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TERMINATION AGREEMENT
AGREEMENT made as of the 31st day of January, 1997 by and between The
Caldor Corporation, a Delaware corporation with principal offices at 00 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (hereinafter referred to as "Caldor"), and
Xxx X. Xxxxxx, with a permanent residence located at 000 Xxxxxx Xxxxx Xxxx, Xxx
Xxxxxx, Xxxxxxxxxxx 00000 (hereinafter referred to as the "Employee").
WlTNESSETH
WHEREAS, Caldor and the Employee entered into that certain Second Amended
And Restated Employment Agreement dated as of April 25, 1995 (the "Employment
Agreement");
WHEREAS, on September 18,1995, Caldor and several of its affiliates
(collectively, with all of Caldor's other affiliates and subsidiaries, the
"Company") each filed a voluntary petition for relief pursuant to chapter 00,
Xxxxx 00, Xxxxxx Xxxxxx Code with the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court");
WHEREAS, by order dated November 24, 1995, the Bankruptcy Court authorized
the Company to implement an enhanced employee severance program (the "Enhanced
Severance Program");
WHEREAS, the Company and the Employee have held various discussions in
connection with the amicable resolution of all claims the Employee has
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against the Company and the Company has against the Employee, and in order to
reach agreement on the terms of the Employee's employment termination, have
determined to enter into this Termination Agreement;
NOW, THEREFORE, in consideration on the premises and the mutual covenants
and agreements hereinafter contained, the parties hereby agree as follows:
1. Termination of Employment. The Employee's employment shall terminate
effective as of January 31, 1997 (the "Effective Date"), subject to entry by the
Bankruptcy Court of an order approving this Termination Agreement (the
"Bankruptcy Court Order"). Such termination shall constitute termination of the
Employment Agreement by the Company for its convenience (i.e. without cause).
2. Entitlement to Severance Payment. The Company acknowledges that the
Employee is entitled to participate in the Enhanced Severance Program and agrees
to provide the Employee with the benefits available to him thereunder, except as
modified by the following: (i) Employee shall be entitled to a single lump sum
payment (the "Severance Payment") in the amount of $3.1 million in lieu of (x)
the two payments to which the Employee is entitled under the Enhanced Severance
Program and (y) the bonus payment to which the Employee otherwise would be
entitled to under the Company's performance incentive program for fiscal year
1996 had he been employed with the Company on April 1, 1997; (ii) no portion of
the Severance Payment shall be subject to mitigation; and (iii) the Severance
Payment shall be made within five (5) days after entry of the Bankruptcy Court
Order.
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3. Entitlement to Additional Benefits. In addition to his entitlement to
the Severance Payment, Employee shall be entitled to (i) a continuation through
April 30, 1999 of the health and life insurance benefits available to him under
the Employment Agreement as though Employee had not been terminated; (ii) an
allowance of $22,750 per annum through April 30,1998, for expenses related to
automobiles, financial planning and tax preparation; and (iii) all benefits
accrued under any Company-sponsored retirement, profit sharing or pension plans
pursuant to the terms of such plan.
4. Obligations of Employee Post Termination.
(a) The Employee agrees, as a condition to the performance by the
Company of its obligations under this Termination Agreement, that during the
period commencing on the Effective Date and continuing through and including
January 31, 2000, he shall not, without the prior written approval of the
Company's board of directors (the "Board"), directly or indirectly through any
other person, firm or corporation, (i) engage or participate or make any
financial investment in or become employed by or render advisory or other
services to or for any person, firm or corporation, or in connection with any
business enterprise, which is, directly or indirectly, or provides significant
services or goods to, a Competitor (as such term is defined below) of the
Company or (ii) solicit, entice or induce any such person who on the Effective
Date is, or within the last three (3) months prior to the Effective Date was, an
employee of the Company, to become employed by any person, firm or corporation,
and the Employee shall not approach any such employee for such purpose or
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authorize or knowingly approve the taking of such actions by any other person.
Nothing herein contained, however, shall restrict the Employee from making any
investments in any company whose stock is listed on a national securities
exchange or actively traded in the over-the-counter market, so long as such
investment does not give him the right to control or influence the policy
decisions of any business or enterprise which is or might be, directly or
indirectly, a supplier of, or in competition with any of the business operations
or activities of, the Company. For the purposes hereof, a person, firm,
corporation or other business enterprise shall be deemed to be in competition
with the Company only if it (x) operates, or (y) intends to operate during any
period that any activity described in this Paragraph 4(a) is restricted
hereunder, a discount department store within a radius of 75 miles of any
discount department store operated by the Company (herein referred to as a
"Competitor").
(b) Recognizing that the knowledge, information and relationship with
customers, suppliers, and agents, and the knowledge of the Company's business
methods, systems, plans and policies established, received or obtained by him as
an employee of the Company, are valuable and unique assets of the respective
businesses of the Company, the Employee agrees that he shall not at any time
(otherwise than pursuant to his duties hereunder) disclose, without the prior
approval of the Board, any such knowledge or information pertaining to the
Company, its business, personnel or policies to any unauthorized person, firm,
corporation or other entity, for any reason or purpose whatsoever. The
provisions of this Paragraph 4(b) shall not apply to information which is or
shall become generally known to the public or the trade
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(except by reason of the Employee's breach of his obligations hereunder),
information which is or shall become available in trade or other publications,
information known to the Employee prior to entering the employ of the Company,
and information which the Employee is required to disclose by law or an order of
a court of competent jurisdiction. If the Employee is required by law or a court
order to disclose such information, he shall notify the Company of such
requirement and provide the Company an opportunity (if the Company so elects) to
contest such law or court order.
(c) The Employee acknowledges that the services rendered and to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, he has had and will continue to have access to
confidential information vital to the Company's business. By reason of this, the
Employee consents and agrees that if he violates any of the provisions of this
Agreement with respect to diversion of the Company's customers or employees, or
confidentiality, the Company would sustain irreparable harm and, therefore, in
addition to any other remedies which the Company may have under this Agreement
or otherwise, the Company shall be entitled to apply to any court of competent
jurisdiction for an injunction restraining the Employee from committing or
continuing any such violation of this Agreement, and the Employee shall not
object to any such application.
(d) The Employee agrees to cooperate with the Company in connection with
any matters, litigation, or proceedings which may be pending or which at any
time hereinafter may be brought which involve the Employee or in which the
Employee has knowledge. The Company will compensate the Employee for any out-of-
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pocket expenses and reasonable attorneys' fees incurred in connection with such
cooperation which are not covered or reimbursed by insurance.
5. Restricted Stock. Employee shall relinquish and release all his rights,
whether vested or non-vested, previously granted to him under any
Company-sponsored restricted stock plan pursuant to the terms of such plan.
6. Deductions and Withholding. The Employee agrees that the Company shall
withhold from any and all payments required to be made to the Employee pursuant
to this Termination Agreement, all federal, state, local and/or other taxes
which the Company determines are required to be withheld in accordance with
applicable statutes and/or regulations from time to time in effect.
7. Indemnification. The Company agrees to indemnify and hold the Employee
harmless from and against any and all losses, liabilities, damages, costs or
expenses of any kind, including reasonable attorneys' fees (hereinafter
collectively referred to as the "Indemnified Costs"), based upon or arising out
of the Employee's service as an officer or director of the Company, in each case
to the full extent that the Company has agreed to indemnify and hold the
Employee harmless from and against Indemnified Costs arising out of the
Employee's service as an officer or director of the Company pursuant to the
terms and provisions contained in the Certificate of Incorporation and By-laws
of the Company.
8. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, to the other party
hereto at his or its address as
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set forth at the beginning of this Termination Agreement. Either party may
change the address to which notices, requests, demands and other communications
hereunder shall be sent by sending written notice of such change of address to
the other party.
9. Assignability. Binding Effect and Survival. This Termination Agreement
shall inure to the benefit of and shall be binding upon the heirs, executors,
administrators, successors and legal representatives of the Employee, and shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.
10. Complete Understanding: Amendment. This Termination Agreement
constitutes the complete understanding between the parties with respect to its
subject matter. No statement, representation, warranty or covenant has been made
by either party with respect thereto except as expressly set forth herein. This
Termination Agreement shall not be clarified, altered, modified, amended or
terminated except by written instrument signed by each of the parties hereto.
The Termination Agreement shall be of no force or effect and shall not be
binding upon the parties hereto unless and until the entry of the Bankruptcy
Court Order. Except as otherwise provided herein, this Termination Agreement
supersedes the Employment Agreement, which, upon the occurrence of the Effective
Date and entry of the Bankruptcy Court Order, shall be terminated and of no
further force or effect. Except as otherwise provided herein, Employee hereby
waives any and all rights under the Employment Agreement, along with any and all
claims against the Company with respect thereto, his employment by the Company
and/or the termination thereof.
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11. Governing Law. Except to the extent Connecticut law may be superseded
by federal bankruptcy law, this Termination Agreement shall be governed by and
construed in accordance with the laws of the Connecticut without giving effect
to principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto set their hands as of the date set
forth above.
THE CALDOR CORPORATION
By: /s/ Xxxxxx X. Xxx /s/ Xxx X. Xxxxxx
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Xxxxxx X. Xxx Xxx X. Xxxxxx
Executive Vice President
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