Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective as of the 1st day of May, 1998, by
and between Trans World Entertainment Corporation, a New York corporation (the
Company), and Xxxxxx X. Xxxxxxx (Xxxxxxx).
Background
WHEREAS, Xxxxxxx has served as the President and Chief Executive Officer of
the Company and as the Chairman of its Board of Directors since 1973; and
WHEREAS, Xxxxxxx and the Company executed an employment agreement effective
as of February 1, 1996, which will end on January 30, 1999 (the 1996 Employment
Agreement); and
WHEREAS, the Company recognizes that Xxxxxxx' contribution to the growth
and success of the Company has continued to be substantial throughout the term
of the 1996 Employment Agreement and that without his continued leadership and
vision the Company would not have achieved and maintained its current status in
the industry; and
WHEREAS, the Company desires to renegotiate and extend the terms of the
1996 Employment Agreement to assure the Company of Xxxxxxx' continued services
in a leadership capacity and to compensate him therefor; and
WHEREAS, Xxxxxxx is willing to commit to continue serving the Company on
the terms and conditions provided in this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
parties agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 Employment. The Company hereby employs Xxxxxxx and Xxxxxxx hereby
accepts employment by the Company upon the terms and conditions hereinafter set
forth for a term commencing on the date hereof and expiring on April 30, 2003
(unless Xxxxxxx' service is sooner terminated as set forth below) (the Contract
Period).
1.2 Capacity and Duties.
1.2.1 Xxxxxxx shall be employed by the Company generally as its
President and Chief Executive Officer and shall have the executive authority,
consistent with these positions, as may from time to time be specified by the
Board of Directors of the Company or any duly authorized committee thereof (the
Board).
1.2.2 Xxxxxxx shall devote his full working time, energy, skill
and best efforts to the performance of his duties hereunder, in a manner that
will faithfully and diligently serve the business and interests of the Company
and its affiliates (as defined below), provided that Xxxxxxx may devote such
time as is reasonably required for charitable and other personal activities in
accordance with the Company's practices and policies.
1.2.3 For the purposes of this Agreement, an affiliate of the
Company means any person or entity that controls the Company, is controlled by
the Company, or which is under common control with the Company. For the
purposes of this definition of affiliate, control means the power to direct the
management and policies of a person or entity, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms controlling and controlled shall have correlative meanings; provided that
any person or entity who owns beneficially, either directly or through one or
more intermediaries, more than 20% of the ownership interests in a specified
entity shall be presumed to control such entity for the purposes of this
Agreement.
SECTION 2. COMPENSATION
2.1 Base Compensation. As compensation for Xxxxxxx' services hereunder,
the Company shall pay Xxxxxxx a salary at the annual rate of $600,000. This
salary shall be payable in installments in accordance with the Company's regular
payroll practices in effect from time to time. This salary shall be subject to
increase based on normal periodic merit review by the Compensation Committee of
the Board (the Compensation Committee) in accordance with the corporate policies
of the Company (such salary, including the foregoing adjustments, if any, is
hereinafter referred to as base salary); provided, however, that the amount of
such increase shall not be less than the percentage amount, if any, by which the
CPI (as defined below) for the calendar month immediately preceding such
anniversary date exceeds the CPI for same month of the immediately preceding
year. For the purposes of this Section 2.1, the term CPI shall mean the
Consumer Price Index for All Urban Consumers for all items for New York, New
York, as published by the Bureau of Labor Statistics of the United States
Department of Labor, or of any revised or successor index hereafter published by
the Bureau of Labor Statistics or other agency of the United States government
succeeding to its functions. The annual base salary of Xxxxxxx shall not be
decreased at any time during the Contract Period from the amount then in effect,
unless Xxxxxxx otherwise agrees in writing. Participation in deferred
compensation, discretionary bonus, retirement and other employee benefit plans
and in fringe benefits shall not
reduce the annual base salary payable to Xxxxxxx under this Section 2.1.
2.2 Benefits.
2.2.1 During the Contract Period, Xxxxxxx (and his family, if
applicable) shall be entitled to participate in all incentive, savings,
retirement, welfare and other employee benefit plans, practices, policies and
programs that the Company may provide for the benefit of its executive employees
generally (together with the fringe benefits described below, Employee
Benefits). Xxxxxxx shall also be entitled to participate in any other fringe
benefits which may be or become applicable to the Company's executive employees,
including the payment of reasonable expenses for attending annual and periodic
meetings of trade associations and any other benefits that are commensurate with
the duties and responsibilities to be performed by Xxxxxxx under this Agreement.
In no event shall the Employee Benefits provided to Xxxxxxx be less favorable,
in the aggregate, than the employee benefits plans, practices, policies and
programs provided to Xxxxxxx immediately preceding the effective date of this
Agreement.
2.2.2 If Xxxxxxx becomes a participant in any employee benefit
plan, practice or
policy of the Company or its affiliates, Xxxxxxx shall be given credit under
such plan for all service in the employ of the Company and any predecessors
thereto or affiliates thereof prior to the date hereof, for purposes of
eligibility and vesting, benefit accrual and for all other purposes for which
such service is either taken into account or recognized under the terms of such
plan, practice or policy.
2.2.3 During the Contract Period, Xxxxxxx shall be entitled to a
private office, and such secretarial services as have been previously provided
to Xxxxxxx, and such other assistance and accommodations as shall be suitable to
the character of Xxxxxxx' position with the Company and adequate for the
performance of Xxxxxxx' duties hereunder.
2.2.4 The Company shall pay or reimburse Xxxxxxx for all
reasonable expenses (including expenses of travel and accommodations) incurred
or paid by Xxxxxxx in connection with the performance of Xxxxxxx' duties
hereunder upon receipt of itemized vouchers therefor and such other supporting
information as the Company shall reasonably require.
2.2.5 During the Contract Period, the Company shall continue to
provide Xxxxxxx with an automobile for use by Xxxxxxx consistent with past
practices and shall continue to pay or reimburse Xxxxxxx for expenses he
reasonably incurs for the maintenance and operation of such automobile upon
receipt of itemized vouchers therefor and such other supporting information as
the Company shall reasonably require.
2.2.6 During the Contract Period, Xxxxxxx shall be entitled to
paid vacations in a manner commensurate with Xxxxxxx' status as the President
and Chief Executive Officer of the Company, which shall not be less than the
annual vacation period to which Xxxxxxx is presently entitled.
2.3 Executive Bonus Plan. The Company maintains the Executive Bonus Plan
(the EBP) to provide performance-based incentive compensation to Xxxxxxx and
certain other executives of the Company. During the Contract Period, Xxxxxxx
shall be eligible to earn an annual performance bonus of 0 to 150% of his annual
base salary in effect for that year (incentive compensation), calculated in such
fashion and based on the achievement of certain performance criteria as are
approved by the Board or the Compensation Committee prior to the beginning of
such year under the EBP.
2.4 Insurance. Under the 1996 Employment Agreement the Company assisted
in providing life insurance protection for Xxxxxxx' family at an annual cost to
the Company of $150,000. During the Contract Period, the Company shall
continue to assist Xxxxxxx by paying or advancing each year under an arrangement
selected by Xxxxxxx an amount which has an annual net after tax cost to the
Company of $150,000.
2.5 Additional Compensation. The Board, although under no obligation to
do so, may determine from time to time to pay to Xxxxxxx compensation in
addition to the annual base salary and incentive compensation required to be
paid above. The Board may xxxxx Xxxxxxx options to purchase shares of common
stock of the Company (Common Stock), may issue him restricted Common Stock or
may award him stock appreciation rights.
SECTION 3. TERMINATION OF EMPLOYMENT
3.1 Death or Disability of Xxxxxxx.
3.1.1 Xxxxxxx' employment hereunder shall immediately terminate
upon his
death, upon which the Company shall pay the amounts due under Section 2
(including base salary, Employee Benefits, expense reimbursements and
compensation for unused vacation time) accrued as of the date of Xxxxxxx' death
in accordance with generally accepted accounting principles (GAAP).
3.1.2 If Xxxxxxx, in the reasonable opinion of the Company, is
Disabled (as defined below), the Company shall have the right to terminate
Xxxxxxx' employment upon 30 days prior written notice to Xxxxxxx at any time
after the expiration of the 180 day period referred to below, in which event the
Company shall pay the amounts due under Section 2 (including base salary,
Employee Benefits, expense reimbursements and compensation for unused vacation
time) accrued in accordance with GAAP as of the date of Xxxxxxx' termination
because of Disability. As used in this Agreement, the term Disabled or
Disability shall mean the inability of Xxxxxxx to perform substantially Xxxxxxx'
duties and responsibilities to the Company by reason of a physical or mental
disability or infirmity for a continuous period of at least 180 days. The date
of Disability shall be on the last day of such 180 day period. The
determination of whether the Disability has occurred shall be made by a licensed
physician chosen by the Board. The benefits payable under Sections 3.1, 3.2 or
otherwise under this Agreement shall be reduced by the amount of any benefits to
which Xxxxxxx may be entitled under the benefit plans and programs of the
Company, including any disability plan, supplementary retirement plan or
agreement or insurance policies maintained by the Company for the benefit of
Xxxxxxx.
3.2 Continuing Benefits Following Death or Disability. In addition to any
payments or benefits contemplated by Section 3.1, if Xxxxxxx' employment is
terminated for death or Disability, Xxxxxxx (and, as applicable, his family and
estate) shall continue to receive all base salary, incentive compensation and
all Employee Benefits Xxxxxxx (and, as applicable, his family) would have
received for the balance of the Contract Period had his employment not been so
terminated; provided, however, that if Xxxxxxx' employment is terminated for
death the total amount payable under this Section 3 shall in no event be less
than be less than 2.99 times the average of the aggregate base salary and
incentive compensation paid to Xxxxxxx over the preceding five years.
3.3 Date of Termination.
3.3.1 Except as otherwise provided in this Agreement, the
employment of Xxxxxxx hereunder shall terminate upon the earliest to occur of
the dates specified below:
3.3.1.1 the end of the Contract Period;
3.3.1.2 the close of business on the date of Xxxxxxx' death;
3.3.1.3 the close of business on the date which is 30 days after
the date on which the Company delivers to Xxxxxxx a written notice of the
Company's election to terminate Xxxxxxx' employment for Cause (as defined
below);
3.3.1.4 the close of business on the date which is 30 days after
the date on which the Company delivers to Xxxxxxx a written notice of the
Company's election to terminate Xxxxxxx' employment because of Disability;
3.3.1.5 the close of business on the date which is 30 days after
the date on which Xxxxxxx delivers to the Company a notice of Xxxxxxx' election
to terminate Xxxxxxx' employment for Good Reason (as defined below);
3.3.1.6 the close of business on the date which is 30 days after
the date on which Xxxxxxx delivers to the Company a notice of Xxxxxxx' election
to terminate Xxxxxxx' employment in accordance with Section 3.5.2 following a
change in the present control of the Company (as defined below); provided,
however, Xxxxxxx shall not have the right to terminate this agreement pursuant
to this Section 3.3.1.6 to the extent a change in the present control of the
Company resulted solely from the sale or other transfer of ownership interests
by Xxxxxxx to a person or entity; or
3.3.1.7 the close of business on the date which is 60 days after
the date on which the Company delivers to Xxxxxxx a written notice that the
Board has adopted a resolution terminating the Xxxxxxx' employment and such
termination is not for death, Cause or Disability.
3.3.2 Any purported termination by the Company or by Xxxxxxx shall
be communicated by written Notice of Termination to the other. For the purposes
of this Agreement, a Notice of Termination shall mean a notice which indicates
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Xxxxxxx' employment under the provision so indicated.
No such purported termination shall be effective without delivery of such Notice
of Termination. Termination of employment will not cause a termination of this
Agreement, the terms of which shall survive any termination of employment in
accordance with the express terms hereof.
3.4 Termination for Cause.
3.4.1 In the event Xxxxxxx' employment is terminated (i) by the
Company for Cause, or (ii) by Xxxxxxx for any reason other than Good Reason or
in accordance with Section 3.5.2 following a change in the present control of
the Company (as defined below), the Company's remaining obligations under this
Agreement shall terminate as of the date provided in Section 3.3.
3.4.2 For the purposes of this Agreement, the term Cause shall
mean:
3.4.2.1 fraud, theft, misappropriation or embezzlement of the
Company's funds;
3.4.2.2 conviction of any felony, crime involving fraud or
misrepresentation, or of any other crime (whether or not connected with his
employment) the effect of which is likely to adversely affect the Company,
except if Xxxxxxx' actions which result in such a conviction were taken in good
faith and in a manner Xxxxxxx reasonably believed not to be adverse to the
interests of the Company;
3.4.2.3 after a written demand for substantial performance to
Xxxxxxx from the Board (the mailing of such written demand having been
authorized by at least 60% of the directors then in office) which specifically
identifies the manner in which the Board believes that Xxxxxxx has intentionally
materially breached Xxxxxxx' duties and provides Xxxxxxx with a 30 day period in
which to cure such breach, the willful and continuing intentional material
breach by Xxxxxxx substantially to perform Xxxxxxx' duties with the Company
(other than any such failure resulting from Disability); or
3.4.2.4 abuse of alcohol or other drugs which interferes with
the
performance by Xxxxxxx of his duties, provided that Xxxxxxx has been given 30
days notice by the Company of its intent to terminate Xxxxxxx pursuant to this
provision during which time Xxxxxxx has not demonstrated the cessation of such
abuse to the reasonable satisfaction of the Board.
Notwithstanding the foregoing or any other provision hereof, Xxxxxxx shall not
be deemed to have been terminated for Cause unless there shall have been
delivered to Xxxxxxx a copy of a resolution duly adopted by the affirmative vote
of not less than 60% of the entire membership of the Board at a meeting of the
Board called and held for that purpose (after at least 15 days prior written
notice to Xxxxxxx and an opportunity for Xxxxxxx, together with Xxxxxxx'
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, Xxxxxxx was guilty of conduct set forth above and specifying the
particulars thereof in reasonable detail.
3.4.3 For the purposes of this Agreement, the term Good Reason
shall mean the occurrence of any of the events or conditions described in the
following subparagraphs without Xxxxxxx' express written consent:
3.4.3.1 a material diminution of Xxxxxxx' status, title,
position, scope of authority or responsibilities (including reporting
responsibilities), the assignment to Xxxxxxx of any duties or responsibilities
which, in Xxxxxxx' reasonable judgment, are inconsistent with such status,
title, position, authorities or responsibilities, Xxxxxxx ceasing to be Chairman
of the Board of Directors, or any removal of Xxxxxxx from or failure to
reappoint or reelect Xxxxxxx to any of such positions, except in connection with
the termination of Xxxxxxx' employment for Disability, Cause, as a result of
Xxxxxxx' death or by Xxxxxxx other than for Good Reason;
3.4.3.2 a reduction by the Company in Xxxxxxx' compensation or
benefits as in effect on the date hereof or as the same may be increased from
time to time;
3.4.3.3 the relocation of the Company's principal executive
offices to a location outside a 25-mile radius of Albany, New York or the
Company's requiring Xxxxxxx to be based at any place other than Albany, New
York, except for reasonably required travel on the Company's business;
3.4.3.4 the materially adverse and substantial alteration in the
nature and quality of the office space within which Xxxxxxx performs Xxxxxxx'
duties, including the size and location thereof, as well as the secretarial and
administrative support provided to Xxxxxxx;
3.4.3.5 any material breach by the Company of any material
provision of this Agreement; and
3.4.3.6 the failure of the Company to obtain a satisfactory
agreement from any purchaser of the Company or successor or permitted assignee
of the Company to assume and agree to perform this Agreement.
Provided, however, that a termination by Xxxxxxx in accordance with Section
3.5.2 following a change in the present control of the Company (as defined
below) shall not constitute a termination by Xxxxxxx for Good Reason under this
Agreement.
3.5 Termination Without Cause.
3.5.1 In the event Xxxxxxx' employment is terminated (i) by the
Company for any reason other than Cause, or the death or Disability of Xxxxxxx,
or (ii) by Xxxxxxx for Good
Reason, the Company shall immediately pay Xxxxxxx the amounts due under Section
2 (including base salary, Employee Benefits, expense reimbursements and
compensation for unused vacation time) accrued as of the date of such
termination in accordance with GAAP. In such event, Xxxxxxx (and, as
applicable, his family) shall also continue to receive from the Company until
two years after the end of the Contract Period then in effect, all base salary,
incentive compensation and Employee Benefits that Xxxxxxx (and, as applicable,
his family) would have received had he continued employment and such event had
not occurred.
3.5.2 In the event Xxxxxxx elects to terminate his employment by
written notice to the Company within the 90 day period immediately following a
change in the present control of the Company, the Company shall immediately pay
Xxxxxxx the amounts due under Section 2 (including base salary, Employee
Benefits, expense reimbursements and compensation for unused vacation time)
accrued as of the date of such termination in accordance with GAAP. In such
event, the Company shall also pay Xxxxxxx within 60 days thereafter a single sum
amount equal to 2.99 his base amount (within the meaning of Section 2806(b)(3)
of the Internal Revenue Code of 1986, as amended).
3.5.3 There shall be no requirement on the part of Xxxxxxx to seek
other employment or otherwise mitigate damages in order to be entitled to the
full amount of any payments or benefits to be made pursuant to this Agreement or
any other agreement between Xxxxxxx and the Company or any of its affiliates;
provided, however, if Xxxxxxx' employment is terminated by the Company other
than for Cause or the death or Disability of Xxxxxxx, or by Xxxxxxx for Good
Reason, Xxxxxxx shall, for so long as he is being paid amounts in respect of
base salary hereunder, use reasonable efforts following 12 months after his
employment has been so terminated, to find alternative employment; provided,
however, such reasonable efforts shall not require Xxxxxxx to move, commute more
than 20 miles to his office or accept employment of a stature materially less
than the position Xxxxxxx had with the Company. No payment or benefit under any
portion of this Agreement shall be subject to offset.
SECTION 4. RESTRICTIVE COVENANTS
4.1 Confidentiality. Xxxxxxx acknowledges a duty of confidentiality owed
to the Company and shall not, directly or indirectly, at any time during or
after his employment by the Company, divulge, furnish, or make accessible to
anyone, without the express authorization of the Board, any trade secret,
private or confidential or proprietary information or know-how of the Company or
any of its affiliates obtained or acquired by him while so employed. All
computer software and books paid for by the Company, and all records and files
generated or acquired while an employee of the Company are acknowledged to be
the property of and shall not be removed from the Company's possession or made
use of other than in pursuit of the Company's business and, upon termination of
employment for any reason, Xxxxxxx shall deliver to the Company, without further
demand, all copies thereof which are then in his possession or under his
control. The provisions of this Section 4.1 shall not apply to information
which (i) is or becomes generally available to the public other than as a result
of a disclosure by Xxxxxxx, (ii) was available to Xxxxxxx on a non-confidential
basis prior to its disclosure to Xxxxxxx, (iii) becomes available to Xxxxxxx on
a non-confidential basis from a source other than the Company, (iv) must be
disclosed by law or by order of a court or governmental authority, or (v) is
used to enforce Xxxxxxx' rights with the Company. This Section 4.1 shall
terminate on the date that a sale or other transfer of the Company is completed.
4.2 Noncompetition.
4.2.1 At any time while employed hereunder and, except as provided
in the last
sentence of this Section 4.2.1, for a period of one year following termination
of Xxxxxxx' employment for any reason, Xxxxxxx shall not, directly or
indirectly: (i) engage, anywhere in the Territory (as defined in Section 4.2.2
below), in the retail sale of music, video or related products; (ii) be or
become a stockholder, partner, owner, officer, director or employee or agent
of, or a consultant to or give financial or other assistance to, any person or
entity engaging in any such activities; (iii) seek in competition with the
business of the Company to procure orders from or do business with any customer
of the Company; or (iv) solicit or contact with a view to the engagement or
employment by any person or entity of any person who is an employee of the
Company as of the date of this Agreement, provided this will not preclude hiring
any person who contacts Xxxxxxx for employment and who has not been employed by
the Company at any time during the preceding 6 months. Nothing herein shall
prohibit Xxxxxxx without the written consent of the Board from owning, as a
passive investor, in the aggregate not more than 5% of the outstanding publicly
traded stock of any corporation so engaged. The duration of Xxxxxxx' covenants
set forth in this Section shall be extended by a period of time equal to the
number of days, if any, during which Xxxxxxx is in violation of the provisions
hereof. Xxxxxxx shall not be bound by this Section 4.2.1 following the
termination of his employment (a) by the Company without Cause, or (b) by
Xxxxxxx for Good Reason.
4.2.2 For the purposes of this Agreement, Territory means the
United States.
4.2.3 If either party hereto learns of any breach or potential
breach of this Agreement such party shall immediately notify the other party
hereto of such event, specifying the basis therefor in reasonable detail. The
Company may, in its sole discretion, afford Xxxxxxx an opportunity to remedy or
otherwise cure such breach or potential breach before seeking legal redress,
provided that Xxxxxxx is actively seeking to cure or remedy such breach or
potential breach; but such opportunity to remedy shall be without prejudice to
the right of the Company to seek and obtain injunctive or other relief.
4.3 Injunctive and Other Relief. Xxxxxxx acknowledges and agrees that the
covenants contained in Section 4.1 and 4.2 above are fair and reasonable in
light of the consideration paid hereunder, and that damages alone shall not be
an adequate remedy for any breach by Xxxxxxx of his covenants contained herein
and accordingly expressly agrees that, in addition to any other remedies which
the Company may have, the Company shall be entitled to injunctive relief in any
court of competent jurisdiction for any breach or threatened breach of any such
covenants by Xxxxxxx. Nothing contained herein shall prevent or delay the
Company from seeking, in any court of competent jurisdiction, specific
performance or other equitable remedies in the event of any breach or intended
breach by Xxxxxxx of any of his obligations hereunder. In the event the Company
prevails in an action to enforce its rights under Sections 4.1 and 4.2, it shall
be entitled to be reimbursed for its costs and reasonable attorneys' fees
associated with so enforcing its rights.
SECTION 5. MISCELLANEOUS
5.1 Reimbursement of Counsel Fees; Arbitration. The Company shall pay all
reasonable legal fees, accounting fees and related expenses incurred by Xxxxxxx
in connection with the preparation, negotiation and execution of this Agreement.
Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in New York, New York in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. The prevailing party, shall be entitled to recover from the
other party all of its legal fees, accounting fees and related expenses incurred
in any such arbitration
including without limitation, all expenses of arbitration, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenditures of the types customarily
incurred in connection with prosecuting, defending or investigating any
arbitration, action or suit.
5.2 Severability. The invalidity or unenforceability of any particular
provision or part of any provision of this Agreement shall not affect the other
provisions or parts hereof. If any provision hereof is determined to be invalid
or unenforceable by a court of competent jurisdiction, Xxxxxxx shall negotiate
in good faith to provide the Company with protection as nearly equivalent to
that found to be invalid or unenforceable and if any such provision shall be so
determined to be invalid or unenforceable by reason of the duration or
geographical scope of the covenants contained therein, such duration or
geographical scope, or both, shall be considered to be reduced to a duration or
geographical scope to the extent necessary to cure such invalidity.
5.3 Assignment. Neither this Agreement nor any right or interest
hereunder shall be assignable by Xxxxxxx, Xxxxxxx' beneficiaries, or legal
representatives without the Company's prior written consent; provided, however,
that nothing herein shall preclude (i) Xxxxxxx from designating a beneficiary to
receive any benefit payable hereunder upon Xxxxxxx' death, or (ii) the
executors, administrators, or other legal representatives of Xxxxxxx or Xxxxxxx'
estate from assigning any rights hereunder to devisees, legatees, beneficiaries,
testamentary trustees or other legal heirs of Xxxxxxx (each a Distributee). If
Xxxxxxx should die while any amounts would still be payable to Xxxxxxx if
Xxxxxxx had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to Xxxxxxx'
Distributee or, if there is no such Distributee, to Xxxxxxx' estate.
5.4 Notices. All notices hereunder shall be in writing and shall be
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by telegram, fax or telecopy (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or to such other person and/or at
such other address as may be furnished in writing by either party hereto to the
other. Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases. Any and all service of process
and any other notice in any such action, suit or proceeding shall be effective
against a party if given as provided in this Agreement; provided that nothing
herein shall be deemed to affect the right of a party to serve process in any
other manner permitted by law.
If to the Company:
Chief Financial Officer
Trans World Entertainment Corporation
00 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxxx:
Xx. Xxxxxx X. Xxxxxxx
0 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
5.5 Entire Agreement and Modification. This Agreement (and any Employee
Benefit plan or agreement contemplated hereby) constitutes the entire agreement
between the parties hereto with respect to the matters contemplated herein and
supersedes all prior agreements and understandings with respect thereto. Any
amendment, modification, or waiver of this Agreement shall not be effective
unless in writing. Neither the failure nor any delay on the part of any party
to exercise any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
other right, remedy, power, or privilege with respect to any occurrence be
construed as a waiver of any right, remedy, power, or privilege with respect to
any other occurrence.
5.6 Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the internal laws of the State of New
York (and United States federal law, to the extent applicable), without giving
effect to otherwise applicable principles of conflicts of law.
5.7 Headings; Counterparts. The headings of sections in this Agreement
are for convenience only and shall not affect its interpretation. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which, when taken together, shall be deemed
to constitute but one and the same Agreement.
5.8 Further Assurances. Each of the parties hereto shall execute such
further instruments and take such other actions as any other party shall
reasonably request in order to effectuate the purposes of this Agreement.
5.9 Indemnification. The Company shall pay, as additional compensation
under this Agreement, an amount equal to Xxxxxxx' liability (including all taxes
on such amount), if any, under Internal Revenue Code Section 4999 (or any
successor provision) by reason of payments under any provision of this Agreement
or otherwise. Throughout the Contract Period and for a period of five years
thereafter, the Company shall indemnify and defend Xxxxxxx against all claims
arising out of Xxxxxxx' activities as an officer, director or employee of the
Company to the fullest extent permitted under the law of the applicable state of
incorporation. In addition to the foregoing, Xxxxxxx shall, upon reasonable
notice, furnish such information and proper assistance to the Company in
connection with any litigation in which it is, or may become, a party.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below.
TRANS WORLD ENTERTAINMENT CORPORATION
May 7, 1998 By: Xxxx X. Xxxxxxxx
May 7, 1998 Xxxxxx X. Xxxxxxx
