**Exhibit 10.3**

 

**EMPLOYMENT NON-COMPETE, NON-SOLICIT AND CONFIDENTIALITY AGREEMENT**

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**THIS EMPLOYMENT NON-COMPETE, NON-SOLICIT ANDCONFIDENTIALITY AGREEMENT (“AGREEMENT”) IS ENTERED INTO BETWEEN CITI TRENDS,INC. (“COMPANY”), AND ELIZABETH R. FEHER (“EMPLOYEE”), EFFECTIVE AS OF THE 25THDAY OF MARCH, 2009.**

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For and in consideration of the mutual covenants andagreements contained herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties agree:

 

1.             Employment; Scope of Services. Company shall employ Employee, and Employee shall be employed byCompany, as an Executive Vice President, Chief Merchandising Officer (“ECMO”).  Employee shall use her best efforts and shalldevote her full time, attention, knowledge and skills to the faithfulperformance of her duties and responsibilities as a Company employee.  Employee shall have such authority and suchother duties and responsibilities as assigned by the Chief ExecutiveOfficer.  Employee shall comply withCompany’s policies and procedures, shall conduct herself as an ethical businessprofessional, and shall comply with federal, state and local laws.

 

2.             At-Will Employment. Nothing in this Agreement alters the at-will employment relationshipbetween Employee and Company.  Employmentwith Company is “at-will” which means that either Employee or Company mayterminate the employment relationship at any time, with or without notice, withor without cause. The date of Employee’s cessation of employment for any reasonis the “Separation Date.”

 

3.             Confidentiality.

 

(a)           Employee acknowledges and agrees that (1) the retail sale ofvalue-priced/off-price family apparel is an extremely competitive industry; (2) Companyhas an ongoing strategy for expansion of its business in the United States; (3) Company’smajor competitors operate throughout the United States and someinternationally; and (4) because of Employee’s position as ECMO she willhave access to, knowledge of, and be entrusted with, highly sensitive and competitiveConfidential Information (as defined in subsection (b) below) of Company,including without limitation information regarding sales margins, purchasingand pricing strategies, marketing strategies, vendors and suppliers, plans forexpansion and placement of stores, and also specific information about Company’sdistricts and stores, such as staffing, budgets, profits and the financialsuccess of individual districts and stores.

 

(b)           “Confidential Information” includes technical or sales data, formulas,patterns, compilations, programs, devices, methods, techniques, drawings,processes, financial data and statements, financial plans and strategies,product plans, sales or advertising information and plans, marketinginformation and plans, pricing information, the identity or lists of employees,vendors and suppliers of Company, and confidential or proprietary informationof such employees, vendors and suppliers. Employee acknowledges and agrees thatall Confidential Information is confidential and remains the sole and exclusiveproperty of Company.  Employee agreesthat she shall (a) hold all Confidential Information in strictestconfidence; (b) not disclose, reproduce, distribute or otherwisedisseminate such Confidential Information, and shall protect such ConfidentialInformation from disclosure by or to others; and (c) make no use of suchConfidential Information without the prior

 

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writtenconsent of Company, except in connection with Employee’s employment withCompany. “Confidential Information” means any and all data and informationrelating to Company which (i) derive independent economic value, actual orpotential, from not being generally known or readily ascertainable by propermeans by other persons who may obtain economic value from their disclosure oruse; and (ii) are the subject of reasonable efforts under thecircumstances to maintain their secrecy.

 

(c)           Inthe event any Confidential Information does not qualify for protection as “tradesecrets” as defined in Delaware’s Uniform Trade Secrets Act, then Employeeacknowledges and agrees that the Confidential Information shall remainconfidential and shall not be disclosed by Employee during Employee’semployment with Company and for a period of two (2) years following theSeparation Date, absent the express prior written consent of Company.   Trade secret information shall remainconfidential so long as such information qualifies as a trade secret underapplicable law.

 

(d)           Employee acknowledges that Company has provided or will provide Employeewith Company property, including without limitation employee handbooks, policymanuals, price lists, financial reports, and vendor and supplier information,****among other items. Upon the Separation Date, or upon therequest of Company, Employee shall immediately deliver to Company all propertybelonging to Company, including without limitation all Confidential Informationand any property related to Company, whether in electronic or other format, aswell as any copies thereof, then in Employee’s custody, control orpossession.  Upon the Separation Date,Employee shall provide Company with a declaration certifying that allConfidential Information and any other Company property have been returned toCompany, that Employee has not kept any copies of such items or distributedsuch items to any third party, and that Employee has otherwise complied withthe terms of Section 3 of this Agreement.

 

4.             Covenant Not to Compete. During Employee’s employment with Company and for a period of one (1) yearfollowing the Separation Date, and regardless of the reason for separation,Employee shall not compete with Company on behalf of a Competitor in thecontinental United States**,**or renderingservices to such Competitor which are the same or substantially similar to theServices****which Employee rendered to Companywhile employed by Company as ECMO.  Forpurposes of this Section 4, the term “Competitor” shall mean only thefollowing businesses whose primary business is the sale of value-priced oroff-price family apparel, commonly known as: Cato, TJX (including withoutlimitation TJMAXX and Marshalls), and Ross Stores.

 

5.             Covenant Not to Solicit.  During Employee’s employment with Company and for a period of two (2) yearsfollowing the Separation Date, and regardless of the reason for separation,Employee agrees not to solicit any person or entity who has been a vendor orsupplier of merchandise and/or inventory to Company during the two (2) yearsimmediately preceding the Separation Date or to whom Company is actively solicitingfor the provision of merchandise and/or inventory (collectively referred to as “MerchandiseVendors”) and with whom Employee had material contact for the purpose ofobtaining merchandise and/or inventory on behalf of any of Company’sCompetitors, as defined in Section 4 of this Agreement.  For purposes of this agreement “materialcontact” means that Employee either had access to confidential informationregarding the Merchandise Vendor, or was directly involved in negotiations orretention of such Merchandise Vendor.

 

Employeespecifically acknowledges and agrees that, as ECMO, her duties include, withoutlimitation, establishing purchasing and pricing strategies and policies,managing sales margins, involvement in establishing and maintaining vendor relationships,and having contact with and

 

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confidentialand/or proprietary information regarding Merchandise Vendors. Thenon-solicitation restrictions set forth in this Section 5 are specificallylimited to Merchandise Vendors with whom Employee had contact (whetherpersonally, telephonically, or through written or electronic correspondence)during employment as ECMO or about whom Employee had confidential orproprietary information because of her position with Company.

 

# 6.             CovenantNot to Recruit Personnel. During Employee’s employment with Company and for a period of two (2) yearsfollowing the Separation Date, and regardless of the reason for separation,Employee will not recruit or solicit to hire or assist others in recruiting orsoliciting to hire, any employee of Company and will not cause or assist othersin causing any employee of Company to terminate an employment relationship withCompany.

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# 7.             Severability.  If any provision of this Agreement shall beheld invalid, illegal or otherwise unenforceable, in whole or in part, theremaining provisions, and any partially enforceable provisions to the extentenforceable, shall be binding and remain in full force and effect.  Further, each particular prohibition orrestriction set forth in any Section of this Agreement shall be deemed aseverable unit, and if any court of competent jurisdiction or arbitratordetermines that any portion of such prohibition or restriction is against thepolicy of the law in any respect, but such restraint, considered as a whole, isnot so clearly unreasonable and overreaching in its terms as to beunconscionable, the court or arbitrator shall enforce so much of such restraintas is determined by a preponderance of the evidence to be necessary to protectthe interests of Company.

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# 8.             Survivalof Covenants.  All rights andcovenants contained in Sections 3, 4, 5, and 6 of this Agreement, and allremedies relating thereto, shall survive the termination of this Agreement forany reason.

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# 9.             GoverningLaw.  Citi Trends, Inc. is a Delawarecorporation.  The parties agree thatDelaware law applies in the event of any dispute between them arising out of orrelated to this Agreement.

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# 10.           Acknowledgmentof Reasonableness/Remedies/Enforcement.

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# (a)           Employeeacknowledges that (1) Company has valid interests to protect pursuant toSections 3, 4, 5, and 6 of this Agreement; (2) herb reach of theprovisions of Sections 3, 4, 5,****or6 of this Agreement would result in irreparable injury and permanent damage toCompany; and (3) such restrictions are reasonable and necessary to protectthe interests of Company, are critical to the success of Company’s business,and do not cause undue hardship on Employee.

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# (b)           Employeeagrees that determining damages in the event of a breach of Sections 3, 4, 5, or6 by Employee would be difficult and that money damages alone would be aninadequate remedy for the injuries and damages which would be suffered byCompany from such breach.  Employeefurther agrees that injunctive relief is an appropriate remedy for such breachand that in the event of such breach Company, in addition to and withoutlimiting any other remedies or rights which it may have, may apply to any courtof competent jurisdiction and seek interim, provisional, injunctive, or otherequitable relief until the arbitration award on such claim (see Section 10(c) below)is rendered or the claim is otherwise resolved. Employee may also seek interim, provisional, injunctive, or otherequitable relief for violations of this Agreement by Company until the arbitrationaward on such claim is rendered or the claim is otherwise resolved.  Employee and Company waive any requirementthat a bond or any other security be posted.

 

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(c)           Company and Employee agree that any controversy, dispute, or claimarising out of or related to this Agreement, including without limitation itsenforceability, interpretation, performance or non-performance by any party, orany breach thereof, shall be resolved exclusively through arbitration pursuantto the Employment Arbitration Rules and Mediation Procedures of theAmerican Arbitration Association (“AAA”), Amended and Effective July 1,2006 (“AAA Rules”).  Where the AAA Rules andthis Agreement conflict or where the AAA Rules are silent, this Section 10(c) shallgovern, if applicable.  Company andEmployee agree that this Section 10(c) is an agreement to arbitratepursuant to the Federal Arbitration Act, 9 U.S.C. § 1 *et seq.*,or if that Act is inapplicable for any reason, the arbitration law of the Stateof Delaware.

 

(i)            Any arbitration proceedings pursuant to thisAgreement shall be resolved by a single arbitrator.  The location of any arbitration proceedingsshall be determined in accordance with the AAA Rules.  The arbitrator shall apply the law of theState of Delaware on the substantive claims asserted, and shall have theauthority to award the same remedies, damages, costs, expenses and any otherawards that a court could award.  Thearbitrator shall issue a written award explaining his/her decision, the reasonsfor the decision, and the calculation and reasoning behind any damagesawarded.  The arbitrator’s decision willbe final and binding.  The judgment onthe award rendered by the arbitrator may be entered in any court havingjurisdiction thereof.  Company will pay (a) AAAadministrative fees except that for arbitration claims originally assertedby Employee, Employee will pay to Company a fee that is comparable to thefiling fee being charged by the United States District Court for the Districtof Delaware for the filing of a civil action at the time Employeeinitiates arbitration; (b) the Arbitrator’s fee and reasonable travelexpenses; and (c) the cost of renting an arbitration hearing room, ifnecessary.  Each party shall pay its ownexperts’ and/or attorneys’ fees unless the arbitrator awards reasonable experts’and/or attorneys’ fees to Employee.

 

(ii)           Consistent with Section 7 of thisAgreement, should a court of competent jurisdiction or arbitrator determinethat the scope of any provision of this Section 10(c) is too broad tobe enforced as written, Company and Employee intend that the court orarbitrator reform the provision to such narrower scope as is determined to bereasonable and enforceable.

 

(iii)          Should this Section 10(c) not beinvoked by the parties or should an arbitrator or court of competentjurisdiction determine that the parties’ agreement to arbitrate isunenforceable,****then the parties agree thatDelaware shall be the forum for any dispute arising out of or related to thisAgreement.

 

# 11.           Miscellaneous.  This Agreement constitutes the entireagreement between the parties and supersedes any and all prior contracts,agreements, or understandings between the parties which may have been enteredinto by Company and Employee relating to the subject matter hereof.  ** **This Agreement may not be amendedor modified in any manner except by an instrument in writing signed by bothCompany and Employee.  The failure ofeither party to enforce at any time any of the provisions of this Agreementshall in no way be construed to be a waiver of any such provision or the rightof such party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreementshall be held to be a waiver of any other or subsequent breach.  All remedies are cumulative, including theright of either party to seek equitable relief in addition to money damages.

 

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**EMPLOYEE ACKNOWLEDGES AND AGREES THAT SHE HAS CAREFULLY READTHIS AGREEMENT AND KNOWS AND UNDERSTANDS ITS CONTENTS, THAT SHE ENTERS INTOTHIS AGREEMENT KNOWINGLY AND VOLUNTARILY, AND THAT SHE INDICATES HER CONSENT BYSIGNING THIS FINAL PAGE.**

 

# INWITNESS WHEREOF, the parties hereto have executed this Agreement under seal asof the day and year first above written.

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|   | Citi Trends, Inc.               |
|--------|--------------------------------------|
|   |                                 |
|   |                                 |
|   | By:                                  | /s/ R. Edward Anderson |
|   | R. Edward Anderson                   |
|   | Chairman and Chief Executive Officer |
|   |                                 |
|   |                                 |
|   | /s/ Elizabeth R. Feher               | (L.S.) |
|   | Employee Signature                   |
|   |                                 |
|   | Employee Residence  Address:         |
|   |                                 |
|        |                                      |  |  |

 

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