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EXHIBIT 10(a)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of June 25, 2001, between XXXXXXXX
STORES INC., a Michigan corporation, of Jackson, Michigan (the "Company"), and
XXXXX XXXXXXXX, of Birmingham, Alabama ("Officer").
THE PARTIES HEREBY AGREE as follows:
1. EMPLOYMENT AND TERM. The Company employs Officer as President and
Chief Executive Officer, and Officer agrees to serve in that capacity and in
such other consistent capacities as the Board of Directors of the Company deems
advisable, for a term commencing June 25, 2001 and continuing through June 30,
2004, unless terminated sooner pursuant to the provisions of paragraph 5, for
the compensation and on the terms set forth herein. The term shall automatically
be extended for one additional year each July 1, beginning July 1, 2002, unless
either party gives the other party notice before July 1 that the term shall not
be extended and unless terminated sooner pursuant to the provisions of paragraph
5. For example, if one party gives notice on June 30, 2002 that the term will
not be extended, the term will end on June 30, 2004, unless terminated sooner
pursuant to the provisions of paragraph 5. In addition, the Company will cause
its Board of Directors to increase its size by one member and appoint Officer to
fill the newly-created vacancy, all effective as of June 25, 2001, and during
the term of Officer's employment under this Agreement, the Company will nominate
Officer as a director of the Company at any meeting of shareholders at which
Officer's term as a director expires.
2. COMPENSATION.
(a) Salary. Subject to the provisions of paragraph 5, Officer's
salary shall initially be Five Hundred Thousand Dollars ($500,000.00) per year.
The Company's Board of Directors and/or its Compensation Committee shall review
Officer's salary annually during the term of this Agreement, but shall not
decrease Officer's salary.
(b) Stock Option. Effective June 25, 2001, the Company will grant
Officer a ten-year, nonstatutory option to purchase 250,000 of the Company's
Common Shares, par value $1.00 a share, exercisable at the fair market value of
the Common Shares at the close of business on June 25, 2001 (the "Option"). The
Option shall vest as to 75,000 shares on June 25, 2001, 75,000 shares on June
25, 2002 and 100,000 shares on June 25, 2003. Notwithstanding the foregoing, the
Option shall become immediately exercisable to purchase all of the Common Shares
subject to the Option, to the extent not already purchased, 30 days before
termination of Officer's employment (1) by the Company without Cause, or (2) by
Officer for Good Reason, pursuant to Section 5(d). The parties acknowledge that
Officer has not previously been employed by the Company, and that the Option is
an inducement essential to Officer's entering into this Agreement.
(c) Relocation Benefits. On or before the first regular payroll
date after June 25, 2001, the Company shall pay $75,000 to Officer to pay for
relocation costs, including, without limitation, temporary housing, travel,
moving, house sale and purchase and closing costs. The Company's payment of
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$75,000 shall be the Company's sole obligation for these costs, even if they
exceed $75,000.
(d) Automobile. During the term of Officer's employment under this
Agreement, the Company will provide Officer with a Buick Park Avenue or other
automobile of similar value obtainable under the Company's fleet lease program;
provided, that (1) Officer may, instead, have the Company lease a different
automobile obtainable under the Company's fleet lease program if Officer
reimburses the Company for its increased lease and other costs for such
automobile on or before the date the Company is obligated to pay such costs, or
(2) Officer may, instead, obtain her own automobile and receive cash payments
from the Company equal to the Company's lease and other costs of a Buick Park
Avenue under the Company's fleet lease program at the times the Company would
otherwise pay such costs.
(e) Attorneys' Fees. The Company shall reimburse Xx. Xxxxxxxx for
her reasonable attorneys' fees incurred in connection with negotiating and
drafting this Agreement, up to a maximum of $5,000.
(f) Fringe Benefits. Officer shall also participate in such plans
and additional benefits as may generally be available from time to time to other
executive officers of the Company.
3. DEFERRED COMPENSATION. Officer may, at her election made annually
during the term of this Agreement, determine that payment of any part of
Officer's salary for any year shall be deferred pursuant to, and on the terms
and conditions set forth in, the Xxxxxxxx Stores Inc. Deferred Compensation
Plan, as amended from time to time. If any part of Officer's salary for a year
is deferred, one-twelfth of such amount shall be deferred each month during the
year. Interest shall accrue on deferred compensation from the last day of the
month for which the compensation is deferred. Neither Officer, her estate, her
husband, nor any beneficiary shall have any power to assign or encumber the
right to receive deferred compensation, and any attempted assignment or
encumbrance thereof shall be null and void.
4. DUTIES. Officer agrees, as long as her employment by the Company
continues, to devote substantially all of her business time and to devote her
best efforts to furthering the interests of the Company; to comply with all
regulations and policies of the Company; and to perform the duties reasonably
requested by the Board of Directors of the Company consistent with her position
as President and Chief Executive Officer of the Company. The Company and Officer
agree that Officer may serve on other Boards of Directors and engage in
charitable activities to the extent such service and activities do not interfere
with her duties to the Company.
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5. TERMINATION. Officer's employment under this Agreement shall
terminate on the earliest to occur of the following: (i) immediately upon
Officer's death, (ii) at the Company's option, immediately when notice to
Officer of such termination is given after Officer's "Disability" (as defined
below), (iii) at the Company's option, immediately when notice to Officer of
such termination is given on or after the occurrence of "Cause" (as defined
below) for termination of her employment under this Agreement, (iv) immediately
upon Officer's resignation for Good Reason (as defined in paragraph 5(e)(viii),
(v) not less than 30 days after notice of such termination is given to Officer
by the Company or not less than 30 days after notice of such termination is
given to the Company by Officer (unless the Company elects to have such
termination occur earlier), and (vi) the end of the term as described in
paragraph 1. "Disability" means (1) if Officer is covered by a Company-provided
disability insurance policy, the definition of disability contained in, and
entitling Officer to benefits under, that policy, or (2) if Officer is not
covered by such a policy, Officer's inability, whether physical or mental, to
perform the normal duties of Officer's position for six consecutive months.
"Cause" means (1) Officer's continued failure either to (A) devote substantially
all of her business time to Officer's employment duties (except because of
Officer's illness or Disability) or (B) make a good faith effort to perform
Officer's employment duties; (2) any other willful act or omission which Officer
knew, or had reason to know, would materially injure the Entity; (3) any breach
by Officer of the provisions of paragraph 7, or (4) Officer's conviction of a
felony involving dishonesty or fraud. Notice will be deemed to be given on the
earliest of (i) when delivered, or (ii) three business days after mailed by
certified or registered mail, postage prepaid, return receipt requested, or
(iii) one business day after sent by recognized overnight courier, if to
Officer, to Officer's address on the Company's corporate records, and if to the
Company, to the address of its principal executive offices. The following events
during the term of this Agreement shall have the following respective effects on
the obligations of the Company pursuant hereto:
(a) DEATH. If employment is terminated due to Officer's death, the
Company shall (i) continue to pay an amount equal to Officer's salary, at the
annual rate of her salary in effect immediately prior to her death, from the
date of her death until two years after the date of her death, and (ii) pay the
pro rata bonus, if any, that would have been payable to Officer under any bonus
plan in effect at the time of termination of Officer's employment if Officer had
been employed by the Company for the entire year in which Officer's employment
terminates, but based on the actual number of days Officer was employed by the
Company in that year and the actual salary paid to Officer by the Company with
respect to the period through the date of termination. The Company may offset
against the payments described in this paragraph 5(a) the proceeds of any life
insurance policy maintained by the Company (i.e., a policy with premiums paid by
the Company) insuring Officer's life (i) that is acquired after July 1, 2001 and
does not replace insurance provided by the Company to Officer as of July 1,
2001, and (ii) that are paid to a beneficiary designated by Officer or to her
estate, if the Company paid the premiums with respect to such insurance. If the
Company makes such an offset with respect to payments under paragraph 5(a)(i),
the remaining amounts due pursuant to paragraph 5(a)(i) shall be paid in equal
installments over the same period set forth in paragraph 5(a)(i). In addition to
payments pursuant to this paragraph 5(a), the Company will continue to maintain
medical and hospitalization insurance with the same spouse and dependent
coverage and in the same amounts as the insurance maintained by the Company
immediately prior to her death, for five years after the date of Officer's
death. Officer shall cooperate with the Company in connection with its obtaining
any additional life insurance on Officer's life and any additional disability
insurance with respect to Officer in connection with the payments required by
this paragraph 5(a), paragraph 5(b) or otherwise.
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(b) DISABILITY. If employment is terminated due to Officer's
Disability, the Company shall (i) continue to pay an amount equal to Officer's
salary, at the annual rate in effect immediately prior to the date of her
termination due to her Disability ("Termination Date"), from the Termination
Date until two years after the Termination Date, and after two years after the
Termination Date at one-half such annual rate until three years after the
Termination Date, and (ii) pay the pro rata bonus, if any, that would have been
payable to Officer under any bonus plan in effect at the Termination Date if
Officer had been employed by the Company for the entire year in which Officer's
employment terminates, but based on the actual number of days Officer was
employed by the Company in that year and the actual salary paid to Officer by
the Company with respect to the period through the Termination Date. In
addition, the Company will continue to maintain medical, hospitalization and
life insurance with the same coverage (including any spouse and dependent
coverage) and in the same amounts as the insurance maintained by the Company
immediately prior to her incapacity, for five years after the Termination Date.
The Company may offset against any of the payments described in this paragraph
5(b), disability benefits, if any, paid under any insurance maintained by the
Company. In addition, if Officer dies at any time during the period payments are
required under this paragraph 5(b), the Company may offset against any of the
payments described in this paragraph 5(b) the proceeds of any life insurance
policy insuring Officer's life (i) that is acquired after July 1, 2001 and does
not replace insurance provided by the Company to Officer as of July 1, 2001, and
(ii) that are paid to a beneficiary designated by Officer or to her estate, if
the Company paid the premiums with respect to such insurance. If the Company
makes such an offset with respect to payments under paragraph 5(b)(i), the
remaining amounts due pursuant to paragraph 5(b)(i) shall be paid in equal
installments over the same period set forth in paragraph 5(b)(i). Officer shall
cooperate with the Company in connection with its obtaining any additional life
insurance on Officer's life and any additional disability insurance with respect
to Officer in connection with the payments required by this paragraph 5(b),
paragraph 5(a) or otherwise.
(c) TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON. If
employment is terminated for Cause, or if Officer resigns before the expiration
of the term of this Agreement without "Good Reason" (as defined in Section
5(e)(viii)), the Company shall have no obligation to pay any salary or any other
amount in lieu thereof for any period after the date of termination of
employment.
(d) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.
Except as otherwise provided in paragraph 5(e), if the Company terminates
Officer's employment without Cause before the expiration of the term of this
Agreement (other than as a result of Officer's death or Disability) or if
Officer resigns before the expiration of the term of this Agreement for Good
Reason, as defined in paragraph 5(e)(viii), the Company shall (i) continue to
pay an amount equal to Officer's salary, at the annual rate in effect
immediately prior to such termination of employment, and shall continue to
provide medical and hospitalization insurance with the same coverage (including
any spouse and dependent coverage) and in the same amounts as the insurance
maintained by the Company immediately prior to such termination of employment,
for the balance of the term of this Agreement, without regard to any termination
as a result of Officer's death, Disability, termination by the Company for
Cause, retirement, resignation or termination by the Company without Cause, or
one year, whichever is greater, and (ii) pay the pro rata bonus, if any, that
would have been payable to Officer under any bonus plan in effect at the time of
termination of Officer's employment if Officer had been employed by the Company
for the entire year in
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which Officer's employment terminates, but based on the actual number of days
Officer was employed by the Company in that year and the actual salary paid to
Officer by the Company with respect to the period through the date of
termination. In such event, commencing one year after termination, Officer shall
use reasonable efforts to find new employment. Commencing one year after
termination, the Company's continuing payment obligation, if any, shall be
reduced by the amount of any other salary, consulting fees, or other
compensation or remuneration for services, however designated, received by
Officer with respect to any remaining part of the period covered by the
Company's obligation, and its continuing medical and hospitalization insurance
obligation shall be reduced by the amount of any other medical and
hospitalization insurance provided to Officer with respect to any remaining part
of such period.
(e) CHANGE IN CONTROL.
(i) RIGHT TO RECEIVE BENEFITS. Officer shall receive the
severance benefits described in paragraph 5(e)(ii) if (1) a "Change in
Control" (as defined in paragraph 5(e)(iii)) occurs during the "Period"
(as defined in paragraph 5(e)(iv)), and (2) either (A) at any time
during the period beginning 90 days before, and ending two years after,
the Change in Control, Officer terminates her employment with the
"Entity" (as defined in paragraph 5(e)(vii)) for "Good Reason" (as
defined in paragraph 5(e)(viii)) or the "Entity" terminates Officer's
employment without Cause, or (B) at any time during the 3rd month after
the Change in Control, Officer terminates her employment with the
"Entity" for any reason or for no reason.
(ii) SEVERANCE BENEFITS. If Officer is entitled to severance
benefits under paragraph 5(e)(i), she will receive the following:
(1) an amount equal to the annual salary Officer was
receiving immediately before the Change in Control for the period
(the "Time") from the date of such termination through the later
of (1) two years after the date of such termination, and (2) the
balance of the term of this Agreement, without regard to any
termination as a result of Officer's death, Disability,
termination by the Company for Cause, retirement, resignation or
termination by the Company without Cause; and
(2) a pro rata bonus for the year of such termination
equal to (1) the bonus paid or payable to Officer with respect to
the last full fiscal year of the Company before the Change in
Control (the "Bonus"), multiplied by (2) a fraction, the numerator
of which shall be the number of days in the Company's fiscal year
in which such termination occurs through the date of such
termination, and the denominator of which shall be the total
number of days in the Company's fiscal year in which such
termination occurs; and
(3) an amount equal to the Time (in years and fractions
of a partial year) multiplied by the amount of the Bonus; and
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(4) a continuation during the Time of (1) the medical,
dental, life, disability, hospitalization, optical and
prescription drug benefits Officer and Officer's dependents were
receiving from the Company at the time of the Change in Control
(provided that if it is no longer practical for the Company to
furnish such benefits, Officer will be reimbursed by the Company
during the Time for the cost to Officer of obtaining such
benefits), and (2) any automobile allowance or benefits (including
automobile insurance and maintenance benefits), and continued use
of any automobile, provided to Officer by the Company at the time
of the Change in Control; and
(5) If the total amount of all payments of cash or
property in the nature of compensation contingent on a change in
the ownership or effective control of the Company or in the
ownership of a substantial portion of the Company's assets,
including, without limitation, the benefits provided pursuant to
this paragraph 5(e)(ii) and payments relating to any stock options
or restricted stock that vest as a result of a Change in Control,
shall exceed the maximum amount that may be paid to Officer and
not be deemed a "parachute payment" resulting in an excise tax to
Officer and a loss of compensation deduction to the Company, all
within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor provision, the Company will pay
to Officer (i) the amount of any excise tax imposed on Officer
under Section 4999 of the Internal Revenue Code of 1986, as
amended, or any successor provision, as a result of any payments
by the Company to Officer pursuant to this paragraph 5(e)(ii) and
(ii) any income tax imposed on Officer as a result of the payments
under this paragraph 5(e)(ii)(5)). The benefits provided in
paragraphs 5(e)(ii)(1), 5(e)(ii)(2), 5(e)(ii)(3) and 5(e)(ii)(5)
shall be paid to Officer in an undiscounted lump sum within 10
business days after the date of such termination. The Company may
withhold from such payments all federal, state, city and other
taxes to the extent such taxes are required to be withheld by
applicable law.
(iii) "CHANGE IN CONTROL". For purposes of this Agreement, a
"Change in Control" occurs on the first day any one or more of the
following occurs:
(1) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), together with all affiliates and associates
of such person (as such terms are defined in Rule 12b-2 under the
Exchange Act) but excluding all "Excluded Persons" (as defined in
paragraph 5(e)(v)), becomes the direct or indirect beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing (A) 20% or more of the
combined voting power of all of the Company's outstanding
securities entitled to vote generally in the election of the
Company's directors, or (B) 20% or more of the combined shares of
the Company's capital stock then outstanding, all except in
connection with any merger, consolidation, reorganization or share
exchange involving the Company;
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(2) the consummation of any merger, consolidation,
reorganization or share exchange involving the Company, unless the
holders of the Company's capital stock outstanding immediately
before such transaction own more than 50% of the combined
outstanding shares of capital stock and have more than 50% of the
combined voting power in the surviving entity after such
transaction and they own such securities in substantially the same
proportions (relative to each other) as they owned the Company's
capital stock immediately before such transaction;
(3) the consummation of any sale or other disposition
(in one transaction or a series of related transactions) of all,
or substantially all, of the Company's assets to a person whose
acquisition of 20% or more of the combined shares of the Company's
capital stock then outstanding would have caused a Change in
Control under paragraph 5(e)(iii)(1)); or
(4) the "Continuing Directors" (as defined in paragraph
5(e)(vi)) cease to be a majority of the Company's directors.
A determination by the Company's Continuing Directors (by resolution of
at least a majority of the Continuing Directors) as to whether a Change
in Control has occurred for purposes of this Agreement, the date on
which it has occurred or both shall be conclusive for purposes of this
Agreement.
(iv) "PERIOD". The period (the "Period") will begin on the
date of this Agreement and end on the first to occur of (a) the end of
the term of this Agreement, without regard to any termination as a
result of Officer's death, Disability, termination by the Company for
Cause, retirement, resignation or termination by the Company without
Cause, (b) Officer's death, (c) Officer's Disability, and (d) 90 days
after the termination of Officer's employment (voluntarily or
involuntarily and with or without Cause or Good Reason) if (1) such
termination occurs before a Change in Control, and (2) a Change in
Control does not occur during such 90 day period. Notwithstanding the
foregoing, (1) if Officer becomes entitled to severance benefits under
paragraph 5(e)(i), the provisions of paragraph 5(e)(ii) of this
Agreement will continue until Officer's eligibility to receive
severance benefits under this Agreement ceases and such provisions and
the other provisions of this Agreement not limited by the Period,
including, without limitation, paragraphs 5(g), 7, 10 and 11 will
survive the end of the Period.
(v) EXCLUDED PERSONS. For purposes of this Agreement, the
Excluded Persons are (i) Officer, (ii) any group (as that term is used
in Section 13(d) of the Exchange Act and the rules thereunder) that
includes Officer or in which Officer is, or has agreed to become, an
equity participant, (iii) any entity in which Officer is, or has agreed
to become, an equity participant, (iv) the Company, (v) any subsidiary
of the Company, (vi) any employee benefit plan of the Company or any
subsidiary of the Company or the related trust, and (vii) any entity to
the extent it is holding capital stock of the Company for or pursuant
to the terms of any employee benefit plan of the Company or any
subsidiary of the Company. For purposes of this Agreement, Officer
shall not be deemed an equity participant in any group or entity (i) in
which Officer owns for investment
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purposes only no more than 5% of the stock of a publicly-traded entity
whose stock is either listed on a national stock exchange or quoted in
The Nasdaq National Market, if Officer is not otherwise affiliated with
such group or entity, or (ii) if Officer's participation is
fully-disclosed to, and approved by, the Company's Board of Directors
and the Continuing Directors before the Change in Control occurs.
(vi) "CONTINUING DIRECTORS". For purposes of this
Agreement, the "Continuing Directors" are the directors of the Company
as of the date of this Agreement, and any person who subsequently
becomes a director if such person is appointed to be a director by a
majority of the Continuing Directors or if such person's initial
nomination for election or initial election as a director is
recommended or approved by a majority of the Continuing Directors.
(vii) "ENTITY". For purposes of this Agreement, the "Entity"
shall mean both (1) the Company and, (2) in connection with a Change in
Control defined in paragraph 5(e)(iii)(2) or paragraph 5(e)(iii)(3),
the survivor of the merger, consolidation, reorganization or share
exchange involving the Company and the buyer of all, or substantially
all, of the Company's assets, if such additional entity described in
this clause (2) (if other than the Company) has offered to employ
Officer on such terms that would not constitute "Good Reason" for
termination of Officer's employment if imposed by the Company.
Therefore, for purposes of this paragraph 5(e), Officer shall not be
deemed to have terminated Officer's employment with the Entity for
"Good Reason" and the "Entity" shall not be deemed to have terminated
Officer's employment without Cause unless such actions are taken by all
entities included within the definition of "Entity". In addition, for
purposes of this paragraph 5(e), Officer shall not be deemed to have
terminated Officer's employment with the Entity for "Good Reason" and
the "Entity" shall not be deemed to have terminated Officer's
employment without Cause if (1) the survivor of the merger,
consolidation, reorganization or share exchange involving the Company
and the buyer of all, or substantially all, of the Company's assets has
offered to employ Officer on such terms that would not constitute "Good
Reason" for termination of Officer's employment if imposed by the
Company, (2) Officer refuses such employment, and (3) the Company
terminates Officer's employment for any reason or for no reason.
(viii) "GOOD REASON". Termination of Officer's employment for
"Good Reason" means Officer's voluntary termination of employment with
the Company or Entity as a result of (1) any change by the Company or
Entity (without Officer's consent) in Officer's titles of President and
Chief Executive Officer, (2) any decrease by the Company or Entity
(without Officer's consent) in Officer's compensation or incentives
from Officer's compensation and incentives immediately before such
decrease, except with respect to benefits covered by clause (3);
provided that Officer's bonus shall not be deemed to have decreased if
Officer has a substantially similar opportunity to earn a bonus as
Officer did in the last full fiscal year before the change, (3) any
decrease by the Company or Entity (without Officer's consent) in
Officer's benefits from Officer's benefits immediately
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before such decrease, unless such decrease is applied in the same
manner to all executive officers of the Company or Entity, (4) a
substantial change by the Company or Entity (without Officer's consent)
in Officer's duties or responsibilities from Officer's duties and
responsibilities immediately before such change, (5) any requirement by
the Company or Entity (to which Officer does not consent) that Officer
change Officer's primary place of business to be outside the
metropolitan Xxxxxxx area, or (6) if a Change in Control results in a
new entity being a successor to the Company's business, the failure of
the new entity to assume expressly in writing the Company's obligations
under this Agreement and under any written employment agreement between
Officer and the Company in effect immediately before the Change in
Control. "Good Reason" will not include Officer's death, Disability or
Retirement (as defined below), or Officer's resignation other than as
provided in the preceding sentence. For purposes of this Agreement,
"Retirement" means Officer's retirement from the Company or Entity in
accordance with the Company's or Entity's normal policies.
(f) TRANSFER OF INSURANCE POLICIES. If Officer's employment by the
Company is terminated for any reason except Officer's death or Disability, the
Company will cooperate with Officer, to the extent Officer so desires, to
transfer to Officer, at no cost to the Company and in exchange for a payment by
Officer to the Company equal to the value of the Company's interest in the
policies, the life and disability insurance maintained by the Company on her
behalf immediately before the termination of her employment, to the extent
permitted by the applicable insurance policies. If Officer's employment by the
Company is terminated as a result of Officer's Disability, the Company will
cooperate with Officer, to the extent Officer so desires, to transfer to
Officer, at no cost to the Company and in exchange for a payment by Officer to
the Company equal to the value of the Company's interest in the policies, the
life insurance maintained by the Company on her behalf as of the date five years
after the termination of her employment, to the extent permitted by the
applicable insurance policies.
(g) NO OTHER EMPLOYMENT BENEFITS. The severance benefits provided
in this Agreement are exclusive and in lieu of any other severance benefits to
which Officer may be entitled, except for any benefits under the terms of any
stock options or restricted stock agreements Officer may have.
6. PAYMENT. Amounts equal to, or based on, salary, other than deferred
compensation, as well as death benefits pursuant to paragraph 5(a), other than
proceeds of life insurance, and amounts equal to, or based on, salary, other
than deferred compensation and proceeds of life insurance, paid pursuant to
paragraphs 5(b) and 5(d), shall be paid in monthly or other regular periodic
installments no less frequent than monthly. Amounts equal to the pro rata
portion of Officer's bonus for the year of termination paid pursuant to
paragraphs 5(a), 5(b), and 5(d) shall be paid at the time they are paid to other
participants in the applicable bonus plan. Deferred compensation, with interest
thereon, shall be paid as provided in the Xxxxxxxx Stores Inc. Deferred
Compensation Plan, as amended from time to time. The amounts described in
paragraph 5(e) shall be paid as described in paragraph 5(e)(ii)(5). All such
payments shall be made to Officer while she is living; and in the event of her
death, the payments shall be made to Officer's husband, if he is then living, or
to her estate or any beneficiary or beneficiaries she designates in writing
during her lifetime.
7. NON-COMPETITION; CONFIDENTIALITY AND NON-SOLICITATION.
(a) NON-COMPETITION. Officer will not, during Officer's employment
with the Company, directly or indirectly engage in any activity which is
competitive with any business in which the Company engages.
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(b) CONFIDENTIAL INFORMATION. Officer will not at any time during
or after Officer's employment with the Company, directly or indirectly, disclose
or make accessible to any person or entity or use in any way for Officer's own
personal gain (i) any confidential and secret information as to the prices,
costs, discounts, or profit margins of any goods or services sold, purchased or
handled by the Company (or its subsidiaries), or (ii) any confidential or secret
information relating to the Company's (or its subsidiaries') financial
structure, store layouts, supply sources, designs, procedures, information
systems, administration or operations, except as authorized or directed by the
Company and except that the foregoing restrictions will not apply to information
generally available to others in the Company's line of business, information in
the public domain, information disclosed or made available by the Company to any
other person on a non-confidential basis or disclosures Officer is required by
law to make. Upon termination of Officer's employment with the Company for any
reason, Officer will immediately return to the Company all confidential
materials over which Officer exercises any control.
(c) NON-SOLICITATION. Officer will not at any time during
Officer's employment by the Company and for one year thereafter, directly or
indirectly, solicit for any purpose, interfere with, entice away from the
Company (or its subsidiaries) or hire any employee or agent of the Company (or
its subsidiaries) who was employed by the Company within one year before the
termination of Officer's employment.
(d) EQUITABLE REMEDIES. Paragraphs 7(a), 7(b) and 7(c) are
intended, among other things, to protect the confidential information described
in paragraph 7(b) and relate to matters which are of a special and unique
character, and their violation may cause irreparable injury to the Company, the
amount of which will be extremely difficult, if not impossible, to determine and
which cannot be adequately compensated by monetary damages alone. Therefore, if
Officer breaches or threatens to breach any of those paragraphs, in addition to
any other remedies which may be available to the Company under this Agreement or
at law or equity, the Company may obtain an injunction, restraining order, or
other equitable relief against Officer and such other persons and entities as
are appropriate.
8. MODIFICATION. This Agreement is the complete agreement between
Officer and the Company and may be modified only by a written instrument
executed by both parties.
9. LAW. The internal laws of the State of Michigan shall govern this
Agreement, its construction, and the determination of any rights, duties or
remedies of the parties arising out of or relating to this Agreement.
10. COSTS OF ENFORCEMENT. The Company shall pay on demand all of
Officer's reasonable out-of-pocket fees, costs and expenses (including
reasonable attorneys' fees, court costs and other legal expenses and costs of
investigation) incurred by Officer in connection with the enforcement of this
Agreement (as amended from time to time and including any successor to this
Agreement) or in connection with any disputes concerning the meaning or
interpretation of this Agreement (as amended from time to time and including any
successor to this Agreement). During the pendency of any such enforcement
proceeding or dispute, the Company shall continue to pay the disputed amounts
and benefits provided in this Agreement (as amended from time to time and
including any successor to this Agreement), and if it fails to do so, the
Company shall pay Officer interest, at the prime or base rate announced from
time to time by Comerica Bank, on such amounts from the date they were due
through the date they are actually paid. The obligations contained in this
paragraph 10 shall survive the end of the Period.
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11
11. ARBITRATION.
(a) AGREEMENT TO ARBITRATE. Any disputes between the parties with
respect to the terms and conditions of this Agreement (as amended from time to
time and including any successor to this Agreement) (other than those disputes
with respect to which equitable relief (such as specific performance or an
injunction) is the appropriate remedy) that are not resolved within 30 days
after one party notifies the other party in writing of the dispute shall be
resolved by and through binding arbitration conducted under the auspices of the
American Arbitration Association (or any like organization successor thereto) in
Jackson, Michigan. Both the foregoing agreement of the parties to arbitrate any
and all claims, and the results, determination, finding, judgment and/or award
rendered through such arbitration, shall be final and binding on the parties to
this Agreement and may be specifically enforced by legal proceedings, and,
pursuant to MCLA ss. 600.5001, the parties agree that a judgment of any Michigan
circuit court may be rendered upon any arbitration award rendered pursuant to
this paragraph 11. The parties agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this arbitration
agreement and that any party may, in her or its sole discretion, ask for
specific performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this arbitration agreement.
(b) PROCEDURE. Such arbitration shall be initiated by the written
notice of the dispute described in paragraph 11(a), and such arbitration shall
be a compulsory and binding proceeding on each party. Such arbitration
proceeding shall be conducted under the commercial arbitration rules (formal or
informal) of the American Arbitration Association before one arbitrator, and the
arbitrator in any such arbitration shall be such person who is expert in the
subject matter of the dispute. The costs of the arbitrator and the arbitration
shall be borne by the Company. Each party will bear separately the cost of its
or her respective attorneys, witnesses and experts in connection with such
arbitration, subject to the Company's obligations under paragraph 10. Time is of
the essence of this arbitration procedure, and the arbitrator shall be requested
to render his or her decision within 10 days following completion of the
arbitration.
12. SUCCESSOR OBLIGATIONS. This Agreement will be binding upon and
inure to the benefit of the Company and its successors and assigns, and the
Company will require any successor to, or transferee of, all or substantially
all of its business or assets to assume all of the Company's obligations under
this Agreement (such successor or assign will be deemed, for purposes of this
Agreement, to be the Company). This Agreement will be binding upon Officer and
will inure to Officer's benefit, but Officer may not assign this Agreement
without the Company's prior written consent.
13. DUPLICATE COPIES. This Agreement may be executed in counterparts,
both of which together will be deemed an original of this Agreement.
14. SEVERABILITY. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will remain binding in accordance with their terms.
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12
15. MISCELLANEOUS PROVISIONS. This Agreement supersedes all previous
employment and severance agreements between the parties. In addition to all
other remedies available at law, it shall be specifically enforceable by any
court having jurisdiction. Paragraph headings are for convenience only and shall
not affect the construction of any provision. The rights and obligations
hereunder, particularly but without limitation including paragraph 5(e), shall
survive the expiration of the term of this Agreement.
16. NOTICES: All notices, requests and other communications to any
party hereunder shall be in writing and shall be given to such party at its
address set forth below or such other address as such party may hereafter
specify for the purpose by notice to the other party. Each such notice, request
or other communication shall be effective (i) if given my mail, three business
days after such communication is deposited in the mails with the first-class
postage prepaid, addressed as aforesaid or (ii) if given by telecopy, overnight
courier or any other means, when delivered at the address specified in (or
pursuant to) this paragraph 16.
The Company: Xxxxxxxx Stores Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Chairman of the Board
Telecopier No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Xx. , Esq.
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Telecopier No.: 000-000-0000
Officer: Xxxxx Xxxxxxxx
Address and telecopier number to be provided in a
notice to be given pursuant to the provisions of this
paragraph 16
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx & Xxx Xxxxxx
0 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: 212-779-9928
IN THE PRESENCE OF: XXXXXXXX STORES INC.
/s/ Xxxx X. Xxxxxxx By: /s/ P. Xxxxxx Xxxxx
-------------------------- --- --------------------------
P. Xxxxxx Xxxxx,
Chairman of the Board and
Chief Executive Officer
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------- ------------------------
Xxxxxxx X. Xxxxxxxxx,
Secretary
/s/ Xxxxx X. Faloy /s/ Xxxxx Xxxxxxxx
--------------------------- ----------------------
Xxxxx Xxxxxxxx
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