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Exhibit 10.15
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT amends the Employment Agreement made the 11th day of
March, 1993 by and between DRUG EMPORIUM, INC., a Delaware Corporation having
its principal executive offices at 000 Xxxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000
(the "Company"), and XXXXX X. XXXXXXX, an individual residing at 0000 Xxxxxxxxxx
Xxxxx, Xxxxxx, Xxxx 00000 ("Xxxxxxx"), and is entered into this ____ day of
_________________, 1996.
WHEREAS Xxxxxxx is employed as Chairman and Chief Executive Officer of
Company, and has served in that capacity since December 1, 1992; and
WHEREAS the Company is approached from time to time by outside
individuals and others who have an interest in acquiring all or a portion of
the Company's stock, some of whom have a background indicating the capability
of operating the Company, and some of whom do not; and
WHEREAS the Company desires to evaluate such individuals, companies
and potential offers in the best interests of its shareholders, without the
distraction of the effect of a change in control on its Chief Executive
Officer; and
WHEREAS the Company also wants to assure managerial continuity and
stability during any takeover attempt.
NOW, THEREFORE, in consideration of the foregoing and of the
agreements and covenants herein contained, Company and Xxxxxxx agree that the
Employment Agreement between them dated March 11, 1993, be amended as follows:
1. The Company agrees that if:
a. There is a change in control of the Company as
defined herein; and
x. Xxxxxxx leaves the employment of the Company for any
reason, other than discharge for cause as defined in
the Employment Agreement between Xxxxxxx and
Company, within one year after such change in
control; then
(1) Xxxxxxx shall receive, in a lump sum, a
cash payment in the amount of the total of
the salary and bonus received by Xxxxxxx
from the Company in the last three full
fiscal years prior to the date of the
change in control;
(2) Xxxxxxx shall continue to receive all
employment benefits, including medical
benefits, health insurance and other, to
which he may be entitled as a member of
senior management of the Company for a
period of 36 months after the date of such
change of control;
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(3) Xxxxxxx shall receive an additional
retirement benefit, over and above that to
which he would normally be entitled under
the Company's retirement plans, equal to
the actuarial equivalent of the additional
amount Xxxxxxx would have earned under such
retirement plans or programs had he
accumulated three additional continuous
years of service. Such amount shall be paid
to Xxxxxxx in a cash lump sum payment at
his normal retirement age, or, at Xxxxxxx'x
option, at his early retirement age as
provided for in such retirement plan.
Notwithstanding the provisions of subparagraphs (1),
(2) and (3) above, the aggregate present value of the
payments in the nature of compensation Xxxxxxx shall
receive hereunder shall not exceed an amount
determined by multiplying three (3) times the
aggregate present value of Xxxxxxx'x base amount
calculated in accordance with Internal Revenue Code
Section 280G by ninety-nine percent (99%).
2. The amounts paid to Xxxxxxx hereunder shall be considered severance
pay in consideration of the past services he has rendered to the Company and in
consideration of his continued service from the date hereof to his entitlement
to those payments. Xxxxxxx shall have no duty to mitigate his damages by
seeking other employment. Should Xxxxxxx actually receive payments from any
other employment, the payments called for hereunder shall not be reduced or
offset by any such payments.
3. As used herein, the term "change in control" shall mean
either:
a. The ownership (whether direct or indirect) of shares
in excess of 50% of the outstanding shares of common
stock of the Company by a person or group of persons
not directors of the Company as of the date of this
agreement; or
b. The occurrence of both of the following:
(1) The ownership (whether direct or indirect)
of shares in excess of 20% of the
outstanding shares of common stock of the
Company by a person or group of persons not
directors of the Company as of the date of
this Agreement; and
(2) Any change in the composition of the Board
of Directors of the Company resulting in a
majority of the directors of the Company as
of the date of this Agreement no longer
constituting a majority; provided, however,
that in making such determination,
directors who were elected by, and on the
recommendation of, such present majority
shall be treated as present directors.
4. The arrangements called for by this Amendment are not
intended to have any effect on Xxxxxxx'x participation in any other benefits
available to executive personnel or to
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preclude other compensation or additional benefits as may be authorized by the
Company or its board from time to time.
5. This Amendment shall be binding and shall inure to the
benefit of the respective successors, assigns, legal representatives and heirs
to the parties hereto.
6. This Amendment shall terminate if, prior to any change in control
as defined herein, Xxxxxxx shall voluntarily resign, retire, become permanently
and totally disabled, or voluntarily take another position requiring a
substantial portion of his time. This Amendment shall also terminate if
Xxxxxxx'x employment as Chairman and Chief Executive Officer of the Company
shall have been terminated for any reason by the board of directors of the
Company for any reason prior to a change in control as defined herein.
DRUG EMPORIUM, INC.
By:
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Xxxxx X. Xxxxxxx
Its:
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EMPLOYMENT SECURITY AGREEMENT
This Employment Security Agreement is made as of the _____ day of
__________________________, 1996, by and between DRUG EMPORIUM, INC., a
Delaware Corporation having its principal executive offices at 000 Xxxxxx
Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 (the "Company"), and _________________, an
individual employed by the Company (the "Executive").
WHEREAS, Executive is employed by the Company in a key executive
capacity and possesses intimate knowledge of the business and affairs of the
Company and is a valuable asset to the operations of the Company; and
WHEREAS, the Company is approached from time to time by outside
individuals and others who have an interest in acquiring all or a portion of
the Company's stock, some of whom have a background indicating the capability
of operating the Company, and some of whom do not; and
WHEREAS, the Company desires to evaluate such individuals, companies
and potential offers in the best interests of its shareholders, without the
distraction of the effect of change in control on Executives; and
WHEREAS, the Company also wants to assure managerial continuity and
stability during any takeover attempt.
NOW, THEREFORE, in consideration of the foregoing, and of the
agreements and covenants herein contained, Company and Executive agree as
follows:
1. This Agreement shall be effective and binding immediately upon its
execution, but it shall not become operative unless and until a "change in
control" of the Company, as defined hereinbelow, shall occur. The date of such
change in control is referred to herein as the "operative date" of this
Agreement.
2. As used herein, the term "change in control" shall mean either:
a. The ownership (whether direct or indirect) of shares
in excess of 50% of the outstanding shares of common
stock of the Company by a person or group of persons
not directors of the Company as of the date of this
agreement; or
b. The occurrence of both of the following:
(1) The ownership (whether direct or indirect)
of shares in excess of 20% of the
outstanding shares of common stock of the
Company by a person or group of persons not
directors of the Company as of the date of
this Agreement; and
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(2) Any change in the composition of the Board
of Directors of the Company resulting in a
majority of the directors of the Company as
of the date of this Agreement no longer
constituting a majority; provided, however,
that in making such determination,
directors who were elected by, and on the
recommendation of, such present majority
shall be treated as present directors.
3. The term of this Agreement shall commence with the operative date
and shall continue for a term of two calendar years thereafter. During the term
of this Agreement, the Company agrees to continue the Executive in the employ
of the Company, and the Executive agrees to remain in the employ of the
Company, in the Executive's then-present capacity with no diminution of
responsibility, and to exercise such authority and perform such duties as are
commensurate with the authority exercised and duties performed by the Executive
during the six months immediately prior to the operative date of this
Agreement. Such services shall be performed in the same metropolitan area where
the Executive was employed immediately prior to the operative date, or at such
other location as the Company may reasonably require or to which Company and
Executive may agree.
4. During the term of this Agreement, Executive shall be compensated
at a base salary, bonus, stock option and employee benefit level commensurate
with the salary, bonus, stock option and benefits to which the Executive was
entitled in the twelve months prior to the operative date, or such greater
amount provided by the Company for Executives of comparable duties.
5. The employment of Executive under this Agreement may be terminated,
and the Executive not be entitled to the benefits set forth herein, only upon
the occurrence of one or more of the following events:
a. Death of the Executive; or
b. The Executive becoming permanently disabled within
the meaning of, and the receipt of disability
payments pursuant to, the long-term disability plan
in effect for management employees of the Company
immediately prior to the operative date; or
c. Termination by the Company for cause, as defined
below; or
d. Voluntary resignation by the Executive as defined
below.
6. As used herein, the term "cause" shall mean the Executive (1)
failed in a material and substantial way to perform his duties hereunder, (2)
materially breached any of his other obligations set forth herein, or (3)
committed a material act of malfeasance, disloyalty, dishonesty or breach of
trust against the Company. The termination or discharge of the
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Executive for any reason other than those specified as constituting cause shall
be a termination without cause and a breach of this Agreement.
No termination for cause under the preceding paragraph shall be deemed
to have occurred without prior service of a written notice of termination to
the Executive specifying the factual basis for the allegation of cause, and the
failure of the Executive to cure such basis within 30 days after the notice.
7. The Executive's resignation shall not be "voluntary" and shall not
be a reason for termination of the Agreement in the event that:
a. Without the express written consent of the
Executive, the Executive reasonably determines that
he is assigned any duties inconsistent with his
position, duties, responsibility and status with the
Company at the operative date, or his authority,
position or title in effect immediately prior to the
operative date is materially changed;
b. The compensation, benefits or perquisites of the
Executive in effect at the operative date of this
Agreement are materially reduced;
c. The Company fails to continue in effect any benefit
or compensation plan providing the Executive with
substantially similar benefits to those which the
Executive enjoyed as of the operative date; or
d. In the event that unreasonable relocation or
excessive travel demands in comparison to those in
effect as of the operative date are made upon the
Executive.
8. In the event of a breach of this Agreement by the Company or the
termination of the Executive's employment during the term of this Agreement
other than for cause as defined above, then:
a. Executive shall receive, in a lump sum, a cash
payment in the amount of the total of the salary and
bonus received by Executive from the Company in the
last two full fiscal years prior to the operative
date;
b. Executive shall continue to receive all employment
benefits, including medical benefits, health
insurance and other, to which he may be entitled as
a member of senior management of the Company for a
period of 24 months after the operative date; and
c. Executive shall receive an additional benefit, over
and above that to which he would normally be
entitled under the Company's retirement plans, equal
to the actuarial equivalent of the additional amount
Executive would
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have earned under such retirement plans or programs
had he accumulated two additional continuous years
of service. Such amount shall be paid to Executive
in a cash lump sum payment as his normal retirement
age, or, at Executive's option, at his early
retirement age as provided for in such retirement
net plan.
Notwithstanding the provisions of subparagraphs a., b. and c. above, the
aggregate present value of the payments in the nature of compensation Executive
shall receive hereunder shall not exceed an amount determined by multiplying
three (3) times the aggregate present value of Executive's base amount
calculated in accordance with Internal Revenue Code Section 280G by ninety-nine
percent (99%).
9. The amounts paid to Executive hereunder shall be considered
severance pay in consideration of the past services Executive has rendered to
the Company, and in consideration of continued service from the date hereof to
Executive's entitlement to those payments. Executive shall have no duty to
mitigate damages by seeking other employment. Should Executive actually receive
payments from any other employment, the payments called for hereunder shall not
be reduced or offset by any such payments.
10. In the event Executive's employment is terminated after the
operative date:
a. For twenty-four (24) months after the termination of
Executive's employment hereunder, Executive shall
not, unless acting with the prior written consent of
Company:
(1) Directly or indirectly, for himself, or on
behalf of or in conjunction with any
entity, solicit or endeavor to recruit or
hire, as an employee, consultant, agent or
representative, any person who was an
employee of the Company within six months
of the date that the Executive first
solicited or endeavored to recruit or hire
such person.
(2) Discourage or otherwise attempt to prevent
any person from doing business with the
Company.
b. In the event that the provisions of this Section
should ever be deemed to exceed the time limitations
permitted by applicable law, then such provisions
shall be deemed reformed to the maximum time
limitations permitted by applicable law.
c. Executive specifically acknowledges and agrees that
the remedy at law for any breach of the provision of
this section will be inadequate and that the
Company, in addition to any other relief available
to it, shall be entitled to temporary and permanent
injunctive relief without the necessity of
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providing actual damage. The provision of this
Section 10 shall remain applicable to Executive
until a final decision of a court of competent
jurisdiction is entered finding that Executive was
discharged by the Company in violation of Section 5
hereof.
11. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place. This Agreement shall be binding upon and inure to the benefit of the
Company and any successor to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the "Company" for the purposes of this Agreement), but shall not
otherwise be assignable, transferable or delegable by the Company. The failure
of the Company to obtain such an assignment shall be a breach of this
Agreement, in which event the date of succession or transfer shall be deemed to
be the date of the breach.
12. This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the Executive shall be paid, in the event of the
Executive's death, to the Executive's estate, heirs and representatives. This
Agreement shall inure to the benefit of, be binding upon and be enforceable by,
any successor, surviving or resulting corporation or other entity to which all
or substantially all of the Company's business and assets shall be transferred.
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company.
13. Executive's right to receive payments hereunder shall not be
assignable, transferable or delegable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by his will or by the
laws of descent and distribution and, in the event of any attempted assignment
or transfer contrary to this Section, the Company shall have no liability to
pay any amount so attempted to be assigned, transferred or delegated.
14. This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Ohio,
without giving effect to the principles of conflict of laws of such State. Any
dispute arising out of this Agreement shall be determined by arbitration in
Columbus, Ohio under the rules of the American Arbitration Association then in
effect and judgment upon any award pursuant to such arbitration may be enforced
in any court having jurisdiction thereof.
15. Miscellaneous
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a. Enforcement: The provisions of this Agreement shall
be regarded as divisible, and if any of said
provisions or any part hereof are declared invalid
or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the
remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
b. Withholding: The Company shall be entitled to
withhold from amounts to be paid to the Executive
hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time
required to withhold. The Company shall be entitled
to rely on an opinion of counsel if any question as
to the amount or requirement of any such withholding
shall arise.
c. Expenses and Interest: If, after a change in
control of the Company any claim or legal or
arbitration proceeding shall be made or brought to
recover damages for breach hereof, the Executive
shall recover from the Company prejudgment interest
on any money judgment or arbitration award obtained
by the Executive, calculated at the rate of interest
announced by Bank One Columbus, Ohio from time to
time at its prime rate, calculated from the date
that payments to him should have been made under
this Agreement.
d. Payment Obligations Absolute: The Company's
obligation during and after the term of this
Agreement to pay the Executive the compensation and
to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected
by any circumstances, including, without limitation,
any setoff, counterclaim, recoupment, defense or
other right which the Company may have against him
or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand.
Each and every payment made hereunder by the Company
shall be final and the Company will not seek to
recover all or any part of such payment from the
Executive or from whosoever may be entitled thereto,
for any reason whatsoever.
e. Waiver and Entire Agreement: No provisions of this
Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the
Company. No waiver by either party hereto at any
time of any breach by the other party hereto or
compliance with any condition or provision of this
Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior
or subsequent time. NO agreements or
representations, oral or otherwise, expressed or
implied with respect to the subject matter hereof
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have been made by either party which are not set
forth expressly in this Agreement.
f. Notices: For all purposes of this Agreement, all
communications including without limitation notices,
consents, requests or approvals, provided for herein
shall be in writing and shall be deemed to have been
duly given when delivered or five business days
after having bene mailed by United States registered
or certified mail, return receipt requested, postage
prepaid, addressed to the Company (to the attention
of the Secretary of the Company) at its principal
executive office and to the Executive at his
principal residence, or to such other address as any
party may have furnished to the other in writing and
in accordance herewith, except that notices of
change of address shall be effective only upon
receipt.
g. Severability: The invalidity or unenforceability of
any particular provision of this Agreement shall not
affect the other provisions hereof, and this
Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were
omitted.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first written above.
DRUG EMPORIUM, INC.
By:
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Its:
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EXECUTIVE:
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