.
5. Termination of
Employment . Employee’s employment may be
terminated as follows:
5.1 Termination Due to Death
. If the Employee dies during the Term, this Agreement shall
terminate as of the date of the Employee's death and the Employee's
benefits shall be determined in accordance with the survivor's
benefits, insurance and other applicable programs of the Company
then in effect. Within fifteen (15) business days of the Employee's
death, the Company shall pay the Employee's designee or his estate
(a) that portion of his then Base Salary which shall have been
earned through the termination date and (b) a lump sum payment in
an amount determined by multiplying seventy percent (70%) of his
Base Salary for the fiscal year in which the death occurs by a
fraction, the numerator of which is the number of days elapsed in
such fiscal year through the termination date and the denominator
of which is 365.
5.2 Termination Due to
Disability . If the Employee suffers a Disability (as
defined in Section 6.2) during the Term, the Company shall have the
right to terminate this Agreement by giving the Employee a Notice
of Termination (as defined in Section 6.5), which has attached to
it a copy of the medical opinion that forms the basis of the
determination of Disability. The Employee's employment shall
terminate at the close of business on the last day of the Notice
Period (as defined in Section 6.6).
Upon the termination of this Agreement
because of Disability, the Company shall pay the Employee within
fifteen (15) business days of the termination date (a) that portion
of his then Base Salary which shall have been earned through the
termination date and (b) a lump sum payment in an amount determined
by multiplying seventy percent (70%) of his Base Salary for the
fiscal year in which the termination occurs by a fraction, the
numerator of which is the number of days elapsed in such fiscal
year through the termination date and the denominator of which is
365. The Employee shall also be entitled to receive any applicable
disability insurance benefits resulting from any insurance or other
employee benefit programs of the Company.
- 3 -
5.3 Termination by the Company
for Cause or by the Employee Without Good Reason . At
any time during the Term, the Company may terminate this Agreement
for Cause (as defined in Section 6.1) by giving the Employee a
Notice of Termination, which has attached to it copies of the Board
determination that forms the basis of the Company's action. The
Employee's employment shall terminate at the close of business on
the last day of the Notice Period.
At any time during the Term, the
Employee may terminate this Agreement without Good Reason (as
defined in Section 6.3 hereof) by giving the Board of Directors of
the Company a Notice of Termination. The Employee's employment by
the Company shall terminate at the close of business on the last
day of the Notice Period.
Within fifteen (15) business days after
such termination date, the Company shall pay the Employee that
portion of his then Base Salary which shall have been earned
through the termination date.
5.4 Termination by the Company
Without Cause or by the Employee for Good Reason . At
any time during the Term, the Board of Directors of the Company may
terminate this Agreement without Cause by giving the Employee a
Notice of Termination, and the Employee's employment by the Company
shall terminate at the close of business on the last day of the
Notice Period.
At any time during the Term, the
Employee may terminate this Agreement with Good Reason if all of
the following conditions are satisfied: (a) Employee gives the
Company a Notice of Termination that describes the condition
claimed to constitute Good Reason within ninety (90) calendar days
of the initial existence of the condition; (b) the Company does not
remedy the condition within thirty (30) calendar days of the
Company's receipt of the Notice of Termination; and (c) Employee
gives the Company another Notice of Termination during the six (6)
month period following the end of the cure period described in
clause (b). The Employee's employment shall terminate at the close
of business on the last day of the Notice Period of the second
Notice of Termination.
Within fifteen (15) business days after
such termination date, the Company shall pay to the Employee (a)
that portion of his then Base Salary which shall have been earned
through the termination date; (b) a lump sum payment in an amount
equal to seventy percent (70%) of the product of (i) times (ii),
where (i) is his Base Salary for the fiscal year in which the
termination occurs, and (ii) is a fraction, the numerator of which
is the number of days elapsed in such fiscal year through the
termination date and the denominator of which is 365; and (c) an
additional lump sum payment in an amount equal to three times one
hundred seventy percent (170%) of the Employee's Base Salary for
the fiscal year in which the termination occurs. The Company shall
also provide the Employee with the Medical and Dental
- 4 -
Benefits (as defined in
Section 6.4) for a period of thirty-six (36) calendar months after
the calendar month in which the termination date occurs or until
the earlier date on which the obligation to provide Medical and
Dental Benefits ends pursuant to Section 6.4. All of Employee's
stock options granted after the date of this Agreement shall
contain provisions requiring that such options shall automatically
vest upon the termination of Employee under this Section 5.4 and
all of such options shall be exercisable by Employee during the
remainder of their respective terms. In the event of termination of
this Agreement without Cause or for Good Reason, such termination
shall not be deemed to be a voluntary termination by Employee for
purposes of any stock option or equity incentive plans of the
Company, and any outstanding stock options may be exercised at any
time during the remainder of the term of the option. In addition,
all shares of restricted stock granted to the Employee after the
date of this Agreement, which are not intended to qualify as
"performance based compensation" under Section 162(m) of the Code
shall contain provisions which shall provide for immediate vesting
upon Termination without Cause or for Good Reason.
5.5 Termination by the
Employee Upon Retirement . At any time during the Term, the
Employee may terminate this Agreement by giving the Company a
Notice of Termination advising the Company that he intends to
voluntarily retire in accordance with the Company's retirement
policies on a date specified in the Notice of Termination. The
Employee's employment shall terminate on the date specified in the
Notice of Termination.
Subject to Section 5.12, within fifteen
(15) business days after such termination date, the Company shall
pay the Employee (a) that portion of his then Base Salary which
shall have been earned through the termination date; and (b) a lump
sum payment in an amount equal to seventy percent (70%) of the
product of (i) times (ii), where (i) is Employee's Base Salary for
the fiscal year in which the termination occurs, and (ii) is a
fraction, the numerator of which is the number of days elapsed in
such fiscal year through the termination date and the denominator
of which is 365.
5.6 Accrued Compensation and
Benefits . Notwithstanding any other provision of this
Agreement, upon termination of Employee's employment for any
reason, Employee shall be entitled to receive all accrued but
unpaid compensation, bonuses and benefits under all of the
Company's compensation, bonus and benefit plans in which employee
is a participant, all in accordance with the terms of such plans.
These plans include, without limitation, the Company's 401(k) plan,
deferred compensation plan and bonus plans which are earned in a
fiscal year, but paid in the following year.
5.7 Internal Revenue
Code Limits . Should any payments by the Company to or for the
benefit of Employee under this Agreement constitute an "excess
parachute payment" within the meaning of Section 280G of the Code,
then the Company shall pay Employee an additional amount of money
(the "Gross-Up Payment") that will equal the sum of (a) all excise
or other taxes imposed upon Employee by Section 4999 of the Code
(excluding any penalties or interest) and (b) all additional state
and federal taxes, interest and/or penalties attributable to the
additional payments made to Employee pursuant to this Section 5.7.
If an excise tax is imposed pursuant to Section 4999 of the Code,
Employee agrees to immediately notify the Company within ten (10)
days of the event, in writing, and Employee hereby gives the
Company the right to challenge said
- 5 -
imposition. Any
Gross-Up Payment due under this Section 5.7 shall be paid in a lump
sum as soon as it can be calculated, but in no event later than 30
days after the date the Employee remits the related
taxes.
5.8 Payroll
Withholdings . The Company may withhold from any compensation
or benefits payable under this Agreement all federal, state, city,
or other taxes or deductions as may be required pursuant to any law
or governmental regulation or ruling.
5.9 Compliance With
Post-Employment Restrictions . If Employee breaches any of the
covenants or provisions set forth in Sections 7 and 8 of this
Agreement, then in such event the Company shall have the right
immediately and permanently to discontinue payment and provision of
any of the severance compensation and benefits payable under this
Agreement. The Employee and the Company acknowledge and agree that
such remedy is in addition to, and not in lieu of, any and all
other legal and/or equitable remedies that may be available to the
Company in connection with the Employee's breach or threatened
breach of any of the covenants or provisions of this Agreement.
5.10 Mitigation or Reduction of
Benefits . Employee shall not be required to mitigate
the amount of any payments provided for in this Section 5 by
seeking other employment or otherwise. Except as specifically set
forth herein, the amount of any payment for benefits provided in
this Section 5 shall not be
| 
