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Exhibit 10-T
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This
EMPLOYMENT AND NONCOMPETITION AGREEMENT (the "Agreement") is made
and entered into as of the 31st 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 TIMOTHY BAKER , an individual
residing at 3243 Brookfield Drive, 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 opportunities of advancement, 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 herein, for a
period commencing on the effective date of this Agreement up to and
through January 31, 2009, subject, however, to earlier
termination as expressly provided in this Agreement (such term,
including any extension thereof, shall herein be referred to as the
"Term"). This Agreement shall be renewed automatically for
successive terms of one (1) year each unless either party provides
written notice of non-renewal to the other party at least sixty
(60) days before the end of the then current Term.
2.
Scope of Duties . The Employee shall continue
employment in his current position, Executive Vice President,
Operations. During the Term, the Employee agrees to perform such
other services for the Company as may be directed by any superior
officer of the Company. The Employee shall be supportive of the
Company's business and its best interests and shall not, directly
or indirectly, take any action which could reasonably be expected
to have an adverse effect upon the business or best interests of
the Company. The Employee covenants that he will at all times
honestly and fairly conduct his duties, and will at all times
maintain the highest of professional standards in representing the
interests of the Company. The Employee will comply with Company
policies, decisions, and instructions, which may be changed by the
Company over time. Employee shall perform all duties incident to
his position, as well as any other duties as may from time to time
be assigned by the President of the Company or his designee, and
agrees to abide by all By-laws, policies, practices, procedures or
rules of 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 of base salary payable as
of the effective date of this Agreement ("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 Company will review the Base Salary
on a periodic basis, approximately annually, during the Term to
determine, in the discretion of the Company, whether the Base
Salary should be adjusted, and if so, the amount of such adjustment
and the time at which such adjustment should take effect.
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 the Term, and so long as the Employee serves in the position
of Executive Vice President, 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 for the benefit of
executives at his level and position; 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
For Cause . The Company may terminate Employee's
employment at any time effective immediately for "Cause." As used
in this Agreement, the term "Cause" means the occurrence of any one
or more of the following events: (i) Employee's conviction for
a felony or other crime involving moral turpitude;
(ii) Employee's engaging in illegal conduct or gross
misconduct which is injurious to the Company; (iii) Employee's
engaging in any fraudulent or dishonest conduct in his dealings
with, or on behalf of, the Company; (iv) Employee's failure or
refusal to follow the lawful and reasonable instructions of the
Company's Chief Executive Officer, President, or other executive
officer to whom Employee reports, if such failure or refusal
continues for a period of ten (10) days after the Company delivers
to Employee a written notice stating the instructions which
Employee has failed or refused to follow; (v) Employee's material
breach of any of his obligations under this Agreement; (vi)
Employee's material breach of the Company's policies; (vii)
Employee's use of alcohol or drugs which interferes with the
performance of his duties for the Company or which compromises the
integrity or reputation of the Company; or (viii) Employee's
engaging in any conduct tending to bring the Company into public
disgrace or disrepute.
5.2
Unilateral - The Company . The Company may terminate
Employee's employment at any time without Cause.
5.3
Unilateral - Employee . Employee may terminate his
employment at any time with the Company by providing the Company
with thirty (30) days' advance written notice of such termination.
At the sole option of the Company, such termination will be
considered effective on the date such notice is given.
5.4
For Good Reason - Employee . If Employee voluntarily
terminates his employment during the Term, he shall notify Employer
in writing if he believes the termination is for Good Reason.
Employee shall set forth in reasonable detail why Employee believes
there is Good Reason. For purposes of this Agreement, for "Good
Reason" means the occurrence, without Employee's written consent,
of any one or more of the following events: (a) a reduction in
Employee's position or responsibilities; or (b) a reduction by
the Company in Employee's Base Salary.
5.5
Disability or Death . If Employee suffers a
"Disability," the Company shall have the right to terminate
Employee's employment by delivering to Employee a written notice of
the Company's intent to terminate for Disability, specifying in
such notice a termination date not less than ten (10) calendar days
after the giving of the notice (the "Disability Notice Period").
The Employee's employment shall terminate at the close of business
on the last day of the Disability Notice Period. For purpose of
this Agreement, the term "Disability" shall mean either
(a) when Employee is deemed disabled in accordance with the
long-term disability insurance policy or plan of the Company in
effect at the time of the illness or injury causing the Disability,
or (b) the inability of Employee, because of injury, illness,
disease or bodily or mental infirmity, to perform the essential
functions of his job (with reasonable accommodation) for more than
one hundred and twenty (120) consecutive days. The existence of a
Disability shall be determined by the Company. If the employee
should die during the Term, this Agreement shall terminate as of
the date of Employee's death.
5.6
Compensation Upon Termination . In the event of
termination of Employee's employment as set forth herein, and
subject to the Company's right to offset against any such benefits,
compensation, or severance amounts owed to Employee, whether the
result of promissory notes, loans, or other financial arrangements
the Company may have entered into with or on the Employee's behalf,
and which are or would become due and payable on or after the
termination date, to include the principal and interest pursuant to
such arrangements, the Parties agree that the following terms shall
be the exclusive severance arrangements:
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5.6.1 In
the event of termination of Employee's employment by the Company
for Cause pursuant to Section 5.1 or unilateral termination by the
Employee pursuant to Section 5.3, the Company's obligation to pay
and provide Employee compensation and benefits under this Agreement
shall immediately terminate, except: (a) Employee shall be entitled
to receive that portion of his Base Salary which shall have been
earned through the termination date; and (b) the Company shall pay
or provide Employee such other payments and benefits, if any, which
had accrued hereunder before the termination date. Other than the
foregoing, the Company shall have no further obligations to
Employee under this Agreement.
5.6.2 In
the event the Company terminates Employee's employment without
Cause pursuant to Section 5.2 or Employee terminates for Good
Reason within thirty (30) days of the event constituting Good
Reason pursuant to Section 5.4, at any time other than the two (2)
year period immediately following a "Change in Control," the
Company's obligation to pay and provide Employee compensation and
benefits under this Agreement shall immediately terminate, except:
(a) Employee shall be entitled to receive that portion of his Base
Salary which shall have been earned through the termination date;
(b) the Company shall pay to Employee a bonus in an amount
determined by multiplying the amount of his target bonus under the
Company's 2006 Executive Incentive Compensation Plan (or any
successor plan adopted by the Company) ("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 date of termination and the denominator of which
is 365; (c) the Company shall pay or provide Employee such
other payments and benefits, if any, which had accrued hereunder
before the termination date; (d) the Company shall pay to
Employee a lump sum payment equal to one hundred fifty percent
(150%) of Employee's Base Salary; (e) the Company shall pay
Employee a monthly payment in an amount equivalent to the COBRA
Premium Rates then in effect, for eighteen (18) months immediately
following the date of termination, and said payment shall cease
immediately upon Employee's re-employment during such period, so
long as Employee is covered by the new employer's plan; and (f)
with respect to Company stock options granted after the date of
this Agreement, Employee would immediately vest in any option that
would have vested within twelve (12) months of Employee's
termination date had Employee not been terminated, and such option
may be exercised pursuant to the provisions of the then current
Company Stock Option and Incentive Plan ("Stock Option Plan") as if
the option were vested at the date of termination. The Parties
agree that, to the extent this language is inconsistent with the
Company Stock Option and Incentive Plan, this Agreement shall
modify, govern, and control said Plan. Payment of the severance
compensation described in subpart (d) and (e) of this Section 5.6.2
is subject to the requirements of Sections 5.9 and 5.10. Other than
the foregoing, the Company shall have no further obligations to
Employee under this Agreement.
5.6.3 In
the event Employee's employment is terminated as a result of
Employee's Death or Disability pursuant to Section 5.5, the
Company's obligation to pay and provide the Employee compensation
and benefits under this Agreement shall immediately terminate
except: (a) Employee shall be entitled to receive that portion of
his Base Salary which shall have been earned through the
termination date; and (b) the Company shall pay or provide Employee
such other payments and benefits, if any, which had accrued
hereunder before the termination date. Other than the foregoing,
the Company shall have no further obligations to Employee under
this Agreement.
5.6.4 In
the event of a "Qualifying Termination" within two (2) years
immediately following a "Change In Control," then, in lieu of all
other benefits under this Agreement, the Company's obligation to
pay and provide Employee compensation and benefits under this
Agreement shall immediately terminate, except: (a) Employee shall
be entitled to receive that portion of his Base Salary which shall
have been earned through the termination date; (b) the Company
shall pay or provide Employee such other payments and benefits, if
any, which had accrued hereunder before the termination date; (c)
the Company shall pay to Employee in a lump sum not later than
thirty (30) days after the termination date an amount equal to two
hundred percent (200%) of the sum of (i) his annual Base Salary,
and (ii) the amount of his Target Bonus for the fiscal year in
which the termination occurs; (d) the Company shall pay Employee a
monthly payment in an amount equivalent to the COBRA Premium Rates
then in effect for eighteen (18) months immediately following the
date of termination, and said payment shall cease immediately upon
Employee's re-employment during such period, so long as Employee is
covered by the new employer's health plan; (e) the Company shall
provide Employee with out-placement services at a cost not to
exceed Two Thousand Five Hundred Dollars ($2,500.00); and (f)
Employee shall be allowed to exercise available stock options in
accordance with the Stock Option Plan as if he were terminated
without cause pursuant to the Stock Option Plan. Payment or
provision of the severance compensation or benefits described in
subparts (c), (d) and (e) of this Section 5.6.4 is subject to the
requirements of Sections 5.9 and 5.10. Other than the foregoing,
the Company shall have no further obligations to Employee under
this Agreement.
For purposes of this Agreement, a "Qualifying Termination" shall
mean either (i) a unilateral termination of Employee by the
Company without Cause pursuant to Section 5.2 or (ii) a
termination by Employee for Good Reason pursuant to
Section 5.4 within thirty (30) days of the event constituting
Good Reason.
For purposes of this Agreement, "Change In Control" of the
Company shall mean and shall be deemed to have occurred as of the
first day any one or more of the following conditions shall have
been satisfied:
(A) The
acquisition by any individual entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
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