EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the [21] day of December, 1995 by
and between Melville Corporation, a New York corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and Xx.
Xxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive in connection with its
business pursuant to an agreement embodying the terms of such employment (this
"Agreement") and the Executive desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. Definitions.
(a) "Base Salary" shall have the meaning set forth in Section 4 below.
(b) "Board" shall have the meaning set forth in Section 4 below.
(c) "Cause" shall have the meaning set forth in Section 10(b) below.
(d) "Confidential Information" shall have the meaning set forth in Section
11 below.
(e) "Constructive Termination Without Cause" shall have the meaning set
forth in Section 10(c) below.
(f) "Effective Date" shall have the meaning set forth in Section 2 below.
(g) "ICP" shall have the meaning set forth in Section 7 below.
(h) "Non-renewal Severance Period" shall have the meaning set forth in
Section 10 (d) below.
(i) "Original Term of Employment" shall have the meaning set forth in
Section 2 below.
(j) "MIP" shall have the meaning set forth in Section 5 below.
(k) "Renewal Term" shall have the meaning set forth in Section 2 below.
(l) "Restriction Period" shall have the meaning set forth in Section 12
below.
(m) "SERP I" shall have the meaning set forth in Section 7 below.
(n) "Severance Period" shall have the meaning set forth in Section
10(c)(ii) below.
(o) "Subsidiary" shall have the meaning set forth in Section 11 below.
(p) "Term of Employment" shall have the meaning set forth in Section 2
below.
(q) "Termination Without Cause" shall have the meaning set forth in Section
10 (c).
2. Term of Employment.
(a) The term of the Executive's employment under this Agreement shall
commence immediately upon the execution of this Agreement (the "Effective Date")
and end on the fifth anniversary of such date (the "Original Term of
Employment"). The Original Term of Employment shall be automatically renewed for
successive one-year terms (the "Renewal Terms") unless at least 180 days prior
to the expiration of the Original Term of Employment or any Renewal Term, either
Party notifies the other Party in writing that he or it is electing to terminate
this Agreement at the expiration of the then current Term of Employment. "Term
of Employment" shall mean the Original Term of Employment and all Renewal Terms.
(b) In the event that this Agreement is not renewed because the Company has
given the 180-day notice prescribed in the preceding paragraph on or before the
expiration of the Original Term of Employment or any Renewal Term, such
non-renewal shall be treated as a termination following non-renewal pursuant to
Section 10 (d) below.
(c) Notwithstanding anything in this Agreement to the contrary, at least
one year prior to the expiration of the Original Term of Employment, the Parties
shall meet to discuss this Agreement and may agree in writing to modify any of
the terms of this Agreement.
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3. Position, Duties and Responsibilities.
(a) Commencing on the Effective Date, and continuing for the remainder of
the Term of Employment, the Executive shall be employed as Senior Vice President
Human Resources of the Company and shall report to the Chairman of the Board.
(b) Anything herein to the contrary notwithstanding, nothing in this
Agreement shall preclude the Executive from (i) serving on the boards of
directors of a reasonable number of other corporations or the boards of a
reasonable number of trade associations and/or charitable organizations, (ii)
engaging in charitable activities and community affairs, and (iii) managing his
personal investments and affairs, provided that such activities do not
materially interfere with the proper performance of his duties and
responsibilities under this Agreement.
4. Base Salary.
The Executive shall be paid an annualized salary, payable in accordance
with the regular payroll practices of the Company, of not less than $390,000,
subject to annual review for increase at the discretion of the Compensation
Committee of the Board.
5. Annual Incentive Awards.
The Executive shall participate in the Company's Profit Incentive Plan
("MIP") with a target bonus opportunity of no less than 40% of Base Salary or in
a successor plan to MIP with an equivalent opportunity. Payment of annual
incentive awards shall be made at the same time that other senior-level
executives receive their incentive awards.
6. Long-Term Stock Incentive Programs.
(a) General. The Executive shall be eligible to participate in and to
receive stock incentive awards under the long-term stock incentive programs of
the Company referred to in Section 6(b) below and any successor programs.
(b) Stock Option Award. As part of the award approved by the Compensation
Committee of the Board on April 11, 1995, the Company has granted the Executive
an option pursuant to the terms and conditions set forth in the attached Exhibit
A to purchase 125,000 shares of common stock of the Company at an exercise price
equal to the fair market value of the shares on the date of grant, contingent on
the execution of this Agreement.
(c) Loan Agreement. Executive will be given a $400,000 loan within 30 days
of his request, to be used for relocation purposes either in connection with his
commencement of employment for the Company, or any subsequent relocation which
occurs during the Term of
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Employment. Such loan shall be payable in accordance with terms set forth in the
form of loan agreement and promissory note attached as Exhibit B.
(d) Retirement Benefit. Executive will be provided with a retirement
benefit commencing at the age of 62 payable in the form of a joint and 100%
survivor annuity. Such benefits shall be payable in all events, regardless of
his years of service upon termination of his employment from the Company,
without reduction by reason of any other retirement benefit for which the
Executive may qualify; provided, however, that if the Executive is still
employed by the Company when he reaches age 62, and if he is then entitled to an
unreduced retirement benefit payable in the form of a joint and survivor annuity
under SERP I of at lease $48,000, then the benefit payable under SERP I shall be
in lieu of and in full satisfaction of the Company's obligation under this
Section 6(d).
7. Employee Benefit Programs.
(a) General Benefits. During the Term of Employment, the Executive shall be
entitled to participate in such employee pension and welfare benefit plans and
programs of the Company as are made available to senior-level executives or to
its employees generally, as such plans or programs may be in effect from time to
time, including, without limitation, Future Fund, health, medical, dental,
salary continuation program, long-term disability, travel accident and life
insurance plans. In addition, the Executive shall be entitled to 4 weeks of paid
vacation per year.
(b) Designated Benefits. During the Term of Employment, the Executive shall
be entitled to participate in the Income Continuation Policy for Select Senior
Executives of the Company ("ICP") (which provides benefits to the Executive in
the event of a change in control of the Company), the Deferred Compensation Plan
and the Supplemental Retirement Plan I for Select Senior Management of the
Company ("SERP I"). For the purposes of SERP I, the Executive's SERP Incentive
Target shall be 40% of Base Salary. In addition, during the Term of Employment,
the Company shall, effective 1996, provide the Executive, in accordance with the
terms adopted by the Company, with personal financial and tax planning.
8. Disability.
(a) During the Term of Employment, as well as during the Severance Period,
the Executive shall be entitled to disability coverage as described in this
Section 8(a). In the event the Executive becomes disabled, as that term is
defined under the Company's Long-Term Disability Plan, the Executive shall be
entitled to receive, in place of his Base Salary, an amount equal to 60% of his
Base Salary, at the annual rate in effect at the commencement date of his
Company long-term disability benefit ("Commencement Date") for a period
beginning on the Commencement Date and ending with the earlier to occur of (A)
the Executive's attainment of age 65 or (B) the Executive's commencement of
benefits under SERP I upon his election to receive such benefits. If when the
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Executive ceases to be disabled his position is then vacant and the Company
requests in writing that he resume such position, he may elect to resume such
position by written notice to the Company within 15 days after the Company
delivers its request. If he resumes such position, he shall thereafter be
entitled to his Base Salary at the annual rate in effect at the Commencement
Date and, for the year he resumes his position, a pro rata annual incentive
award. If he ceases to be disabled and does not resume his position in
accordance with the preceding sentence, he shall be treated as if he voluntarily
terminated his employment pursuant to Section 10(e) as of the date the Executive
ceases to be disabled. If the Executive is not offered a position after he
ceases to be disabled, he shall be treated as if his employment was terminated
Without Cause pursuant to Section 10(c) as of the date the Executive ceases to
be disabled.
(b) The Executive shall be entitled to a pro rata annual incentive award
for the year in which the Commencement Date occurs equal to 40% of annualized
Base Salary for such year prior to the Commencement Date, payable in a lump sum
promptly after the Commencement Date. The Executive shall not be entitled to any
annual incentive awards with respect to the period following the Commencement
Date.
(c) During the period the Executive is receiving disability benefits
pursuant to Section 8(a) above, he shall continue to be treated as an employee
for purposes of all employee benefits and entitlements in which he was
participating on the Commencement Date, including without limitation, the
benefits and entitlements referred to in Sections 6, 7(a) and 7(b) above, except
that the Executive shall not be entitled to receive any annual salary increases
or any new stock incentive awards following the Commencement Date.
9. Reimbursement of Business and Other Expenses; Perquisites.
(a) The Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement and the Company shall
promptly reimburse him for all business expenses incurred in connection
therewith, subject to documentation in accordance with the Company's policy.
(b) The Company shall pay all reasonable legal expenses up to $10,000
incurred by the Executive in connection with the negotiation of this Agreement.
10. Termination of Employment.
(a) Termination Due to Death. In the event the Executive's employment is
terminated due to his death, his estate or his beneficiaries, as the case may
be, shall be entitled to:
(i) Base Salary through the date of death and thereafter at the
annualized rate in effect on the date of death for a period of one year;
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(ii) pro rata annual incentive award for the year in which the
Executive's death occurs equal to 40% of annualized Base Salary for such year,
payable in a lump sum promptly after his death;
(iii) lapse of all restrictions on any restricted stock award
(including any performance-based restricted stock) outstanding at the time of
his death;
(iv) Company common stock, issued without restrictions, equal to any
outstanding award of contingent shares as of the date of death;
(v) the right to exercise any stock option vested at the time of his
death for a period of one year following death or for the remainder of the
exercise period if less;
(vi) the balance of any incentive awards earned (but not yet paid);
(vii) any amounts earned, accrued or owing to the Executive but not
yet paid under Section 6, 7, 8 or 9 above;
(viii) other or additional benefits then due or earned in accordance
with applicable plans and programs of the Company; and
(b) Termination by the Company for Cause.
(i) "Cause" shall mean:
(A) the Executive is convicted of a felony involving moral
turpitude; or
(B) the Executive engages in conduct that constitutes willful
gross neglect or willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case, in material harm to the financial
condition of the Company.
(ii) A termination for Cause shall not take effect unless the
provisions of this paragraph (ii) are complied with. The Executive shall be
given written notice by the Company of its intention to terminate him for Cause,
such notice (A) to state in detail the particular act or acts or failure or
failures to act that constitute the grounds on which the proposed termination
for Cause is based and (B) to be given within six months of the Company's
learning of such act or acts or failure or failures to act. The Executive shall
have 30 days after the date that such written notice has been given to him in
which to cure such conduct, to the extent such cure is possible. If he fails to
cure such conduct, the Executive shall then be entitled to a hearing before the
Compensation Committee of the Board. Such hearing shall be held within 45 days
of such notice to the Executive, provided he requests such hearing within 35
days of the written notice from the Company of the intention to terminate him
for Cause. If, within five days following such hearing, the Executive is
furnished written notice by the Board confirming that, in its judgment, grounds
for Cause on the basis of the original notice exist, he shall thereupon be
terminated for Cause.
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(iii) In the event the Company terminates the Executive's employment
for Cause, he shall be entitled to:
(A) Base Salary through the date of the termination of his
employment for Cause;
(B) any incentive awards earned (but not yet paid);
(C) any amounts earned, accrued or owing to the Executive but not
yet paid under Section 6, 7, 8 or 9 above; and
(D) other or additional benefits then due or earned in accordance
with applicable plans or programs of the Company.
(c) Termination Without Cause or Constructive Termination Without Cause. In
the event the Executive's employment is terminated without Cause (which
termination shall be effective as of the date specified by the Company in a
written notice to the Executive), other than due to death, or in the event there
is a Constructive Termination Without Cause (as defined below), the Executive
shall be entitled to and his sole remedies under this Agreement shall be:
(i) Base Salary through the date of termination of the Executive's
employment;
(ii) Base Salary, at the annualized rate in effect on the date of
termination of the Executive's employment (or in the event a reduction in Base
Salary is the basis for a Constructive Termination Without Cause, then the Base
Salary in effect immediately prior to such reduction), for a period of 36 months
following such termination (the "Severance Period"); provided that except as set
forth in the last paragraph of this Section 10(c) the salary continuation
payment under this Section 10(c)(ii) shall be in lieu of any salary continuation
arrangements under any other severance program of the Company or any other
agreement between the Executive and the Company;
(iii) pro rata annual incentive award for the year in which
termination occurs equal to 40% of annualize Base Salary, payable in a lump sum
promptly following termination;
(iv) an amount equal to 40% of Base Salary at the annualized rate in
effect on the date of termination of the Executive's employment (or in the event
of a reduction in Base Salary is the basis for a Constructive Termination
Without Cause, then the Base Salary in effect immediately prior to such
reduction) multiplied by three, payable in equal monthly payments over the
Severance Period;
(v) during the Severance Period, continued lapse of all restrictions
on any restricted stock award (including any performance-based restricted stock)
outstanding at the time of such termination of employment in accordance with the
schedule of such lapses of restrictions set forth in the award;
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(vi) Company common stock, issued without restrictions, equal to any
outstanding award of contingent shares as of the date of termination;
(vii) the right to exercise any stock option held by the Executive at
the date of his termination (with continued vesting of any options not yet
exercisable during the Severance Period in accordance with its original
schedule), such option to be exercisable during the Severance Period and for 90
days thereafter or for the remainder of the exercise period if less, provided,
however, that options granted pursuant to the Company's 1987 Stock Option Plan
shall in no event be exercisable after three years following termination and
provided further that the Executive shall not be entitled to receive any
additional stock incentive awards during the Severance Period;
(viii) the balance of any incentive awards earned (but not yet paid);
(ix) any amounts earned, accrued or owing to the Executive but not yet
paid under Section 6, 7, 8 or 9 above;
(x) continued participation in all medical, dental, health and life
insurance plans and in other employee benefit plans or programs (but excluding
SERP I and Future Fund) at the same benefit level at which he was participating
on the date of the termination of his employment until the earlier of:
(A) the end of the Severance Period; or
(B) the date, or dates, he receives equivalent coverage and
benefits under the plans and programs of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit,
basis);
provided that (x) if the Executive is precluded from continuing his
participation in any employee benefit plan or program as provided in this clause
(x) of this Section 10(c), he shall receive cash payments equal on an after-tax
basis to the cost to him of obtaining the benefits provided under the plan or
program in which he is unable to participate for the period specified in this
clause (x) of this Section 10(c), (y) such cost shall be deemed to be the lowest
cost that would be incurred by the Executive in obtaining such benefit himself
on an individual basis, and (z) payment of such amounts shall be made quarterly
in advance; and
(xi) other or additional benefits then due or earned in accordance
with applicable plans and programs of the Company.
"Termination Without Cause" shall mean the Executive's employment is
terminated by the Company for any reason other than Cause (as defined in Section
10 (b)) or due to death.
"Constructive Termination Without Cause" shall mean a termination of the
Executive's employment at his initiative as provided in this Section 10(c)
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following the occurrence, without the Executive's written consent, of one or
more of the following events (except as a result of a prior termination):
(A) a reduction in the Executive's then current Base Salary or
his target bonus opportunity under MIP or any successor plan;
(B) the loss of any of the Executive's titles or positions;
(C) a material diminution in the Executive's duties or the
assignment to the Executive of duties which are materially inconsistent with his
duties; or
(D) a "Benefit Event" as defined in paragraph 4 or 5 of Section
4.02(a) of the ICP, unless within 15 days of such event the Company obtains the
written agreement of any person or entity to which the assets or business
involved in such Benefit Event are transferred to perform all the obligations of
this Agreement, or such person or entity is otherwise bound by operation of law
to perform all the obligations of this Agreement.
Notwithstanding the provisions of this Section 10(c), in the event that the
Executive receives a payment under Section 4.01(b) of the ICP, the amounts due
under Sections 10(c)(ii) and (iv) above shall be reduced by the amount of such
payment, such reduction to be effected by eliminating installments due under
Sections 10(c)(ii) and (iv) above in reverse order. Notwithstanding the
elimination of such installments, the Severance Period shall continue to be 36
months.
(d) Termination following Non-renewal. In the event that the Company
notifies the Executive in writing at least 180 days prior to the expiration of
the Original Term of Employment or any Renewal Term that it is electing to
terminate this Agreement at the expiration of the then current Term of
Employment and the executive's employment terminates upon such expiration, at
the Company's initiative, the Executive shall be entitled to:
(i) Base Salary through the date of termination of the Executive's
employment;
(ii) Base Salary, at the annualized rate in effect on the date of
termination of the Executive's employment, for a period of 18 months following
such termination (the "Non-renewal Severance Period"); provided that the salary
continuation payment under this Section 10 (d) (ii) shall be in lieu of any
salary continuation arrangements under any other severance program of the
Company or any other agreement between the Executive and the Company other than
benefits to which the Executive is entitled under Section 4.01 (b) of the ICP,
provided that any such ICP benefits shall reduce the payments due under this
Section 10(d) (ii) in the same manner as is provided in the last paragraph of
Section 10(c);
(iii) pro rata annual incentive award for the year in which
termination occurs equal to 40% of annualized Base Salary, payable in a lump sum
promptly following termination;
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(iv) the right to exercise any stock option held by the Executive at
the date of his termination to the extent vested at such date during the
Non-renewal Severance Period and for 90 days thereafter or for the remainder of
the exercise period if less, provided, however, that the Executive shall not be
entitled to receive any additional stock incentive awards during the Non-renewal
Severance Period;
(v) the balance of any incentive awards earned (but not yet paid);
(vi) any amount earned, accrued or owing to the Executive but not yet
paid under Section 6,7,8 or 9 above;
(vii) continued participation in all medical and dental plans at the
same benefit level at which he was participating on the date of the termination
of his employment until the earlier of:
(A) the end of the Non-renewal Severance Period; or
(B) the date, or dates, he receives equivalent coverage and
benefit xxxxxx the plans and programs of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit,
basis);
provided that (x) if the Executive is precluded from continuing his
participation in any employee benefit plan or program as provided in this clause
(vii) of this Section 10 (d), he shall receive cash payments equal on an
after-tax basis to the cost to him of obtaining the benefits provided under the
plan or program in which he is unable to participate for the period specified in
this clause (vii) of this Section 10 (d), (y) such cost shall be deemed to be
the lowest cost that would be incurred by the Executive in obtaining such
benefit himself on an individual basis, and (z) payment of such amounts shall be
made quarterly in advance; and
(viii) other or additional benefits then due or earned in accordance
with applicable plans and programs of the Company.
(e) Voluntary Termination. In the event of a termination of employment by
the Executive on his own initiative, other than a termination due to death or a
Constructive Termination Without Cause, the Executive shall have the same
entitlements as provided in Section 10(b)(iii) above for a termination for
Cause. A voluntary termination under this Section 10(e) shall be effective upon
30 days prior written notice to the Company or such shorter period as may be
determined by the Company and shall not be deemed a breach of this Agreement.
(f) No Mitigation; No Offset. In the event of any termination of employment
under this Section 10, the Executive shall be under no obligation to seek other
employment; amounts due the Executive under this Agreement shall not be offset
by any remuneration attributable to any subsequent employment that he may
obtain.
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(g) Nature of Payments. Any amounts due under this Section 10 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
(h) Exclusivity of Severance Payments. Upon termination of the Executive's
employment during the Term of Employment, he shall not be entitled to any
severance payments or severance benefits from the Company or any payments by the
Company on account of any claim by him of wrongful termination, including claims
under any federal, state or local human and civil rights or labor laws, other
than the payments and benefits provided in this Section 10.
11. Confidentiality.
(a) During the Term of Employment and thereafter, the Executive shall not,
without the prior written consent of the Company, disclose to anyone other than
in the normal course of carrying out his responsibilities under this Agreement
or make use of any Confidential Information, except when required to do so by a
court of law, by any governmental agency having supervisory authority over the
business of the Company or any Subsidiary or by any administrative or
legislative body (including a committee thereof) that orders him to divulge,
disclose or make accessible such information. In the event that the Executive is
so ordered, he shall give prompt written notice to the Company in order to allow
the Company the opportunity to object to or otherwise resist such order.
(b) During the Term of Employment and thereafter, Executive shall not
disclose the existence or contents of this Agreement unless and to the extent
such disclosure is required by law, by a governmental agency, or in a document
required by law to be filed with a governmental agency. In the event that
disclosure is so required, the Executive shall give prompt written notice to the
Company in order to allow the Company the opportunity to object to or otherwise
resist such requirement. This restriction shall not apply to such disclosure by
him to members of his immediate family, his tax, legal or financial advisors,
any lender, or tax authorities, each of whom shall be advised not to disclose
such information.
(c) "Confidential Information" shall mean all information that is not known
or available to the public concerning the business of the Company or any
Subsidiary relating to any of their products, product development, trade
secrets, customers, suppliers, finances, and business plans and strategies. For
this purpose, information known or available generally within the trade or
industry of the Company or any Subsidiary shall be deemed to be known or
available to the public. Confidential Information shall include information that
is, or becomes, known to the public as a result of a breach by the Executive of
the provisions of Section 11(a) above.
(d) "Subsidiary" shall mean any corporation controlled directly or
indirectly by the Company and any affiliate of the Company.
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12. Non-solicitation of Employees.
(a) During the portion of the Restriction Period as defined below following
the termination of the Executive's employment, the Executive shall not induce
employees of the Company or any Subsidiary, to terminate their employment.
During the portion of the Restriction Period following the termination of the
Executive's employment, the Executive shall not directly or indirectly hire any
employee of the Company or any Subsidiary or any person who was employed by the
Company or any Subsidiary within 180 days of such hiring.
(b) For the purposes of Section 12, "Restriction Period" shall mean the
period beginning with the Effective Date and ending with
(i) in the case of a termination of the Executive's employment without
Cause or a Constructive Termination Without Cause, the end of the Severance
Period;
(ii) in the case of a termination of the Executive's employment for
Cause, the first anniversary of such termination;
(iii) in the case of a termination of the Executive's employment upon
the expiration of the Original Term of Employment or any Renewal Term that
results in the commencement of the Non-renewal Severance Period pursuant to
Section 10 (d) above, the end of the Non-renewal Severance Period;
(iv) in the case of a voluntary termination of the Executive's
employment, the date of such termination.
13. Remedies.
In addition to whatever other rights and remedies the Company may have at
equity or in law, if the Executive breaches any of the provisions contained in
Section 11 or 12 above, the Company (a) shall have the right to immediately
terminate all payments and benefits due under this Agreement contingent upon a
judicial determination that a violation has occurred and (b) shall have the
right to seek injunctive relief. The Executive acknowledges that such a breach
would cause irreparable injury and that money damages would not provide an
adequate remedy for the Company.
14. Resolution of Disputes.
Any disputes arising under or in connection with this Agreement shall be
resolved by binding arbitration, to be held at the location of the Company's
principal offices in accordance with the rules and procedures of the American
Arbitration Association, except that disputes arising under or in connection
with Section 11 and 12 above shall be submitted to the federal or state courts
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in the State of New York. Judgment upon the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof. Each party shall bear
his or its own costs of the arbitration or litigation, including, without
limitation, attorneys' fees. Pending the resolution of any arbitration or court
proceeding, the Company shall continue payment of all amounts and benefits due
the Executive under this Agreement.
15. Indemnification.
(a) The Company agrees that if the Executive is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of the Company or any
Subsidiary or is or was serving at the request of the Company or any Subsidiary
as a director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is the Executive's alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Executive shall be indemnified
and held harmless by the Company to the fullest extent legally permitted or
authorized by the Company's certificate of incorporation or bylaws or
resolutions of the Company's Board of Directors or, if greater, by the laws of
the State of New York, against all cost, expense, liability and loss (including,
without limitation , attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement)reasonably incurred or
suffered by the Executive in connection therewith, and such indemnification
shall continue as to the Executive even if he has ceased to be a director,
member, officer, employee or agent of the Company or other entity and shall
inure to the benefit of the Executive's heirs, executors and administrators. The
Company shall advance to the Executive all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 days after receipt by
the Company of a written request for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses.
(b) Neither the failure of the Company (including its board of directors,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any proceeding concerning payment of amounts claimed by the
Executive under Section 16(a) above that indemnification of the Executive is
proper because he has met the applicable standard of conduct, nor a
determination by the Company (including its board of directors, independent
legal counsel or stockholders) that the Executive has not met such applicable
standard of conduct, shall create a presumption that the Executive has not met
the applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors and officers'
liability insurance policy covering the Executive to the extent the Company
provides such coverage for its other executive officers.
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16. Effect of Agreement on Other Benefits.
Except as specifically provided in this Agreement, the existence of this
Agreement shall not be interpreted to preclude, prohibit or restrict the
Executive's participation in any other employee benefit or other plans or
programs in which he currently participates.
17. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive)
and permitted assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred in connection with the sale or
transfer of all or substantially all of the assets of the Company, provided that
the assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law. The Company further agrees that, in the
event of a sale or transfer of assets as described in the preceding sentence, it
shall take whatever action it legally can in order to cause such assignee or
transferee to expressly assume the liabilities, obligations and duties of the
Company hereunder. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only by will or operation
of law, except as provided in Section 24 below.
18. Representation.
The Company represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization.
19. Entire Agreement.
This Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto.
20. Amendment or Waiver.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by the Executive and an authorized officer of
the Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company, as the case may
be.
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21. Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
22. Survivorship.
The respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment to the extent necessary to
the intended preservation of such rights and obligations.
23. Beneficiaries/References.
The Executive shall be entitled, to the extent permitted under any
applicable law, to select and change a beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following the Executive's death by
giving the Company written notice thereof. In the event of the Executive's death
or a judicial determination of his incompetence, reference in this Agreement to
the Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
24. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of New York without reference to principles of conflict
of laws.
25. Notices.
Any notice given to a Party shall be in writing and shall be deemed to have
been given when delivered personally or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the address indicated below or to such changed address as such Party may
subsequently give such notice of:
If to the Company: Melville Corporation
Xxx Xxxxxx Xxxx
Xxx, Xxx Xxxx 00000
If to the Executive: Xx. Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
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26. Headings.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
27. Counterparts.
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
Melville Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xx. Xxxxxx X. Xxxxxx
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