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EXHIBIT 10.3
[Executive Officer Form]
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the ___ day of
__________, 1996 by and between Whitehall Jewellers, Inc., a
Delaware corporation, and _______________ ("Executive").
W I T N E S S E T H
WHEREAS, Executive currently serves as a key employee of the
Company (as defined in Section 1) and his or her services and knowledge are
valuable to the Company in connection with the management of one or more of the
Company's principal operating facilities, divisions, departments or
subsidiaries;
WHEREAS, concurrently with the execution hereof Executive and
the Company are terminating Executive's employment agreement with the Company,
which employment agreement provided for substantial benefits (including
severance); and
WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure
Executive's continued services, and to encourage Executive's full attention and
dedication to the Company, the Board has authorized the Company to enter into
this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause means (1) the commission by Executive of a felony
involving moral turpitude or (2) any material breach of any statutory or common
law duty to the Company or any subsidiary involving willful malfeasance.
Activities undertaken by Executive in accordance with the letter from the
Company to Executive dated February 12, 1996 and the related amendment of such
date to Executive's prior Employment Agreement dated August 30, 1995 (as
amended) with the Company (notwithstanding the fact that such
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Employment Agreement was terminated) shall not constitute "Cause."
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 25% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of a conversion
or exchange privilege in respect of outstanding convertible or exchangeable
securities), (B) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, (C) any acquisition by an Exempt Person, or (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or consolidation,
each of the conditions described in clauses (i), (ii) and (iii) of subsection
(3) of this Section (1)(c) shall be satisfied;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided, however, that any individual who becomes a
director of the Company subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by the vote
of at least a majority of the directors then comprising the Incumbent Board
shall be deemed to have been a member of the Incumbent Board; and provided
further, that no individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall be deemed to have been a member
of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case, immediately
after such reorganization, merger or consolidation, (i) more than 60% of the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or
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consolidation and more than 60% of the combined voting power of the then
outstanding securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals or entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored or maintained by
the Company or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company) and any Person
which beneficially owned, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 25% or more of the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of the then outstanding
shares of common stock of such corporation or 25% or more of the combined voting
power of the then outstanding securities of such corporation entitled to vote
generally in the election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent Board at
the time of the execution of the initial agreement or action of the Board
providing for such reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a plan
of complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, immediately after such sale or other
disposition, (A) more than 60% of the then outstanding shares of common stock
thereof and more than 60% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or
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any corporation controlled by the Company) and any Person which beneficially
owned, immediately prior to such sale or other disposition, directly or
indirectly, 25% or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 25% or more of the then outstanding shares of common
stock thereof or 25% or more of the combined voting power of the then
outstanding securities thereof entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of directors
thereof were members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or other
disposition.
(d) "Company" means Whitehall Jewellers, Inc., a Delaware
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in a prior
written notice by the Company or Executive, as the case may be, to the other,
delivered pursuant to Section 11 or (2) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.
(f) "Exempt Person" means each of Xxxx X. Xxxxxxxx, Xxxx X.
Xxxxxxxxxx, Xxxxxxx X. Xxxxxxxx and any Affiliate (as such term is defined in
Rule 12b-1 under the Securities Exchange Act of 1934, as in effect on the date
hereof, "Affiliate) thereof and, until consummation of the Company's initial
public offering, Frontenac Company and any Affiliate thereof.
(g) "Good Reason" means, without Executive's express written
consent, the occurrence of any of the following events:
(1) any of (i) the assignment to Executive of any duties
inconsistent in any material respect with Executive's position(s), duties,
responsibilities or status with the Company as of the date of this Agreement or,
if a Change in Control has occurred, immediately prior to such Change in
Control, (ii) a change in Executive's reporting responsibilities, titles or
offices with the Company as in effect on the date of this Agreement or, if a
Change in Control has occurred, immediately prior to such Change in Control or
(iii) any removal or involuntary termination of Executive from the Company
otherwise than as expressly permitted by this Agreement or any failure to
re-elect Executive to any position with the Company held by Executive on the
date of this Agreement or, if a Change in Control has occurred, immediately
prior to such Change in Control;
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(2) a reduction by the Company in Executive's rate of annual
base salary as in effect on the date of this Agreement or, if a Change in
Control has occurred, immediately prior to such Change in Control or as the same
may be increased from time to time thereafter;
(3) any requirement of the Company that Executive (i) be based
anywhere other than at the facility where the Executive is located on the date
of this Agreement (or a new headquarters facility [in downtown Chicago] [within
a 30-mile radius of the Company's current headquarters]) or (ii) travel on
Company business to an extent substantially more burdensome than the travel
obligations of Executive immediately prior to the date hereof or, if a Change in
Control has occurred, immediately prior to such Change in Control;
(4) the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which Executive is participating
immediately prior to the date of this Agreement or, if a Change in Control has
occurred, prior to such Change in Control, unless Executive is permitted to
participate in other plans providing Executive with substantially comparable
benefits, or the taking of any action by the Company which would adversely
affect Executive's participation in or materially reduce Executive's benefits
under any such plan, (ii) provide Executive and Executive's dependents welfare
benefits (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to the date of
this Agreement or, if a Change in Control has occurred, prior to such Change in
Control or, if more favorable to Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies, (iii) provide fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to the date of
this Agreement or, if a Change in Control has occurred, prior to such Change in
Control or, if more favorable to Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies, (iv) provide an office or offices of a size and with
furnishings and other appointments, together with personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
Executive by the Company and its affiliated companies immediately prior to the
date of this Agreement or, if a Change in Control has occurred, prior to such
Change in Control or, if more favorable to Executive, as provided generally at
any time thereafter with respect to other peer executives of the Company
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and its affiliated companies, (v) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and practices of
the Company and its affiliated companies as in effect for Executive immediately
prior to the date of this Agreement or, if a Change in Control has occurred,
prior to such Change in Control or, if more favorable to Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies, or (vi) reimburse Executive promptly for
all reasonable employment expenses incurred by Executive in accordance with the
most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for Executive immediately prior to the date of
this Agreement or, if a Change in Control has occurred, prior to such Change in
Control, or if more favorable to Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 9(b).
For purposes of this Agreement, any good faith determination
of Good Reason made by Executive shall be conclusive; provided, however, that an
isolated, insubstantial and inadvertent action taken in good faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive shall not constitute Good Reason.
(h) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive for any
reason other than a Good Reason, (3) as a result of Executive's death or (4) by
the Company due to Executive's absence from his duties with the Company on a
full- time basis for at least 180 consecutive days as a result of Executive's
incapacity due to physical or mental illness; provided, however, that a
termination of Executive's employment for any reason whatsoever during the
"Window Period" (hereinafter defined) shall not constitute a Nonqualifying
Termination.
(i) "Termination Period" means the period of time beginning
with the date hereof and ending on the earliest to occur of (1) Executive's 70th
birthday, (2) Executive's death and (3) three years following a Change in
Control.
(j) "Window Period" means the 30-day period commencing six
months after the date of a Change in Control.
2. Payments Upon Termination of Employment.
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(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying Termination,
then the Company shall pay to Executive (or Executive's beneficiary or estate)
within 30 days following the Date of Termination, as compensation for services
rendered to the Company:
(1) a lump sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its affiliated
companies through the Date of Termination, to the extent not theretofore paid,
(ii) Executive's annual bonus in an amount at least equal to the higher of (x)
one-half of the maximum bonus the Executive could earn during the fiscal year
during which such Change in Control occurs and (y) the average of the
Executive's annual bonus (annualized for any fiscal year consisting of less than
12 full months) with respect to which bonus paid or payable, including by reason
of any deferral, to Executive by the Company and its affiliated companies in
respect of the two fiscal years of the Company (or such portion thereof during
which Executive performed services for the Company if Executive shall have been
employed by the Company for less than such two fiscal year period) immediately
preceding the fiscal year in which the Change in Control occurs, multiplied by a
fraction, the numerator of which is the number of days in the fiscal year in
which the Change in Control occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, and (iii) any compensation
previously deferred by Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid; plus
(2) a lump-sum cash amount (subject to any applicable payroll
or other taxes required to be withheld pursuant to Section 4) in an amount equal
to (i) 2.5 times (1.5 times if a Change in Control has not occurred) Executive's
highest annual base salary from the Company and its affiliated companies in
effect during the 12-month period prior to the Date of Termination plus (ii) 2.5
times (1.5 times if a Change in Control has not occurred) Executive's highest
annualized (for any fiscal year consisting of less than 12 full months or with
respect to which Executive has been employed by the Company for less than 12
full months), bonus paid or payable, including by reason of any deferral, to
Executive by the Company and its affiliated companies in respect of the five
fiscal years of the Company (or such portion thereof during which Executive
performed services for the Company if Executive shall have been employed by the
Company for less than such five fiscal year period) immediately preceding the
fiscal year in which the Change in Control occurs, provided, however, that in
the event there are fewer than 30 whole months (18 whole months if a Change in
Control has not occurred) remaining from the Date of Termination to the date of
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Executive's 70th birthday, the amount calculated in accordance with this Section
3(a)(2) shall be reduced by multiplying such amount by a fraction the numerator
of which is the number of months, including a partial month (with a partial
month being expressed as a fraction the numerator of which is the number of days
remaining in such month and the denominator of which is the number of days in
such month), so remaining and the denominator of which is 30 (18 if a Change in
Control has not occurred); provided further, that any amount paid pursuant to
this Section 3(a)(2) shall be paid in lieu of any other amount of severance
relating to salary or bonus continuation to be received by Executive upon
termination of employment of Executive under any severance plan, policy or
arrangement of the Company.
(b) For a period of 2.5 years (18 months if a Change in
Control has not occurred) commencing on the Date of Termination, the Company
shall continue to keep in full force and effect all policies of medical,
accident, disability and life insurance with respect to Executive and his
dependents with the same level of coverage, upon the same terms and otherwise to
the same extent as such policies shall have been in effect immediately prior to
the Date of Termination or, if more favorable to Executive, as provided
generally with respect to other peer executives of the Company and its
affiliated companies, and the Company and Executive shall share the costs of the
continuation of such insurance coverage in the same proportion as such costs
were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to Executive within 30 days following the Date of Termination,
a cash amount equal to the sum of (1) Executive's full annual base salary from
the Company through the Date of Termination, to the extent not theretofore paid
and (2) any compensation previously deferred by Executive (together with any
interest and earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid.
3. Certain Additional Payments by the Company. (a) Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, benefit or distribution by the Company or its
affiliated companies to or for the benefit of Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 3) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code, or any successor provision, or any interest or
penalties are incurred by Executive with respect to such excise tax (such
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excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 3(c), all
determinations required to be made under this Section 3, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's public accounting firm (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within 15 business days of the receipt of notice from Executive that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Executive shall
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross- Up Payment, as determined
pursuant to this Section 3, shall be paid by the Company to Executive within
five days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by Executive, it shall
furnish Executive with a written opinion that failure to report the Excise Tax
on Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made, including subsequent interest and penalties ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 3(c) and Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
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(c) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 10 business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(1) give the Company any information reasonably
requested by the Company relating to such claim,
(2) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order
effectively to contest such claim, and
(4) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 3(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided further, that if the Company directs Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment
to Executive on an interest-free basis and shall indemnify and hold Executive
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harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced
by the Company pursuant to Section 3(c), Executive becomes entitled to receive,
and receives, any refund with respect to such claim, Executive shall (subject to
the Company's complying with the requirements of Section 3(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to Section 3(c), a
determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
4. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom.
5. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's employment with
the Company (which shall be deemed to include, without limitation, issues
relating to Executive's stock options) or involving the failure or refusal of
the Company to perform fully in accordance with the terms hereof, the Company
shall reimburse Executive, on a current basis, for all legal fees and expenses,
if any, incurred by Executive in connection with such contest or dispute,
together with interest in an amount equal to the base rate of The First National
Bank of Boston from time to time in effect, but in no event higher than the
maximum legal rate permissible under applicable law, such interest to accrue
from the date the Company receives Executive's statement for such fees and
expenses through the date of payment thereof; provided, however, that in the
event the resolution of any such
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contest or dispute includes a finding denying, in total, Executive's claims in
such contest or dispute, Executive shall be required to reimburse the Company,
over a period of 12 months from the date of such resolution, for all sums
advanced to Executive pursuant to this Section 5; provided, further, that no
such reimbursement shall be required if Executive had a reasonable basis for the
position taken by Executive with respect to such claims.
6. Intentionally Omitted.
7. Scope of Agreement. Nothing in this Agreement
shall be deemed to entitle Executive to continued employment with
the Company or its subsidiaries.
8. Directors and Officers Liability Insurance;
Indemnification. The Company agrees that, notwithstanding a Termination of
Executive's employment with the Company, the Company shall, for at least three
years after the Date of Termination, use all reasonable efforts to have
Executive included as a named insured or otherwise covered for actions or
failures to act by Executive in his capacity as a director or officer of the
Company to at least the same extent as other executive officers or directors, as
the case may be, of the Company under any directors and officers liability
insurance policies maintained by the Company; provided that the additional cost
of providing coverage with a retroactive date including Executive's period of
service or with an extended reporting period or a combination of both does not
materially increase the cost of the Company's directors and officers insurance.
The Company agrees that it will not alter the indemnification provisions in its
charter or by-laws so as to give Executive less protection thereunder with
respect to periods during which Executive serves or served the Company as an
executive officer or other employee as is afforded other executive officers or
peer employees, as the case may be, with respect to periods during which they
serve the Company.
9. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in
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paragraph (a) of this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of the Company hereunder. Failure
of the Company to obtain such assumption prior to the effectiveness of any such
merger, consolidation or transfer of assets shall be a breach of this Agreement
and shall entitle Executive to compensation and other benefits from the Company
in the same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing, the date on which any such merger, consolidation or
transfer becomes effective shall be deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.
10. Notice. (a) For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed (1) if to the Executive, to ________________________,
and if to the Company, to Whitehall Jewellers, Inc., 000 X. Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, attention: Secretary, or (2) to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specify the termination date (which date shall be not
less than 15 days after the giving of such notice). The failure by Executive or
the Company to set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
Executive or the Company hereunder or preclude Executive or the
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Company from asserting such fact or circumstance in enforcing Executive's or the
Company's rights hereunder.
11. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to Executive under any of the provisions of this
Agreement and, such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment (which shall
be deemed to include, without limitation, issues relating to Executive's
options), then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was for Cause,
that the determination by Executive of the existence of Good Reason was not made
in good faith, or that the Company is not otherwise obligated to pay any amount
or provide any benefit to Executive and his dependents or other beneficiaries,
as the case may be, under paragraphs (a) and (b) of Section 3, the Company shall
pay all amounts, and provide all benefits, to Executive and his dependents or
other beneficiaries, as the case may be, that the Company would be required to
pay or provide pursuant to paragraphs (a) and (b) of Section 3 as though such
termination were by the Company without Cause or by Executive with Good Reason;
provided, however, that the Company shall not be required to pay any disputed
amounts pursuant to this paragraph except upon receipt of an undertaking by or
on behalf of Executive to repay all such amounts to which Executive is
ultimately adjudged by such court not to be entitled.
12. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
regard to the principle of conflicts of laws. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which other provisions
shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
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14. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by Executive or the Company to insist upon strict compliance with
any provision of this Agreement or to assert any right Executive or the Company
may have hereunder, including, without limitation, the right of Executive to
terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement. The rights
of, and benefits payable to, Executive, his estate or his beneficiaries pursuant
to this Agreement are in addition to any rights of, or benefits payable to,
Executive, his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
WHITEHALL JEWELLERS, INC.
By:
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---------------------------------
[Executive's Name] [Title]
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