Exhibit 10.1


 


EMPLOYMENT NON-COMPETE, NON-SOLICIT AND CONFIDENTIALITY AGREEMENT


 


THIS EMPLOYMENT NON-COMPETE, NON-SOLICIT AND
CONFIDENTIALITY AGREEMENT (“AGREEMENT”) IS ENTERED INTO BETWEEN CITI TRENDS,
INC. (“COMPANY”), AND R. EDWARD ANDERSON (“EMPLOYEE”), EFFECTIVE AS OF THE 25TH
DAY OF MARCH, 2009.


 


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


 


1.                                     Employment; Scope of Services. 
Company shall employ Employee, and Employee shall be employed by
Company, as a Chairman and Chief Executive Officer (“CCEO”).  Employee shall use his best efforts and shall
devote his full time, attention, knowledge and skills to the faithful
performance of his duties and responsibilities as a Company employee.  Employee shall have such authority and such
other duties and responsibilities as assigned by the Board of Directors.  Employee shall comply with Company’s policies
and procedures, shall conduct himself as an ethical business professional, and
shall comply with federal, state and local laws.


 


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


 


3.                                     Confidentiality.


 


(a)                                  Employee acknowledges and agrees that (1) the
retail sale of value-priced/off-price family apparel is an extremely
competitive industry; (2) Company has an ongoing strategy for expansion of
its business in the United States; (3) Company’s major competitors operate
throughout the United States and some internationally; and (4) because of
Employee’s position as CCEO he will have access to, knowledge of, and be
entrusted with, highly sensitive and competitive Confidential Information (as
defined in subsection (b) below) of Company, including without limitation
information regarding sales margins, purchasing and pricing strategies,
marketing strategies, vendors and suppliers, plans for expansion and placement
of stores, and also specific information about Company’s districts and stores,
such as staffing, budgets, profits and the financial success 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,
marketing information and plans, pricing information, the identity or lists of
employees, vendors and suppliers of Company, and confidential or proprietary
information of such employees, vendors and suppliers. Employee acknowledges and
agrees that all Confidential Information is confidential and remains the sole
and exclusive property of Company. 
Employee agrees that he shall (a) hold all Confidential Information
in strictest confidence; (b) not disclose, reproduce, distribute or
otherwise disseminate such Confidential Information, and shall protect such
Confidential Information from disclosure by or to others; and (c) make no
use of such Confidential Information without the prior


 

















 


written
consent of Company, except in connection with Employee’s employment with
Company. “Confidential Information” means any and all data and information
relating to Company which (i) derive independent economic value, actual or
potential, from not being generally known or readily ascertainable by proper
means by other persons who may obtain economic value from their disclosure or
use; and (ii) are the subject of reasonable efforts under the
circumstances to maintain their secrecy.


 


(c)                                  In the event any Confidential Information
does not qualify for protection as “trade secrets” as defined in Delaware’s
Uniform Trade Secrets Act, then Employee acknowledges and agrees that the
Confidential Information shall remain confidential and shall not be disclosed
by Employee during Employee’s employment with Company and for a period of two (2) years
following the Separation Date, absent the express prior written consent of
Company.   Trade secret information shall
remain confidential so long as such information qualifies as a trade secret
under applicable law.


 


(d)                                 Employee acknowledges that Company has
provided or will provide Employee with Company property, including without
limitation employee handbooks, policy manuals, price lists, financial reports,
and vendor and supplier information,  among other
items. Upon the Separation Date, or upon the request of Company, Employee shall
immediately deliver to Company all property belonging to Company, including
without limitation all Confidential Information and any property related to
Company, whether in electronic or other format, as well as any copies thereof,
then in Employee’s custody, control or possession.  Upon the Separation Date, Employee shall
provide Company with a declaration certifying that all Confidential Information
and any other Company property have been returned to Company, that Employee has
not kept any copies of such items or distributed such items to any third party,
and that Employee has otherwise complied with the 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) year
following the Separation Date, and regardless of the reason for separation,
Employee shall not compete with Company on behalf of a Competitor in the
continental United States, or rendering
services to such Competitor which are the same or substantially similar to the
Services  which Employee rendered to Company
while employed by Company as CCEO.  For
purposes of this Section 4, the term “Competitor” shall mean only the
following businesses whose primary business is the sale of value-priced or
off-price family apparel, commonly known as: Cato, TJX (including without
limitation TJMAXX and Marshalls), and Ross Stores.


 


5.                                     Covenant Not to Solicit.  
During Employee’s employment with Company and for a period of two (2) years
following the Separation Date, and regardless of the reason for separation, Employee
agrees not to solicit any person or entity who has been a vendor or supplier of
merchandise and/or inventory to Company during the two (2) years
immediately preceding the Separation Date or to whom Company is actively
soliciting for the provision of merchandise and/or inventory (collectively
referred to as “Merchandise Vendors”) and with whom Employee had material
contact for the purpose of obtaining merchandise and/or inventory on behalf of
any of Company’s Competitors, as defined in Section 4 of this
Agreement.  For purposes of this
agreement “material contact” means that Employee either had access to
confidential information regarding the Merchandise Vendor, or was directly
involved in negotiations or retention of such Merchandise Vendor.


 


Employee
specifically acknowledges and agrees that, as CCEO, his duties include, without
limitation, establishing purchasing and pricing strategies and policies,
managing sales margins, involvement in establishing and maintaining vendor
relationships, and having contact with and


 

















 


confidential
and/or proprietary information regarding Merchandise Vendors. The
non-solicitation restrictions set forth in this Section 5 are specifically
limited to Merchandise Vendors with whom Employee had contact (whether
personally, telephonically, or through written or electronic correspondence)
during his employment as CCEO or about whom Employee had confidential or
proprietary information because of his position with Company.


 


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


 


7.                                     Severability.  If any provision of this Agreement shall be
held invalid, illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any partially enforceable provisions to the extent
enforceable, shall be binding and remain in full force and effect.  Further, each particular prohibition or
restriction set forth in any Section of this Agreement shall be deemed a
severable unit, and if any court of competent jurisdiction or arbitrator
determines that any portion of such prohibition or restriction is against the
policy of the law in any respect, but such restraint, considered as a whole, is
not so clearly unreasonable and overreaching in its terms as to be
unconscionable, the court or arbitrator shall enforce so much of such restraint
as is determined by a preponderance of the evidence to be necessary to protect
the interests of Company.


 


8.                                     Survival
of Covenants.  All rights and
covenants contained in Sections 3, 4, 5, and 6 of this Agreement, and all
remedies relating thereto, shall survive the termination of this Agreement for
any reason.


 


9.                                     Governing
Law.  Citi Trends, Inc. is a Delaware
corporation.  The parties agree that
Delaware law applies in the event of any dispute between them arising out of or
related to this Agreement.


 


10.                               Acknowledgment
of Reasonableness/Remedies/Enforcement.


 


(a)                                Employee
acknowledges that (1) Company has valid interests to protect pursuant to
Sections 3, 4, 5, and 6 of this Agreement; (2) his breach of the
provisions of Sections 3, 4, 5,  or
6 of this Agreement would result in irreparable injury and permanent damage to
Company; and (3) such restrictions are reasonable and necessary to protect
the interests of Company, are critical to the success of Company’s business,
and do not cause undue hardship on Employee.


 


(b)                               Employee
agrees that determining damages in the event of a breach of Sections 3, 4, 5,
or 6 by Employee would be difficult and that money damages alone would be an
inadequate remedy for the injuries and damages which would be suffered by
Company from such breach.  Employee
further agrees that injunctive relief is an appropriate remedy for such breach
and that in the event of such breach Company, in addition to and without
limiting any other remedies or rights which it may have, may apply to any court
of competent jurisdiction and seek interim, provisional, injunctive, or other
equitable 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 other
equitable relief for violations of this Agreement by Company until the
arbitration award on such claim is rendered or the claim is otherwise
resolved.  Employee and Company waive any
requirement that a bond or any other security be posted.


 

















 


(c)                                Company and Employee agree that any
controversy, dispute, or claim arising out of or related to this Agreement,
including without limitation its enforceability, interpretation, performance or
non-performance by any party, or any breach thereof, shall be resolved
exclusively through arbitration pursuant to the Employment Arbitration Rules and
Mediation Procedures of the American Arbitration Association (“AAA”), Amended
and Effective July 1, 2006 (“AAA Rules”). 
Where the AAA Rules and this Agreement conflict or where the AAA Rules are
silent, this Section 10(c) shall govern, if applicable.  Company and Employee agree that this Section 10(c) is
an agreement to arbitrate pursuant 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 State of Delaware.


 


(i)                                     Any arbitration proceedings pursuant to this
Agreement shall be resolved by a single arbitrator.  The location of any arbitration proceedings
shall be determined in accordance with the AAA Rules.  The arbitrator shall apply the law of the
State of Delaware on the substantive claims asserted, and shall have the
authority to award the same remedies, damages, costs, expenses and any other
awards that a court could award.  The
arbitrator shall issue a written award explaining his/her decision, the reasons
for the decision, and the calculation and reasoning behind any damages
awarded.  The arbitrator’s decision will
be final and binding.  The judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  Company will pay (a) AAA
administrative fees except that for arbitration claims originally asserted
by Employee, Employee will pay to Company a fee that is comparable to the
filing fee being charged by the United States District Court for the District
of Delaware for the filing of a civil action at the time Employee
initiates arbitration; (b) the Arbitrator’s fee and reasonable travel
expenses; and (c) the cost of renting an arbitration hearing room, if
necessary.  Each party shall pay its own
experts’ and/or attorneys’ fees unless the arbitrator awards reasonable experts’
and/or attorneys’ fees to Employee.


 


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


 


(iii)                               Should this Section 10(c) not be
invoked by the parties or should an arbitrator or court of competent
jurisdiction determine that the parties’ agreement to arbitrate is
unenforceable,  then the parties agree that
Delaware shall be the forum for any dispute arising out of or related to this
Agreement.


 


11.                               Miscellaneous.  This Agreement constitutes the entire
agreement between the parties and supersedes any and all prior contracts,
agreements, or understandings between the parties which may have been entered
into by Company and Employee 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
Company and Employee.  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.


 

















 


EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS CAREFULLY READ
THIS AGREEMENT AND KNOWS AND UNDERSTANDS ITS CONTENTS, THAT HE ENTERS INTO THIS
AGREEMENT KNOWINGLY AND VOLUNTARILY, AND THAT HE INDICATES HIS CONSENT BY
SIGNING THIS FINAL PAGE.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as
of the day and year first above written.


 


	
   

  	
  Citi Trends, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce D. Smith

  
	
   

  	
  Bruce D. Smith

  
	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ R. Edward Anderson

  	
  (L.S.)

  
	
   

  	
  Employee Signature

  
	
   

  	
   

  
	
   

  	
  Employee Residence
  Address: