THIS TRANSITION
AGREEMENT (this “Agreement”) made and entered into as
of the 23rd day of June, 2009 by and between BELK, INC., for and on
behalf of itself and its subsidiaries, including but not limited to
Belk Stores Services, Inc. and Belk Merchandising LLC (hereinafter
referred to collectively as the “Company”), and H. W.
MCKAY BELK (hereinafter referred to as
“Mr. Belk”).
WHEREAS,
Mr. Belk has been employed by the Company and its predecessors
for thirty years, and during that time has provided invaluable
service to the Company and its stockholders in various roles,
including his current role as President and Chief Merchandising
Officer; and
WHEREAS,
Mr. Belk has made a decision to transition out of the
Company’s full time management in order to devote more of his
time to ministry related activities; and
WHEREAS, in order
to facilitate a smooth transition, Mr. Belk has agreed to
effect this transition over the period of time as particularly
described hereinafter, and to continue during such period to
provide services to the Company in matters relating to
merchandising strategy and vendor relationships;
NOW, THEREFORE, in
consideration of the mutual covenants and promises stated in this
document by the Company and Mr. Belk to each other and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby expressly acknowledged by the parties, the
parties agree that:
1.
Sabbatical Period . Mr. Belk will continue his
full time employment with the Company through August 2, 2009,
which will be his last full day of work. From August 3, 2009
through August 1, 2010, Mr. Belk will be on sabbatical
(the “sabbatical period”). During the sabbatical
period, Mr. Belk will remain an associate (i.e., employee) of
the Company as President and Chief Merchandising Officer. In such
capacity, Mr. Belk will be available as needed to provide
assistance to the Company on matters relating to merchandising
strategy and vendor relations. Such assistance will be provided on
a reasonable schedule, mutually agreed upon by Mr. Belk and
the Company’s Chief Executive Officer. Mr. Belk will
remain on the Company’s payroll at a salary of $763,516 for
the sabbatical period, and his salary for the sabbatical period
will be paid in equal installments over the sabbatical period on
each regularly scheduled pay day in accordance with the
Company’s standard payroll practice for associates, as the
same may change from time to time, but no less frequently than
monthly. For the Company’s fiscal year ending on
January 30, 2010 (“FY10”) only, Mr. Belk will
be eligible to participate in the Company’s Annual Incentive
Plan as if he had been employed on a full time basis throughout
FY10, as long as he continues to be an employee throughout FY10;
provided, however, Mr. Belk will not be entitled to
participate in any new incentive compensation plans that may be put
in place for the third or fourth quarters of FY10, including for
such purposes any revisions of the goals in the Annual Incentive
Plans designed to incent performance during the third or fourth
quarters. Mr. Belk will not be entitled to participate in any
Company incentive compensation plans for years subsequent to FY10.
During the sabbatical period, Mr. Belk shall continue to have
an office and secretarial assistance (from his current
administrative assistant or another administrative assistant
approved by Mr. Belk) at the Company’s
headquarters.
2
2.
Vice Chairman Period . From August 2, 2010
through January 28, 2012, Mr. Belk will remain an
associate with the Company in the role of Vice Chairman (the
“Vice Chairman period”). Mr. Belk will continue to
provide assistance to the Company, on a consulting basis in the
manner described previously herein, on matters relating to
merchandising strategy and vendor relations. From August 2,
2010 through January 29, 2011, Mr. Belk’s salary
will be $381,758, paid on each pay day during such period in equal
installments on each regularly scheduled pay day during such period
in accordance with the Company’s standard payroll practice
for associates, as the same may change from time to time, but no
less frequently than monthly. From January 30, 2011 through
January 28, 2012, Mr. Belk’s salary will be
$381,758, paid on each pay day during such period in equal
installments in accordance with the Company’s standard
payroll practice for associates, as the same may change from time
to time, but no less frequently than monthly. Mr. Belk will
not be entitled to participate in any Company incentive
compensation plans during the Vice Chairman period.
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