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Exhibit 10-S
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This
EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is made
and entered into as of the 31 st day of December, 2006,
by and between SHOE CARNIVAL, INC ., an Indiana corporation
with its principle offices located at 8233 Baumgart Road,
Evansville, Indiana (the "Company"), and MARK L. LEMOND , an
individual residing at 2477 Hidden Oak Ct., Newburgh, Indiana (the
"Employee").
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 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, 2010. The
term shall be extended automatically for one (1) year on each
February 1 ("Anniversary Date") beginning February 1,
2008, 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.
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:
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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.
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. 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 Exec-U-Care) 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:
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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
Base Salary which shall have been earned through the termination
date and (b) a bonus in an amount determined by multiplying
the Target Bonus (as defined in Section 6.7) 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.
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 Base Salary, at
the rate then in effect as provided, which shall have been earned
through the termination date and (b) a bonus in an amount
determined by multiplying the Target Bonus 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.
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 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 by giving the Company a Notice of Termination
which describes the actions, events or beliefs that form the basis
of the Employee's action. The Employee's employment 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 to the Employee (a) that portion of his Base Salary which
shall have been earned through the termination date, (b) a
bonus in an amount determined by multiplying the Target Bonus 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 and (c) an amount equal to three times the sum of
(i) the Employee's Base Salary plus (ii) the Employee's
Target Bonus for the fiscal year in which the termination occurs.
The Company shall also provide the Employee with the Medical and
Dental Benefits (as defined in Section 6.4) for the remainder
of the Term. 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 the Term.
Termination of this Agreement for Good Reason, shall not be deemed
to be a voluntary termination by Employee for purposes of any stock
option plans of the Company.
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.
Within
fifteen (15) business days after such termination date, the Company
shall pay the Employee (a) that portion of his Base Salary
which shall have been earned through the termination date and
(b) a bonus in an amount determined by multiplying the Target
Bonus 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.
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 Internal Revenue Code of 1986, as amended
(the "Code"), then the Company shall pay Employee an additional
amount of money 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. If an excise tax is imposed pursuant to the
Internal Revenue Code of 1986, 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
imposition.
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 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 reduced by any
compensation or benefits or the amount paid to or earned by the
Employee as a result of employment by another employer after the
Employee's termination date or otherwise.
5.11
Release Agreement . As a condition of receiving the
severance benefits described in Section 5, Employee will be
required to sign a standard release agreement acceptable to the
Company in which he releases and waives all claims which he may
have against the Company or any affiliate, employee, shareholder,
officer, director, agent or representative of the Company (except
for his rights under this Agreement or any other vested rights
Employee may have under any insurance, pension, employee stock
ownership or stock option or equity incentive plans sponsored or
made available by the Company). The Company will provide such
release agreement to Employee at the termination of Employee's
employment with the Company. As part of the rel
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