-----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, GpennJeeM495x3Jy68VVaAziGbNXcOqEUAGYDyHdP0O/1F7Tsa5EicjCghJAcJZU QZld7waGc9OJJzT2EOjsSw== 0001127264-02-000146.txt : 20020930 0001127264-02-000146.hdr.sgml : 20020930 20020930150627 ACCESSION NUMBER: 0001127264-02-000146 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020930 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COLBERT DONALD W CENTRAL INDEX KEY: 0001179302 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: POST OFFICE BOX 31800 CITY: RICHMOND STATE: VA ZIP: 23294-1800 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: S&K FAMOUS BRANDS INC CENTRAL INDEX KEY: 0000723924 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-APPAREL & ACCESSORY STORES [5600] IRS NUMBER: 540845694 STATE OF INCORPORATION: VA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-35050 FILM NUMBER: 02776394 BUSINESS ADDRESS: STREET 1: 11100 W BROAD ST STREET 2: PO BOX 31800 CITY: RICHMOND STATE: VA ZIP: 23294-1800 BUSINESS PHONE: 8043462500 MAIL ADDRESS: STREET 1: P O BOX 31800 CITY: RICHMOND STATE: VA ZIP: 23294-1800 SC 13D 1 sk_13d.txt SCHEDULE 13D FOR DONALD W. COLBERT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 S & K FAMOUS BRANDS, INC. (Name of Issuer) Common Stock ------------ (Title of Class of Securities) 783774102 --------- (CUSIP Number) Donald W. Colbert c/o S & K Famous Brands, Inc. P. O. Box 31800 Richmond, VA 23294-1800 Tel. No.: (804) 346-2500 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 8, 1999 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 783774102 1. Name of Reporting Person Donald W. Colbert 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS (See instructions) SC, PF 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e) 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States 7. SOLE VOTING POWER NUMBER OF 136,220 (includes 65,940 shares which he has the right SHARES to acquire within 60 days) BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 0 EACH 9. SOLE DISPOSITIVE POWER REPORTING 136,220 (includes 65,940 shares which he has the right OFFICER to acquire within 60 days) 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 136,220 (includes 65,940 shares which he has the right to acquire within 60 days) 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3% 14. TYPE OF REPORTING PERSON (See Instructions) IN 2 ORIGINAL REPORT ON SCHEDULE 13D Item 1. Security and Issuer This statement relates to the common stock, par value $0.50 per share (the "Common Stock") of S & K Famous Brands, Inc. (the "Company"), a Virginia corporation, which has its principal executive offices at 11100 West Broad Street, P. O. Box 31800, Richmond, Virginia 23294-1800. Item 2. Identity and Background (a) This statement is being filed on behalf of Donald W. Colbert. (b) Mr. Colbert's business address is c/o S&K Famous Brands, Inc., 11100 West Broad Street, P. O. Box 31800, Richmond, VA 23294-1800 (c) Mr. Colbert is Vice Chairman and Chief Operating Officer of the Company which is a retail company engaged in the sale of men's tailored clothing, furnishings, sportswear and accessories through stores trading as S&K Famous Brand Menswear. (d) and (e) During the last five years, Mr. Colbert has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Colbert is a citizen of the United States of America. Item 3. Source and Amount of Funds or Other Considerations On March 8, 1999, Mr. Colbert purchased 48,058 shares of Common Stock at a market price of $8.53 per share utilizing a loan, in the principal amount of $409,995, awarded to him pursuant to the Company's 1995 Stock Purchase Loan Plan. Previously, on May 17, 1995, Mr. Colbert had acquired 53,142 shares of Common Stock at a market price of $7.00 per share utilizing a loan awarded under the same plan in the principal amount of $371,994. Mr. Colbert purchased his remaining holdings of Common Stock in the open market or by exercise of stock options granted to him by the Company, in each case utilizing his personal funds to pay the purchase price. Under the terms of the loan programs approved by the Compensation Committee of the Company's Board of Directors pursuant to the 1995 Stock Purchase Loan Plan, each of the loans made to a plan participant, including those made to Mr. Colbert, has a term of seven years but becomes due and payable up to one year following a termination of the participant's employment. The loans may be prepaid without penalty at any time and are subject to mandatory repayments equal to a specified percentage of any net annual cash bonus paid to him. The loans bear interest, compounded annually, at a rate equal to the Applicable Federal Rate rounded upward to the nearest 0.25% and adjusted annually. The loan is secured by a pledge to the Company of the shares of Common Stock acquired with the loan proceeds. The shares are subject to additional restrictions on transfer which lapse as to one-third of the shares on each of the second, third and fifth anniversaries of the date of the loan. These restrictions do not apply to certain transfers such as those to family members for tax or estate planning purposes. All or a portion of the interest accruing on the loans is subject to forgiveness based on the Company's achievement of performance goals established annually by the Compensation Committee. Up to 25% of the principal amount of the loans may be forgiven dependent upon the participant's continued employment with the Company through the seventh anniversary of the loan and retention of the shares acquired with the 3 loan proceeds. On March 26, 2002, the Company's Compensation Committee and Board of Directors approved amendments to the terms of the loans made in 1995 (i) to permit officers, including Mr. Colbert, to surrender shares of Common Stock to the Company in satisfaction of the loans and (ii) to extend the due date for payment of the loans to May 31, 2002. In May, 2002, Mr. Colbert repaid his 1995 loan in full. 65,940 shares are unexercised options granted under the Company's Stock Incentive Plan on or prior to September 19, 2000. Item 4. Purpose of Transaction Mr. Colbert has been the Vice Chairman of the Company since March 2002 and Chief Operating Officer and a Director of the Company since 1983. Mr. Colbert was President of the Company from 1983 through March 2002. As Vice Chairman and Chief Operating Officer, Mr. Colbert regularly explores actions and transactions that may be advantageous to the company, including but not limited to possible mergers, acquisitions, reorganizations or other material changes in the business, corporate structure, management, policies, governing instruments, capitalization, securities or regulatory or reporting obligations of S&K Famous Brands. Mr. Colbert has no current plans or proposals with respect to any of the items described in (a) through (j) of Item 4 and the ownership of his shares is held as an investment. Item 5. Interest in Securities of the Issuer (a) Mr. Colbert is the current beneficial owner of 136,220 shares (5.3%) of Common Stock, of which 65,940 shares of Common Stock are issuable upon exercise of options which are currently exercisable. Please see 5(c) below for further information regarding Mr. Colbert's ownership since March 8, 1999. (b) Of such 136,220 shares, Mr. Colbert is the direct beneficial owner and has sole voting and dispositive power. Please see 5(c) below for further information regarding Mr. Colbert's ownership since March 8, 1999. Mr. Colbert was the direct beneficial owner and had sole voting and dispositive power with respect to all of the shares held by him at any time since March 8, 1999. (c) The following is a list of Mr. Colbert's transactions in the Company's Common Stock during the period beginning 60 days prior to his becoming the beneficiary of more than 5% of the Common Stock to date. Number of Shares Beneficially Date of Event Number of Shares Owned after Percentage of or Acquired or Event or Outstanding Transaction Type of Event or Transaction Disposed of Price per Share Transaction Common Stock - --------------- ------------------------------- --------------------- --------------------- ---------------- ----------------- 1/16/99 Option Received March 17, 8,000 Acquired Option Exercise 229,242 4.6% 1997 becomes exercisable in Price $9.625 60 days 3/8/99 Open Market Purchase 48,058 Acquired $8.53125 per share 277,300 5.6% 4 Number of Shares Beneficially Date of Event Number of Shares Owned after Percentage of or Acquired or Event or Outstanding Transaction Type of Event or Transaction Disposed of Price per Share Transaction Common Stock - --------------- ------------------------------- --------------------- --------------------- ---------------- ----------------- 7/6/99 Option Received September 4, 4,600 Acquired Option Exercise 281,900 5.9% 1998 becomes exercisable in Price $11.9375 60 days 1/16/00 Option Received March 17, 8,000 Acquired Option Exercise 289,900 6.1% 1997 becomes exercisable in Price $9.625 60 days 7/6/00 Option Received September 4, 4,600 Acquired Option Exercise 294,500 6.2% 1998 becomes exercisable Price $11.9375 within 60 days 7/26/00 Option Received September 24, 5,140 Acquired Option Exercise 299,640 6.3% 1999 becomes exercisable Price $8.40625 within 60 days 7/6/01 Option Received September 4, 4,600 Acquired Option Exercise 304,240 7.3% 1998 becomes exercisable Price $11.9375 within 60 days 7/21/01 Option Received September 19, 4,060 Acquired Option Exercise 308,300 7.4% 2000 becomes exercisable Price $7.375 within 60 days 7/26/01 Option Received September 24, 5,140 Acquired Option Exercise 313,440 7.5% 1999 becomes exercisable Price $8.40625 within 60 days 8/24/01 Option Received August 24, 16,000 Disposed of 297,440 7.1% 1993 expires unexercised 4/15/02 Cashless Exercise of Options 80,200 Acquired Option Exercise 237,312 5.8% Received October 20, 1992, (and 60,128 Price $7.6875, August 25, 1994 and May 17, disposed of through $9.00 and $8.3125, 1995 cashless exercise) respectively (Sale price of $11.16 per share) 4/26/02 Sale to the Company in Tender 114,892 Disposed of $11.00 per share 122,420 4.8% Offer 7/6/02 Option Received September 4, 4,600 Acquired Option Exercise 127,020 4.9% 1998 becomes exercisable Price $11.9375 within 60 days 7/21/02 Option Received September 19, 4,060 Acquired Option Exercise 131,080 5.1% 2000 becomes exercisable Price $7.375 within 60 days 7/26/02 Option Received September 24, 5,140 Acquired Option Exercise 136,220 5.3% 1999 becomes exercisable Price $8.40625 within 60 days
5 (d) Not applicable. (e) On April 26, 2002, Mr. Colbert ceased to be a 5% beneficial owner. On July 21, 2002, Mr. Colbert again became a 5% beneficial owner. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer See Item 3 for a description of the Company's 1995 Stock Purchase Loan Plan. Item 7. Material to Be Filed as Exhibits 1. 1995 Stock Purchase Loan Plan (incorporated by reference to Exhibit A to S&K Famous Brands' definitive proxy statement for the 1995 Annual Meeting of Shareholders as filed with the Securities & Exchange Commission on April 14, 1995). 2. Loan and Stock Purchase Agreement between Donald W. Colbert and S&K Famous Brands, Inc. dated April 21, 1995 (filed herewith). 3. Loan and Stock Purchase Agreement between Donald W. Colbert and S&K Famous Brands, Inc. dated March 8, 1999 (filed herewith). 4. Promissory Note by Donald W. Colbert dated April 21, 1995 (filed herewith). 5. Promissory Note by Donald W. Colbert dated March 8, 1999 (filed herewith). Signature After reasonable inquiry and to the best of our knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: September 30, 2002 /s/ Donald W. Colbert --------------------- Name: Donald W. Colbert Title: Vice Chairman and Chief Operating Officer 6 EX-2 3 ex_2.txt LOAN AND STOCK PURCHASE AGREEMENT DATED APR. 21, 1995 Exhibit 2 LOAN AND STOCK PURCHASE AGREEMENT THIS LOAN AND STOCK PURCHASE AGREEMENT (as amended, supplemented or modified from time to time, the "Loan Agreement") is dated as of April 21, 1995 and is between Donald W. Colbert (the "Borrower") and S&K FAMOUS BRANDS, INC., a Virginia corporation (the "Company"). This Loan Agreement is made pursuant to the S&K Famous Brands, Inc. Stock Purchase Loan Plan (the "Plan"). All terms not otherwise defined herein shall have the meanings given such terms in the Plan. Accordingly, the parties hereto agree as follows: ARTICLE I PURCHASE AND LOAN TERMS Section 1.1. Purchase and Loan. (a) The Borrower agrees, on the terms and conditions set forth in this Loan Agreement, to purchase Company Stock as provided in his Election To Participate. The Loan is for the purpose of the Borrower acquiring shares of Company Stock (the "Shares"). (b) The Company agrees, on the terms and conditions set forth in this Loan Agreement, to make a loan (the "Loan") to the Borrower under the Plan. The loan shall be evidenced by, and repayable in accordance with, a single promissory note in the form of Exhibit A hereto and appropriately completed (the "Note"). (c) The Borrower's purchase of the Shares and the Company's making of the Loan shall be subject to the approval of the Plan by the Company's shareholders at the 1995 annual meeting of shareholders. If the Plan is so approved, the purchase of the Shares and the Loan shall be closed promptly thereafter effective as of the date of this Loan Agreement. If the Plan is not so approved, the transactions contemplated by this Loan Agreement shall be null and void. Section 1.2. Recourse Liability. The Company shall have full recourse against the Borrower on account of the Loan, and the Borrower shall have personal liability with respect to the obligation hereunder and with respect to the representations and warranties contained herein. Section 1.3 Restrictions on Resale or Transfer (a) The Borrower may not sell or otherwise transfer any of the Shares for two (2) years after the date of this Loan Agreement. After two (2) years from the date of this Loan Agreement, the Borrower may sell or transfer up to one-third of the Shares. After three (3) years from the date of this Loan Agreement, the Borrower may sell or transfer an additional one-third of the Shares. After five (5) years from the date of this Loan Agreement, the Borrower may sell or transfer the remaining one-third of the Shares. The restrictions on sale or transfer of the Shares in this Section 1.3(a) shall apply even if the Loan is repaid in full. (b) The restrictions on resale or transfer in Section 1.3(a) shall terminate if the Loan becomes due and payable in full for any reason, including on the death or termination of employment of the Borrower. (c) The restrictions on resale or transfer in Section 1.3(a) shall not apply and the Shares may be transferred by reason of (i) a transfer by will or the laws of descent and distribution, (ii) a transfer to the Participant's spouse of no more than one-half of the Shares pursuant to a domestic relations order issued by a court, or (iii) a transfer made for tax or estate planning purposes to members of the Borrower's immediate family or to partnerships or trusts whose sole beneficiaries are the Borrower and/or the Borrower's immediate family members, provided, however, that in the case of a 7 transfer described in this clause (iii), any subsequent disposition, grant of an option or creation or sufferance of a lien with respect to any of such Shares so transferred which is not described in clause (i), or (ii) shall be prohibited (each of the foregoing an "Exempt Transfer"). (d) Notwithstanding the other provisions of this Section 1.3, the Borrower may not sell or transfer any of the Shares that are then subject to the security interest provided under Article III. Section 1.4. Repayments From Bonus. A portion of any cash bonuses payable to the Borrower with respect to the Company's fiscal year ending January 27, 1996 or any later fiscal year shall be applied first to the payment of accrued interest and then to repayment of principal on the Note. The portion so applied shall be 25% of the bonus after reduction for any withholdings required by law. ARTICLE II FORGIVENESS OF INTEREST AND PRINCIPAL Section 2.1. Performance-Based Interest Forgiveness. All or a portion of the interest on the Loan may be forgiven by the Company upon achievement of the performance goals as established by the Committee pursuant to the Plan. The following procedures shall apply if the Committee determines to offer such forgiveness: (a) Within 90 days after the start of a Fiscal Year, the Committee shall select the Performance Criteria to be used and the extent to which each Performance Criteria shall be weighted. The Committee shall also establish the Performance Goals applicable to the Loan. The Committee may establish Performance Goals based on performance over multiple Fiscal Years. (b) The Committee shall determine the amount of interest that shall be forgiven depending upon whether, or the extent to which, the Performance Goals have been achieved. The Performance Criteria, their weighting, Performance Goals, potential interest and/or principal forgiveness that are established for a Loan shall be issued to the Borrower on a performance schedule. (c) At such times as required under a performance schedule, the Committee shall determine the achievement of the Performance Goals and the resulting amount of interest, if any, that shall be forgiven under the performance schedule. All determinations regarding the extent to which any Performance Goals have been achieved will be made by the Committee. (d) Except as specifically provided, the Borrower must be employed on the last day of the Fiscal Year to receive interest forgiveness for that year. If the Borrower terminates employment with the Company at or after his Normal Retirement Date, the Company shall forgive a percentage of the interest equal to the amount of interest to be forgiven based on performance in that Fiscal Year times a fraction, the numerator of which is the number of full months in the Fiscal Year before the Borrower's retirement and the denominator of which is 12. (e) If less than the amount of interest to be forgiven remains due on the Note, the Company shall forgive the remaining interest amount and pay the Borrower an amount equal to the amount of interest to be forgiven less the interest that is forgiven. 8 Section 2.2. Continuation of Employment. (a) If the Borrower is employed by the Company on the Final Payment Date (as defined in the Note), the Company shall forgive the payment of the Applicable Percentage (as defined below) of the original principal amount due under the terms of the Note. If the Borrower is employed by the Company on the Final Payment Date but there is less than the Applicable Percentage of the original principal amount remaining due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. (b) The Applicable Percentage is the percentage determined by the following formula: The number of Shares acquired with the Loan for which no 25% x Disposition Event has occurred as of the Final Payment Date -------------------------------------------------------- The original number of Shares acquired with the Loan A "Disposition Event" means any sale or other transfer of the Shares except for Exempt Transfers. Section 2.3. Disability. If the Borrower has a Disability and is employed by the Company immediately before he has a Disability, the Company shall forgive the payment of all interest accrued for the current Fiscal Year and all future interest due on the Note. The Company shall also forgive the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower has a Disability is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. Section 2.4. Death. If the Borrower dies while employed by the Company, the Company shall forgive the payment of all interest accrued for the current Fiscal Year and all future interest due on the Note. The Company shall also forgive the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower dies is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower's successor or estate an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower's successor or his estate shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. Section 2.5. Retirement. (a) If the Borrower terminates employment with the Company at or after his Normal Retirement Date, the Company shall forgive a percentage of the principal equal to the principal then outstanding times the following percentage: Months since Date of this Loan Agreement x Applicable Percentage ---------------------------------------- Total Months in term of the Note The Applicable Percentage shall be calculated as provided in Section 2.2, as if the date on which the Borrower retires is the Final Payment Date. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. (b) If the principal to be forgiven under subsection (a) is more than the remaining principal amount due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the amount to be forgiven under subsection (a) less the principal amount that is actually forgiven. 9 Section 2.6. Change of Control. If the Borrower's employment with the Company is terminated within two (2) years after a Change of Control occurs either (i) by the Company without Cause or (ii) by the Borrower with Good Reason, the Company shall forgive the payment of (x) all interest accrued for the current Fiscal Year and all future interest due and (y) the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower terminates employment is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note. Section 2.7. Termination of Employment. If the Borrower terminates employment with the Company other than as provided in Sections 2.2, 2.3, 2.4, 2.5, or 2.6, the Company shall not forgive any further amounts of interest or principal on the Loan and all payments shall be due and payable as provided in the Note. ARTICLE III THE SECURITY INTEREST Section 3.1. The Security Interest. The Borrower hereby pledges to the Company, and grants to the Company a security interest in the Shares and all cash, instruments and other property and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Shares. Section 3.2. Security for Obligations. This Loan Agreement secures the payment of all of the obligations under the Note. All certificates evidencing the Shares shall be delivered to and held by or on behalf of the Company pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignment in blank. Section 3.3. Termination of Security Interests; Release of Collateral. Upon the full, final and irrevocable payment and performance of the Note, the security interests in the Shares shall terminate and all rights to the Shares shall revert to the Borrower. Upon any such termination of the security interests, the Company will execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence the termination of the security interests or the release of the Shares. Any such documents shall be without recourse to or warranty by the Company. Section 3.4. Borrower Representations. The Borrower represents and warrants as follows: (a) This Loan Agreement constitutes a valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, except as (i) the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. (b) The Borrower owns all the Shares free and clear of any liens other than the security interests granted hereby. The Shares are subject to no lien, option to purchase or similar rights of any person. The Borrower is not and will not become a party to or otherwise bound by any agreement, other than this Loan Agreement, which restricts in any manner the rights of any present or future holder of any of the Shares with respect thereto. (c) The Borrower's financial information provided to the Company in connection with the Loan is true and accurate in all material respects. Section 3.5. Liens on Shares. The Borrower will not sell or otherwise dispose of, or grant any option with respect to, any of the Shares or create or suffer to exist any lien (other than security interests in favor of the Company) on any Shares until the payment of the Note in full. 10 Section 3.6. Release of Shares. Prior to the payment in full of the Note, the entire amount of any Shares released from the security interests shall be immediately sold by the Borrower. The entire proceeds of any sale of the Shares shall be applied first to the payment of accrued interest and then to principal. If the entire principal and accrued interest on the Loan is repaid, the provisions of Section 3.3(a) shall apply. ARTICLE IV DISTRIBUTIONS ON COLLATERAL; VOTING Section 4.1. Distributions on Shares; Voting. So long as no Event of Default shall have occurred and be continuing: (a) The Borrower shall be entitled to exercise any and all voting rights pertaining to the Shares or any part thereof. (b) The following items shall be treated as a prepayment of the Loan (except as provided in paragraph (d) below): (i) cash dividends, dividends paid or payable other than in cash, and instruments and other property distributed in respect of, or in exchange for, any Shares, (ii) dividends and other distributions paid or payable in cash in connection with a partial or total liquidation or dissolution or with a reduction of capital, capital surplus or paid-in-surplus, and (iii) cash paid in redemption of, or in exchange for, any Shares. (c) The Company shall execute and deliver (or cause to be executed and delivered) to the Borrower all such proxies, powers of attorney, consents, ratifications, waivers and other instruments, if any, as the Borrower may reasonably request to enable the Borrower to exercise the voting and other rights which he is entitled to exercise pursuant to paragraph (i) above. (d) Any stock that is received by the Borrower as a stock dividend, redemption or otherwise in respect to or exchange for the Shares shall be deemed to be Shares subject to Article III of this Loan Agreement. Section 4.2. Events of Default. (a) For purposes of this Loan Agreement, each of the following events shall constitute an Event of Default: (i) any violation of Section 1.3 of this Loan Agreement; (ii) the creation or sufferance of a lien on the Shares, provided that the creation of an involuntary lien shall not be an Event of Default if the lien is released within ninety (90) days following the date the Borrower becomes aware of such lien, (iii) the Borrower shall be in default under the terms of the Note, (iv) the Borrower shall fail to observe or perform any covenant or agreement contained in this Loan Agreement for ten (10) days after written notice thereof has been given to the Borrower by the Company, or 11 (v) any representation, warranty, certification or statement made by the Borrower in this Loan Agreement shall prove to have been incorrect in any material respect when made. (b) Upon the occurrence of an Event of Default, the Company shall have the rights and remedies set forth in the Note. The rights and remedies provided herein and in the Note shall be cumulative and not exclusive of any rights or remedies provided by law. ARTICLE V MISCELLANEOUS Section 5.1 Miscellaneous (a) No failure or delay by the Company in exercising any right, power or privilege under this Loan Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. (b) This Loan Agreement may be amended only in a writing signed by the Borrower and the Company. Any waiver must be in a writing signed by the waiving party. (c) The provisions of this Loan Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Loan Agreement is for the benefit of the Company and its successors and assigns. This Loan Agreement shall not be transferable by the Borrower except by will or by the laws of descent and distribution. (d) If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Company in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. Section 5.2 Governing Law. This Loan Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without application of Virginia conflict of law rules. IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of the day and year first above written. BORROWER /s/ Donald W. Colbert ------------------------------------- (Signature) Print Name: Donald W. Colbert Title: President S&K FAMOUS BRANDS, INC. By: /s/ Stuart C. Siegel ------------------------- Title: Chairman 12 EX-3 4 ex_3.txt LOAN AND STOCK PURCHASE AGREEMENT DATED MAR. 8, 1999 Exhibit 3 LOAN AND STOCK PURCHASE AGREEMENT THIS LOAN AND STOCK PURCHASE AGREEMENT (as amended, supplemented or modified from time to time, the "Loan Agreement") is dated as of March 8, 1999 and is between Donald W. Colbert (the "Borrower") and S&K FAMOUS BRANDS, INC., a Virginia corporation (the "Company"). This Loan Agreement is made pursuant to the S&K Famous Brands, Inc. Stock Purchase Loan Plan (the "Plan"). All terms not otherwise defined herein shall have the meanings given such terms in the Plan. Accordingly, the parties hereto agree as follows: ARTICLE I PURCHASE AND LOAN TERMS Section 1.1 Purchase and Loan. (a) The Borrower agrees, on the terms and conditions set forth in this Loan Agreement, to purchase Company Stock as provided in his Election To Participate. The Loan is for the purpose of the Borrower acquiring shares of Company Stock (the "Shares"). (b) The Company agrees, on the terms and conditions set forth in this Loan Agreement, to make a loan (the "Loan") to the Borrower under the Plan. The loan shall be evidenced by, and repayable in accordance with, a single promissory note in the form of Exhibit A hereto and appropriately completed (the "Note"). Section 1.2. Recourse Liability. The Company shall have full recourse against the Borrower on account of the Loan, and the Borrower shall have personal liability with respect to the obligation hereunder and with respect to the representations and warranties contained herein. Section 1.3. Restrictions on Resale or Transfer. (a) The Borrower may not sell or otherwise transfer any of the Shares for two (2) years after the date of this Loan Agreement. After two (2) years from the date of this Loan Agreement, the Borrower may sell or transfer up to one-third of the Shares. After three (3) years from the date of this Loan Agreement, the Borrower may sell or transfer an additional one-third of the Shares. After five (5) years from the date of this Loan Agreement, the Borrower may sell or transfer the remaining one-third of the Shares. The restrictions on sale or transfer of the Shares in this Section 1.3(a) shall apply even if the Loan is repaid in full. (b) The restrictions on resale or transfer in Section 1.3(a) shall terminate if the Loan becomes due and payable in full for any reason, including on the death or termination of employment of the Borrower. (c) The restrictions on resale or transfer in Section 1.3(a) shall not apply and the Shares may be transferred by reason of (i) a transfer by will or the laws of descent and distribution, (ii) a transfer to the Participant's spouse of no more than one-half of the Shares pursuant to a domestic relations order issued by a court, or (iii) a transfer made for tax or estate planning purposes to members of the Borrower's immediate family or to partnerships or trusts whose sole beneficiaries are the Borrower and/or the Borrower's immediate family members, provided, however, that in the case of a transfer described in this clause (iii), any subsequent disposition, grant of an option or creation or sufferance of a lien with respect to any of such Shares so transferred which is not described in clause (i), or (ii) shall be prohibited (each of the foregoing an "Exempt Transfer"). (d) Notwithstanding the other provisions of this Section 1.3, the Borrower may not sell or transfer any of the Shares that are then subject to the security interest provided under Article III. 13 Section 1.4. Repayments From Bonus. A portion of any cash bonuses payable to the Borrower with respect to the Company's fiscal year ending January 29, 2000 or any later fiscal year shall be applied first to the payment of accrued interest and then to repayment of principal on the Note and, if applicable, the Borrower's note evidencing an existing loan under the previous loan program implemented under the Plan in 1995. Such payment will be allocated proportionately between the two notes based on the respective amounts of accrued but unpaid interest and the principal balance of each. The portion so applied shall be 25% of the bonus after reduction for any withholdings required by law. The note and loan and stock purchase agreement relating to the Borrower's loan under the 1995 loan program are hereby amended to the extent necessary to reflect the allocation of payments required under this Section. ARTICLE II FORGIVENESS OF INTEREST AND PRINCIPAL Section 2.1. Performance-Based Interest Forgiveness. All or a portion of the interest on the Loan may be forgiven by the Company upon achievement of the performance goals as established by the Committee pursuant to the Plan. The following procedures shall apply if the Committee determines to offer such forgiveness: (a) Within 90 days after the start of a Fiscal Year, the Committee shall select the Performance Criteria to be used and the extent to which each Performance Criteria shall be weighted. The Committee shall also establish the Performance Goals applicable to the Loan. The Committee may establish Performance Goals based on performance over multiple Fiscal Years. (b) The Committee shall determine the amount of interest that shall be forgiven depending upon whether, or the extent to which, the Performance Goals have been achieved. The Performance Criteria, their weighting, Performance Goals, potential interest and/or principal forgiveness that are established for a Loan shall be issued to the Borrower on a performance schedule. (c) At such times as required under a performance schedule, the Committee shall determine the achievement of the Performance Goals and the resulting amount of interest, if any, that shall be forgiven under the performance schedule. All determinations regarding the extent to which any Performance Goals have been achieved will be made by the Committee. (d) Except as specifically provided, the Borrower must be employed on the last day of the Fiscal Year to receive interest forgiveness for that year. If the Borrower terminates employment with the Company at or after his Normal Retirement Date, the Company shall forgive a percentage of the interest equal to the amount of interest to be forgiven based on performance in that Fiscal Year times a fraction, the numerator of which is the number of full months in the Fiscal Year before the Borrower's retirement and the denominator of which is 12. (e) If less than the amount of interest to be forgiven remains due on the Note, the Company shall forgive the remaining interest amount and pay the Borrower an amount equal to the amount of interest to be forgiven less the interest that is forgiven. Section 2.2. Continuation of Employment. (a) If the Borrower is employed by the Company on the Final Payment Date (as defined in the Note), the Company shall forgive the payment of the Applicable Percentage (as defined below) of the original principal amount due under the terms of the Note. If the Borrower is employed by the Company on the Final Payment Date but there is less than the Applicable Percentage of the original principal amount remaining due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. 14 (b) The Applicable Percentage is the percentage determined by the following formula: The number of Shares acquired with the Loan for which no 25% x Disposition Event has occurred as of the Final Payment Date -------------------------------------------------------- The original number of Shares acquired with the Loan A "Disposition Event" means any sale or other transfer of the Shares except for Exempt Transfers. Section 2.3. Disability. If the Borrower has a Disability and is employed by the Company immediately before he has a Disability, the Company shall forgive the payment of all interest accrued for the current Fiscal Year and all future interest due on the Note. The Company shall also forgive the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower has a Disability is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. Section 2.4. Death. If the Borrower dies while employed by the Company, the Company shall forgive the payment of all interest accrued for the current Fiscal Year and all future interest due on the Note. The Company shall also forgive the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower dies is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower's successor or estate an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower's successor or his estate shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. Section 2.5. Retirement. (a) If the Borrower terminates employment with the Company at or after his Normal Retirement Date, the Company shall forgive a percentage of the principal equal to the principal then outstanding times the following percentage: Months since Date of this Loan Agreement x Applicable Percentage ---------------------------------------- Total Months in term of the Note The Applicable Percentage shall be calculated as provided in Section 2.2, as if the date on which the Borrower retires is the Final Payment Date. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note according to its terms. (b) If the principal to be forgiven under subsection (a) is more than the remaining principal amount due on the Note, the Company shall forgive the remaining principal amount and pay the Borrower an amount equal to the amount to be forgiven under subsection (a) less the principal amount that is actually forgiven. Section 2.6. Change of Control. If the Borrower's employment with the Company is terminated within two (2) years after a Change of Control occurs either (i) by the Company without Cause or (ii) by the Borrower with Good Reason, the Company shall forgive the payment of (x) all interest accrued for the current Fiscal Year and all future interest due and (y) the Applicable Percentage of the principal due on the Note as provided in Section 2.2, calculated as if the date on which the Borrower terminates employment is the Final Payment Date. If less than the Applicable Percentage of the original principal amount remains due on the Note, the Company shall forgive the 15 remaining principal amount and pay the Borrower an amount equal to the Applicable Percentage of the original principal amount less the principal amount that is forgiven. The Borrower shall remain liable for payment of any remaining principal and accrued interest due on the Note. Section 2.7. Termination of Employment. If the Borrower terminates employment with the Company other than as provided in Sections 2.2, 2.3, 2.4, 2.5, or 2.6, the Company shall not forgive any further amounts of interest or principal on the Loan and all payments shall be due and payable as provided in the Note. ARTICLE III THE SECURITY INTEREST Section 3.1. The Security Interest. The Borrower hereby pledges to the Company, and grants to the Company a security interest in the Shares and all cash, instruments and other property and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of the Shares. Section 3.2. Security for Obligations. This Loan Agreement secures the payment of all of the obligations under the Note. All certificates evidencing the Shares shall be delivered to and held by or on behalf of the Company pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignment in blank. Section 3.3. Termination of Security Interests; Release of Collateral. Upon the full, final and irrevocable payment and performance of the Note, the security interests in the Shares shall terminate and all rights to the Shares shall revert to the Borrower. Upon any such termination of the security interests, the Company will execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence the termination of the security interests or the release of the Shares. Any such documents shall be without recourse to or warranty by the Company. Section 3.4. Borrower Representations. The Borrower represents and warrants as follows: (a) This Loan Agreement constitutes a valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, except as (i) the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. (b) The Borrower owns all the Shares free and clear of any liens other than the security interests granted hereby. The Shares are subject to no lien, option to purchase or similar rights of any person. The Borrower is not and will not become a party to or otherwise bound by any agreement, other than this Loan Agreement, which restricts in any manner the rights of any present or future holder of any of the Shares with respect thereto. (c) The Borrower's financial information provided to the Company in connection with the Loan is true and accurate in all material respects. Section 3.5. Liens on Shares. The Borrower will not sell or otherwise dispose of, or grant any option with respect to, any of the Shares or create or suffer to exist any lien (other than security interests in favor of the Company) on any Shares until the payment of the Note in full. Section 3.6. Release of Shares. Prior to the payment in full of the Note, the entire amount of any Shares released from the security interests shall be immediately sold by the Borrower. The entire proceeds of any sale of the Shares shall be applied first to the payment of accrued interest and then to principal. If the entire principal and accrued interest on the Loan is repaid, the provisions of Section 3.3(a) shall apply. 16 ARTICLE IV DISTRIBUTIONS ON COLLATERAL; VOTING Section 4.1. Distributions on Shares; Voting. So long as no Event of Default shall have occurred and be continuing: (a) The Borrower shall be entitled to exercise any and all voting rights pertaining to the Shares or any part thereof. (b) The following items shall be treated as a prepayment of the Loan (except as provided in paragraph (d) below): (i) cash dividends, dividends paid or payable other than in cash, and instruments and other property distributed in respect of, or in exchange for, any Shares, (ii) dividends and other distributions paid or payable in cash in connection with a partial or total liquidation or dissolution or with a reduction of capital, capital surplus or paid-in-surplus, and (iii) cash paid in redemption of, or in exchange for, any Shares. (c) The Company shall execute and deliver (or cause to be executed and delivered) to the Borrower all such proxies, powers of attorney, consents, ratifications, waivers and other instruments, if any, as the Borrower may reasonably request to enable the Borrower to exercise the voting and other rights which he is entitled to exercise pursuant to paragraph (i) above. (d) Any stock that is received by the Borrower as a stock dividend, redemption or otherwise in respect to or exchange for the Shares shall be deemed to be Shares subject to Article III of this Loan Agreement. Section 4.2 Events of Default. (a) For purposes of this Loan Agreement, each of the following events shall constitute an Event of Default: (i) any violation of Section 1.3 of this Loan Agreement; (ii) the creation or sufferance of a lien on the Shares, provided that the creation of an involuntary lien shall not be an Event of Default if the lien is released within ninety (90) days following the date the Borrower becomes aware of such lien, (iii) the Borrower shall be in default under the terms of the Note, (iv) the Borrower shall fail to observe or perform any covenant or agreement contained in this Loan Agreement for ten (10) days after written notice thereof has been given to the Borrower by the Company, or (v) any representation, warranty, certification or statement made by the Borrower in this Loan Agreement shall prove to have been incorrect in any material respect when made. (b) Upon the occurrence of an Event of Default, the Company shall have the rights and remedies set forth in the Note. The rights and remedies provided herein and in the Note shall be cumulative and not exclusive of any rights or remedies provided by law. 17 ARTICLE V MISCELLANEOUS Section 5.1 Miscellaneous. (a) No failure or delay by the Company in exercising any right, power or privilege under this Loan Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. (b) This Loan Agreement may be amended only in a writing signed by the Borrower and the Company. Any waiver must be in a writing signed by the waiving party. (c) The provisions of this Loan Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Loan Agreement is for the benefit of the Company and its successors and assigns. This Loan Agreement shall not be transferable by the Borrower except by will or by the laws of descent and distribution. (d) If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Company in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. Section 5.2 Governing Law. This Loan Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without application of Virginia conflict of law rules. IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of the day and year first above written. BORROWER /s/ Donald W. Colbert ---------------------------------- (Signature) Print Name: Donald W. Colbert Title: President S&K FAMOUS BRANDS, INC. By /s/ Robert E. Knowles ---------------------------- Title: Executive Vice President 18 EX-4 5 ex_4.txt PROMISSORY NOTE DATED APR. 21, 1995 Exhibit 4 PROMISSORY NOTE ************** $372,000 April 21, 1995 - -------- FOR VALUE RECEIVED, the maker, Donald W. Colbert, promises to pay to S&K Famous Brands, Inc. (the "Company"), the principal sum of three hundred and seventy-two thousand dollars ($372,000) plus interest, compounded annually, from the date hereof until this Note is paid in full at a rate per annum equal to the Applicable Federal Rate rounded upward to the nearest 0.25%. The initial interest rate is 7.50%. The interest rate shall be adjusted automatically on and as of each anniversary of the date of this Note to a rate per annum equal to the Applicable Federal Rate in effect at the time of adjustment rounded upward to the nearest 0.25%. Interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and shall be paid for the actual number of days elapsed (including the first day but excluding the last day). If not sooner paid, the principal and any accrued but unpaid interest shall be due and payable on April 21, 2002 (the "Final Payment Date"). This Note is payable at the corporate offices of the Company at 11100 West Broad Street, Richmond, Virginia or at such other place as the Company may designate in writing from time to time. This Note is issued pursuant to the S&K Famous Brands, Inc. Stock Purchase Loan Plan (the "Plan") and a Loan and Stock Purchase Agreement between the Company and maker (the "Loan Agreement"). All terms not otherwise defined herein shall have the meanings given such terms in the Plan and the Loan Agreement. Mandatory Payments. Mandatory payments shall be made in amounts equal to 25% of any net annual cash bonus (i.e., annual cash bonus reduced by any withholdings required by law) paid to the maker with respect to performance or services rendered during the fiscal year ending January 27, 1996 or subsequent fiscal years. Mandatory payments shall be due on the date(s) such bonuses are paid and shall be applied first to the payment of accrued but unpaid interest and then to the repayment of principal. Optional Prepayments. The right of prepayment is reserved, in whole or in part, at any time without penalty. Optional prepayments shall be applied first to the payment of accrued but unpaid interest and then to the repayment of principal. Termination of Employment. (a) In the event of the maker's death, Disability or Retirement or if the maker's employment with the Company is terminated within two (2) years after a Change of Control either (i) by the Company without Cause or (ii) by the maker with Good Reason, the entire unpaid principal balance of this Note and any accrued but unpaid interest shall become due and payable on the first anniversary of such event or termination. (b) In the event of any termination of maker's employment with the Company not covered by subparagraph (a) above, the entire unpaid principal balance of this Note and any accrued but unpaid interest shall become due and payable ninety (90) days following the date of termination. Interest and Principal Forgiveness. The interest and principal of this Note may be subject to forgiveness in accordance with the terms of the Loan Agreement. Default. If any payment due hereunder is not made within ten (10) calendar days following the date on which such payment was due, or if the maker is declared or adjudicated to be bankrupt by a United States Bankruptcy Court, the maker shall be in default hereunder. Upon the occurrence of a default under this Note or the Loan Agreement, the entire unpaid principal balance of this Note and all accrued but unpaid interest, if any, shall, at the option of the 19 holder, immediately become due and payable. Upon the occurrence of a default, any overdue principal and, to the extent permitted by law, overdue interest on this Note shall bear interest, payable on demand, for each day until paid, at a rate per annum equal to the sum of 3.00% plus the otherwise applicable rate for such day. The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided by law. Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Company in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. No Waivers. No failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Miscellaneous. Presentment, demand, protest, and notices of dishonor and of protest are hereby waived by the maker to the extent permitted by law. The maker agrees to pay, to the extent permitted by law, all expenses incurred in collecting this obligation, including reasonable attorney's fees, should this obligation or any part thereof not be paid as and when due. Governing Law. This Note shall be governed by, and construed in accordance with, the substantive laws of the Commonwealth of Virginia, without application of Virginia conflict of law rules. Donald W. Colbert /s/ Donald W. Colbert --------------------- (Signature) President --------- (Title) 20 EX-5 6 ex_5.txt PROMISSORY NOTE DATED MAR. 8, 1999 EXHIBIT 5 PROMISSORY NOTE ************** $409,994.81 March 8, 1999 FOR VALUE RECEIVED, the maker, Donald W. Colbert, promises to pay to S&K Famous Brands, Inc. (the "Company"), the principal sum of four hundred nine thousand nine hundred ninety-four and 81/100 dollars ($409,994.81) plus interest, compounded annually, from the date hereof until this Note is paid in full at a rate per annum equal to the Applicable Federal Rate rounded upward to the nearest 0.25%. The initial interest rate is 4.75%. The interest rate shall be adjusted automatically on and as of each anniversary of the date of this Note to a rate per annum equal to the Applicable Federal Rate in effect at the time of adjustment rounded upward to the nearest 0.25%. Interest shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and shall be paid for the actual number of days elapsed (including the first day but excluding the last day). If not sooner paid, the principal and any accrued but unpaid interest shall be due and payable on March 9, 2006 (the "Final Payment Date"). This Note is payable at the corporate offices of the Company at 11100 West Broad Street, Richmond, Virginia or at such other place as the Company may designate in writing from time to time. This Note is issued pursuant to the S&K Famous Brands, Inc. Stock Purchase Loan Plan (the "Plan") and a Loan and Stock Purchase Agreement between the Company and maker (the "Loan Agreement"). All terms not otherwise defined herein shall have the meanings given such terms in the Plan and the Loan Agreement. Mandatory Payments. Mandatory payments on this Note and, if applicable, any prior note of the maker issued under the Plan shall be made in an aggregate amount equal to 25% of any net annual cash bonus (i.e., annual cash bonus reduced by any withholdings required by law) paid to the maker with respect to performance or services rendered during the fiscal year ending January 29, 2000 or subsequent fiscal years. Mandatory payments shall be due on the date(s) such bonuses are paid, shall be applied first to the payment of accrued but unpaid interest and then to the repayment of principal and will be allocated proportionately between this Note and any such prior note of the maker based on the respective amounts of accrued but unpaid interest and the principal balance of each. Optional Prepayments. The right of prepayment is reserved, in whole or in part, at any time without penalty. Optional prepayments shall be applied first to the payment of accrued but unpaid interest and then to the repayment of principal. Termination of Employment. (a) In the event of the maker's death, Disability or Retirement or if the maker's employment with the Company is terminated within two (2) years after a Change of Control either (i) by the Company without Cause or (ii) by the maker with Good Reason, the entire unpaid principal balance of this Note and any accrued but unpaid interest shall become due and payable on the first anniversary of such event or termination. (b) In the event of any termination of maker's employment with the Company not covered by subparagraph (a) above, the entire unpaid principal balance of this Note and any accrued but unpaid interest shall become due and payable ninety (90) days following the date of termination. Interest and Principal Forgiveness. The interest and principal of this Note may be subject to forgiveness in accordance with the terms of the Loan Agreement. 21 Default. If any payment due hereunder is not made within ten (10) calendar days following the date on which such payment was due, or if the maker is declared or adjudicated to be bankrupt by a United States Bankruptcy Court, the maker shall be in default hereunder. Upon the occurrence of a default under this Note or the Loan Agreement, the entire unpaid principal balance of this Note and all accrued but unpaid interest, if any, shall, at the option of the holder, immediately become due and payable. Upon the occurrence of a default, any overdue principal and, to the extent permitted by law, overdue interest on this Note shall bear interest, payable on demand, for each day until paid, at a rate per annum equal to the sum of 3.00% plus the otherwise applicable rate for such day. The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided by law. Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Company in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. No Waivers. No failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Miscellaneous. Presentment, demand, protest, and notices of dishonor and of protest are hereby waived by the maker to the extent permitted by law. The maker agrees to pay, to the extent permitted by law, all expenses incurred in collecting this obligation, including reasonable attorney's fees, should this obligation or any part thereof not be paid as and when due. Governing Law. This Note shall be governed by, and construed in accordance with, the substantive laws of the Commonwealth of Virginia, without application of Virginia conflict of law rules. Donald W. Colbert ----------------- (Printed Name) /s/ Donald W. Colbert -------------------------- (Signature) President --------- (Title) 22 -----END PRIVACY-ENHANCED MESSAGE-----