EXHIBIT 10.1
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL RELEASE ("Agreement") is entered into by
and between Xxxxxxx X. Xxxxxx on his/her own behalf and on behalf of his/her
representatives, attorneys, heirs, executors, administrators, successors and
assigns (hereinafter collectively, "Employee"), and Footstar Corporation, on
behalf of itself, Footstar, Inc., and each of their respective subsidiaries,
affiliates, divisions, officers, directors, employees, agents, representatives,
attorneys, successors and assigns (hereinafter "Footstar" and/or "Company"). In
consideration of the covenants, conditions and obligations set forth herein the
parties agree as follows:
1. Employee's last day of work with the Company shall be February 6, 2006.
2. Subject to the terms of this Agreement Footstar agrees to pay Employee the
following sums in accordance with the Key Employee Retention Plan (KERP)
established by order of the U.S. Bankruptcy Court of the Southern District
of New York in May 2004 within 14 days of separation; provided, however,
Footstar is in receipt of a fully executed copy of this Agreement and the
requisite revocation period set forth in Paragraph (28) has expired:
a) KERP payment of $557,500.00 (Five Hundred Fifty Seven Thousand Five
Hundred Dollars and 00/Cents);
b) Sum of $1,003,500.00 (One Million Three Thousand Five Hundred Dollars
and 00/Cents) representing severance benefits of 78 weeks of wages and
annualized target bonus in effect in May 2004.
c) The amounts described in paragraph 2 (a)-(b) above shall be paid in
one lump sum payment less all required withholdings and/or deductions.
3. Footstar agrees not to contest any claim by Employee for unemployment
benefits.
4. Employee Benefit Plans: Employee shall be permitted to continue to
participate in the Medical and Dental Plans ("Plans" or "Plan") that were
in effect for the Employee on the day immediately preceding Employee's
separation for a period of (18) months from the date of separation(1).
Notwithstanding anything to the contrary contained herein, it is agreed and
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(1) All payments for medical and/or dental shall be deducted from Employee's
lump sum payment. In the event Employee obtains coverage during this period
and provides Company with notice of same, a refund for the amounts deducted
shall be issued by the Company on a pro-rata basis.
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understood that in the event medical and/or dental insurance coverage
becomes available as a result of obtaining other employment, then in that
event, Employee shall promptly notify the Company and the medical and
dental insurance coverage described herein shall cease. It is further
understood and agreed that Footstar, in its sole discretion, may from time
to time, during the period following Employee's separation, increase or
decrease the monthly contributions or change Plan provisions. If such
changes are implemented, Employee's contributions and/or coverage will
change in the same manner as for other active employees participating in
the Plan. The medical benefit continuation referred to in this paragraph
will be provided through COBRA. Employee contributions for this coverage
will remain at the same level an active employee pays under the group plan.
If medical coverage is elected beyond this period, the full COBRA rates
will apply. Employee will not be entitled to participate in the Company's
short term or long term disability plans or its life insurance program
after February 6, 2006.
5. Outplacement Services: The Company will provide Outplacement Services for
the Employee through Right Management Consultants following Employee's last
day of employment for a period of 18 months from the date of separation.
Employee shall contact Xxxxxx Xxxxxx, Vice President Human Resources -
Footstar Services at (000) 000-0000 for details relating to the
outplacement program.
6. 401 (k) Profit Sharing Plan: Employee shall not be permitted to make
contributions to his/her 401(k) account after February 6, 2006.
7. Stock Options: Employee shall have ninety (90) days following the date of
the last payment pursuant to Paragraph (2) to exercise such stock options
pursuant to the terms of such options. Employee shall not be eligible for
any additional stock option grants and shall forfeit any stock options not
then exercised.
8. Switch to Equity Plan (STEP): Employee shall receive as soon as practicable
after February 6, 2006 100% of the Employee's deferred vested shares.
9. Disposition of Stock: Employee acknowledges that he shall be responsible
for complying with any and all applicable laws related to the disposition
of Company stock.
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10. It is agreed that the sums paid in accordance with Paragraph (2) shall be
deemed to include and shall constitute full payment for any and all
vacation, vacation pay, incentive compensation, severance compensation,
bonuses, commissions, draws and other forms of compensation to which
Employee may be entitled, and whether earned or calculated on a pro rata
basis; EXCEPT FOR ANY UNUSED, ACCRUED 2006 VACATION TIME AND ANY CLAIM
EMPLOYEE MAY HAVE FILED WITH THE BANKRUPTCY COURT FOR THE 2004 CASH
PERFORMANCE INCENTIVE (CPI) PAYMENT; PROVIDED, EMPLOYEE HAS FILED A VALID
PROOF OF CLAIM WITH THE BANKRUPTCY COURT FOR SUCH CPI PAYMENT WITHIN THE
ESTABLISHED DEADLINE. EMPLOYEE ACKNOWLEDGES THAT THE VALIDITY OF THE CPI
CLAIM WILL BE DETERMINED THROUGH THE BANKRUPTCY PROCESS.
11. In consideration for the Company's agreement to the provisions and payment
of amounts set forth in this Agreement:
(A) Employee expressly releases and forever discharges the Company and its
representatives, agents, predecessors, successors, parent companies,
subsidiaries, affiliates, principals and insurers (and their current
and former officers, directors, employees, agents, shareholders,
successors and assigns), and any and all employee benefit plans (and
any fiduciary of such plans) sponsored by any of them, and all other
persons, firms or corporations who might be claimed to be liable by
Employee, from any and all claims, actions, causes of action, losses,
damages (including actual, liquidated, compensatory, punitive or other
damages), demands, promises, agreements, obligations, costs, expenses
and attorneys fees, known or unknown, which Employee now has or may
later discover or which may hereafter exist against them, or any of
them, in connection with or arising directly or indirectly out of or
in any way related to any and all matters, transactions, events or
other things occurring prior to the effective date of this Agreement,
including those arising out of or in connection with Employee's
employment or employment agreement with Footstar or arising out of
events, facts or circumstances which either preceded, flowed from or
followed the cessation of Employee's employment with Footstar, or
which occurred during the course of Employee's employment with
Footstar or incidental thereto, and including but not limited to any
arising under Title VII of the Civil Rights Act of 1964, as amended;
the Age Discrimination In Employment Act of 1967, as amended; the
Civil Rights Act of 1991, as amended; the Employee Retirement Income
Security Act of 1964, as amended; the Family and Medical Leave Act, as
amended; 42 U.S.C. Sections 1981 through 1988; CEPA (N.J.S.A. 34:19-1
et .seq.); the Occupational Safety and Health Act; the Worker
Adjustment and Retraining Notification (WARN) Act; the American's with
Disabilities Act; the Fair Credit Reporting Act; the Immigration
Reform Control Act; the National Labor Relations Act; or under any
other federal, state or local civil or human rights law or any other
local, state or federal law, ordinance and regulation, or under any
public policy, contract, tort or common law.
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(B) Employee affirms that Employee has not filed, caused to be filed, and
presently is not a party to any claim, complaint or action against the
Company in any forum or form. Employee further affirms that Employee
has been paid and/or has received all leave (paid or unpaid),
compensation, wages, bonuses, commissions, and/or benefits to which
Employee may have been entitled and that no other leave (paid or
unpaid), compensation, wages, bonuses, commissions and/or benefits are
due to Employee. Employee furthermore affirms that Employee has no
known workplace injuries or occupational diseases and had been
provided and/or has not been denied any leave requested under the
Family Medical Leave Act and/or any other federal, state or local
leave law. Employee further affirms Employee has not complained of and
is not aware of any fraudulent activity or any act(s) which would form
the basis of a claim of fraudulent or illegal activity against the
Company. In the event Employee is subject to subpoena, court order or
otherwise compelled to testify, appear or provide information
regarding the Company, within (3) days of Employee's receipt of said
subpoena, court order or other notification, Employee will provide
written notice, via facsimile transmission and mail to Footstar, 000
XxxXxxxxx Xxxx., Xxxxxx, XX 00000 Attention: Legal Department;
Facsimile Number (000) 000-0000 to the Company without regard to who
brought the action, suit, cause of action or claim.
(C) Employee confirms that in consideration for the payments herein he has
waived all rights under the Employment Agreement between Footstar and
Employee and all of Employee's rights thereunder are null and void.
(D) Employee understands and agrees that the claims released and
discharged herein are forever waived and relinquished by this
Agreement, and that this Agreement expressly contemplates the total
extinguishment of any and all such claims. Employee further
understands and agrees that Employee has no right or claim to
employment with Footstar at any time after the effective date of this
Agreement. Employee specifically acknowledges that this provision
applies equally to all persons and entities described in Paragraph
11(A) above as well as to Footstar itself.
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12. Employee covenants and agrees that on Employee's last day of work Employee
shall return any and all property, including all copies or duplicates
thereof belonging to the Company, including but not limited to keys,
security cards, equipment, documents, supplies, customer lists, and
customer information, confidential documents, etc. A breach of this
provision shall be considered a material breach of this Agreement.
13. Employee agrees to cooperate with the Company by making himself/herself
available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit or proceeding whether civil,
criminal, administrative or investigative, and to assist the Company or any
subsidiary, or affiliate of the Company, in any action, suit or proceeding
by providing information and meeting and consulting with Company
representatives or counsel or any subsidiary or affiliate of the Company as
requested. The Company agrees to reimburse Employee, for all reasonable and
necessary out of pocket expenses incurred in connection with his provision
of testimony or assistance (excluding attorneys fees Employee may incur
because of retention of counsel, independent of Employer's counsel, to
assist in any threatened or pending litigation unless such attorneys' fees
are governed by Paragraph 14 below). A breach of this provision will be
considered a material breach of this Agreement.
14. Liability Insurance. Indemnification, Releases, and Exculpations. The
Company acknowledges that Employee was covered by the Company's Director's
& Officers liability insurance policy and certain of the Company's other
liability policies during the course of his employment as an Officer of the
Company. The Company has purchased "run-off" coverage that will extend the
Director's & Officers insurance policy in place on Employee's last day of
employment for the six (6) year period following the Company's emergence
from bankruptcy. The Company agrees that if the Employee is made a party,
or is threatened to be made a party, to any action, suit or proceeding,
whether civil or criminal (a "Proceeding"), by reason of the fact that he
was a director, officer or Employee of the Company, the Employee shall be
held harmless to the fullest extent legally permitted or authorized by the
Company's Director's & Officer's liability insurance policy, and/or any
other applicable liability insurance policy and/or as may have been
authorized by the Company pursuant to its certificate of incorporation or
bylaws or resolutions of the Company's Board of Directors to the extent
permitted by law and/or any applicable bankruptcy proceedings (including
the applicable releases, exculpations and indemnifications set forth in the
Company Plan of Reorganization) against all cost, expense, liability and
loss (including without limitation, reasonable and necessary defense costs,
attorneys fees, judgments, fines or penalties and amounts paid or to be
paid in the settlement) reasonably incurred or suffered by Employee in
connection therewith.
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15. Employee represents and agrees that Employee will keep confidential the
terms and execution of this Agreement. The sole exceptions to this
confidentiality provision are for communications to Employee's immediate
family, personal attorney (and attorney's employees), accountant or
financial advisor, or as required by law and then, only on the condition
that Employee shall advise such person or entity that the terms of the
Agreement are confidential and further disclosure is prohibited. A breach
of this provision shall be considered a material breach of this Agreement.
16. Employee agrees that Employee will make no statements or remarks to anyone,
including any of Employee's potential employers or to the Company
suppliers, vendors or customers, about Footstar or any of the entities and
persons described in Paragraph 11(A) above, that are disparaging,
derogatory or defamatory to them. A breach of this provision shall be
considered a material breach of this Agreement.
17. Employee agrees that in Employee's position as Executive Vice President &
CAO, Employee has been made privy to certain confidential information,
proprietary property and trade secrets of the Company and that disclosure
or use by Employee of such information, property or trade secrets would
damage the Company. Employee agrees that he will hold in confidence and
will not, without the Company's prior written permission, use, disclose or
disseminate (or act so as to cause the use, disclosure or dissemination of)
any such confidential information, property or trade secrets. The
obligations set forth in this provision shall not apply to any confidential
information, property or trade secrets, which have become generally known
to the public through no act or limitation upon the Employee.
18. Employee covenants and agrees that for a period of six (6) months following
separation, Employee will not directly or indirectly, hire or engage on
behalf of Employee or any other person or entity or any person known to
Employee to be a current employee or representative of the Company.
Employee further agrees that he will not, directly or indirectly, during
such period, intentionally suggest, assist or influence the engagement or
hiring by any other person or entity of any person known to Employee to be
a current employee or representative of the Company. Nor will Employee
directly or indirectly intentionally encourage or induce any person or
entity or any person known to Employee to be a current employee,
distributor, source, supplier, customer or contractor of the Company to
sever his, her or its relationship with the Company or intentionally do
anything else which would be adverse in any material or substantial respect
to the interests of the Company.
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19. Employee agrees that in the event Employee materially breaches or violates
any provision of this Agreement then the Company, in addition to any other
rights or remedies it may have, shall have no obligation to make any
further payments otherwise due Employee pursuant to this Agreement and the
Company shall be entitled to recover from Employee any sums paid or
expenses incurred by the Company on behalf of the Employee pursuant to this
Agreement without reinstatement of any claim or demand Employee has settled
through this Agreement; provided, however, this provision does not apply to
any claims brought pursuant to the Age Discrimination in Employment Act or
the Older Worker's Benefits Protection Act.
20. Nothing contained in this Agreement, or the fact the parties have signed
the Agreement and exchanged the consideration provided hereunder, should be
construed to be an admission of liability of wrongdoing on the part of
either party. Moreover, neither this Agreement or anything herein shall be
admissible in any proceedings as evidence of, or an admission by, the
Company of any violation of any federal, state or local laws, or of their
own policies or procedures. This Agreement shall not be admissible in any
forum except to secure enforcement of its terms and conditions, or as
required by law.
21. No waiver of any breach of any term or conditions of this Agreement shall
be or shall be construed to be a waiver of any other breach of this
Agreement. No waiver shall be binding under this Agreement unless in
writing and signed by the party waiving such breach.
22. This Agreement shall be construed according to and governed by the laws of
the State of New Jersey and all disputes governing this Agreement shall be
brought in a court of competent jurisdiction in the State of New Jersey.
23. If any of the provisions, terms, clauses or waivers or releases of claims
or rights contained in this Agreement are declared illegal, unenforceable,
or ineffective in a legal forum, all other provisions, terms, clauses and
waivers and releases of claims and rights contained in the Agreement shall
remain valid and binding upon both parties, and the Court shall have the
power to modify the invalid and unenforceable provisions in a manner which
most closely fulfills the intent and terms of this Agreement as herein set
forth.
24. This Agreement may not be changed, altered and/or modified except by a
writing signed by Employee and the Company.
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25. The parties agree that this Agreement may be executed in counterparts, each
of which shall be deemed to constitute an executed original.
26. In the event it shall be determined that there is ambiguity contained in
this Agreement, said ambiguities shall not be construed against any party
hereto as a result of such party's preparation of this Agreement, but shall
be construed in favor or against either of the parties hereto in light of
all the facts, circumstances and intentions of the parties at the time this
Agreement goes into effect.
27. Employee acknowledges that Employee has been provided with, and has read a
copy of the Agreement. Employee further acknowledges that Employee has had
a period of twenty one (21) days to examine the terms and conditions
contained in this Agreement and has been advised to consult with an
attorney before signing this Agreement and Employee has used as much of the
aforesaid twenty one (21) day period as he/she desired before entering into
this Agreement. Employee further acknowledges that Employee has executed
this Agreement freely and voluntarily, without fraud, duress or undue
influence of any kind or nature whatsoever.
28. Notwithstanding anything to the contrary contained in this Agreement
Employee shall have the right to revoke this Agreement for a period of
seven (7) days following execution of the Agreement by both parties. It is
agreed and understood that this Agreement will not become effective until
the expiration of the seven (7) day period. In the event Employee elects to
revoke this Agreement, upon revocation, this Agreement shall be deemed null
and void and Employee shall not receive payment hereunder. Revocation
should be made by providing notice to the Company in accordance with
Paragraph 29 below, which notice must be received by Footstar no later than
the close of business on the seventh (7th) day after the date upon which
the Agreement is executed by both parties.
29. All notices or other communications shall be deemed to be given if
delivered by hand, sent via overnight delivery (for which a receipt is
obtained), or mailed (certified or registered mail), with postage prepaid
as follows:
TO EMPLOYEE: 0000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, or to such other person
and/or place as Employee may designate in writing to the Company.
TO COMPANY: 000 XxxXxxxxx Xxxx., Xxxxxx, XX 00000Xxxx: Senior Vice
President Human Resources, or such other persons and/places as the Company
may designate in writing to Employee.
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30. This Agreement shall be binding and shall inure to the benefit of the
parties and their respective heirs, legal representatives, successors and
assigns.
EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS READ AND UNDERSTANDS THIS
AGREEMENT, AND THAT EMPLOYEE HAS SIGNED THIS AGREEMENT VOLUNTARILY FOR THE
PURPOSES OF RECEIVING ADDITIONAL BENEFITS FROM THE COMPANY BEYOND THOSE PROVIDED
BY COMPANY POLICY.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
consisting of [9] pages including this signature page.
FOOTSTAR: EMPLOYEE:
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxx
Title: President and CEO
Sworn and subscribed Sworn and subscribed
before me on this before me on this
16th day of February, 2006 ___ day of ________________, 2006
________________________________ ________________________________
Notary Public Notary Public
My Commission Expires: _____________ My Commission Expires: __________
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