Exhibit 10.11


 


SEVERANCE
AGREEMENT


 


This SEVERANCE AGREEMENT
(this “Agreement”) made this 25th day of March 2009, is by and
between Citi Trends, Inc., a Delaware corporation (the “Company”),
and Ivy D. Council, an individual (the “Executive”).


 


WHEREAS, the Company and the
Executive are also parties to an Employment Non-Compete, Non-Solicit and
Confidentiality Agreement (the “Confidentiality Agreement”) and certain
restricted stock award and stock option agreements (collectively, the “Equity
Agreements”) which are to remain in full force and effect;


 


NOW, THEREFORE, in
consideration of the mutual agreements set forth herein, the parties agree as
follows:


 


1.             Termination Payments and
Benefits.  Regardless of the circumstances of the
Executive’s termination, Executive shall be entitled to payment when due of any
earned and unpaid base salary, expense reimbursements and vacation days accrued
prior to the termination of Executive’s employment, and other unpaid vested
amounts or benefits under Company retirement and health benefit plans, and, as
applicable, under Equity Agreements in accordance with their terms, and to no
other compensation or benefits.  If (i) the
Company terminates the Executive’s employment without Cause, or (ii) the
Executive terminates employment with the Company within twelve (12) months
following the occurrence of a Change in Control, provided that within such
period, either Executive’s job duties have been materially and permanently
diminished or the Executive’s compensation has been materially decreased, then,
in the case of either (i) or (ii) above, the Company will provide the
Executive with separation payments of twelve (12) months base salary at
Executive’s base salary rate at the time of Executive’s termination or if
greater, the Executive’s base rate in effect on the Change of Control Date; to
be paid in twenty-six (26) regular bi-weekly pay periods beginning on the first
pay period following the termination of the Executive and Executive’s execution
of the Separation and General Release Agreement referenced below.


 


For purposes of this Agreement, “Change in Control”
shall mean the occurrence of any one of the following events:


 


(1)           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 “1934
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 50% or more of the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (1),
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition by a Person who is on the date of this Agreement the beneficial
owner of 50% or more of the Outstanding Company Voting Securities, (ii) any
acquisition directly from the Company, (iii) any acquisition by the
Company, (iv) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (3) of this definition; or


 

















 


(2)           individuals who, as of the
date of this Agreement, constitute the Board of Directors of the Company (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
of Directors of the Company; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors of the Company; or


 


(3)           consummation of a
reorganization, merger, consolidation or share exchange or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the corporation resulting from
such Business Combination (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Voting Securities, and (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (iii) at least a majority
of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or


 


(4)           approval by the shareholders
of the Company of a complete liquidation or dissolution of the Company.


 


These separation payments are conditioned upon
Executive executing a Separation and General Release Agreement at the time of
termination which releases and waives any and all claims against the Company
and its affiliated persons and companies, and is acceptable to the Company.


 


In all other circumstances of separation, including if
the Executive resigns, retires or is terminated for Cause, the Executive shall
not be entitled to receive any separation payments.  For purposes of this Agreement, “Cause”
shall mean the Executive’s:


 


(1)           commission of an act of fraud or dishonesty, the
purpose or effect of which, in the CEO and/or Board’s sole determination,
adversely affects the Company;


 


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(2)           conviction of a felony or a crime involving
embezzlement, conversion of property or moral turpitude (whether by plea of
nolo contendere or otherwise);


 


(3)           engaging in willful or reckless misconduct or gross
negligence in connection with any property or activity of the Company, the
purpose or effect of which, in the CEO and/or Board’s sole determination,
adversely affects the Company;


 


(4)           material breach of any of the Executive’s obligations
as an employee or  stockholder as set
forth in the Company’s Information Security Policies and Code of Business
Conduct, the Confidentiality Agreement or any other agreement in effect between
the Company and the Executive; provided that, in the event such breach is
susceptible to cure, the Executive has been given written notice by the CEO
and/or Board of such breach and 30 days from such notice fails to cure the
breach; or


 


(5)           failure or refusal to perform any material duty or
responsibility under this Agreement or a determination that the Executive has
breached his fiduciary obligations to the Company; provided that, in the event
such failure, refusal or breach is susceptible to cure, the Executive has been
given written notice by the CEO and/or Board of such failure, refusal or breach
and 30 days from such notice fails to cure such failure, refusal or breach.


 


2.             Notice. 
The Executive will send all communications to the Company in writing,
to: Senior Vice President of Human Resources, Citi Trends, Inc., 104
Coleman Blvd., Savannah, Georgia 31408, Fax: (912) 443-3663.  All communications from the Company to the
Executive relating to this Agreement shall be sent to the Executive in writing
at his office and home address as reflected in the Company’s records.


 


3.             Amendment. 
No provisions of this Agreement may be modified, waived, or discharged
except by a written document signed by a duly authorized Company officer and
the Executive.  A waiver of any
conditions or provisions of this Agreement in a given instance shall not be deemed
a waiver of such conditions or provisions at any other time in the future.


 


4.             Choice of Law and Venue. 
The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Georgia (excluding any
that mandate the use of another jurisdiction’s laws).  Any action to enforce or for breach of this
Agreement shall be brought exclusively in the state or federal courts of the
County of Chatman, City of Savannah.


 


5.             Successors. 
This Agreement shall be binding upon, and shall inure to the benefit of,
the Executive and Executive’s estate, but the Executive may not assign or
pledge this Agreement or any rights arising under it, except to the extent
permitted under the terms of the benefit plans in which Executive
participates.  Without the Executive’s
consent, the Company may assign this Agreement to any affiliate or to a
successor to substantially all the business and assets of the Company.


 


6.             Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute the same instrument.


 


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7.             Entire Agreement. 
This Agreement and the Confidentiality Agreement between the parties
constitute the entire agreement between the parties and supersede any and all
prior contracts, agreements, or understandings between the parties which may
have been entered into by Company and the Executive relating to the subject
matter hereof.  This Agreement may not be
amended or modified in any manner except by an instrument in writing signed by
both the Company and the Executive.  The
failure of either party to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of any such provision or
the right of such party thereafter to enforce each and every such
provision.  No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.  All remedies are cumulative, including the
right of either party to seek equitable relief in addition to money damages.


 


8.             Employment At-Will Relationship. 
Executive
and the Company agree that nothing in this Agreement alters the at-will nature
of Executive’s employment relationship with the Company.


 


IN WITNESS WHEREOF, the parties hereto have set their
hands as of the day and year first written above.


 


 


	
   

  	
  CITI TRENDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Edward Anderson

  
	
   

  	
  Name:

  	
  R. Edward Anderson

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ivy D. Council

  
	
   

  	
  Ivy D. Council

  



 


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