Exhibit 10(b)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of June 11, 1998, between
XXXXXXXX STORES INC., a Michigan corporation, of Jackson, Michigan (the
"Company"), and XXXX X. XXXXXXX, of Jackson, Michigan ("Xxxxxxx").
THE PARTIES HEREBY AGREE that the Employment Agreement between them,
dated as of April 15, 1998 is restated, effective May 28, 1998, as follows:
1. Employment and Term. The Company employs Xxxxxxx as Vice Chairman
of the Board, and Xxxxxxx agrees to serve in that capacity and/or in such
other capacity or capacities as the Board of Directors of the Company deems
advisable, for a term commencing April 15, 1998 and continuing through April
14, 2001, unless terminated sooner pursuant to the provisions of paragraph 5,
for the compensation and on the terms set forth herein. The term shall
automatically be extended for one additional year each April 15, beginning
April 15, 1999, unless either party gives the other party notice before April
15 that the term shall not be extended and unless terminated sooner pursuant
to the provisions of paragraph 5. For example, if one party gives notice on
April 14, 1999 that the term will not be extended, the term will end on April
14, 2001, unless terminated sooner pursuant to the provisions of paragraph 5.
2. Compensation. Subject to the provisions of paragraph 5,
Xxxxxxx'x salary shall be Three Hundred Thousand Dollars ($300,000.00) per
year. Xxxxxxx shall also participate in such plans and additional benefits as
may generally be available from time to time to other executive officers of
the Company.
3. Deferred Compensation. Xxxxxxx may determine that payment of any
part of Xxxxxxx'x salary for any year shall be deferred pursuant to, and on
the terms and conditions set forth in, the Xxxxxxxx Stores Inc. Deferred
Compensation Plan, as amended from time to time. If any part of Xxxxxxx'x
salary for a year is deferred, one-twelfth of such amount shall be deferred
each month during the year. Interest shall accrue on deferred compensation
from the last day of the month for which the compensation is deferred.
Neither Xxxxxxx, his estate, his wife, nor any beneficiary shall have any
power to assign or encumber the right to receive deferred compensation, and
any attempted assignment or encumbrance thereof shall be null and void.
4. Duties. Xxxxxxx agrees, as long as his employment by the Company
continues, to devote his entire time and best efforts to furthering the
interests of the Company; to comply with all regulations and policies of the
Company; and to perform the duties requested by the Chief Executive Officer
or the Board of Directors of the Company.
5. Termination. Xxxxxxx'x employment under this Agreement shall
terminate on the earliest to occur of the following: (i) immediately upon
Xxxxxxx'x death, (ii) at the Company's option, immediately when notice to
Xxxxxxx of such termination is given after Xxxxxxx'x "Disability" (as defined
below), (iii) at the Company's option, immediately when notice to Xxxxxxx of
such
termination is given on or after the occurrence of "Cause" (as defined
below) for termination of his employment under this Agreement, (iv) not less
than 30 days after notice of such termination is given to Xxxxxxx by the
Company or not less than six months after notice of such termination is given
to the Company by Xxxxxxx (unless the Company elects to have such termination
occur earlier), and (v) the end of the term as described in paragraph 1.
"Disability" means (1) if Xxxxxxx is covered by a Company-provided disability
insurance policy, the definition of disability contained in, and entitling
Xxxxxxx to benefits under, that policy, or (2) if Xxxxxxx is not covered by
such a policy, Xxxxxxx'x inability, whether physical or mental, to perform
the normal duties of Xxxxxxx'x position for six consecutive months. "Cause"
means (1) Xxxxxxx'x continued failure either to (A) devote substantially full
time to Xxxxxxx'x employment duties (except because of Xxxxxxx'x illness or
Disability) or (B) make a good faith effort to perform Xxxxxxx'x employment
duties; (2) any other willful act or omission which Xxxxxxx knew, or had
reason to know, would materially injure the Entity; (3) any breach by Xxxxxxx
of the provisions of paragraph 7, or (4) Xxxxxxx'x conviction of a felony
involving dishonesty or fraud. Notice will be deemed to be given on the
earliest of (i) when delivered, or (ii) three business days after mailed by
certified or registered mail, postage prepaid, return receipt requested, or
(iii) one business day after sent by recognized overnight courier, if to
Xxxxxxx, to Xxxxxxx'x address on the Company's corporate records, and if to
the Company, to the address of its principal executive offices. The following
events during the term of this Agreement shall have the following respective
effects on the obligations of the Company pursuant hereto:
(a) Death. If employment is terminated due to Xxxxxxx'x
death, the Company shall (i) continue to pay an amount equal to Xxxxxxx'x
salary, at the annual rate of his salary in effect immediately prior to his
death, from the date of his death until two years after the date of his
death, and (ii) pay the pro rata bonus, if any, that would have been payable
to Xxxxxxx under any bonus plan in effect at the time of termination of
Xxxxxxx'x employment if Xxxxxxx had been employed by the Company for the
entire year in which Xxxxxxx'x employment terminates, but based on the actual
number of days Xxxxxxx was employed by the Company in that year and the
actual salary paid to Xxxxxxx by the Company with respect to the period
through the date of termination. The Company may offset against the payments
described in this paragraph 5.(a) the proceeds of any life insurance policy
insuring Xxxxxxx'x life (i) that is acquired after January 31, 1996 and does
not replace insurance provided by the Company to Xxxxxxx as of January 31,
1996, and (ii) that are paid to a beneficiary designated by Xxxxxxx or to his
estate, if the Company paid the premiums with respect to such insurance. If
the Company makes such an offset with respect to payments under paragraph
5.(a)(i), the remaining amounts due pursuant to paragraph 5.(a)(i) shall be
paid in equal installments over the same period set forth in paragraph
5.(a)(i). In addition to payments pursuant to this paragraph 5.(a), the
Company will continue to maintain medical and hospitalization insurance with
the same spouse and dependent coverage and in the same amounts as the
insurance maintained by the Company immediately prior to his death, for five
years after the date of Xxxxxxx'x death. In addition, the principal amount of
split dollar life insurance currently maintained by the Company for Xxxxxxx,
less the total premium payments made by the Company, shall be paid to
beneficiaries designated by Xxxxxxx. Xxxxxxx shall cooperate with the Company
in connection with its obtaining any additional life insurance on Xxxxxxx'x
life and any additional disability insurance with respect to Xxxxxxx in
connection with the payments required by this paragraph 5.(a), paragraph
5.(b) or otherwise.
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(b) Disability. If employment is terminated due to
Xxxxxxx'x Disability, the Company shall (i) continue to pay an amount equal
to Xxxxxxx'x salary, at the annual rate in effect immediately prior to the
date of his termination due to his Disability ("Termination Date"), from the
Termination Date until two years after the Termination Date, and after two
years after the Termination Date at one-half such annual rate until three
years after the Termination Date, and (ii) pay the pro rata bonus, if any,
that would have been payable to Xxxxxxx under any bonus plan in effect at the
Termination Date if Xxxxxxx had been employed by the Company for the entire
year in which Xxxxxxx'x employment terminates, but based on the actual number
of days Xxxxxxx was employed by the Company in that year and the actual
salary paid to Xxxxxxx by the Company with respect to the period through the
Termination Date. In addition, the Company will continue to maintain medical,
hospitalization and life insurance with the same coverage (including any
spouse and dependent coverage) and in the same amounts as the insurance
maintained by the Company immediately prior to his incapacity, for five years
after the Termination Date. The Company may offset against any of the
payments described in this paragraph 5.(b), disability benefits, if any, paid
under any insurance maintained by the Company. In addition, if Xxxxxxx dies
at any time during the period payments are required under this paragraph
5.(b), the Company may offset against any of the payments described in this
paragraph 5.(b) the proceeds of any life insurance policy insuring Xxxxxxx'x
life (i) that is acquired after January 31, 1996 and does not replace
insurance provided by the Company to Xxxxxxx as of January 31, 1996, and (ii)
that are paid to a beneficiary designated by Xxxxxxx or to his estate, if the
Company paid the premiums with respect to such insurance. If the Company
makes such an offset with respect to payments under paragraph 5.(b)(i), the
remaining amounts due pursuant to paragraph 5.(b)(i) shall be paid in equal
installments over the same period set forth in paragraph 5.(b)(i). Xxxxxxx
shall cooperate with the Company in connection with its obtaining any
additional life insurance on Xxxxxxx'x life and any additional disability
insurance with respect to Xxxxxxx in connection with the payments required by
this paragraph 5.(b), paragraph 5.(a) or otherwise.
(c) Termination for Cause. If employment is terminated for
Cause, or if Xxxxxxx resigns before the expiration of the term of this
Agreement, the Company shall have no obligation to pay any salary or any
other amount in lieu thereof for any period after the date of termination of
employment.
(d) Termination Without Cause. Except as otherwise provided
in paragraph 5.(e), if the Company terminates Xxxxxxx'x employment without
Cause before the expiration of the term of this Agreement (other than as a
result of Xxxxxxx'x death or Disability), the Company shall (i) continue to
pay an amount equal to Xxxxxxx'x salary, at the annual rate in effect
immediately prior to such termination of employment, and shall continue to
provide medical and hospitalization insurance with the same coverage
(including any spouse and dependent coverage) and in the same amounts as the
insurance maintained by the Company immediately prior to such termination of
employment, for the balance of the term of this Agreement, without regard to
any termination as a result of Xxxxxxx'x death, Disability, termination by
the Company for Cause, retirement, resignation or termination by the Company
without Cause, or one year, whichever is greater, and (ii) pay the pro rata
bonus, if any, that would have been payable to Xxxxxxx under any bonus plan
in effect at the time of termination of Xxxxxxx'x employment if Xxxxxxx had
been employed by the Company for the entire year in which Xxxxxxx'x
employment terminates, but based on the
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actual number of days Xxxxxxx was employed by the Company in that year and
the actual salary paid to Xxxxxxx by the Company with respect to the period
through the date of termination. In such event, Xxxxxxx shall use reasonable
efforts to find new employment. Commencing one year after termination, the
Company's continuing payment obligation, if any, shall be reduced by the
amount of any other salary, consulting fees, or other compensation or
remuneration for services, however designated, received by Xxxxxxx with
respect to any remaining part of the period covered by the Company's
obligation, and its continuing medical and hospitalization insurance
obligation shall be reduced by the amount of any other medical and
hospitalization insurance provided to Xxxxxxx with respect to any remaining
part of such period.
(e) Change in Control.
(i) Right to Receive Benefits. Xxxxxxx shall
receive the severance benefits described in paragraph 5.(e)(ii) if
(1) a "Change in Control" (as defined in paragraph 5.(e)(iii))
occurs during the "Period" (as defined in paragraph 5.(e)(iv)), and
(2) either (A) at any time during the period beginning 90 days
before, and ending two years after, the Change in Control, Xxxxxxx
terminates his employment with the "Entity" (as defined in
paragraph 5.(e)(vii)) for "Good Reason" (as defined in paragraph
5.(e)(viii)) or the "Entity" terminates Xxxxxxx'x employment
without Cause, or (B) at any time during the 3rd month after the
Change in Control, Xxxxxxx terminates his employment with the
"Entity" for any reason or for no reason.
(ii) Severance Benefits. If Xxxxxxx is entitled
to severance benefits under paragraph 5.(e)(i), he will receive the
following:
(1) an amount equal to the annual salary
Xxxxxxx was receiving immediately before the Change in
Control for the period (the "Time") from the date of such
termination through the later of (1) two years after the
date of such termination, and (2) the balance of the term
of this Agreement, without regard to any termination as a
result of Xxxxxxx'x death, Disability, termination by the
Company for Cause, retirement, resignation or termination
by the Company without Cause; and
(2) a pro rata bonus for the year of such
termination equal to (1) the bonus paid or payable to
Xxxxxxx with respect to the last full fiscal year of the
Company before the Change in Control (the "Bonus"),
multiplied by (2) a fraction, the numerator of which shall
be the number of days in the Company's fiscal year in
which such termination occurs through the date of such
termination, and the denominator of which shall be the
total number of days in the Company's fiscal year in which
such termination occurs; and
(3) an amount equal to the Time (in
years and fractions of a partial year) multiplied by the
amount of the Bonus; and
(4) a continuation during the Time of
(1) the medical, dental, life, disability,
hospitalization, optical and prescription drug benefits
Xxxxxxx and Xxxxxxx'x
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dependents were receiving from the Company at the time of
the Change in Control (provided that if it is no longer
practical for the Company to furnish such benefits,
Xxxxxxx will be reimbursed by the Company during the Time
for the cost to Xxxxxxx of obtaining such benefits), (2)
the Company's obligations under the Split Dollar
Agreement, dated as of January 31, 1992, between the
Company and Xxxxxxx, and (3) any automobile allowance or
benefits (including automobile insurance and maintenance
benefits), and continued use of any automobile, provided
to Xxxxxxx by the Company at the time of the Change in
Control; and
(5) If the total amount of all payments
of cash or property in the nature of compensation
contingent on a change in the ownership or effective
control of the Company or in the ownership of a
substantial portion of the Company's assets, including,
without limitation, the benefits provided pursuant to this
paragraph 5.(e)(ii) and payments relating to any stock
options or restricted stock that vest as a result of a
Change in Control, shall exceed the maximum amount that
may be paid to Xxxxxxx and not be deemed a "parachute
payment" resulting in an excise tax to Xxxxxxx and a loss
of compensation deduction to the Company, all within the
meaning of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor provision, the Company
will pay to Xxxxxxx (i) the amount of any excise tax
imposed on Xxxxxxx under Section 4999 of the Internal
Revenue Code of 1986, as amended, or any successor
provision, as a result of any payments by the Company to
Xxxxxxx pursuant to this paragraph 5.(e)(ii) and (ii) any
income tax imposed on Xxxxxxx as a result of the payments
under this paragraph 5.(e)(ii)(5)). The benefits provided
in paragraphs 5.(e)(ii)(1), 5.(e)(ii)(2), 5.(e)(ii)(3) and
5.(e)(ii)(5) shall be paid to Xxxxxxx in an undiscounted
lump sum within 10 business days after the date of such
termination. The Company may withhold from such payments
all federal, state, city and other taxes to the extent
such taxes are required to be withheld by applicable law.
(iii) "Change in Control". For purposes of this
Agreement, a "Change in Control" occurs on the first day any one or
more of the following occurs:
(1) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), together with
all affiliates and associates of such person (as such
terms are defined in Rule 12b-2 under the Exchange Act)
but excluding all "Excluded Persons" (as defined in
paragraph 5.(e)(v)), becomes the direct or indirect
beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company
representing (A) 40% or more of the combined voting power
of all of the Company's outstanding securities entitled to
vote generally in the election of the Company's directors,
or (B) 40% or more of the combined shares of the Company's
capital stock then outstanding, all except in connection
with any merger, consolidation, reorganization or share
exchange involving the Company;
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(2) the consummation of any merger,
consolidation, reorganization or share exchange involving
the Company, unless the holders of the Company's capital
stock outstanding immediately before such transaction own
more than 50% of the combined outstanding shares of
capital stock and have more than 50% of the combined
voting power in the surviving entity after such
transaction and they own such securities in substantially
the same proportions (relative to each other) as they
owned the Company's capital stock immediately before such
transaction;
(3) the consummation of any sale or other
disposition (in one transaction or a series of related
transactions) of all, or substantially all, of the
Company's assets to a person whose acquisition of 40% or
more of the combined shares of the Company's capital stock
then outstanding would have caused a Change in Control
under paragraph 5.(e)(iii)(1)); or
(4) the "Continuing Directors" (as
defined in paragraph 5.(e)(vi)) cease to be a majority of
the Company's directors.
A determination by the Company's Continuing Directors (by
resolution of at least a majority of the Continuing Directors) as
to whether a Change in Control has occurred for purposes of this
Agreement, the date on which it has occurred or both shall be
conclusive for purposes of this Agreement.
(iv) "Period". The period (the "Period") will begin
on the date of this Agreement and end on the first to occur of (a)
the end of the term of this Agreement, without regard to any
termination as a result of Xxxxxxx'x death, Disability, termination
by the Company for Cause, retirement, resignation or termination by
the Company without Cause, (b) Xxxxxxx'x death, (c) Xxxxxxx'x
Disability, and (d) 90 days after the termination of Xxxxxxx'x
employment (voluntarily or involuntarily and with or without Cause
or Good Reason) if (1) such termination occurs before a Change in
Control, and (2) a Change in Control does not occur during such 90
day period. Notwithstanding the foregoing, (1) if Xxxxxxx becomes
entitled to severance benefits under paragraph 5.(e)(i), the
provisions of paragraph 5.(e)(ii) of this Agreement will continue
until Xxxxxxx'x eligibility to receive severance benefits under
this Agreement ceases and such provisions and the other provisions
of this Agreement not limited by the Period, including, without
limitation, paragraphs 5.(h), 7, 10 and 11 will survive the end of
the Period.
(v) "Excluded Persons". For purposes of this
Agreement, the "Excluded Persons" are (i) Xxxxxxx, (ii) any "group"
(as that term is used in Section 13(d) of the Exchange Act and the
rules thereunder) that includes Xxxxxxx or in which Xxxxxxx is, or
has agreed to become, an equity participant, (iii) any entity in
which Xxxxxxx is, or has agreed to become, an equity participant,
(iv) the Company, (v) any subsidiary of the Company, (vi) any
employee benefit plan of the Company or any subsidiary of the
Company or the related trust, (vii) any entity to the extent it is
holding capital stock of the Company for or pursuant to the terms
of any employee benefit plan of the Company or any subsidiary of
the Company, and (viii) any director or officer of the Company as
of the date of this Agreement. For
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purposes of this Agreement, Xxxxxxx shall not be deemed an "equity
participant" in any group or entity (i) in which Xxxxxxx owns for
investment purposes only no more than 5% of the stock of a
publicly-traded entity whose stock is either listed on a national
stock exchange or quoted in The Nasdaq National Market, if Xxxxxxx
is not otherwise affiliated with such group or entity, or (ii) if
Xxxxxxx'x participation is fully-disclosed to, and approved by, the
Company's Board of Directors and the Continuing Directors before
the Change in Control occurs.
(vi) "Continuing Directors". For purposes of this
Agreement, the "Continuing Directors" are the directors of the
Company as of the date of this Agreement, and any person who
subsequently becomes a director if such person is appointed to be a
director by a majority of the Continuing Directors or if such
person's initial nomination for election or initial election as a
director is recommended or approved by a majority of the Continuing
Directors.
(vii) "Entity". For purposes of this Agreement, the
"Entity" shall mean both (1) the Company and, (2) in connection
with a Change in Control defined in paragraph 5.(e)(iii)(2) or
paragraph 5.(e)(iii)(3), the survivor of the merger, consolidation,
reorganization or share exchange involving the Company and the
buyer of all, or substantially all, of the Company's assets, if
such additional entity described in this clause (2) (if other than
the Company) has offered to employ Xxxxxxx on such terms that would
not constitute "Good Reason" for termination of Xxxxxxx'x
employment if imposed by the Company. Therefore, for purposes of
this paragraph 5.(e), Xxxxxxx shall not be deemed to have
terminated Xxxxxxx'x employment with the Entity for "Good Reason"
and the "Entity" shall not be deemed to have terminated Xxxxxxx'x
employment without Cause unless such actions are taken by all
entities included within the definition of "Entity". In addition,
for purposes of this paragraph 5.(e), Xxxxxxx shall not be deemed
to have terminated Xxxxxxx'x employment with the Entity for "Good
Reason" and the "Entity" shall not be deemed to have terminated
Xxxxxxx'x employment without Cause if (1) the survivor of the
merger, consolidation, reorganization or share exchange involving
the Company and the buyer of all, or substantially all, of the
Company's assets has offered to employ Xxxxxxx on such terms that
would not constitute "Good Reason" for termination of Xxxxxxx'x
employment if imposed by the Company, (2) Xxxxxxx refuses such
employment, and (3) the Company terminates Xxxxxxx'x employment for
any reason or for no reason.
(viii) "Good Reason". Termination of Xxxxxxx'x
employment for "Good Reason" means Xxxxxxx'x voluntary termination
of employment with the Entity before or after a Change in Control
as a result of (1) any change by the Entity (without Xxxxxxx'x
consent) in Xxxxxxx'x title from Xxxxxxx'x title immediately before
such Change in Control, (2) any decrease by the Entity (without
Xxxxxxx'x consent) in Xxxxxxx'x compensation or incentives from
Xxxxxxx'x compensation and incentives immediately before such
Change in Control, except with respect to benefits covered by
clause (3); provided that Xxxxxxx'x bonus shall not be deemed to
have decreased if Xxxxxxx has a substantially similar opportunity
to earn a bonus as Xxxxxxx did in the last full fiscal year before
the Change in Control, (3) any decrease by the Entity (without
Xxxxxxx'x consent) in Xxxxxxx'x benefits from Xxxxxxx'x benefits
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immediately before such Change in Control, unless such decrease is
applied in the same manner to all executive officers of the Entity,
(4) a substantial change by the Entity (without Xxxxxxx'x consent)
in Xxxxxxx'x duties or responsibilities from Xxxxxxx'x duties and
responsibilities immediately before such Change in Control, (5) any
requirement by the Entity (to which Xxxxxxx does not consent) that
Xxxxxxx change Xxxxxxx'x primary place of business to be outside
the metropolitan Xxxxxxx area, (6) Xxxxxxx'x removal from, or
failure to be elected to, the Entity's Board of Directors or the
Entity's failure to nominate Xxxxxxx for election to the Entity's
Board of Directors, or (7) if the Change in Control results in a
new entity being a successor to the Company's business, the failure
of the new entity to assume expressly in writing the Company's
obligations under this Agreement and under any written employment
agreement between Xxxxxxx and the Company in effect immediately
before the Change in Control. "Good Reason" will not include
Xxxxxxx'x death, Disability or Retirement (as defined below), or
Xxxxxxx'x resignation other than as provided in the preceding
sentence. For purposes of this Agreement, "Retirement" means
Xxxxxxx'x retirement from the Entity in accordance with the
Entity's normal policies.
(f) Split Dollar Life Insurance. If Xxxxxxx'x employment
by the Company is terminated for any reason except Xxxxxxx'x death, the split
dollar life insurance policy referred to in paragraph 5.(a) shall be disposed
of in accordance with the terms of a certain Split Dollar Agreement dated
January 31, 1992 between the parties, as the same may be amended from time to
time.
(g) Transfer of Insurance Policies. If Xxxxxxx'x
employment by the Company is terminated for any reason except Xxxxxxx'x death
or Disability, the Company will cooperate with Xxxxxxx, to the extent Xxxxxxx
so desires, to transfer to Xxxxxxx, at no cost to the Company and in exchange
for a payment by Xxxxxxx to the Company equal to the value of the Company's
interest in the policies, the life and disability insurance maintained by the
Company on his behalf immediately before the termination of his employment,
to the extent permitted by the applicable insurance policies. If Xxxxxxx'x
employment by the Company is terminated as a result of Xxxxxxx'x Disability,
the Company will cooperate with Xxxxxxx, to the extent Xxxxxxx so desires, to
transfer to Xxxxxxx, at no cost to the Company and in exchange for a payment
by Xxxxxxx to the Company equal to the value of the Company's interest in the
policies, the life insurance maintained by the Company on his behalf as of
the date five years after the termination of his employment, to the extent
permitted by the applicable insurance policies.
(h) No Other Employment Benefits. The severance benefits
provided in this Agreement are exclusive and in lieu of any other severance
benefits to which Xxxxxxx may be entitled, except for any benefits under the
terms of any stock options or restricted stock agreements Xxxxxxx may have.
6. Payment. Amounts equal to, or based on, salary, other than
deferred compensation, as well as death benefits pursuant to paragraph 5.(a),
other than proceeds of life insurance, and amounts equal to, or based on,
salary, other than deferred compensation and proceeds of life insurance, paid
pursuant to paragraphs 5.(b) and 5.(d), shall be paid in monthly or other
regular periodic installments no less frequent than monthly. Amounts equal to
the pro rata portion of Xxxxxxx'x bonus for the year of termination paid
pursuant to paragraphs 5.(a), 5.(b), and 5.(d) shall
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be paid at the time they are paid to other participants in the applicable
bonus plan. Deferred compensation, with interest thereon, shall be paid as
provided in the Xxxxxxxx Stores Inc. Deferred Compensation Plan, as amended
from time to time. The amounts described in paragraph 5.(e) shall be paid as
described in paragraph 5.(e)(ii)(5). All such payments shall be made to
Xxxxxxx while he is living; and in the event of his death, the payments shall
be made to Xxxxxxx'x wife, if she is then living, or to his estate or any
beneficiary or beneficiaries he designates in writing during his lifetime.
7. Non-Competition; Confidentiality and Non-Solicitation.
(a) Non-Competition. Xxxxxxx will not, during Xxxxxxx'x
employment with the Company, directly or indirectly engage in any activity
which is competitive with any business in which the Company engages.
(b) Confidential Information. Xxxxxxx will not at any time
during or after Xxxxxxx'x employment with the Company, directly or
indirectly, disclose or make accessible to any person or entity or use in any
way for Xxxxxxx'x own personal gain (i) any confidential and secret
information as to the prices, costs, discounts, or profit margins of any
goods or services sold, purchased or handled by the Company (or its
subsidiaries), or (ii) any confidential or secret information relating to the
Company's (or its subsidiaries') financial structure, store layouts, supply
sources, designs, procedures, information systems, administration or
operations, except as authorized or directed by the Company and except that
the foregoing restrictions will not apply to information generally available
to others in the Company's line of business, information in the public
domain, information disclosed or made available by the Company to any other
person on a non-confidential basis or disclosures Xxxxxxx are required by law
to make. Upon termination of Xxxxxxx'x employment with the Company for any
reason, Xxxxxxx will immediately return to the Company all confidential
materials over which Xxxxxxx exercise any control.
(c) Non-Solicitation. Xxxxxxx will not at any time during
Xxxxxxx'x employment by the Company and for two years thereafter, directly or
indirectly, solicit for any purpose, interfere with, entice away from the
Company (or its subsidiaries) or hire any employee or agent of the Company
(or its subsidiaries) who was employed by the Company within one year before
the termination of Xxxxxxx'x employment.
(d) Equitable Remedies. Paragraphs 7.(a), 7.(b) and 7.(c)
are intended, among other things, to protect the confidential information
described in paragraph 7.(b) and relate to matters which are of a special and
unique character, and their violation may cause irreparable injury to the
Company, the amount of which will be extremely difficult, if not impossible,
to determine and which cannot be adequately compensated by monetary damages
alone. Therefore, if Xxxxxxx breaches or threatens to breach any of those
paragraphs, in addition to any other remedies which may be available to the
Company under this Agreement or at law or equity, the Company may obtain an
injunction, restraining order, or other equitable relief against Xxxxxxx and
such other persons and entities as are appropriate.
8. Modification. This Agreement is the complete agreement between
Xxxxxxx and the Company and may be modified only by a written instrument
executed by both parties.
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9. Law. The internal 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.
10. Costs of Enforcement. The Company shall pay on demand all of
Xxxxxxx'x reasonable out-of-pocket fees, costs and expenses (including
reasonable attorneys' fees, court costs and other legal expenses and costs of
investigation) incurred by Xxxxxxx in connection with the enforcement of this
Agreement (as amended from time to time and including any successor to this
Agreement) or in connection with any disputes concerning the meaning or
interpretation of this Agreement (as amended from time to time and including
any successor to this Agreement). During the pendency of any such enforcement
proceeding or dispute, the Company shall continue to pay the disputed amounts
and benefits provided in this Agreement (as amended from time to time and
including any successor to this Agreement), and if it fails to do so, the
Company shall pay Xxxxxxx interest, at the prime or base rate announced from
time to time by Comerica Bank, on such amounts from the date they were due
through the date they are actually paid. The obligations contained in this
paragraph 10 shall survive the end of the Period.
11. Arbitration.
(a) Agreement to Arbitrate. Any disputes between the
parties with respect to the terms and conditions of this Agreement (as
amended from time to time and including any successor to this Agreement)
(other than those disputes with respect to which equitable relief (such as
specific performance or an injunction) is the appropriate remedy) that are
not resolved within 30 days after one party notifies the other party in
writing of the dispute shall be resolved by and through binding arbitration
conducted under the auspices of the American Arbitration Association (or any
like organization successor thereto) in Jackson, Michigan. Both the foregoing
agreement of the parties to arbitrate any and all claims, and the results,
determination, finding, judgment and/or award rendered through such
arbitration, shall be final and binding on the parties to this Agreement and
may be specifically enforced by legal proceedings, and, pursuant to MCLA ss.
600.5001, the parties agree that a judgment of any Michigan circuit court may
be rendered upon any arbitration award rendered pursuant to this paragraph
11. The parties agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this arbitration
agreement and that any party may, in his or its sole discretion, ask for
specific performance and/or injunctive relief in order to enforce or prevent
any violations of the provisions of this arbitration agreement.
(b) Procedure. Such arbitration shall be initiated by the
written notice of the dispute described in paragraph 11.(a), and such
arbitration shall be a compulsory and binding proceeding on each party. Such
arbitration proceeding shall be conducted under the commercial arbitration
rules (formal or informal) of the American Arbitration Association before one
arbitrator, and the arbitrator in any such arbitration shall be such person
who is expert in the subject matter of the dispute. The costs of the
arbitrator and the arbitration shall be borne by the Company. Each party will
bear separately the cost of its or his respective attorneys, witnesses and
experts in connection with such arbitration, subject to the Company's
obligations under paragraph 10. Time
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is of the essence of this arbitration procedure, and the arbitrator shall be
requested to render his or her decision within 10 days following completion
of the arbitration.
12. Successor Obligations. This Agreement will be binding upon and
inure to the benefit of the Company and its successors and assigns, and the
Company will require any successor to, or transferee of, all or substantially
all of its business or assets to assume all of the Company's obligations
under this Agreement (such successor or assign will be deemed, for purposes
of this Agreement, to be the Company). This Agreement will be binding upon
Xxxxxxx and will inure to Xxxxxxx'x benefit, but Xxxxxxx may not assign this
Agreement without the Company's prior written consent.
13. Duplicate Copies. This Agreement may be executed in
counterparts, both of which together will be deemed an original of this
Agreement.
14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If
any provision of this Agreement is held illegal, void or invalid in its
entirety, the remaining provisions of this Agreement will not in any way be
affected or impaired but will remain binding in accordance with their terms.
15. Miscellaneous Provisions. This Agreement supersedes all previous
employment and severance agreements between the parties. In addition to all
other remedies available at law, it shall be specifically enforceable by any
court having jurisdiction. Paragraph headings are for convenience only and
shall not affect the construction of any provision. The rights and
obligations hereunder, particularly but without limitation including
paragraph 5.(e), shall survive the expiration of the term of this Agreement.
IN THE PRESENCE OF: XXXXXXXX STORES INC.
By: /c/ P. Xxxxxx Xxxxx
---------------------
P. Xxxxxx Xxxxx,
Chairman of the Board and
Chief Executive Officer
By: /c/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxxx,
Secretary
/c/ Xxxx X. Xxxxxxx
--------------------
Xxxx X. Xxxxxxx
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