-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DLcH3uhUDaUQMjGHG+3oOtpv12g+NnpcJcVnNHYQyuCy1qqClzdY0CcePYyIjoyw Wgh2ITHkZe2KcAy2D2xdYA== 0000928385-01-501149.txt : 20010620 0000928385-01-501149.hdr.sgml : 20010620 ACCESSION NUMBER: 0000928385-01-501149 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010505 FILED AS OF DATE: 20010619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK JOS A CLOTHIERS INC /DE/ CENTRAL INDEX KEY: 0000920033 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-APPAREL & ACCESSORY STORES [5600] IRS NUMBER: 363189198 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-14657 FILM NUMBER: 1663237 BUSINESS ADDRESS: STREET 1: 500 HANOVER PIKE CITY: HAMPSTEAD STATE: MD ZIP: 21074 BUSINESS PHONE: 4102392700 10-Q 1 d10q.txt FORM 10-Q United States Securities and Exchange Commission Washington, DC 20549 FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended May 5, 2001 ----------- Or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0-23874 ------- Jos. A. Bank Clothiers, Inc. Delaware 5611 36-3189198 -------- ---- ---------- (State incorporation) (Primary Standard (I.R.S. Employer Industrial Classification Identification Code Number) Number) 500 Hanover Pike, Hampstead, MD 21074-2095 - ------------------------------- ---------- None ---- (Former name or former address, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or if such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Indicate the number of shares of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding as of June 7, 2001 - ----- ------------------------------ Common Stock, $.01 par value 5,955,627 Jos. A. Bank Clothiers, Inc. Index -----
Part I. Financial Information Page No. --------------------- -------- Item 1. Financial Statements Condensed Consolidated Statements 3 of Operations - Three Months ended May 5, 2001 and April 29, 2000 Condensed Consolidated Balance 4 Sheets - as of May 5, 2001 and February 3, 2001 Condensed Consolidated Statements 5 of Cash Flows - Three Months ended May 5, 2001 and April 29, 2000 Notes to Condensed Consolidated Financial Statements 6-9 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9-12 Part II. Other Information ----------------- Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 - ----------
2 PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In Thousands except per share data) (Unaudited) Three Months Ended ------------------ May 5, April 29, 2001 2000 ---- ---- Net Sales $47,406 $46,408 ------- ------- Costs and expenses: Cost of goods sold 23,896 23,166 General and administrative 4,553 4,848 Sales and marketing 17,656 16,316 Store opening costs 69 13 One-time charge 210 -- ------- ------- 46,384 44,343 ------- ------- Operating income 1,022 2,065 Interest expense, net 219 293 ------- ------- Income from continuing operations before provision for income taxes 803 1,772 Provision for income taxes 297 691 ------- ------- Net income $ 506 $ 1,081 ======= ======= Earnings per share: Net income: Basic $ 0.08 $ 0.16 Diluted $ 0.08 $ 0.16 Weighted average shares outstanding: Basic 5,956 6,679 Diluted 6,210 6,818 See accompanying notes 3 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In Thousands) (Unaudited) May 5, February 3, 2001 2001 -------- -------- ASSETS Current Assets: Cash and cash equivalents $ 521 $ 3,126 Accounts receivable 3,264 2,724 Inventories: Raw materials 4,529 3,861 Finished goods 54,373 46,588 -------- -------- Total inventories 58,902 50,449 -------- -------- Prepaid expenses and other current assets 5,545 5,329 Deferred income taxes 941 375 -------- -------- Total current assets 69,173 62,003 -------- -------- Property, plant and equipment, at cost 55,669 53,808 Accumulated depreciation and amortization (29,142) (28,176) -------- -------- Net property, plant and equipment 26,527 25,632 Deferred income taxes 1,262 1,262 Other assets 93 57 -------- -------- Total assets $ 97,055 $ 88,954 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 18,524 $ 16,663 Accrued expenses 14,988 16,268 Current portion of long-term debt 717 422 -------- -------- Total current liabilities 34,229 33,353 Noncurrent Liabilities: Long-term debt 13,176 6,447 Deferred Rent 3,436 3,446 -------- -------- Total liabilities 50,841 43,246 -------- -------- Shareholders' equity: Common stock 71 71 Additional paid-in capital 56,535 56,535 Accumulated deficit (5,334) (5,840) -------- -------- 51,272 50,766 Less: treasury stock (5,058) (5,058) -------- -------- Total shareholders' equity 46,214 45,708 -------- -------- Total liabilities and shareholders' equity $ 97,055 $ 88,954 ======== ======== See accompanying notes 4 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In Thousands) (Unaudited) Three Months Ended ------------------ May 5, April 29, 2001 2000 ---- ---- Cash flows from operating activities: Net income $ 506 $ 1,081 Adjustments to reconcile net income Net cash used in operating activities: Increase in deferred taxes (566) -- Depreciation and amortization 1,089 1,015 Net decrease in operating working capital (8,674) 584 -------- -------- Net cash provided by (used in) operating activities (7,645) 2,680 -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (1,984) (821) -------- -------- Net cash used in investing activities of continuing operations (1,984) (821) -------- -------- Cash flows from financing activities: Borrowings under long-term Credit Agreement 17,136 16,224 Repayment under long-term Credit Agreement (15,482) (14,028) Borrowing of other long-term debt 5,500 -- Repayment of other long-term debt (130) (121) Repurchase of Common Stock -- (3,138) Net proceeds from Issuance of Common Stock -- 35 -------- -------- Net cash provided by (used in) financing activities of continuing operations 7,024 (1,028) Net cash used in discontinued operations -- (136) -------- -------- Net increase (decrease) in cash and cash equivalents (2,605) 695 Cash and cash equivalents - beginning of period 3,126 1,087 -------- -------- Cash and cash equivalents - end of period $ 521 $ 1,782 ======== ======== See accompanying notes 5 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Unaudited) 1. BASIS OF PRESENTATION Jos. A. Bank Clothiers, Inc. (the "Company") is a nationwide retailer of classic men's clothing through conventional retail stores and catalog and internet direct marketing. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. These adjustments are of a normal recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10- Q. Therefore, these financial statements should be read in conjunction with the Company's February 3, 2001 Annual Report on Form 10-K. 2. SIGNIFICANT ACCOUNTING POLICIES Inventories are stated at the lower of first-in, first-out, cost or market. Costs related to mail order catalogs and promotional materials are included in prepaid expenses and other current assets. These costs are amortized over the expected periods of benefit, not to exceed six months. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 - Accounting for Income Taxes (SFAS 109). This standard requires, among other things, recognition of future tax benefits, measured by enacted tax rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. 6 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 3. WORKING CAPITAL The net change in operating working capital is composed of the following: Three Months Ended ------------------ May 5, April 29, 2001 2000 ---- ---- Increase in accounts receivable $ (540) $(1,190) Increase in inventories (8,453) (1,569) Increase in prepaids and other assets (252) (1,769) Increase in accounts payable 1,861 2,935 Increase (decrease) in accrued expenses and other liabilities (1,290) 2,177 ------- ------- Net (increase) decrease in operating working capital $(8,674) $ 584 ======= ======= 4. EARNINGS PER SHARE Earnings Per Share (EPS) - Statement of Financial Accounting Standards (SFAS) No. 128 requires presentation of basic earnings per share and diluted earnings per share. The weighted average shares used to calculate basic and diluted earnings per share in accordance with SFAS No. 128 is as follows: Three Months Ended ------------------ May 5, April 29, 2001 2000 ---- ---- Weighted average shares outstanding for basic EPS 5,956 6,679 Dilutive effect of common stock equivalents 254 139 ----- ----- Weighted average shares outstanding for diluted EPS 6,210 6,818 ===== ===== Weighted average shares outstanding for calculating dilutive EPS include basic shares outstanding, plus shares issuable upon the exercise of stock options, using the treasury stock method. 7 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 5. STOCK REPURCHASE On April 12, 2000, the Company announced a repurchase of approximately 13% of its then outstanding stock. In a private transaction, the Company purchased 896,400 shares at $3.50 per share. The purchase has been recorded in the accompanying Condensed Consolidated Balance Sheets as treasury stock. 6. SEGMENT REPORTING The Company has two reportable segments: full line stores and catalog/internet direct marketing. While each segment offers a similar mix of men's clothing to the retail customer, the full line stores also provide alterations. The accounting policies of the segments are the same as those described in the Company's February 3, 2001 Annual Report on Form 10-K. The Company evaluates performance of the segments based on "four wall" contribution which excludes any allocation of "management company" costs, distribution center costs (except order fulfillment costs which are allocated to catalog/internet), interest and income taxes. The Company's segments are strategic business units that offer similar products to the retail customer by two distinctively different methods. In full line stores the typical customer travels to the store and purchases men's clothing and/or alterations and takes their purchases with them. The catalog/internet direct marketing customer receives a catalog in his or her home, office and/or visits our web page via the internet and either calls, mails, faxes or places an order on-line. The merchandise is then shipped to the customer. The detail segment data is presented in the following table:
Quarter ended May 5, 2001 Full line Catalog/Internet (in thousands) Stores Direct Marketing Other Total ------ ---------------- ----- ----- Net sales $40,582 $ 5,333 $ 1,491(a) $47,406 Depreciation and amortization 791 15 283 1,089 Operating income (loss) (b) 5,823 338 (5,139) 1,022 Identifiable assets (c) 59,975 11,453 25,627 97,055 Capital Expenditures (d) 777 390 817 1,984 Quarter ended April 29, 2000 (in thousands) Net sales $39,469 $ 5,250 $ 1,689 (a) $46,408 Depreciation and amortization 772 5 238 1,015 Operating income (loss) (b) 6,564 754 (5,253) 2,065 Identifiable assets (c) 51,749 10,212 27,677 89,638 Capital Expenditures (d) 92 415 314 821
8 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 (a) Revenue from segments below the quantitative thresholds are attributable primarily to four operating segments of the Company. Those segments include factory stores, outlet stores, franchise and regional tailor shops. None of these segments has ever met any of the quantitative thresholds for determining reportable segments. (b) Operating income represents profit before allocations of overhead from corporate office and the distribution center, interest and income taxes. (c) Identifiable assets include cash, accounts receivable, inventories, prepaid expenses and fixed assets residing in or related to the reportable segments. Assets included in Other are primarily fixed assets associated with the corporate office and distribution center, deferred tax assets, and inventory which has not been assigned to one of the reportable segments. (d) Capital Expenditures include purchases of property, plant and equipment made for the reportable segment. 7. ONE-TIME CHARGE During the first quarter of fiscal 2001, the Company recorded a one-time charge of $.2 million. The one-time charge primarily represents professional fees incurred in the first quarter of 2001 in connection with a strategic action considered by the Board of Directors. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition The following discussion should be read in conjunction with the attached condensed consolidated financial statements and notes thereto and with the Company's audited financial statements and notes thereto for the fiscal year ended February 3, 2001. Overview - The results for the first quarter of 2001 halted the Company's - -------- streak of five consecutive quarters of improved earnings. The Company generated record earnings in the first quarter of 2000 and was unable to equal that performance in the first quarter of 2001. The Company generated recurring income of $.10 per share (excluding $.02 per share for one-time charges) in the first quarter of 2001 compared to $.16 per share in fiscal 2000. The key components of the first quarter 2001 results were a) an .8% decrease in comparable store sales, b) lower gross profit due to the Company's aggressive inventory management, c) lower general and administrative expenses, principally travel and incentive compensation, as the Company is restricting its overhead cost growth despite spending significant effort to support the planned opening of 10 new stores in the first half of 2001 and d) higher sales and marketing costs, primarily occupancy, payroll and advertising expenses for the 11 stores opened since the end of the first quarter of 2000 and higher catalog/internet advertising costs. The one-time charge primarily represents professional fees incurred in the first quarter 2001 in connection with a strategic action considered by the Company's Board of Directors. 9 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01
Percentage of Net Sales Three Months Ended ------------------ May 5, April 29, 2001 2000 ----- ----- Net Sales.................................................... 100.0% 100.0% Cost of goods sold........................................... 50.4 49.9 ----- ----- Gross profit................................................. 49.6 50.1 General and administrative expenses.......................... 9.6 10.5 Sales and marketing expenses................................. 37.2 35.2 Store opening costs.......................................... 0.1 -- One-time charge.............................................. 0.4 -- ----- ----- Operating income............................................. 2.2 4.4 Interest expense, net........................................ 0.5 0.6 ----- ----- Income from continuing operations before income taxes........ 1.7 3.8 Provision for income taxes................................... 0.6 1.5 ----- ----- Net income................................................... 1.1% 2.3% ===== =====
Net Sales - Net sales increased 2.1% or $1.0 million to $47.4 million in the - --------- first quarter of fiscal 2001 compared to $46.4 million in 2000. The sales increase was primarily related to sales from new stores, a 2% increase in combined catalog/internet sales and a .8% decrease in comparable stores sales. The Company's mix of sales shifted slightly as sportcoats, slacks and sportswear increased to 40% of sales in fiscal 2001 compared to 37% in fiscal 2000. The following table summarizes store opening and closing activity during the respective periods. For the Three Months Ended May 5, April 29, 2001 2000 ---- ---- Stores open at the beginning of the period 116 108 Opened 3 2 Closed 1 -- --- --- Stores open at the end of the period 118 110 === === Gross Profit - Gross profit (sales less cost of goods sold) increased only $.3 - ------------ million to $23.5 million in the first quarter of 2001 from $23.2 million in 2000, despite the $1.0 million sales increase. Gross profit as a percent of sales decreased to 49.6% in fiscal 2001 from 50.1% in 2000 as the Company was aggressive with its promotions in an effort to maintain appropriate inventory levels. General and Administrative Expenses - General and administrative expenses were - ----------------------------------- decreased $.3 million in the first quarter of 2001 compared to fiscal 2000 due primarily to a decrease in accrued incentive compensation expense and decreases in various other expenses including professional fees. 10 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 Sales and Marketing Expenses - Sales and marketing expenses increased $1.3 - ---------------------------- million to $17.6 million, or 37.2% of net sales, in the first quarter of fiscal 2001 from $16.3 million, or 38.1% in the first quarter of 2000. The increased sales and marketing expense primarily represents occupancy, payroll and advertising for the 11 new stores opened since the end of the first quarter of 2000 and higher catalog/internet advertising costs. The increased expense as a percentage of sales relates to decreased leverage of store expenses on the lower comparable store sales, lower catalog sales and the new stores that are in various stages of meeting mature store sales levels. Store Opening Costs - Store opening costs increased to $69 thousand during the - ------------------- first quarter of 2001 from $13 thousand in the prior year. The Company opened three new full-line stores in the first quarter of 2001 and opened two factory stores in the first quarter of 2000 for which the Company does not run an opening advertising campaign which it does for the opening of most full-line stores. Interest Expense - Interest expense decreased in the first quarter compared to - ---------------- the prior year due primarily to the lower average outstanding balance in the current year. One-Time Charge - The one-time charge primarily represents professional fees - --------------- incurred in the first quarter of 2001 in connection with a strategic action considered by the Board of Directors. Income Taxes - The first quarter of fiscal 2001 effective income tax rate is - ------------ 37.0% compared to 39.0% in fiscal 2001. The decrease resulted from lower effective state tax rates. Liquidity and Capital Resources - The Company has significant availability under - ------------------------------- its current borrowing agreement. At May 5, 2001 the Company had outstanding borrowings of $3.4 with $35.1 million of availability under its Credit Agreement compared to borrowings of $9.0 million and availability of $28.0 million at the end of the first quarter last year. The decrease in borrowing and increase in availability resulted primarily from the issuance of the $5.5 million real estate loan during the first quarter of fiscal 2001. The following table summarizes the Company's sources and uses of funds as reflected in the condensed consolidated statements of cash flows: Three Months Ended ------------------ May 5, April 29, 2001 2000 ---- ---- Cash provided by (used in): Operating activities $(7,645) $ 2,680 Investing activities (1,984) (821) Financing activities 7,024 (1,028) Discontinued operations -- (136) ------- ------- Net increase (decrease) in cash and cash equivalents $(2,605) $ 695 ======= ======= Cash used in operating activities was primarily due to increased inventory to support new store expansion partially offset by higher accounts payable. Cash used in investing activities primarily relates to the opening of new stores and upgrading the distribution center. Cash provided by financing activities is primarily from the issuance of the $5.5 million real estate loan. 11 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 The Company expects to spend between $14 million and $17 million on capital expenditures in fiscal 2001, primarily to open between 22 and 30 new stores, to relocate several stores and to install a new warehouse distribution system to accommodate future store growth. The capital expenditures will be financed through operations, the Credit Agreement and the Term Debt. The Company believes that its current liquidity, Credit Agreement and Term Loan will be adequate to support its current working capital and investment needs. The Company's plans and beliefs concerning future operations contained herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forecast due to a variety of factors that can adversely affect the Company's operating results, liquidity and financial condition such as risks associated with economic, weather and other factors affecting consumer spending, the ability of the Company to finance its expansion plans, mix of goods sold, pricing, availability of lease sites for new stores and other competitive factors. Many of the risks are described in the Company's reports filed with the Securities and Exchange Commission, which should be carefully reviewed before any investment decision. 12 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 PART II. OTHER INFORMATION Item 6. Exhibit - ---------------- Exhibit 10.16b - Second Amendment to Employment Agreement dated May 25, 2001 between Robert N. Wildrick and Jos. A. Bank Clothiers, Inc., filed herewith 13 Jos. A. Bank Clothiers, Inc. S.E.C. Form 10-Q, 5/5/01 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 19th, 2001 Jos. A. Bank Clothiers, Inc. (Registrant) /s/ David E. Ullman __________________________________ David E. Ullman Executive Vice President, Chief Financial Officer 14 EX-10.16 2 dex1016.txt EXHIBIT 10.16B EXHIBIT 10.16B SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ---------------------------------------- THIS SECOND AMENDMENT (this "Amendment"), made this 25th day of May, 2001, is made to that certain Employment Agreement by and between ROBERT N. WILDRICK ("Executive") and JOS. A. BANK CLOTHIERS, INC. ("Employer"), dated as of November 1, 1999, as amended by that certain First Amendment to Employment Agreement, dated March 6, 2000 (as so amended, the "Agreement"). WHEREAS, Executive and Employer are the sole parties to the Employment Agreement; and WHEREAS, Executive and Employer have agreed to amend the Employment Agreement, NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Executive and Employer hereby amend the Employment Agreement and agree as follows: 1. Section 2 of the Agreement is hereby amended by deleting from the third line thereof the date "February 2, 2002" and inserting in lieu thereof the date "January 29, 2005". 2. Section 3.2 of the Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: 3.2 Location of Executive Offices. The Company will maintain its principal ----------------------------- executive offices at a location in the Baltimore, Maryland metropolitan area and additional executive offices at a location in the Palm Beach, Florida metropolitan area. Executive may conduct the affairs of the Company from the Palm Beach office, subject to spending such amounts of his time as shall be reasonably necessary in the Baltimore Office. Executive shall not be required to perform services for the Company at a location other than the Baltimore office and the Palm Beach office, except for services rendered in connection with reasonably required travel on the Company's business. 3. Section 4.1 of the Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: 4.1 Base Salary. Employer shall pay to Executive during the Employment ----------- Period an annual base salary (the "Base Salary") in accordance with this Section 4.1. Subject to increases as set forth in the immediately following sentence, the Base Salary for the period from the Start Date through February 2, 2002 shall be $450,000 and the Base Salary for the period from February 3, 2002 through January 29, 2005 shall be $750,000. Beginning in Fiscal 2001, the Board shall increase the Base Salary at least once each fiscal year on the date on which general salary increases within the Company for such year take effect (the "Annual Increase Date"). The annual increase shall be in an amount not less than the percentage increase in the consumer price index over the most recently reported 12-month period. In the event the Board fails to so increase the Base Salary in any fiscal year by the Annual Increase Date, the Base Salary shall automatically be increased on such date by an amount equal to the percentage increase in the consumer price index over the most recently reported 12-month period. The Base Salary for each calendar year shall be payable in installments in accordance with the Company's policy on payment of executives in effect from time to time. 4. Effective for Fiscal 2002 (and for each fiscal year thereafter during the Employment Period), Section 4.2.A of the Agreement is hereby amended by: a. deleting from the third line thereof the number "100%" and inserting in lieu thereof the number "125%"; b. deleting from the fifth line thereof the word "Committee" and inserting in lieu thereof the phrase "Compensation Committee of the Board (the `Committee')"; and c. adding at the end thereof the following: "The Company and Executive acknowledge that the Company has in the past established additional bonus programs wherein participants' bonus rates are more or less than the otherwise applicable maximum bonus rate for such participants. For example, in Fiscal 2000 (during which Executive's bonus rate was 100% of Base Salary), the Company established three bonus programs- the "max" bonus program, wherein Executive's bonus rate was 50% of Base Salary; the "supermax" bonus program, wherein Executive's bonus rate was 100% of Base Salary; and the "turnaround" bonus program, wherein Executive's bonus rate was 200% of Base Salary. Without limiting the Executive's right to receive a Bonus as set forth in the first sentence of this Section 4.2.A, if and to the extent the Company shall establish additional bonus programs in the future, without obligating the Company to do so, Executive's bonus rate in such programs shall be proportionately increased or decreased based upon Executive's otherwise applicable bonus rate of 125%. For example, if Executive's contractual bonus rate in Fiscal 2000 had been 125%, his bonus rates for the three bonus programs then in effect would have been: 62.5% of Base Salary for the "max" program; 125% of Base Salary for the "supermax" program; and 250% of Base Salary for the "turnaround" program. 5. Section 4.3 of the Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: 4.3 Car and Club Allowance. Employer shall pay to Executive throughout the ---------------------- Employment Period a car and club allowance equal to $1,750 per month, which shall be in lieu of any expense reimbursement related to a car (purchased or leased) or a club. 6. Section 4.7 of the Agreement is hereby amended by inserting at the end thereof the following: Employer shall propose to the shareholders of the Company the creation of an additional option plan for at least 350,000 shares of the Company's common stock (the "Stock"). If the shareholders do not approve such proposal, Employee shall be entitled to terminate this Agreement as of February 2, 2002 by notice to the Company not later than August 3, 2001 and the Company shall pay to Mr. Wildrick severance in the amount of $900,000 pursuant to Section 6.4 hereof. Provided the shareholders approve such proposal, the Company will grant to Mr. Wildrick as of the date of shareholder approval an option to purchase 350,000 shares of the Stock as hereinafter set forth. The grant shall consist of a first tranche of 150,000 options, a second tranche of 100,000 options and a third tranche of 100,000 options (respectively, "Tranche One", "Tranche Two" and "Tranche Three"). The Tranche One options shall vest immediately upon issuance and shall be exercisable at a price equal to the closing price of the Stock on the date of grant. The Tranche Two options shall vest on February 2, 2003 and shall be exercisable at a price equal to the greater of the exercise price of the Tranche One options or $8.00 per share. The Tranche Three options shall vest on February 1, 2004 and shall be exercisable at a price equal to the greater of the exercise price of the Tranche One options or $9.00 per share. Options shall be exercisable not earlier than the date of vesting. If the parties fail to agree upon a renewal or extension of the Employment Period and the Employment 2 Period expires on its then stated expiration date, vested options may be not be exercised later than three months after the expiration of the Employment Period. Subject to the foregoing provisions, the agreement pursuant to which the options shall be granted shall be generally in the form of option agreement attached as an exhibit hereto. 7. Section 5.3 of the Agreement is hereby amended by deleting therefrom clause (z) and inserting in lieu thereof the following "(z) any transfer of the Company's principal or additional executive offices outside the respective geographic areas described in Section 3.2 of this Amendment or requirement that Executive principally perform his duties outside of the Palm Beach, Florida metropolitan area." 8. Section 6.1 of the Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: 6.1 Termination Without Cause by Employer or for Good Reason or ----------------------------------------------------------- Change of Control by Executive. If the Employment Period is terminated by ------------------------------ Executive at any time pursuant to the provisions of Section 5.4 hereof, Employer will pay to Executive on the last day of the Employment Period the sum of (a) $1,800,000, plus (b) if applicable, the Bonus for the last full Bonus Year pursuant to Section 4.2. If the Employment Period is terminated by Employer pursuant to the provisions of Section 5.1 hereof or by Executive pursuant to the provisions of Section 5.3 hereof, Employer will pay to Executive on the last day of the Employment Period the sum of (y) $1,500,000, plus (z) if applicable, the Bonus for the last full Bonus Year pursuant to Section 4.2. Employer shall have no obligation to continue any other benefits provided for in Section 4 past the date of termination. 9. Section 6.3 of the Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: 6.3 Termination for Cause Following a Change of Control. In the event --------------------------------------------------- Employer terminates the Employment Period for cause pursuant to Section 5.2 at any time within 90 days following a change in control of the Company, Employer shall pay to Executive on the last day of the Employment Period the sum of (a) $1,800,000, plus (b) if applicable, the Bonus for the last full Bonus Year pursuant to Section 4.2. Employer shall have no obligation to continue any other benefits provided for in Section 4 past the date of termination. 10. Section 6.4 of the Agreement is hereby amended by deleting therefrom the phrase "his then annual Base Salary plus his maximum Bonus for the year in which the termination occurs and" on the third and fourth lines of page 8 of the Agreement and inserting in lieu thereof the phrase "(a) $900,000 and (b)". Except as specifically amended hereby, the Employment Agreement shall remain in full force and effect according to its terms. To the extent of any conflict between the terms of this Amendment and the terms of the remainder of the Employment Agreement, the terms of this Amendment shall control and prevail. Capitalized terms used but not defined herein shall have those respective meanings attributed to them in the Employment Agreement. The word "Company" as used herein and in the Agreement shall mean and refer to "Jos. A. Bank Clothiers, Inc." and is used herein and in the 3 Agreement interchangeably with the word "Employer". This Amendment shall hereafter be deemed a part of the Employment Agreement for all purposes. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written. JOS. A. BANK CLOTHIERS, INC. By: /s/: Andrew A. Giordano /s/: Robert N. Wildrick ------------------------ ----------------------- Andrew A. Giordano, ROBERT N. WILDRICK Chairman of the Board 4 -----END PRIVACY-ENHANCED MESSAGE-----