Document:

EXHIBIT 10.27

 

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 DAVID ALEXANDER (“EMPLOYEE”),
EFFECTIVE AS OF THE 5TH DAY OF DECEMBER, 2008.

 

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 its President & Chief Operating Officer (“PCOO”).  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 Chairman and Chief
Executive Officer.  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 PCOO 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 PCOO.  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 PCOO, 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 PCOO 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/ R. Edward Anderson

  
	
   

  	
  R. Edward Anderson

  
	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David Alexander

  	
  (L.S.)

  
	
   

  	
  Employee Signature

  
	
   

  	
   

  
	
   

  	
  Employee Residence
  Address:EXHIBIT
10.28

 

FIRST AMENDMENT

 

THIS FIRST AMENDMENT
(this “Amendment”) dated as of March 25, 2009 to the Credit
Agreement referenced below is by and among Citi Trends, Inc., a Delaware corporation (the “Borrower”),
and Bank of America, N.A. (the “Lender”).

 

W I T N E S S E T
H

 

WHEREAS, revolving credit
facilities have been extended to the Borrower pursuant to the Credit Agreement
(as amended, modified and supplemented from time to time, the “Credit
Agreement”) dated as of March 26, 2008 among Borrower, the Guarantors from
time to time party thereto and the Lender; and

 

WHEREAS, the Borrower has
requested certain modifications to the Credit Agreement and the Lender has
agreed to the requested modifications on the terms and conditions set forth
herein.

 

NOW, THEREFORE, IN
CONSIDERATION of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.                                       Defined Terms. 
Capitalized terms used herein but not otherwise defined herein shall
have the meanings provided to such terms in the Credit Agreement.

 

2.                                       Amendment.

 

2.1                                 The
Revolving Committed Amount is permanently reduced from $35 million to $20
million.

 

2.2                                 The pricing grid in the definition of “Applicable
Rate” in Section 1.01 of the Credit Agreement is amended to read as
follows:

 

	
  Pricing

  Tier

  	
   

  	
  Consolidated Leverage

  Ratio

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  1

  	
   

  	
  <2.25:1.0

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.25

  	
  %

  
	
  2

  	
   

  	
  >
  2.25:1.0 but < 3.00:1.0

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.25

  	
  %

  
	
  3

  	
   

  	
  >
  3.00:1.0

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  

 

2.3                                 The definitions of “Base Rate” and “Maturity
Date” in Section 1.01 of the Credit Agreement are amended to read as
follows:

 

“Base
Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Eurodollar Rate
plus 1.0% and (c) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate”.  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in the “prime
rate” announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.

 

 

“Maturity
Date” means March 24, 2010; provided, however, that, in
each case, if such date is not a Business Day, the Maturity Date shall be the
next preceding Business Day.

 

2.4                                 In the definition of “Eurodollar Daily
Floating Base Rate” in Section 1.01 of the Credit Agreement, each
reference to “Eurodollar Rate Loan” is amended to read “Loan”.

 

2.5                                 Section 3.02 of the Credit Agreement is
amended to read as follows:

 

If
the Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for the Lender or the
Lender’s Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
the Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by the Lender to the Borrower, any
obligation of the Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans or to make Base Rate Loans as
to which the interest rate is determined with reference to the Eurodollar Base
Rate,  shall be suspended until the Lender notifies the Borrower that the
circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower
shall, upon demand from the Lender, prepay or, if applicable, convert all
Eurodollar Rate Loans to Base Rate Loans (other than Base Rate Loans as to
which the interest rate is determined with reference to the Eurodollar Base
Rate).  Upon any such prepayment or conversion,
the Borrower shall also pay accrued interest on the amount so prepaid or
converted.

 

2.5                                 The last two sentences of Section 3.03
of the Credit Agreement are amended to read as follows:

 

Thereafter,
the obligation of the Lender to make or maintain Eurodollar Rate Loans and Base
Rate Loans as to which the interest rate is determined with reference to the
Eurodollar Rate shall be suspended until the Lender revokes such notice.  Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of or conversion to Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans (with the Base Rate determined other
than by reference to the Eurodollar Rate) in the amount specified therein.

 

3.                                       Conditions
Precedent.  This Amendment shall be
effective as of the date hereof upon satisfaction of each of the following
conditions precedent:

 

(a)                                  execution
of this Amendment by the Borrower and the Lender; and

 

(b)                                 payment
by the Borrower to the Lender of an amendment fee equal to $30,000.

 

4.                                       Representations and Warranties.  The
Borrower represents and warrants to the Lender that, after giving effect to
this Amendment, the representations and warranties set forth in the Loan Documents
are true and correct in all material respects as of the date hereof.

 

2

 

5.                                       Reaffirmation
of Obligations.  The Borrower affirms its obligations under
the Loan Documents and agrees that such obligations are valid and subsisting
obligations of the Borrower to the Lender and not subject to any credits,
offsets, defenses, claims, counterclaims or adjustments of any kind.

 

6.                                       No
Other Changes.  Except as modified hereby, all of the terms
and provisions of the Loan Documents shall remain in full force and effect.

 

7.                                       Counterparts;
Delivery.  This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and it shall not be necessary in making
proof of this Amendment to produce or account for more than one such
counterpart. Delivery of an executed
counterpart of this Amendment by facsimile or other electronic imaging means
shall be effective as an original.

 

8.                                       Governing
Law.  This Amendment shall be deemed to be a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of Georgia.

 

[SIGNATURE PAGES FOLLOW]

 

3

 

IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.

 

	
  BORROWER:

  	
  CITI
  TRENDS, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bruce Smith

  
	
   

  	
  Name:

  	
  Bruce
  Smith

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie Pendleton

  
	
   

  	
  Name:

  	
  Stephanie
  Pendleton

  
	
   

  	
  Title:

  	
  Senior
  Vice President

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