AGREEMENT AND GENERAL RELEASE
-----------------------------
WHEREAS, Xxxxx Xxxxxxxx (referred to in this Agreement as "Employee")
has been employed by Xxx Shops, Inc. (referred to in this Agreement as "Xxx
Shops" or "the Company"); pursuant to the terms of an Employment Agreement dated
December 20, 2001 ("the Employment Agreement") and
WHEREAS, Employee and Xxx Shops mutually desire to terminate the
Employment Agreement and to resolve amicably all aspects of Employee's
separation from employment with Xxx Shops;
NOW THEREFORE, Employee and Xxx Shops agree as follows:
1. Employee, in consideration of Xxx Shops' undertakings set forth in
Paragraph 2 and intending to be legally bound does hereby:
(a) resign his position as Vice President of Merchandising and any
and all officer or director positions held with Xxx Shops or any of its
affiliates or subsidiaries effective March 31, 2004 ("Termination Date"); and
(b) release and forever discharge Xxx Shops and its past, present
and future officers, directors, employees, shareholders and agents, attorneys,
insurers and all of their respective successors and assigns, jointly and
severally, from all claims, actions or causes of action of any kind, known or
unknown, which Employee now has or hereafter may have, arising out of any
matter, occurrence, omission or event occurring prior to the execution of this
Agreement, including, but not limited to: (i) any claims relating to or arising
out of Employee's employment with and/or termination of employment with Xxx
Shops; (ii) any claims for unpaid or withheld wages, vacation, sick and/or
personal time pay, un-reimbursed expenses, severance pay, notice, bonuses,
management incentive programs, and/or other compensation or benefits of any
kind; (iii) any and all claims of discrimination in employment arising before
the execution of this Agreement, including, but not limited to claims for
discrimination or harassment on the basis of age, sex, race, religion, color,
creed, handicap, disability, citizenship, national origin or sexual orientation
arising under Title VII of the Civil Rights Act of 1964, The Americans with
Disabilities Act, The Family and Medical Leave Act of 1993, The Age
Discrimination in Employment Act, 29 USCA ss.621, et seq. ("ADEA") and/or any
other similar federal, state and local laws, and any claims for retaliation
thereunder; (iv) any other claims arising out of or in any way related to
Employee's employment or the separation of his employment with Xxx Shops,
including, but not limited to breach of contract, breach of the Employment
Agreement, breach of covenant of good faith and fair dealing, defamation, fraud,
promissory or equitable estoppel, misrepresentation, violation of public policy,
wrongful discharge, unfair dismissal, or any other common law claim now or
hereafter recognized; and (v) all claims for attorneys' fees. Notwithstanding
the foregoing, Employee does not release Xxx Shops of and from any claims (i)
for indemnification under the Company's by-laws for actions or omissions
occurring prior to March 31, 2004; (ii) for vested benefits under the Company's
401(k) or stock option plans; and
(c) agree to fully cooperate with and assist the Company and their
counsel in connection with any litigation, corporate transactions, general
business matters, or agency investigations or audits, and to make himself
reasonably available to the Company to do so at times and locations as to not
interfere with his duties and responsibilities to any future employer.
2. Xxx Shops, in consideration of the promises of Employee set forth in
this Agreement and intending to be legally bound, does hereby:
(a) release and forever discharge Employee from any claims, actions,
or causes of action in connection with any acts or omissions of Employee arising
out of any matter, occurrence, omission or event occurring prior to the
execution of this Agreement. Notwithstanding the foregoing, Xxx Shops does not
release Employee from claims, actions or causes of action associated with the
disclosure of trade secrets, proprietary information, or confidential
information as set forth in this Agreement or any claim for breach of this
Agreement; and
(b) agree to pay employee $250,000 in a lump sum within ten (10)
days after this Agreement becomes effective, less applicable federal, state and
local taxes; and
(c) agree to provide for the benefit of Employee and his eligible
dependents continued coverage in the Company's group insurance plans for
medical, dental and vision benefits through March 31, 2005, or until Employee is
eligible for comparable coverage from a new employer, whichever is earlier.
Thereafter, Employee and his eligible dependents may continue coverage, at
Employee's sole expense, through COBRA. All other employee benefits shall
terminate on the Termination Date, subject to any conversion rights which exist
under any insurance policies or applicable law; and
(d) agree to continue to provide Employee with indemnification to
the fullest extent permitted by the Company's by-laws and applicable law for
actions and omissions occurring prior to March 31, 2004.
(e) agree to transfer to Employee the lease for his current Company
vehicle, with Employee to assume responsibility for all payments due after March
31, 2004.
3. Employee acknowledges and agrees that the money and benefits he will
receive under Paragraph 2 above exceed the money and benefits to which he
otherwise would be entitled, and that such excess is sufficient consideration to
support the grant of the General Release in Paragraph 1 above.
4. Employee will have the right to exercise his 50,000 options in the
stock of Xxx Shops, Inc. which were vested prior to March 31, 2004 in accordance
with the terms of the Company's Stock Option Plan. For purposes of the Stock
Option Plan, Employee's separation shall be deemed to be a termination without
cause. Employee agrees that prior to exercising any stock options he will offer
Xxx Shops the right to cancel the options by paying Employee the difference
between the closing price for the shares on the date of notification by Employee
of his intention to exercise the options and the exercise price. Xxx Shops will
have one (1) business day following notification to exercise its right to cancel
the options. In the absence of notification from Xxx Shops of its exercise of
its right, Employee may proceed with the intended exercise.
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5. Employee agrees that he will not voluntarily cooperate in
litigation, regulatory or administrative proceedings or investigations against
the Company or affiliates, nor will he act in any manner disloyal to the Company
or contrary to its interests as determined by the Company, provided that this
restriction will not prevent Employee from testifying truthfully under subpoena
in any legal proceeding.
6. Employee represents that he has not instituted or permitted to be
instituted against Xxx Shops any claim or suit. Employee agrees not to institute
any claim or suit against Xxx Shops that is within the scope of his release of
Xxx Shops in subparagraph 1(b) above other than any claim seeking to determine
the validity of his waiver of his rights under the ADEA.
7. Employee agrees that he will not issue any press release or make any
public statement concerning his employment, his departure, or the financial
affairs of the Company without the prior written consent of the Company.
Employee agrees that he will not disclose the existence or the terms of this
Agreement to anyone except his spouse, his tax advisor, his attorney and taxing
authorities. Further, Employee agrees that unless he is given written consent
from the Company, he will not participate in any interview or make any oral
statement, and will not draft, edit or otherwise be involved in any way in the
publication of any written document, audio or visual presentation or other
publication, or the preparation or presentation of any speeches, courses or
consulting which in any manner, directly or indirectly, describes, discusses or
alludes to any matter or experience in which Employee was involved or learned
about while employed by the Company. This paragraph 7 will not prevent Employee
from using his general skill, ability, experience and industry knowledge in any
future business activity.
8. Employee agrees not to disparage Xxx Shops and/or any of its
officers, directors or employees, either personally or professionally. Xxx Shops
agrees that it will not disparage Employee either personally or professionally
in any communication by an officer or director or other authorized agent. Xxx
Shops will provide positive references for Employee consistent with its public
announcement of Employee's departure. This non-disparagement provision will not
prevent any party from providing truthful information to any government agency,
court or party in litigation, or prevent Xxx Shops from making any public
statement required by law.
9. Employee agrees that he will continue to comply after the
termination of confidentiality provisions of paragraph 7 of the Employment
Agreement. Employee further agrees that he will immediately return any and all
documents and other property he may have which belongs to Xxx Shops. Employee
further agrees to return to Xxx Shops any other of its documents and property
that he may discover he has at a later time.
10. Employee agrees that until March 31, 2005, he will not induce any
employee, consultant, vendor or other third-party with whom Xxx Shops does
business to terminate or modify their relationship with Xxx Shops or otherwise
interfere with the Company's contractual relationships.
11. Xxx Shops will provide plaintiff with W-2 forms for all taxable
income received by Employee as required by law.
12. If any term, covenant, restriction or provision of this Agreement
is determined by any court to be unenforceable, illegal or invalid, the other
terms, covenants, restrictions and provisions shall remain in full force and
effect.
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13. This Agreement constitutes the entire agreement between the
parties. Any modifications to this Agreement must be in writing and signed by a
duly authorized representative of Xxx Shops.
14. This Agreement is made in Pennsylvania and is to be governed by
Pennsylvania law to the extent that state law is applicable. Employee expressly
waives any rule or custom requiring construction against the drafter of this
Agreement.
15. Employee agrees and represents that:
(a) he has read carefully the terms of this Agreement, including
the General Release and non-disclosure provision contained in Paragraph 1;
(b) he has been informed by the terms of this document that he may
have this document reviewed by his own attorney and has been represented by Xxxx
Xxxxxxx, Esquire, an attorney selected by him, in the negotiation of this
Agreement;
(c) he understands the meaning and effect of the terms of this
Agreement, including the General Release and non-disclosure provision contained
in Paragraph 1;
(d) he was given at least twenty-one (21) days in which to consider
this Agreement;
(e) he entered into this Agreement voluntarily and without
compulsion of any kind;
(f) he has not filed any claims, complaints or suits against Xxx
Shops; and
(g) no promise or inducement not expressed in this Agreement has
been made to him.
16. Employee may revoke this Agreement for a period of seven (7) days
following his execution of it. This Agreement shall not be effective or
enforceable until the revocation period has expired. Any revocation must be in
writing signed by Employee and delivered to the office of Xxxxxxx Xxx of Xxx
Shops, before the revocation period has expired.
THEREFORE, the parties, intending to be legally bound by this
Agreement, execute this document on the 23rd day of April, 2004.
EMPLOYEE: XXX SHOPS, INC.:
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxx
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Xxxxx Xxxxxxxx Xxxxxx Xxxxxxx
President
/s/ Xxxx Xxxxxxx /s/ Xxxxxx Xxxxxx
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Witness Xxxxxx Xxxxxx
Executive Vice President
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