EXHIBIT 10
EMPLOYMENT AGREEMENT
VALUE CITY DEPARTMENT STORES, INC. AND XXXX X. XXXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is by and between Value City Department
Stores, Inc. ("Company") and Xxxx X. Xxxxxxx ("Executive"), and has been fully
executed by both parties and is effective as of February 3, 2002. As described
in subsection 3.7, this Agreement supercedes and replaces the employment
agreement between Executive and Shonac Corporation ("Shonac") that originally
was effective May 1, 1998 and any other oral or written agreement between the
Executive and the Company or Shonac ("Prior Agreement"). The Company agrees to
employ Executive as Chief Executive Officer and President of Value City
Department Stores, Inc. and Executive hereby accepts such employment and agrees
to serve the Company faithfully and loyally subject to the supervision, advice
and direction of the Chairman of the Company's Board of Directors ("Chairman")
and upon the following terms and conditions:
1. Term. The employment of Executive hereunder will commence effective
February 3, 2002, and will end on January 29, 2005 (which date, as the same may
be extended as provided in this Section, is referred to as the "Expiration
Date"), unless sooner terminated or extended as provided in this Agreement. The
Company agrees to notify Executive, in writing, no later than January 31, 2004,
if the Company intends to allow this Agreement to terminate by non-renewal at
the Expiration Date. If such notice of non-renewal is not given by the Company,
this Agreement shall be renewed upon such terms and conditions (including,
without limitation, the period of extension of the Expiration Date) as shall be
negotiated and mutually agreed upon by the parties, in writing, prior to the
Expiration Date; provided, however, (1) such renewal terms and conditions shall
include the Company's continuing obligation to provide Executive at least one
year's notice of its intention to allow this Agreement to terminate by
non-renewal at the extended Expiration Date, and (2) if the parties, acting in
good faith, are unable to negotiate and mutually agree, prior to the Expiration
Date, upon such renewal terms and conditions, this Agreement shall be
automatically renewed for one additional fiscal year of the Company, without any
change in its terms and conditions (other than one fiscal year's extension of
the Expiration Date), and the Company shall be deemed to have timely given, at
least 12 months before the first day of this additional one year period, to
Executive the required notice of its intention to allow this Agreement to
terminate by non-renewal and the term of this Agreement will be deemed to have
ended on the last day of this continuation period.
2. EMPLOYMENT FUNCTIONS.
2.1. POSITION. The Executive shall serve as the Chief
Executive Officer and President of the Company with such authority and duties as
are customary for this position. The Executive shall report directly to and be
subject to the supervision, advice and direction of the Chairman.
2.2. DUTIES. The Executive shall devote his full business
time, best efforts and undivided attention to the business and affairs of the
Company, except for any vacations, illness or disability. Executive is
knowledgeable about the current business affairs and financial status of the
Company, and shall have the duties and responsibilities customarily incident to
the position of Chief Executive Officer and President, subject to the
supervision, advice and direction of the Chairman. Executive agrees that he
shall at all times observe and be bound by all rules,
policies, practices and resolutions heretofore or hereafter adopted in writing
by the Company which are generally applicable and provided to the Company's
officers and employees and which do not otherwise conflict with this Agreement.
Nothing contained in this subsection 2.2 shall be construed to prevent Executive
from: (1) making or holding passive investments in outstanding shares in the
securities of publicly-owned companies or other businesses [other than
organizations described in subsection 4.4, regardless of when and how that
investment was made]; (2) serving on corporate, civic, religious, educational
and/or charitable boards or committees; or (3) delivering periodic lectures or
fulfilling periodic speaking engagements; provided, however, that none of the
foregoing activities may lead to a conflict with his position, duties or any
other obligation in this Agreement.
2.3. PLACE OF PERFORMANCE. The principal location where
Executive will perform his duties will be at the Company's corporate offices in
Columbus, Ohio, except for required travel on the Company's business and except
to the extent to which the Chairman requires Executive to perform duties at
another Company office.
3. COMPENSATION.
3.1. SALARY. The Company shall pay to Executive an annualized
base salary of $700,000 as compensation for his services under this Agreement.
The annualized base salary shall be paid in equal installments in accordance
with the Company's payroll practices for executive employees. Executive's
annualized base salary will be increased annually (as of the first day of each
fiscal year of the Company) during the term of this Agreement by 2.5 percent of
the base salary payable to Executive hereunder during the preceding fiscal year
of the Company and may be further increased during the term of this Agreement at
the discretion of the Company's Board of Directors ("Board"). Also, as soon as
administratively feasible after the parties sign this Agreement, the Company
will make a lump sum payment to Executive equal to the amount Executive would
have received as base salary between the effective date of this Agreement and
the date he begins to receive base salary at the rate described in the first
sentence of this subsection less the amount actually paid to Executive during
this period.
3.2. INCENTIVE COMPENSATION.
3.2.1. SIGNING BONUS. In addition to any other bonus or
incentive pay described in this section, the Company will pay Executive a lump
sum cash payment of $250,000. This signing bonus will be payable when Executive
signs this Agreement and will be paid as soon as administratively possible after
the effective date of this Agreement.
3.2.2. INCENTIVE COMPENSATION. Executive shall be
eligible to receive incentive compensation calculated under the terms of the
Company's Executive Incentive Plan (which contains certain predetermined targets
and measures established by the Company) as such plan is modified by the Company
for the Company's key executives. Under this Incentive Plan, the Company intends
to provide Executive with an annual bonus based on 100 percent of his base
salary if 100 percent of the EBIT goal is met for that year and that this bonus
amount will be adjusted above or below 100 percent of base salary based on the
extent to which the annual EBIT goal is exceeded or not met, as illustrated in
the following table:
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PERCENTAGE OF EBIT PERCENTAGE OF BASE SALARY PAID
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140 percent 200 percent
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Each whole percentage between 80 percent and 140 2.5 percent
percent
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80 percent 50 percent
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Below 80 percent 0 percent
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For purposes of this subsection, EBIT will be calculated without regard to the
effect of any transaction outside the Company's normal business operations or to
the costs of any such transaction.
Any such bonus will be payable within 120 days after the later of the close of
the Company's fiscal year or completion of an outside audit by the Company's
then current independent audit firm.
3.3. STOCK.
3.3.1. STANDARD STOCK OPTIONS. Subject to the terms
of the Value City Department Stores, Inc. 2000 Stock Incentive Plan ("Stock
Incentive Plan") and any applicable standard stock option agreement, Company
will grant to Executive options to purchase 840,000 shares of the Company's
common stock at a per share exercise price of $4.50. These options will be
granted effective February 3, 2002 and shall vest under the following schedule:
------------------------------------------------------- -----------------------------------------------------
DATE PERCENTAGE VESTED
------------------------------------------------------- -----------------------------------------------------
February 1, 2003 20 percent
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January 31, 2004 40 percent
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January 29, 2005 60 percent
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February 4, 2006 80 percent
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February 3, 2007 100 percent
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3.3.2. RESTRICTED STOCK. Subject to the terms of the
Company's Stock Incentive Plan and any applicable restricted stock agreement,
the Company will grant to Executive 110,000 shares of restricted stock. These
restricted shares will be granted as of February 3, 2002 and will vest (and
associated restrictions will lapse) on February 4, 2006, subject to terms
established by the Board when granted, which shall be consistent with the terms
of the Stock Incentive Plan through which the restricted stock is issued.
3.3.3. PERFORMANCE STOCK OPTIONS. Subject to the
terms of the Company's Stock Incentive Plan and any applicable performance stock
option agreement, Company will grant to Executive performance options to
purchase 1,590,000 shares of the Company's stock at a per share exercise price
of $4.50. These options will be granted as of February 3, 2002 and will vest on
(1) January 30, 2010 or, if earlier, (2) the later of (A) January 31, 2004 if,
for each
day of any 60-consecutive trading day period that ends on or before January 31,
2004, the closing price of the Company's stock is at least $12.00 per share or
(B) the last day of (i) any 60-consecutive trading day period that ends after
January 31, 2004 and before January 30, 2010 and on each day of which the
closing price of the Company's stock is at least $12.00 per share or (ii) the
Company has achieved at least 95 percent of the EBIT goal the Board set for the
Company for each of any three consecutive fiscal years ending after the
effective date of this Agreement and on and before January 30, 2010. For
purposes of this subsection, EBIT will be calculated without regard to the
effect of any transaction outside the Company's normal business operations or to
the costs of any such transaction.
3.3.4 ADDITIONAL STOCK GRANTS OR OPTIONS. Executive
shall be eligible for discretionary grants of restricted stock and options as
Company's Board may determine from time to time.
3.4. BENEFIT PLANS. Executive is entitled to participate in
any deferred compensation or other employee benefit plans, including any profit
sharing or 401(k) plans; group life, health, hospitalization and disability
insurance plans; discount privileges; and other employee welfare benefits made
available generally to, and under the same terms as, Company's other executives.
3.5. VACATIONS. Subject to the terms of the Company's vacation
policy applicable to senior executives, the Executive shall be entitled to four
weeks of vacation. The dates of said vacations shall be mutually agreed upon by
the Chairman or its designee and Executive.
3.6. CAR. During the term of this Agreement, the Company (1)
will allow the Executive to continue to use the vehicle he was provided by
Shonac during the term of the prior Agreement, and (2) will pay expenses related
to usual and customary business use (insurance, maintenance, gas) of this
vehicle and (3) if appropriate, will purchase or lease for Executive a
comparable vehicle. These amounts will be grossed-up for taxes. (The term
"grossed up" as used in this Agreement refers to a payment to Executive that,
after reduction for any income or excise taxes due, is equal to the net amount
payable.)
3.7. EFFECT ON PRIOR AGREEMENT. Although this Agreement is a
substitution for and replaces the Prior Agreement, Executive, Company and Shonac
agree that this substitution and replacement will not be treated as a
termination of the Executive's employment under the Prior Agreement or under any
compensation or benefit arrangement in which Executive participated or
benefited. However, Executive's compensation and any other benefits of
continuing employment for 2002 will be governed by the terms of this Agreement
and not the terms of the Prior Agreement.
3.8. EXPENSES. During his employment, Executive shall be
entitled to receive prompt reimbursement for all normal and reasonable expenses
incurred by him in performing services under this Agreement, including all
reasonable expenses of travel, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company. The Company shall furnish Executive with the Company credit cards
provided to its other senior executives for use solely in the performance of his
duties under this Agreement.
3.9. COUNTRY CLUB. The Company will pay the Executive's
country club dues and expenses pursuant to established guidelines.
3.10. TAXES. The compensation provided to Executive hereunder
shall be subject to any withholdings and deductions required by any applicable
tax laws.
4. EXECUTIVE'S OBLIGATIONS. In consideration of employing
Executive and providing him with the compensation and promises made in this
Agreement, Executive agrees, with respect to the Company (which, for these
purposes, includes the Company and all of its subsidiaries, parent corporation
and affiliated entities) as follows:
4.1. CONFIDENTIAL INFORMATION. Executive acknowledges that the
Company has a legitimate and continuing proprietary interest in the protection
of its confidential information and has invested, and will continue to invest,
substantial sums of money to develop, maintain and protect confidential
information. Executive therefore agrees that during and after his employment,
any Confidential Information, as defined below, shall be held in confidence and
treated as proprietary to Company. Executive agrees not to use or disclose any
Confidential Information except to promote and advance the business interests of
Company. Executive agrees that upon his separation from employment, for any
reason whatsoever, he shall not take or copy, and shall immediately return to
Company, any documents that constitute or contain Confidential Information.
"Confidential Information" includes, but is not limited to, any confidential
data, figures, projections, estimates, pricing data, customer lists, buying
manuals or procedures, distribution manuals or procedures, other policy and
procedure manuals or handbooks, supplier information, tax records, personnel
histories and records, information regarding sales, information regarding
properties and any other confidential information regarding the business,
operations, properties or personnel of Company which are disclosed to or learned
by Executive as a result of his employment, but shall not include his personal
personnel records. Confidential Information also shall not include any
information that (1) Executive had in his possession prior to his first
performing services for Company or Shonac that was a matter of public knowledge;
(2) became or becomes a matter of public knowledge thereafter through sources
independent of Executive; (3) has been or is disclosed by Company without
restriction on its use or (4) has been or is required to be disclosed by law or
governmental order or regulation. Executive agrees, if there is any reasonable
doubt whether an item is "public knowledge," that he will not regard the item as
"public knowledge" until and unless the Chairman confirms to the Executive that
the information is public knowledge or an arbitrator, acting pursuant to Section
9, determines that the information is "public knowledge."
4.2. SOLICITATION OF EMPLOYEES. Executive agrees that during
his employment, and following the termination of his employment for any period
of salary continuation or for two years, whichever is greater, he shall not,
directly or indirectly, solicit the Company's employees to leave their
employment; he shall not employ or seek to employ them; and he shall not cause
or induce any of the Company's competitors to solicit or employ the Company's
employees.
4.3. SOLICITATION OF THIRD PARTIES. Executive agrees that
during his employment, and following the termination of his employment for any
period of salary continuation or for two years, whichever is greater, he shall
not, either directly or indirectly, recruit, solicit or otherwise induce or
influence any customer, supplier, sales representative, lender, lessor or any
other person having a business relationship with the Company to discontinue or
reduce the extent of
such relationship except in the course of his duties pursuant to this Agreement
and with the good faith objective of advancing the Company's business interests.
4.4. NON-COMPETITION. Executive agrees that following the
termination of his employment for any period of salary continuation or for two
years, whichever is greater, he shall not, either directly or indirectly, accept
employment with, act as a consultant to, or otherwise perform substantially the
same or similar services (which shall be determined regardless of job title) for
any business that directly competes with the Company's business, which shall be
understood as the sale of off-price and discount merchandise, including, but not
limited to, discount and off price shoes and accessories. Examples of businesses
that compete with the Company's business include, but are not limited to, The
TJX Companies, Inc., T.J. Maxx, Marshall's, Marshall's HomeGoods, X.X. Xxxxxx,
Marmaxx, Winners, Xxxx Stores, Inc, Payless ShoeSource, Off-broadway Shoes,
Famous Footwear and Footstar. The restriction imposed in this subsection applies
to any parent, division, affiliate, newly formed or purchased business(es)
and/or successor of a business that competes with the Company's business.
4.5. POST-TERMINATION COOPERATION. Executive agrees that upon
termination of his employment with the Company he will continue to cooperate in
the following areas:
4.5.1. WITH THE COMPANY. Executive agrees that he will
make himself reasonably available to answer questions for the Company's officers
regarding his position or duties or any project, initiative or effort for which
Executive was responsible during his employment with the Company. Executive also
agrees to cooperate with the Company during the course of all third-party
proceedings arising out of the Company's business about which Executive has
knowledge or information. Such proceedings may include, but are not limited to,
internal investigations, administrative investigations or proceedings and
lawsuits (including pre-trial discovery and trial testimony). For purposes of
this subsection, cooperation includes, but is not limited to, Executive's making
himself reasonably available for interviews, meetings, depositions, hearings
and/or trials without the need for subpoena or assurances by the Company,
providing any and all documents in his possession that relate to the proceeding,
and providing assistance in locating any and all relevant notes and/or
documents. Executive will be entitled to receive reasonable compensation (and
reimbursement for reasonable expenses incurred in connection with) any activity
described in this subsection.
4.5.2. WITH THIRD PARTIES. Executive agrees not to
communicate with, or give statements or testimony to, any opposing attorney,
opposing attorney's representative (including private investigator) or current
or former employee relating to any matter about which Executive has knowledge or
information (other than knowledge or information that is "public knowledge" as
defined in subsection 4.1) as a result of his employment with the Company or
Shonac unless compelled to do so by lawfully-served subpoena or court order.
Such matters specifically include, but are not limited to, any pending or
threatened lawsuits or administrative investigations. Executive also agrees to
notify the Chairman immediately if he is contacted by a third party or receives
a subpoena or court order to appear and testify.
4.5.3. WITH MEDIA. Executive agrees not to communicate
with, or give statements to, any member of the media (print, television or
radio) relating to any matter about which Executive has knowledge or information
(other than knowledge or information that is "public knowledge" as defined in
subsection 4.1) as a result of his employment, including peri-
ods of employment with Shonac. Such matters specifically include, but are not
limited to, any pending or threatened lawsuits or administrative investigations.
Executive also agrees to notify the Chairman immediately if he is contacted by
any member of the media.
4.6. NON-DISPARAGEMENT. Executive and Company agree that
during and after the Term of this Agreement neither shall make any disparaging
remarks about the other and Executive will not make any disparaging remarks
about the Company's Chairman or any of the Company's senior executives. However,
this subsection will not preclude (1) any remarks that may be made by Executive
under the terms of subsections 4.5, (2) the Company from making disparaging
remarks about Executive concerning any conduct that may lead to a termination
for Cause, as defined in subsection 5.3 (including, but not limited to,
initiating an inquiry or investigation that may result in a termination for
Cause), but only to the extent reasonably necessary to investigate Executive's
conduct and to protect the Company's interests or (3) the Executive from making
disparaging remarks about the Company concerning any conduct that may lead to a
termination for Good Reason, as defined in subsection 5.4 (including, but not
limited to, initiating an inquiry or investigation that may result in a
termination for Good Reason), but only to the extent reasonably necessary to
investigate Company's conduct and to protect the Executive's interests.
4.7. REMEDIES. Except as expressly provided in subsection 4.1,
Executive agrees that any disputes under Section 4 shall not be subject to
arbitration under Section 9. If Executive breaches any provision of Section 4 of
this Agreement, the damage may be substantial, although difficult to quantify,
and money damages may not afford the Company an adequate remedy; therefore, if
Executive breaches or threatens to breach Section 4, the Company shall be
entitled, in addition to other rights and remedies, to specific performance,
injunctive relief and other equitable relief to prevent or restrain such
conduct.
5. TERMINATION AND RELATED BENEFITS. This Agreement shall
terminate upon the occurrence of the events described in this section. The
incentive compensation, stock and stock options and severance benefits provided
under this Agreement are provided in exchange for the covenants and releases
made and entered into by and between the Executive and the Company, which
covenants and releases have a value equal to 100 percent of the incentive
compensation, stock and stock options and severance benefits provided in this
Agreement.
5.1. DEATH. This Agreement shall terminate automatically on
the date of Executive's death. In the event of termination under this subsection
5.1, the Company shall make the following payments to the beneficiary the
Executive designates on the attached form or, with respect to any option or
restricted stock, the beneficiary the Executive designates under the Stock
Incentive Plan (or other equity plan) under which the options or restricted
stock was issued ("Beneficiary"):
5.1.1. BASE SALARY. Base salary earned as of the date of
termination.
5.1.2. INCENTIVE COMPENSATION. The pro rata share of any
incentive compensation that, but for Executive's death, he would have otherwise
received under the Company's Executive Incentive Plan on the date of death and
based on the extent to which performance standards are met on the last day of
the year in which the Executive dies.
5.1.3. STANDARD STOCK OPTIONS. Subject to the terms of
any applicable standard stock option agreement, Executive's Beneficiary may
exercise any outstanding standard stock options that are then vested and that
would have been vested if the Executive had lived until the last day of the
fiscal year during which he dies.
5.1.4. RESTRICTED STOCK. All amounts payable on account
of Executive's death under any applicable restricted stock agreement (determined
as if Executive has died on the last day of the fiscal year during which he
dies) will be distributed to the Executive's Beneficiary.
5.1.5. PERFORMANCE STOCK OPTIONS. Subject to the terms of
any applicable performance stock option agreement, Executive's Beneficiary may
exercise any outstanding performance stock options that are then vested and that
would have been vested if the Executive had lived until the last day of the
fiscal year during which he dies.
5.2. DISABILITY. Upon Executive's permanent disability, the
Company shall have the right to terminate this Agreement immediately upon notice
to Executive. For these purposes, permanent disability shall mean that Executive
cannot, with a reasonable accommodation, perform his duties on a full-time basis
for a period of more than six consecutive calendar months due to a physical or
mental disability or infirmity. In the event of termination as a result of
permanent disability, the Company shall pay to the Executive (and not the
Executive's Beneficiary) the amounts described in subsection 5.1 as if the
Executive died on the date his permanent disability is established.
5.3. CAUSE. The Company may terminate the Executive's
employment for Cause upon notice to Executive. The Company shall have "Cause" to
terminate the Executive's employment upon Executive's (1) failure to
substantially perform his position or duties, provided that the Company shall
make a written demand for substantial performance setting forth the specific
reason(s) for same and Executive shall, if the failure is one that can be cured,
have 60 days to cure; (2) willful, illegal or grossly negligent conduct which is
materially injurious to the Company monetarily or otherwise; (3) violation by
Executive of laws or regulations governing the Company; (4) breach of any
fiduciary duty owed to the Company by Executive; (5) misrepresentation or
dishonesty by Executive which the Company determines has had or is likely to
have a material adverse effect upon the Company's operations or financial
conditions; (6) breach of subsection 2.2 or Section 4 of this Agreement; (7)
involvement in any act of moral turpitude that has an injurious effect on the
Company or its reputation; or (8) breach of the terms of any non-solicitation or
confidentiality clauses contained in an employment agreement(s) with a former
employer. Executive shall have an opportunity to be heard by the Board prior to
a termination for Cause. In the event of a termination for Cause, the Company
shall pay to the Executive:
5.3.1. BASE SALARY. Any base salary earned to the date of
termination.
5.3.2. INCENTIVE COMPENSATION. Any unpaid incentive
compensation earned under the terms of the Company's Executive Incentive Plan
for the fiscal year that ends before the fiscal year during which he is
terminated for Cause, as defined in subsection 5.3 (but no incentive
compensation will be given with respect to the fiscal year during which he is
terminated for Cause, as defined in subsection 5.3).
5.3.3. STANDARD STOCK OPTIONS. Executive's entitlement to
standard stock options shall be as provided in the Company's Stock Incentive
Plan and any applicable standard stock option agreement.
5.3.4. RESTRICTED STOCK. Executive's entitlement to
restricted stock shall be as provided in the Company's Stock Incentive Plan and
any applicable restricted stock agreement.
5.3.5. PERFORMANCE STOCK OPTIONS. Executive's entitlement
to performance stock options shall be as provided in the Company's Stock
Incentive Plan and any applicable performance stock option agreement.
5.4. WITHOUT CAUSE OR GOOD REASON. The Company may terminate
Executive's employment at any time Without Cause upon notice to Executive. A
termination "Without Cause" is a termination of the Executive's employment by
the Company for any reason other than those set forth in subsections 5.1
[Death], 5.2 [Disability], 5.3 [Cause] or 5.8 [Non-Renewal] of this subsection.
Also, the Executive may terminate his employment for "Good Reason" (as defined
in this section). Except as provided in Section 5.6, in the event of a
termination by the Company Without Cause or by the Executive for Good Reason,
the Company shall pay to Executive:
5.4.1. BASE SALARY. Base Salary for 12 months (or, if
longer, for the balance of the term of this Agreement determined without regard
to the special period described in Section 1(2)) following the effective date of
termination, which shall be paid in equal installments in accordance with the
Company's payroll practices for executive employees. The Company shall also
reimburse Executive for his cost of maintaining continuing health care coverage
for a period of no more than 18 months following the effective date of
termination; provided, however, that health insurance reimbursements shall cease
upon Executive's becoming eligible for similar coverage under another benefit
plan and further provided that the amount of this reimbursement will not be
larger than the sum of the premiums the Executive would have incurred under
COBRA to maintain coverage for 18 months under the Company's plan in which he
was participating (and at the same level he was participating) when his
employment terminated. Executive shall have a duty to mitigate these payments,
as described in subsection 10.5.
5.4.2. INCENTIVE COMPENSATION. The pro rata share of any
incentive compensation that, but for Executive's termination Without Cause or
the Executive's termination for Good Reason, he would have otherwise received
under the Company's Executive Incentive Plan on the date of his termination
Without Cause or termination for Good Reason and based on the extent to which
performance standards are met on the last day of the year in which the Executive
is terminated Without Cause or terminates for Good Reason.
5.4.3. STANDARD STOCK OPTIONS. Subject to the terms of
the Company's Stock Incentive Plan and any applicable standard stock option
agreement, all standard stock options will be fully vested and exercisable.
5.4.4. RESTRICTED STOCK. Subject to the terms of the
Company's Stock Incentive Plan and any applicable restricted stock agreement,
all restrictions then imposed on any restricted stock (other than those imposed
by any applicable state or federal statute) will lapse and be removed and the
shares will be distributed to Executive.
5.4.5 PERFORMANCE STOCK OPTIONS. Subject to the terms of
the Company's Stock Incentive Plan and any applicable performance stock option
agreement, all performance stock options will be fully vested and exercisable.
5.4.6 DEFINITION OF GOOD REASON. For purposes of this
Agreement, "Good Reason" means without Executive's express prior written
consent, the occurrence of any one or more of the following events during the
term of this Agreement and which is not corrected to Executive's reasonable
satisfaction within 60 days after he gives notice to the Chairman of the
Company's Board of the circumstance that he believes does or may constitute Good
Reason:
(1) A material reduction in Executive's duties,
responsibilities or status with respect to Company, as compared to those in
effect on the effective date of this Agreement (but will not include any changes
resulting directly from implementation of a plan that restructures the Company's
business organization and which Executive designed or was materially involved in
designing and to which Executive has specifically agreed in writing);
(2) Deprivation of Executive of the titles of Chief
Executive Officer and President of Company without a simultaneous grant of a
more senior title;
(3) The permanent assignment to Executive of job
duties materially inconsistent with Executive's office on the effective date of
this Agreement;
(4) The failure of Company to maintain Executive's
relative level of coverage under the employee benefit or retirement plans,
policies, practices or arrangements as in effect on the effective date of this
Agreement, both in terms of the amount of benefits provided and the relative
level of Executive's participation. However, Good Reason will not arise under
this subsection if Company eliminates and/or modifies any of these programs if
required by law to do so or to the extent needed to preserve the tax-character
of the plan, policy, practice or arrangement;
(5) Any material breach of this Agreement including
failure to make any payment or grant provided under this Agreement when due by
or on or in behalf of the Company; or
(6) After a Change in Control, (i) a requirement
that Executive relocate his principal office or worksite (or the indefinite
assignment of Executive) to a location more than 50 miles distant from (A) the
principal office or worksite to which he was permanently assigned as of the
Effective Date or (B) any location to which Executive is permanently assigned,
with his consent, after the Effective Date or (ii) relocation of the Company's
corporate headquarters to a site that is more than 50 miles distant from (A) its
location on the effective date of this Agreement or (B) any location to which it
is moved with his concurrence after the effective date of this Agreement. For
purposes of this subsection, the Executive will be deemed to have consented to
any relocation undertaken as part of a plan that restructures the Company's
business organization and which Executive designed or was materially involved in
designing and to which Executive has specifically agreed in writing)
5.5. VOLUNTARY TERMINATION BY EXECUTIVE. Executive may
voluntarily terminate his employment with the Company at any time. In the event
of Executive's voluntary termination, the Company shall pay to Executive the
amounts described in subsection 5.3 [Cause] as if the termination had been
pursuant to that subsection.
5.6. CHANGE IN CONTROL. Subject to subsection 5.7, if the
Company terminates Executive's employment during the term of this Agreement
(including any renewals under Section 1) Without Cause, as defined in subsection
5.3, or if the Executive terminates employment for Good Reason as defined in
subsection 5.4.6 within six consecutive calendar months ending immediately
before the month in which a Change in Control occurs or 24 consecutive calendar
months beginning after a "Change in Control" (as defined in subsection 5.6.5)
the Company will pay the following amounts (reduced by any amounts paid or
benefit provided under Section 5.4 on account of a termination Without Cause or
for Good Reason within the six consecutive calendar months ending immediately
before the month in which a change in control occurs):
5.6.1. BASE SALARY AND INCENTIVE COMPENSATION. Within 30
days, the Company will pay to the Executive a lump sum amount equal to the sum
of (1) 300 percent of his base salary (at the annual rate in effect on the date
of termination) plus (2) 300 percent of his targeted bonus under the Incentive
Plan described in subsection 3.2.2 (based on achievement of 100 percent of EBIT)
for the year in which his employment terminates. For purposes of this
subsection, EBIT will be calculated without regard to the effect of any
transaction outside the Company's normal business operations or to the costs of
any such transaction.
5.6.2. STANDARD STOCK OPTIONS. Subject to the terms of
the Company's Stock Incentive Plan and any applicable standard stock option
agreement, all outstanding standard stock options will be fully exercisable.
5.6.3. RESTRICTED STOCK. Subject to the terms of the
Company's Stock Incentive Plan and any applicable restricted stock agreement,
all restrictions imposed on any outstanding shares of restricted stock will
lapse.
5.6.4. PERFORMANCE STOCK OPTIONS. Subject to the terms of
the Company's Stock Incentive Plan and any applicable performance stock option
agreement, all outstanding performance stock options will be fully exercisable.
5.6.5. CHANGE IN CONTROL. For purposes of this Agreement
and except as provided below, "Change in Control" means the occurrence of the
following:
(1) Other than as a result of the exercise by
Cerebus Partners, L.P. of board representation rights under the Senior
Convertible Facility, more than half of the Persons who were directors of the
Company on the first day of any period consisting of twelve (12) consecutive
calendar months (the first of which twelve (12) month periods commencing with
the first day of the month during which this Agreement was executed), cease, for
any reason other than death, disability or replacement by other Persons
nominated by a nominating committee controlled by Schottenstein Stores
Corporation to be directors of the Company; or
(2) The failure of Schottenstein Stores
Corporation to "Control" (as defined in the Loan Agreement) the "Borrowers" (as
defined in the Loan Agreement).
Notwithstanding the foregoing, when measuring the effect of an event on any
option or restricted stock granted under subsections 3.3.1, 3.3.2 and 3.3.3.,
"Change in Control" will have the same meaning given to this term under the
Stock Incentive Plan (or other equity plan) under which the option or restricted
stock is granted.
5.7. EXCISE TAX EQUALIZATION PAYMENT.
5.7.1. If the Executive becomes entitled to a payment
under subsection 5.6 and/or any other payment or benefit under this Agreement or
under any other agreement with or plan of the Company (in the aggregate, the
"Total Payments") and if any of the Total Payments will be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") or any similar tax that may hereafter be imposed (the "Excise
Tax"), the Company shall pay to the Executive in cash an additional lump sum
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive after deduction of any Excise Tax upon the Total Payments and any
federal, state and local income tax, wage, employment and Excise Tax upon the
Gross-Up Payment (including FICA), shall be equal to the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practicable
following the effective date of Executive's termination, but in no event beyond
thirty (30) days from such date.
5.7.2 In determining the potential impact of the Excise
Tax, the Company may rely on any advice it deems appropriate, including, but not
limited to, the counsel of its independent auditors. For purposes of determining
whether any of the Total Payments will be subject to the Excise Tax and the
amounts of such Excise Tax:
(1) Any other payments or benefits received or to
be received by the Executive in connection with a Change in Control or the
Executive's termination of employment [whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, or with
any Person (as defined in subsection 5.6.5) whose actions result in a Change in
Control or any Person affiliated with the Company or such Persons] shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of Section
280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion
of the Company's independent auditors, such other payments or benefits (in whole
or in part) do not constitute parachute payments, or unless such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the base amount within the meaning of Section 280G(b)(3) of the
Code, or are otherwise not subject to the Excise Tax;
(2) The amount of the Total Payments which shall be
treated as subject to the Excise Tax shall be equal to the amount of excess
parachute payments within the meaning of Section 280G(b)(1) of the Code [after
applying subsection 5.7.2(1)]; and
(3) The value of any noncash benefits or any
deferred payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
(4) For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Executive's residence on the effective date of the Executive's termination, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
5.7.3. In the event the Internal Revenue Service adjusts
the computation of the Company under subsection 5.7.2 so that the Executive did
not receive the greatest net benefit, the Company shall reimburse the Executive
for the full amount necessary to make the Executive whole, plus a market rate of
interest, as determined by the Committee; provided, however, that the Executive
follows the procedures set forth in this subsection 5.7.3.
(1) The Executive shall notify the Company if and
when he consents to the extension of the statute of limitations for any year for
which a payment is made under Section 5.6;
(2) The 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 ten (10) business days
after the later of either: (A) the date the Executive has actual knowledge of
such claim or (B) ten (10) days after the Internal Revenue Service issues to the
Executive either a written report proposing imposition of the Excise Tax or a
statutory notice of deficiency with respect thereto, and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which it 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 the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) Give the Company any information reasonably
requested by the Company relating to such claim;
(ii) 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;
provided, however, (A) nothing in this Agreement shall obligate Executive to
extend any statute of limitations with respect to any tax return if any other
tax issues have been, or might be, raised by the Internal Revenue Service in
connection with such return and (B) Executive shall be entitled to be
represented by counsel of his own choosing with respect to such other issue(s)
and such counsel and the counsel selected by the Company shall reasonably
cooperate with one another in the respective representations;
(iii) Cooperate with the Company in good faith
in order effectively to contest such claim; and
(iv) Permit the Company to participate in any
proceedings relating to such claims.
(3) Provided, however, that the Company shall
directly bear and pay all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the 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 of the
foregoing provisions of this subsection 5.7.3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim. However, if the
Executive does not comply in every respect with the procedures described in this
subsection, (A) the Company will not be obliged to defend (or participate in the
defense of) the Executive against any claim made by the Internal Revenue Service
and (B) will not be liable in any respect for any additional taxes, interest or
penalties assessed against the Executive.
(4) If, after the receipt by the Executive of an
amount pursuant to this subsection 5.7 (including the Gross-Up Payment), the
Executive becomes entitled to receive any refund with respect to such claim due
to an overpayment of any Excise Tax or income tax, including interest and
penalties with respect thereto, the Executive shall (subject to the Company's
complying with the requirements of this subsection 5.7.3) 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 the Executive
of an amount advanced by the Company pursuant to this subsection 5.7.3, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (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.
5.8. NON-RENEWAL. Executive's employment shall terminate on
the last day of the term of the Agreement if the Company fails to renew the
Agreement as provided for in Section 1 before a Change in Control. In the event
of termination by non-renewal, Company will pay Executive only the amount
described in subsection 5.3 (as if he had been terminated for Cause) plus base
salary, at the rate then in effect, for 12 months. Also, Executive will be
entitled to any standard stock options, restricted stock and performance stock
options that would have been vested during the one year following the date of
termination but Executive will not be entitled to any additional compensation or
benefits. However, if the Company fails to renew the Agreement anytime after a
Change in Control, the Executive will receive the payments described in
subsections 5.6 and 5.7.
5.9. METHOD OF PAYMENT. The Company, at its option, may elect
to pay, as a lump sum, any installment payments due under Section 5. If the
Company decides to accelerate payment of any installment obligation due under
Section 5, the amount paid will be reduced to reflect the value of the
accelerated payment. This reduction will be based on the rate paid under 90-day
U.S. Treasury Bills issued on the first issue date after this Agreement
terminates.
5.10. APPLICATION OF PRO RATA. Whenever a pro rata share is
required to be paid under this Section 5, it will be based on the number of days
between the first day of the fiscal year during which Executive terminates
employment and the date that Executive terminates employment divided by the
number of days in the fiscal year during which the Executive terminates
employment.
6. NOTICE.
6.1. HOW GIVEN. Whenever in this Agreement notice is permitted
or required, the notice shall be in writing and delivered in person or by
registered, U.S. mail, return receipt requested, postage prepaid, or through
Federal Express, UPS, DHL and any other reputable professional delivery service
that maintains a confirmation of delivery system. In the event of delivery by
mail, the notice shall be addressed to the Chairman at the Company's
then-current corporate offices and to Executive at his then-current address as
contained in his personnel file.
6.2. EFFECTIVE DATE. Notice is effective on the date it is
delivered in the event of personal delivery, or on the date its receipt is
acknowledged in the event of delivery by registered mail or through a
professional delivery service described in subsection 6.1.
6.3. TERMINATION. Any notice pertaining to termination of
employment under Section 5 of this Agreement shall indicate the specific
provision relied upon in this Agreement and describe in reasonable detail the
facts and circumstances that purport to provide the basis for the termination.
7. RELEASE. In exchange for the payments and benefits to
Executive described in this Agreement, as well as any and all other mutual
promises made in this Agreement, Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, legatees and assigns agree to release and forever discharge the
Company and its subsidiaries, parent corporations and affiliated entities, and
its and their executives, officers, directors, agents, attorneys, successors and
assigns, from any and all claims, suits and/or causes of action that grow out of
or are in any way related to his recruitment to or his employment with the
Company, except Executive does not release and discharge the Company for any
claim that the Company has breached this Agreement and such claims will be
subject to arbitration pursuant to Section 9 of this Agreement. This release
includes, but is not limited to, any claims that the Company violated the
Employee Retirement and Income Security Act, the Age Discrimination in
Employment Act, the Older Worker's Benefit Protection Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964 (as amended), the
Family and Medical Leave Act, any law prohibiting discrimination, harassment or
retaliation in employment, any claim of promissory estoppel or detrimental
reliance, defamation, intentional infliction of emotional distress, the public
policy of any state, or any federal, state or local law. Executive agrees that,
upon termination of his employment, he shall reaffirm and execute this release
in writing. If Executive fails to reaffirm and execute this release, Executive
agrees that he will not receive any payment from the Company other than the
salary, earned incentive pay and benefits due and payable as a result of actual
work for the Company. Specifically, Executive agrees that a necessary condition
for the payment of any of the amounts described in Section 5 in the event of
termination (except termination under subsection 5.1 [Death]) is Executive's
reaffirmation of this release upon termination of his employment. Executive
agrees that he is an experienced senior executive knowledgeable about the claims
that might arise in the course of his employment with
the Company and that he knowingly agrees that the payments upon termination
(except those upon Executive's Death) provided for in the Agreement are
satisfactory consideration for the release of such possible claims. Executive is
advised to consult with an attorney prior to executing this Agreement. Executive
agrees that he has been given 21 days in which to consider this release.
Executive may revoke his consent to this Agreement by delivering a written
notice of such revocation to the Chairman within seven days of his signing this
Agreement. Should Executive revoke this Agreement, it shall become null and void
and Executive must return any compensation received under it, except salary
earned for actual work.
8. INSURANCE. The Company shall, to the extent permitted by law,
include Executive during the term of this Agreement under any directors and
officers liability insurance policy maintained for its directors and officers.
The coverage shall be at least as favorable to Executive in amount and each
other material respect as the coverage of other directors and officers covered
thereby. This obligation to provide insurance for Executive shall survive
expiration or termination of this Agreement with respect to proceedings or
threatened proceedings based on acts or omissions of Executive occurring during
Executive's employment with the Company or with any affiliated company.
9. ARBITRATION. UNLESS STATED OTHERWISE IN THIS AGREEMENT, THE
PARTIES AGREE THAT ARBITRATION SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR EACH
OF THEM TO REDRESS ANY DISPUTE, CLAIM OR CONTROVERSY INVOLVING THE
INTERPRETATION OF THIS AGREEMENT OR THE TERMS, CONDITIONS OR TERMINATION OF THIS
AGREEMENT OR THE TERMS, CONDITIONS OR TERMINATION OF EXECUTIVE'S EMPLOYMENT WITH
THE COMPANY, INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS FOR ANY TORT, BREACH OF
CONTRACT, VIOLATION OF PUBLIC POLICY OR DISCRIMINATION, WHETHER SUCH CLAIM
ARISES UNDER FEDERAL OR STATE LAW.
9.1. The Executive expressly understands and agrees that the
claims that are subject to arbitration under this subsection include, but are
not limited to, asserted violations of the Employee Retirement Income Security
Act of 1974, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964 (as amended), the
Family and Medical Leave Act, the Older Worker's Benefit Protection Act; and any
other federal, state or local statute, common law or regulation governing
employment relationships, employment discrimination, harassment or retaliation.
9.2. The parties intend that any arbitration award shall be
final and binding and that a judgment on the award may be entered in any court
of competent jurisdiction, and enforcement may be had according to its terms.
This subsection shall survive the termination or expiration of this Agreement.
9.3. Arbitration shall be held in Columbus, Ohio, and shall be
conducted by a retired federal judge or other qualified arbitrator. The
arbitrator will be mutually agreed upon by the parties and the arbitration will
be conducted in accordance with the Voluntary Arbitration Rules of the American
Arbitration Association then in effect. The parties shall have the right to
conduct discovery pursuant to the Federal Rules of Civil Procedure; provided,
however, that the Arbitrator shall have the authority to establish an expedited
discovery schedule and cutoff and to resolve any discovery disputes. The
Arbitrator shall not have jurisdiction or authority to change any provision of
this Agreement by alterations of, additions to or subtractions from the terms
hereof. The Arbitrator's sole authority in this regard shall be to interpret or
apply any provision(s) of this Agreement or any public law alleged to have been
violated. The Arbitrator shall be limited to awarding compensatory damages,
including unpaid wages or benefits, but, to the extent allowed by law, shall
have no authority to award punitive, exemplary or similar-type damages.
9.4. Any claim or controversy not sought to be submitted to
arbitration, in writing, within 120 days of when the party asserting the claim
knew, or through reasonable diligence should have known, of the facts giving
rise to that party's claim, shall be deemed waived and the party asserting the
claim shall have no further right to seek arbitration or recovery with respect
to such claim or controversy. Both parties agree to strictly comply with the
time limitation specified in this subsection. For purposes of this section, a
claim or controversy is sought to be submitted to arbitration if either party
gives notice to the other that (1) an issue has arisen or is likely to arise
that, unless resolved otherwise, may be resolved through arbitration under this
section and (2) unless the issue is resolved otherwise, the complaining party
intends to submit the matter to arbitration under the terms of this section.
9.5. To the extent allowed by law, the parties shall split the
arbitrator's fee. Additionally, and also to the extent allowed by law, the
Company will reimburse Executive for all other costs of the arbitration
(including any attorney's fees) he incurred in connection with an arbitration
affecting a matter under this Agreement and in which the Executive prevailed;
provided, however, that the amount of this reimbursement will be no more than
the smaller of (1) the amount incurred or (2) the larger of (A) the additional
amount awarded by the arbitrator as a result of the arbitration with respect to
which the costs and attorney fees were incurred or (B) the amount the arbitrator
believes is an equitable reimbursement taking into account the nature and
significance of the matter raised.
9.6. The parties hereby acknowledge that since arbitration is
the exclusive remedy, neither party has the right to resort to any federal,
state or local court or administrative agency concerning breaches of this
Agreement or any other matter subject to arbitration, except as otherwise
provided in this Agreement, and that the decision of the Arbitrator shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court before any administrative agency with respect to any
arbitrable claim or controversy.
9.7. EXECUTIVE AND THE COMPANY EACH WAIVE THE RIGHT TO HAVE A
CLAIM OR DISPUTE WITH ONE ANOTHER DECIDED IN A JUDICIAL FORUM OR BY A JURY,
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT.
10. GENERAL PROVISIONS.
10.1. REPRESENTATION OF EXECUTIVE. Executive represents and
warrants that he is not under any contractual or legal restraint that prevents
or prohibits him from entering into this Agreement or performing his obligations
under this Agreement.
10.2. MODIFICATION OR WAIVER; ENTIRE AGREEMENT. No provision
of this Agreement may be modified or waived except in a document signed by
Executive and the Chairman or such other person as may be designated by the
Board. This Agreement, and any attachments referenced in the Agreement,
constitute the entire agreement between the parties regarding their employment
relationship, and any other agreements are terminated and of no further force
or legal effect. No agreements or representations, oral or otherwise, with
respect to the subject matter hereof have been made or relied upon by either
party which are not set forth expressly in this Agreement.
10.3. GOVERNING LAW; SEVERABILITY. This Agreement is intended
to be performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations. If any provisions of this
Agreement, or the application thereof to any person or circumstance, shall, for
any reason and to any extent, be held invalid or unenforceable, such invalidity
and unenforceability shall not affect the remaining provisions hereof and the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The validity,
construction and interpretation of this Agreement and the rights and duties of
the parties hereto shall be governed by the laws of the State of Ohio, without
reference to the Ohio choice of law rules.
10.4. NO WAIVER. Except as otherwise provided in subsection
9.4, failure to insist upon strict compliance with any term hereof shall not be
considered a waiver of any such term.
10.5. MITIGATION. If Executive obtains other employment during
any period in which he is entitled to receive continued salary or incentive
payments under Section 5, any salary or bonus payments (but excluding directors'
fees) earned by Executive during such period shall reduce the Company's
obligation to pay continued salary and/or other incentive pay amounts under
Section 5 by the amount of the salary and/or incentive compensation amounts the
Executive earns.
10.6. WITHHOLDING. All payments required to be made by the
Company hereunder to the Executive or his estate or beneficiaries shall be
subject to the withholding of such amounts as the Company may reasonably
determine it should withhold pursuant to any applicable law.
10.7. SURVIVAL. Subject to the terms of the Executive's
beneficiary designation form, the parties agree that the covenants and promises
set forth in Sections 4 through 10 shall survive the termination of this
Agreement and continue in full force and effect.
10.8. MISCELLANEOUS. No right or interest to, or in, any
payments shall be assignable by the Executive; provided, however, that this
provision shall not preclude Executive from designating in writing one or more
beneficiaries to receive any amount that may be payable after Executive's death
and shall not preclude the legal representative of Executive's estate from
assigning any right hereunder to the person or persons entitled thereto. This
Agreement shall be binding upon and shall inure to the benefit of the Executive,
his heirs and legal representatives and the Company and its successors. The
rights of Executive under this Agreement shall be solely those of an unsecured
general creditor of the Company. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof.
10.9. SUCCESSORS TO COMPANY. This Agreement may and shall be
assigned or transferred to, and shall be binding upon and shall inure to the
benefit of, any successor of the Company, and any such successor shall be deemed
substituted for all purposes of the "Company" under the terms of this Agreement.
As used in this Agreement, the term "successor" shall
mean any person, firm, corporation or business entity which at any time, whether
by merger, purchase or otherwise, acquires all or essentially all of the assets
of the business of the Company. Notwithstanding such assignment, the Company
shall remain, with such successor, jointly and severally liable for all its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement, which includes an arbitration provision, and consists of 21 pages.
EXECUTIVE
/s/ Xxxx X. Xxxxxxx
----------------------------------------------
Signed: 07/24/2002
VALUE CITY DEPARTMENT STORES, INC.
By: /s/ Xxx Xxxxxxxxxxxxx
------------------------------------------
Signed: 07/24/2002
