Exhibit 10(b)
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made on October 31, 1996,
among Xxxxxxxx Stores Inc., a Michigan corporation (the "Company"), Xxxxxxxx
Stores Realty Company, a Michigan corporation ("Realty"), Xxxxxxxx Credit
Corp., a Michigan corporation ("Credit"), and Xxxx X. Xxxxxxxxx ("Xx.
Xxxxxxxxx"). The Company, Realty, Credit and Xx. Xxxxxxxxx are sometimes
referred to together as the "Parties" and individually as a "Party".
R E C I T A L S
A. Xx. Xxxxxxxxx is the Chairman of the Board and Chief
Executive Officer and a director of each of the Company, Realty and Credit
and a member of the Executive Committee and the Directors Committee of the
Company.
B. Xx. Xxxxxxxxx wishes to resign from all of his positions
with the Company and its subsidiaries, Realty and Credit, other than as a
Director of the Company, and to provide for his severance compensation in
accordance with this Agreement.
C. The Company, Realty and Credit wish to accept Xx. Xxxxxxxxx'x
resignation and to provide for his severance compensation in accordance with
this Agreement.
THEREFORE, the Parties agree as follows:
1. Termination of Xx. Xxxxxxxxx'x Employment. Effective as of the
date of this Agreement (the "Effective Date"), Xx. Xxxxxxxxx resigns from all
of his positions with the Company, Realty, and Credit and any of their
employee benefit plans, other than as a Director of the Company, including
the following: Chairman of the Board and Chief Executive Officer, a member of
the Executive Committee and of the Directors Committee of the Board of
Directors of the Company, Chairman of the Board and Chief Executive Officer
and a director of Realty and Chairman of the Board and Chief Executive
Officer and a director of Credit. Xx. Xxxxxxxxx will answer inquiries from
the Company, Realty or Credit regarding aspects of the Company's, Realty's
and Credit's business affairs of which he has knowledge and which occurred
during his employment.
2. Severance Compensation.
(a) Severance. The Company will provide Xx. Xxxxxxxxx with the
severance benefits described in Sections 5(d), (e), (f) and (g) of the
Employment Agreement, dated as of February 1, 1996, between the Company and
Xx. Xxxxxxxxx (the "Employment Agreement"), as if the Company had terminated
Xx. Xxxxxxxxx'x employment without good cause, subject to Xx. Xxxxxxxxx'x
compliance with the mitigation obligations and offset rights set forth in
Section 5(d) of the Employment Agreement. Such benefits shall be provided at
the times provided in such Sections and Section 6. of the Employment
Agreement. The Company may withhold from such benefits normal withholding for
federal, state, city and other taxes to the extent such taxes are required to
be withheld under applicable law.
(b) Termination of Employment Agreement. As of the Effective
Date, the Employment Agreement is terminated and cancelled and
shall be of no further force or effect, except as otherwise provided in
Section 2.(a).
(c) No Other Payments or Benefits. Xx. Xxxxxxxxx will not be
entitled to any other payments or benefits whatsoever, including
participation after the Effective Date in any employee benefit plans or
executive bonus plans, except as otherwise provided in Section 2.(a) (with
dental benefits to be provided to the same extent as medical insurance as set
forth in Section 5(d) of the Employment Agreement) and except for any accrued
vacation pay that would be owing to Xx. Xxxxxxxxx had the Company terminated
his employment without cause on the Effective Date. For no purpose (including
contributions under employee benefit plans, the 1996 Executive Bonus Plan,
vacation benefits, or other benefits) shall the payments and benefits
described in this Section 0 be considered salary to Xx. Xxxxxxxxx or be
deemed to continue his employment beyond the Effective Date.
3. Termination of Prior Agreements; Unemployment Compensation.
This Agreement supersedes all prior understandings and agreements between the
Parties (written or otherwise) except for (i) the Change in Control Severance
Agreement between you and the Company dated December 18, 1995 which shall
remain in effect in accordance with its terms until the end of the Period, as
defined in that Agreement, (ii) the Split Dollar Agreement Collateral
Assignment Form, dated December 20, 1988, between the Company and the XxXxxx
X. Xxxxxxxxx Trust, and (iii) your right to indemnification in accordance
with Article VI of the Company's Bylaws. Xx. Xxxxxxxxx acknowledges that he
is not entitled to any severance or termination payments whatsoever in
connection with the termination of his employment with the Company, except as
otherwise provided in Section 2. Xx. Xxxxxxxxx agrees that his resignation is
voluntary, that he is not entitled to unemployment compensation and that he
will not seek or obtain unemployment compensation based upon his termination
of employment with the Company or its subsidiaries.
4. Miscellaneous.
(a) Successors. This Agreement will be binding upon the
Parties and their respective successors, assigns, heirs, executors and
administrators.
(b) Governing Law. The laws of the State of Michigan shall
govern this Agreement, its construction, and the determination of any rights,
duties or remedies of the parties arising out of or relating to this
Agreement.
(c) Counterparts. This Agreement may be signed in
counterparts, both of which together will be deemed an original of this
Agreement.
(d) Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the Parties with respect to the subject matter of
this Agreement; this Agreement may be amended only by a written instrument
executed by both Parties.
(e) Severability. The provisions of this Agreement will be
deemed severable, and if any part of any provision is held illegal, void or
unenforceable under applicable law, such provision may be changed to the
extent necessary to make the provision, as so changed, legal, valid, binding
and enforceable. If any provision of this Agreement is held illegal, void,
invalid or unenforceable in its entirety, the remaining provisions of this
Agreement will not in any way be affected or impaired but will remain valid,
binding and enforceable in accordance with their terms.
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IN WITNESS WHEREOF, the Parties have signed this Agreement on the
date set forth in the introductory paragraph above.
XXXXXXXX STORES INC.
By: /s/ Xxxx X. Xxxxxxx
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Its: Vice Chairman
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XXXXXXXX STORES REALTY COMPANY
By: /s/ Xxxx X. Xxxxxxx
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Its: Vice Chairman
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XXXXXXXX CREDIT CORP.
By: /s/ Xxxx X. Xxxxxxx
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Its: Vice Chairman
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/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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