Exhibit 10.8


 


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 R. David Alexander, Jr., 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, 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/ R. David Alexander, Jr.

  
	
   

  	
  R. David Alexander, Jr.

  



 


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