EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of September 1,
2002 between Xxxxxx X. Xxxxx ("Xxxxx") and Hanover Direct, Inc., a Delaware
corporation (the "Company").
1. Provision of Services. Xxxxx shall serve as the President
and Chief Executive Officer (the "President/CEO") and as a member of
the Company's Board of Directors (the "Board of Directors"), its
Executive Committee (the "Executive Committee") and its Nominating
Committee (the "Nominating Committee").
2. Responsibilities. Xxxxx shall act and serve during the term
of this Agreement as the President and Chief Executive Officer of the
Company and shall report to the Board of Directors. Xxxxx'x employment
responsibilities will include those normally held by the president and
chief executive officer of a corporation of a similar size and nature
to the Company. Xxxxx shall devote his full-time efforts (which shall
mean an average of 50 hours per work week, excluding reasonable
vacation, personal or sick time) in connection with his role as
President, Chief Executive Officer and member of the Board of Directors
and its Executive and Nominating Committees. All employees and officers
shall report directly or indirectly to Xxxxx.
3. Term. Subject to paragraph 6, the term of this Agreement
(the "Agreement Term") and the term for services of Xxxxx shall
commence as of September 1, 2002 and shall terminate on September 30,
2004.
4. Compensation. The following compensation shall be payable
pursuant to this Agreement:
(a) In consideration for providing his services as
President/CEO, during the Agreement Term, Xxxxx shall
receive, in addition to the other consideration
provided in this Agreement, compensation at the rate
of $75,000 per month or $900,000 per annum (the "Base
Compensation"), payable in accordance with the
Company's normal payroll policies; provided, however,
that for purposes of the 2002 Management Incentive
Plan referred to in Exhibit 1, and the 2003
Management Incentive Plan, if any, Xxxxx'x annual
Base Compensation shall be deemed to be $600,000
through March 31, 2003.
(b) The Company shall provide Xxxxx with the employee
benefits it provides to its other senior executives
and employees, including but not limited to the
benefits of its Key Executive Eighteen Month
Compensation Continuation Plan effective as of April
25, 2001, as amended (the "Change of Control Plan"),
and its transaction bonus program (each as
referred to in Exhibit 1). In addition, Xxxxx has
earned a maximum bonus for fiscal 2001 pursuant to
the Company's 2001 Management Incentive Plan equal to
$600,000, $300,000 of which is unpaid and shall be
payable by the Company to Xxxxx by no later than
December 28, 2002 (or on the date of closing of any
transaction which constitutes a Change of Control (as
hereinafter defined), if earlier). Xxxxx shall
receive a bonus for fiscal 2002 under the Company's
2002 Management Incentive Plan determined in a manner
consistent with bonuses awarded to all other Class 8
participants under such Plan for such period, subject
to all of the terms and conditions applicable
generally to Class 8 participants thereunder. Xxxxx
shall receive a bonus for fiscal 2003 and 2004 under
such plans as the Compensation Committee of the Board
of Directors may approve determined in a manner
consistent with bonuses awarded to other senior
executives under such plans.
(c) The Company shall reimburse Xxxxx for his reasonable
out-of-pocket expenses in performing services for the
Company as President/CEO (such as travel, meals,
communications and lodging) which are incurred during
the Agreement Term on appropriate business. Xxxxx
shall submit invoices and documentation for such
reimbursable expenses on a monthly basis, and the
Company shall process payment of the same upon
receipt in accordance with its customary procedures.
(d) The Company shall promptly reimburse Xxxxx for his
reasonable legal fees after written approval of the
Executive Committee of the Board of Directors (which
shall not be unreasonably withheld) in the event that
he shall consult with counsel during the Agreement
Term in connection with his fiduciary
responsibilities to the Company under the Agreement.
(e) Upon the closing of any transaction which constitutes
a "Change of Control" (as defined in paragraph 5),
provided that Xxxxx is then employed by the Company,
the Company shall make a lump sum cash payment to
Xxxxx on the date of such closing of $1,350,000
pursuant to the Change of Control Plan, $450,000
pursuant to the transaction bonus program and such
amount of bonus as may be payable pursuant to the
Company's 2001 or 2002 Management Incentive Plan or
similar plans for fiscal 2003 and 2004 as described
in paragraph 4(b), as applicable as well as employee
benefits such as accrued vacation and insurance in
accordance with the Company's customary practice. The
lump sum cash payment referred to in this paragraph
4(e) shall be in lieu of any cash payment pursuant to
paragraph 6(b)(iii) as a result of a termination of
this Agreement pursuant to paragraph 6(a)(v) and in
lieu of the aggregate amount of Base Compensation to
which Xxxxx would have otherwise been entitled
through the end of the Agreement Term.
(f) The Company shall make the lump sum cash payment of
$450,000 previously due on June 30, 2002 to Xxxxx in
one lump sum payment on December 28, 2002 (or the
date of closing of any transaction which
2
constitutes a Change of Control (as hereinafter
defined), if earlier). In addition, the Company shall
make a cash payment of $450,000 in the aggregate to
Xxxxx payable in two equal lump sum payments of
$225,000 on March 31, 2003 and September 30, 2004,
notwithstanding any Change of Control (as hereinafter
defined).
(g) During the Agreement Term, solely at the expense of
the Company, Xxxxx shall be entitled to engage the
services of Meridian Ventures, LLC ("Meridian")
personnel from time to time at their then current
rates, in his discretion, to assist him in performing
his duties under this Agreement.
5. Stock Options. Pursuant to paragraph 5 of the Services
Agreement made as of December 5, 2000 by and among Meridian, Xxxxx and
the Company (the "Prior Services Agreement"), the Company granted Xxxxx
a stock option (the "2000 Option") for an aggregate 2.7 million
(2,700,000) shares of the common stock, par value $.66 2/3 per share,
of the Company (the "Shares") at an exercise price of $.25 per share.
If not already covered by a Registration Statement on Form S-8 (or
other similar form), all Shares underlying the 2000 Option shall be
registered by the Company utilizing a Registration Statement on Form
S-8 (or other similar form) prior to December 28, 2002. The 2000 Option
is fully vested and exercisable until June 30, 2005.
In addition to the 2000 Option, the Company granted Xxxxx an
additional stock option under and subject to the terms and conditions
of the Company's 2000 Management Stock Option Plan (the "2001 Option")
for an aggregate of five hundred thousand (500,000) Shares at an
exercise price of $.30 per share. Such Shares are covered by a
Registration Statement on Form S-8 relating to the Company's 2000
Management Stock Option Plan. The 2001 Option shall not be vested and
exercisable until March 31, 2003 (provided that this Agreement shall
then be in effect), upon which date (and under such circumstances) the
2001 Option shall become fully vested and exercisable; provided,
however, that Xxxxx hereby agrees that the Shares underlying the 2001
Option shall not be saleable until September 30, 2004 and, if issued
prior thereto, shall be legended to such effect and stop transfer
instructions given to the Company's transfer agent with respect
thereto. The 2001 Option shall terminate on the earlier of March 31,
2006 or upon any termination of the Agreement pursuant to paragraph
6(a)(i) or 6(a)(iv). The 2001 Option shall vest and become exercisable
upon any termination of the Agreement pursuant to paragraph 6(a)(ii),
6(a)(v) or 6(a)(vi).
In addition, and notwithstanding anything to the contrary
contained herein, the 2001 Option shall vest in its entirety and become
fully exercisable upon the earliest to occur of (i) Xxxxx'x resignation
"For Good Reason" (as defined below), (ii) the Company's termination of
Xxxxx'x services hereunder without being "For Cause" (as defined
below), or (iii) a "Change of Control" (as defined below). Options
which vest and become exercisable pursuant to this paragraph 5 shall
remain exercisable for a 3-year period (or the date of their earlier
exercise). In the event of a vesting resulting from a termination of
the Agreement pursuant to paragraph 6(a)(v), such vesting shall take
place sufficiently in advance of such termination (but subject to its
occurrence) to permit Xxxxx to take all steps reasonably necessary to
exercise his 2001 Option and to deal with the Shares purchased under
the 2001 Option so that those Shares may be treated in the same
3
manner in connection with the transaction described in paragraph
6(a)(v) as the Shares of other shareholders.
For purposes of this Agreement, the following terms shall have
the following meanings:
"For Good Reason" shall mean the voluntary termination by
Xxxxx of his employment with the Company on account of any of the
following actions: (i) a substantial and material diminution of Xxxxx'x
duties or responsibilities for the Company, (ii) a material and
substantial diminution of Xxxxx'x base salary or any long-term
incentive opportunity (each as in effect as of the first day of the
Agreement Term), (iii) the Company's requiring Xxxxx to regularly
report to work at a facility that is more than 30 miles from the
facility at which Xxxxx regularly reported as of the first day of the
Agreement Term, (iv) decisions or actions by the Board of Directors,
committees or individual members of the Board (including designees of
Richemont Finance S.A., if any) that materially impede Xxxxx'x ability
to take actions to increase value for all shareholders of the Company,
(v) the failure of the Company to provide Xxxxx with the number of paid
vacation days to which he would otherwise be entitled in accordance
with the vacation policy of the Company, or (vi) any action by the
Company that adversely affects in a material way Xxxxx'x participation
in or materially reduces Xxxxx'x benefits under any of such of the
Company's employee benefit or compensation plans; provided, however,
that in all cases, in order to terminate his employment with the
Company For Good Reason, Xxxxx must notify the Company in writing that
Good Reason exists within 60 days of his knowledge of the event or
events constituting Good Reason. The Company shall thereafter have 30
days within which to cure Xxxxx'x otherwise Good Reason (the "Cure
Period"). Unless Xxxxx'x Good Reason is cured during the Cure Period,
his termination For Good Reason shall become effective on the first
business day following the conclusion of the Cure Period.
"For Cause" shall mean the involuntary termination of Xxxxx'x
employment with the Company on account of his (i) willful and continued
failure to perform his regular duties for the Company, (ii) commission
of an act of fraud relating to and adversely affecting the Company, or
(iii) conviction of a felony in connection with his employment with the
Company.
"Change of Control" shall mean the first to occur of any of
the events described in clauses (i) through (iii) below, following the
first day of the Agreement Term:
(i) When any Person becomes, through an acquisition, the
beneficial owner of shares of the Company having at least 50% of the
total number of votes that may be cast for the election of directors of
the Company (the "Voting Shares"); provided, however, that the
following acquisitions shall not constitute a Change of Control:
(A) if a Person owns less than 50% of the voting
power of the Company and that Person's ownership increases above 50%
solely by virtue of an acquisition of stock by the Company, then no
Change of Control shall have occurred,
4
unless and until that Person subsequently acquires one or more
additional shares representing voting power of the Company; or
(B) any acquisition by a Person who as of the first
day of the Agreement Term owned at least 33% of the Voting
Shares.
(ii)(A) Notwithstanding the foregoing, a Change of Control
will occur when the shareholders of the Company approve any of the following
(each, a "Transaction"):
(I) any reorganization, merger, consolidation or
other business combination of the Company;
(II) any sale or any series of sales since April 27,
2001 involving an aggregate of 50% or more of the market value
of the Company's assets (for this purpose, said 50% amount
shall be deemed to be $107.6 million); or
(III) a complete liquidation or dissolution of the
Company.
(B) Notwithstanding clause (ii)(A) above, shareholder approval
of either of the following types of Transactions will not give rise to a Change
of Control:
(I) a Transaction involving only the Company and one
or more of its subsidiaries; or
(II) a Transaction (other than as described in clause
(ii)(A)(II) of this definition) immediately following which
the shareholders of the Company immediately prior to the
Transaction continue to have a majority of the voting power in
the resulting entity.
(iii) When, within any 24 month period, persons who were
directors of the Company (each, a "Director") immediately before the
beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death or disability) to constitute at least a
majority of the Board of Directors or the board of directors of any
successor to the Company. For purposes of this clause (iii), any
Director who was not a Director as of the first day of the Agreement
Term shall be deemed to be an Incumbent Director if such Director was
elected to the Board of Directors by, or on the recommendation of, or
with the approval of, at least a majority of the members of the Board
of Directors or the Nominating Committee who, at the time of the vote,
qualified as Incumbent Directors either actually or by prior operation
of this clause (iii), and any persons (and their successors from time
to time) who are designated by a holder of 33% or more of the Voting
Shares to stand for election and serve as Directors in lieu of other
such designees serving as Directors on the first day of the Agreement
Term shall be considered Incumbent Directors. Notwithstanding the
foregoing, any director elected to the Board of Directors to avoid or
settle a threatened or actual proxy contest shall not, under any
circumstances, be deemed to be an Incumbent Director.
5
6. Termination. The following provisions shall relate to the
termination of this Agreement:
(a) The Agreement, the Agreement Term, the term for
services of Xxxxx and the employment of Xxxxx
hereunder will terminate upon the first to occur of
the following: (i) the tenth day after written notice
by the Company to Xxxxx with respect to any material
breach by Xxxxx of the terms of this Agreement or
Willful Misconduct (as defined below) committed by
Xxxxx; (ii) the tenth day after written notice by
Xxxxx to the Company that the Company is in material
breach of this Agreement; (iii) the expiration of the
Agreement Term; (iv) the death or permanent
disability of Xxxxx; (v) the first day after the
acquisition of the Company (whether by merger or the
acquisition of all of its outstanding capital stock)
or the tenth day after the sale or any series of
sales since April 27, 2001 involving an aggregate of
50% or more of the market value of the Company's
assets (for this purpose, said 50% amount shall be
deemed to be $107.6 million); or (vi) the day the
Company terminates the employment of Xxxxx when there
has been no Willful Misconduct or material breach of
the Agreement by Xxxxx.
(b) The parties agree that Xxxxx will have been unable to
pursue alternative, profitable opportunities in order
to take on his employment hereunder, that Xxxxx would
suffer substantial financial damage if Xxxxx or the
Company were to exercise their rights of termination
hereunder, and that the amount of damages to Xxxxx
would be difficult, if not impossible, to calculate
accurately. Accordingly, the parties agree that if
pursuant to this paragraph 6, Xxxxx or the Company
shall at any time cause this Agreement to terminate
or the Agreement shall otherwise terminate, then the
Company shall pay Xxxxx an amount as set forth below.
In the event of the termination of this Agreement as
provided in paragraph 6(a), Xxxxx shall receive
hereunder the Base Compensation through the end of
the month in which the date of termination has
occurred, plus a termination payment as follows:
(i) If the termination is pursuant to
paragraph 6(a)(i) or 6(a)(iv)
above, no amount shall be due and
owing to Xxxxx;
(ii) If the termination is pursuant to
paragraph 6(a)(iii) above, Xxxxx
shall be entitled to receive such
amount of bonus as may be payable
pursuant to the Company's 2002
Management Incentive Plan or other
bonus plan, as applicable (based
upon the termination date and the
terms and conditions of the
applicable bonus plan), as described
in paragraph 4(b) as well as
employee benefits such as accrued
vacation and insurance in accordance
with the Company's customary
practice; or
(iii) If the termination is pursuant to
paragraph 6(a)(ii) or 6(a)(vi),
Xxxxx shall be entitled to receive
a lump sum
6
payment equal to (A) the aggregate
amount of Base Compensation to
which he would have otherwise been
entitled through the end of the
Agreement Term plus (B) $900,000 in
severance pay and such amount of
bonus as may be payable pursuant to
the Company's 2002 Management
Incentive Plan or other bonus plan,
as applicable (based upon the
termination date and the terms and
conditions of the applicable bonus
plan), as described in paragraph
4(b) as well as employee benefits
such as accrued vacation and
insurance in accordance with the
Company's customary practice. If
the termination is pursuant to
paragraph 6(a)(v) and the amount
realized in the transaction
described therein is less than
$0.50 per Share (or the equivalent
of $0.50 per Share), and if and
only if the Change of Control Plan
shall not then be in effect, Xxxxx
shall be entitled to receive a lump
sum payment equal to the aggregate
amount of Base Compensation to
which he would have otherwise been
entitled through the end of the
Agreement Term. If the termination
is pursuant to paragraph 6(a)(v)
and the amount realized in the
transaction described therein
equals or exceeds $0.50 per Share
(or the equivalent of $0.50 per
Share), and if and only if the
Change of Control Plan shall not
then be in effect, Xxxxx shall be
entitled to receive a lump sum
payment equal to the greater of the
Base Compensation to which he would
have otherwise been entitled
through the end of the Agreement
Term or the sum of $1,000,000. If
the termination is pursuant to
paragraph 6(a)(v) and the Change of
Control Plan is then in effect, no
amount shall be payable hereunder
pursuant to either of the
immediately preceding two
sentences, and Xxxxx shall be
entitled to receive his benefit
under the Change of Control Plan
plus the other amounts described in
paragraph 4(g).
(c) The parties agree that the amounts established
hereunder are liquidated damages reasonable under the
terms and circumstances of this Agreement (but
excluding amounts due under paragraph 8 which shall
continue to survive the termination of this
Agreement), the payment of which shall fully satisfy
and discharge any obligation of the Company to pay
(i) any further compensation under paragraph 4 and
(ii) any compensation for lost opportunity costs
incurred by Xxxxx as a result of his entering into
this Agreement.
(d) In addition, upon termination of this Agreement for
any reason, the Company shall reimburse Xxxxx in
accordance with paragraph 4(d) for all reasonable
reimbursable expenses incurred by him prior to the
time of termination.
7
(e) Any amounts payable to Xxxxx pursuant to this
paragraph 6 shall be paid in a lump sum within five
business days after the termination date of this
Agreement; provided, however, that, if the party
receiving a notice pursuant to paragraph 6(a)(i) or
6(a)(ii) notifies the other party that a dispute
exists concerning the termination, then, for purposes
of paragraphs 5 and 6, the deemed date of termination
of this Agreement shall be the date on which the
dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment,
order or decree of an arbitrator or court of
competent jurisdiction (which, in either case, is not
appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been
perfected); provided further that the date of
termination of this Agreement shall be extended by a
notice of dispute only if such notice is given in
good faith and the party giving such notice pursues
the resolution of such dispute with reasonable
diligence. To the extent permitted by applicable law,
any such dispute and any other controversy arising
under or in connection with this Agreement, except
(at the Company's election) a dispute or controversy
under paragraph 9, shall be settled exclusively by
binding arbitration in New York, New York, in
accordance with the Employment Dispute Resolution
Rules then in effect with the American Arbitration
Association. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
7. Insurance. The Company shall maintain in force during the
term of this Agreement, directors' and officers' liability insurance
("D&O Insurance") with limits not less than five million dollars
($5,000,000) on terms and conditions currently provided for under the
Company's existing insurance policy, and shall use reasonable efforts
to name Xxxxx as an insured thereunder. A copy of the policy shall be
furnished to Xxxxx for his information annually.
8. Indemnity. If Xxxxx is threatened with or made a party to,
or called as a witness or deposed or subpoenaed in, any action, suit or
other legal, administrative or governmental proceeding or other legal
process by reason that Xxxxx is or was deemed a consultant, officer,
employee or other agent of the Company or any of its affiliates, the
Company shall defend, indemnify and hold Xxxxx harmless to the maximum
extent allowed by applicable law and the Company's Certificate of
Incorporation and By-Laws against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, disbursements
and expenses, including counsel fees reasonably incurred by Xxxxx in
connection therewith, to the extent the same are not paid under the D&O
Insurance ("Indemnified Liability" or "Indemnified Liabilities");
provided however, that Xxxxx shall not be entitled to indemnification
hereunder to the extent any such liability, obligation, loss, damage,
penalty, action, judgment, suit, claim, disbursement or expense results
from the gross negligence, willful misconduct or criminal conviction
("Willful Misconduct") of Xxxxx as determined by a court of competent
jurisdiction. Xxxxx represents and warrants that he has not received
notice of any claim which might constitute an Indemnified Liability
hereunder. The Company represents that it has not received any notice
of any claim against Xxxxx that would constitute an Indemnified
Liability hereunder. Payments under this indemnity in respect of
indemnified settlements or
8
judgments shall be paid at the time of final settlement or final
judgment (from which no appeal may be taken), or, in respect of counsel
fees or costs of defense, which shall be limited to one counsel, shall
be paid at the time such fees or costs are incurred.
With the prior written consent of the Company, which shall not
be unreasonably withheld, Xxxxx shall have the right to pay or
compromise and adjust all Indemnified Liabilities not manifestly
without merit. The Company shall have the right to pay or compromise
without Xxxxx'x consent Indemnified Liabilities other than those which
arise from or are related to any criminal action, suit or proceeding.
Notwithstanding anything to the contrary contained in the preceding
sentence, Xxxxx'x consent shall be required for any settlement which
contains a stipulation to, or admission or acknowledgement of, any
liability or wrongdoing on the part of Xxxxx.
This paragraph 8 shall survive the termination of this
Agreement.
9. Confidentiality. Xxxxx shall at all times both during his
employment hereunder and after termination thereof regard and preserve
as confidential all trade secrets and other confidential information
pertaining to the business of the Company that have been or may be
obtained by Xxxxx by reason of the performance of the terms of this
Agreement. Xxxxx agrees that all documents, reports, manuals, drawings,
designs, tools, equipment, plans, proposals, marketing and sales plans,
customer lists, or materials made by the Company or coming into Xxxxx'x
possession by reason of his performance under this Agreement, are the
property of the Company and shall not be used by Xxxxx in any way
prohibited by this Agreement. Except as expressly provided herein,
during the Agreement Term and after termination thereof, Xxxxx shall
not deliver, reproduce, publish or in any way allow, after due care,
information describing any trade secrets or other confidential
documents or things to be delivered or used by any third party without
specific direction or written consent of the Company or in response to
lawful process. Immediately upon termination of this Agreement, Xxxxx
shall promptly deliver to the Company all documents, tools, equipment,
drawings, blueprints, manuals, material and significant or confidential
letters and notes, reports, price lists, customer lists and copies
thereof, and all other materials relating to the Company's business and
which are in the possession of or under the control of Xxxxx.
Confidential information as defined above shall exclude information or
materials that become generally available to the public other than
through disclosure by Xxxxx in violation of this Agreement.
This paragraph 9 shall survive the termination of the
Agreement.
10. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the internal laws of the state of New
York.
11. Modification. This Agreement may only be modified by
mutual agreement.
12. Assignment. This Agreement is a personal service contract
and may not be assigned by either party.
13. Notices. All notices required or permitted by this
Agreement shall be in writing and shall be personally delivered or
faxed to the parties at their addresses set forth
9
below or to such different addresses as such parties shall direct by
notice sent in accordance with this paragraph.
10
If to Xxxxxx X. Xxxxx:
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Tel.: 000-000-0000
Fax: 000-000-0000
with copies to:
Xxxxxx X. Xxxxxxxxx, Esq.
Rosenfeld, Wolff, Xxxxxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
If to the Company:
Corporate Counsel
Hanover Direct, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
and
Chief Administrative Officer
Hanover Direct, Inc.
000 Xxxxx Xxxx, Xxxxxxxx 00
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
with copies to:
Xxxxx Xxxxxx, Esq.
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: 000-000-0000
Fax.: 000-000-0000
14. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11
15. Attorneys' Fees. Xxxxx shall be entitled to reimbursement
for reasonable attorneys' fees and disbursements incurred in connection
with the review of, and advice with respect to the execution or
extension of, or administration of, this Agreement; provided, however,
that the aggregate amount of such reimbursement shall not exceed
$25,000. If any legal action or proceeding or arbitration proceeding is
brought either for the enforcement of this Agreement or because of an
alleged dispute, breach, default, or material misrepresentation in
connection with any of the provisions of the Agreement, the successful
or prevailing party shall be entitled, in addition to any other relief
to which it may be entitled, to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding including fees and
costs incurred on appeal and in collecting any judgment, and the
arbitrator or court shall so provide in its judgment.
16. Consent to Jurisdiction. Subject to their agreement to
binding arbitration in paragraph 6(e), the Company and Xxxxx each
hereby irrevocably consent to the jurisdiction of the courts of the
State of New York for all purposes in connection with any legal action
or proceeding which arises out of or relates to this Agreement and
agree that any legal action or proceeding instituted under this
Agreement shall be brought only in such courts and that such courts
shall have jurisdiction as provided above, except that the Company
shall be entitled to enforce its rights under paragraph 9 in any court
of competent jurisdiction.
17. Successors and/or Assigns. Whenever in this Agreement
either of the parties hereto is referred to, such reference shall be
deemed to include the successors and/or assigns and/or personal
representatives of such party, and this Agreement shall inure to the
benefit of and shall be binding on the parties hereto and the
successors and/or assigns and/or personal representatives of each such
party.
18. Entire Agreement. This Agreement (together with those
agreements listed on Exhibit 1 hereto) sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein
and supersedes all prior agreements (including but not limited to the
Prior Services Agreement and the Services Agreement made as of December
14, 2001 by and among Meridian, Xxxxx and the Company, as amended (the
"December 14 Services Agreement")), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written,
by any officer, employee or representative of any party hereto, other
than the indemnification obligations in paragraph 8 of the December 14
Services Agreement, the Prior Services Agreement and the obligations
contained in the agreements listed on Exhibit 1 hereto.
12
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
HANOVER DIRECT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Operating Officer
/s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
13
EXHIBIT 1
WRITTEN AGREEMENTS BETWEEN THE COMPANY AND XXXXX
RE: COMPENSATION AND BENEFITS
Hanover Direct, Inc. Key Executive Eighteen Month Compensation Continuation Plan
effective as of April 25, 2001, as amended
Transaction Bonus in the event of a Change of Control as set forth in a letter
agreement between the Company and Xxxxx dated May 14, 2001, as amended as of the
date hereof
2001 Management Incentive Plan
2002 Management Incentive Plan
14
