Exhibit 10.1

 

March 11, 2014

Chairman’s Transition Arrangement

Binding Agreement to Terms

 

 

This Term Sheet sets forth the agreement of Robert N. Wildrick (the
“Consultant”), Jos. A. Bank Clothiers, Inc. (the “Company”) and The Men’s
Wearhouse, Inc. (“Parent” and together the Consultant and the Company, the
“Parties”) with respect to the entitlements of the Consultant and the
obligations of the Company under that certain Consulting Agreement, dated as of
September 9, 2008 between the Consultant and the Company, as amended (the
“Consulting Agreement”) and certain other agreements of the Consultant, the
Company and Parent.

 

Reference is hereby made to the Agreement and Plan of Merger, dated as of March
11, 2014, between the Company, Parent and a wholly owned subsidiary of Parent
(the “Merger Agreement”). Capitalized terms and not defined herein shall have
the meaning set forth in the Merger Agreement.

 

Transition Period; Accrued and Additional Fees

The Consultant will continue to perform his duties pursuant to the Consulting
Agreement between the date hereof and the Offer Closing (the “Transition
Period”), pursuant to the terms of the Consulting Agreement and shall continue
to receive remuneration for such services in accordance with the terms of the
Consulting Agreement.

 

During the Transition Period, the Consultant shall continue to accrue additional
fees under the Consulting Agreement for services rendered in excess of the
Consultant’s obligations under the Consulting Agreement (hereinafter “Additional
Fees”), which shall be accrued during the Transition Period in accordance with
the Company’s historic practices, subject to a maximum of $500,000.

 

Payment of Current Accrued Additional Fees

The Company has determined that as of the date hereof the Consultant is entitled
to $1,800,000 from the Company in earned Additional Fees and that the Company
shall pay such amount to the Consultant in full on or within three (3) business
days following the date hereof and the Parent does not object to this payment.

 

 

 

Treatment of Consulting Agreement at Offer Closing

Immediately upon the Offer Closing, the Consultant may elect to terminate the
Consulting Agreement pursuant to Section 6.3 of the Consulting Agreement and the
Consultant therefore shall be entitled to immediate payment from the Company
(such payment to be made on the date of the Offer Closing) of the Consulting Fee
which the Consultant would have become entitled to during the remaining term of
the Consulting Agreement (i.e., through January 30, 2016) absent such
termination.

 

In addition, from time to time during the Transition Period, the Company shall
pay to the Consultant all Additional Fees which the Consultant earns during the
Transition Period, subject to a maximum of $500,000. The Consultant’s
entitlements to these amounts are not subject to the occurrence of the Offer
Closing.

 

Non-Competition Agreement

In consideration of the Non-Competition Payment (as defined below), the
Consultant hereby agrees that, during the two-year period commencing on the date
upon which the Offer Closing occurs, the Consultant will continue to comply with
and be bound by the provisions of Section 7.1 of the Consulting Agreement (the
“Non-Competition Covenant”), except that for purposes of the Non-Competition
Covenant, (i) the term Client shall be deemed during such period to include both
the Company and the Parent and its subsidiaries and (ii) the Consultant hereby
further agrees that during such two year period he will not, directly or
indirectly, own, manage, operate, control, be employed by (whether as an
employee, consultant, independent contractor or otherwise, and whether or not
for compensation) or render services to any person, firm, corporation or other
entity, in whatever form, that competes with the Parent and its subsidiaries;
provided, that the foregoing shall not prohibit the Consultant from being a
passive owner of not more than one percent (1%) of the equity securities of a
publicly traded corporation engaged in a business that is in competition with
the Parent and its subsidiaries.

 

 

 

Non-Competition Payment

In consideration of the Consultant’s agreement to be bound by the
Non-Competition Covenant set forth above, Parent shall pay or shall cause the
Company to pay the Consultant a cash payment of $3.5 million (the
“Non-Competition Payment”), $1 million of which will be paid out upon the Offer
Closing and the remainder of which will be paid out in equal quarterly
installments over the two year period commencing on the Offer Closing,
commencing on the first quarterly anniversary of the Offer Closing.

 

Code Section 280G and 4999 Matters; Code Section 409A

During the Transition Period, the Company and the Consultant shall obtain from
an independent, reputable nationally-recognized valuation firm a valuation of
the Non-Competition Covenant for purposes of establishing the degree to which to
the Non-Competition Payment constitutes reasonable compensation for services to
be rendered following a change in control for purposes of Sections 280G and 4999
of the Internal Revenue Code (the "Code").

 

The Parent shall take (or cause the Company to take) a tax position consistent
with such reasonable valuation obtained by the Consultant and the Company for
purposes of the Parent’s tax reporting obligations related to the
Non-Competition Payment, including as they pertain to Sections 280G and 4999 of
the Code.

 

In the event that any portion of the payments pursuant to the Consulting
Agreement or the Non-Competition are subject to the excise tax imposed pursuant
to Section 4999 of the Code, the Consultant shall receive the full amount of
such payments, unless the Consultant would be in a better after-tax position if
such payments were to be reduced, in which case such payments will be reduced to
the minimum extent possible such that no portion of such payments is subject to
the excise tax imposed pursuant to Section 4999 of the Code.

 

The Consulting Agreement and this Term Sheet are intended to comply with the
requirements of Section 409A of the Code and shall be construed in a manner
consistent with such interpretation.

 

 

 

Effectiveness of Term Sheet

With the exception of the provisions hereof with respect to earned and accrued
Additional Fees payable as of or immediately following the date hereof and
Additional Fees earned during the Transition Period, the provisions of this Term
Sheet shall be null and void in the event that the Offer Closing does not occur.

 

 

 

 

 

The Parties agree that the provisions of this Term Sheet constitute binding
obligations of each of the Parties, as applicable, and agree to execute such
additional documents as may be required to effect the terms hereof. This Term
Sheet shall be governed by the laws of the State of Delaware.

 

  /s/ Robert N. Wildrick   Robert N. Wildrick                           JOS. A.
BANK CLOTHIERS, INC.                   By:   /s/ Sid Ritman     Name: Sidney H.
Ritman     Title: Director & Chairperson of
Compensation Committee                                        THE MEN’S
WEARHOUSE, INC.                   By: /s/ Doug Ewert     Name:   Doug S. Ewert  
  Title: Chief Executive Officer