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EXHIBIT 10(u)
April 9, 1997
Xx. Xxxxxx X. Xxxxx
00 Xxxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxx Xxxxxx 00000
Dear Xx. Xxxxx:
This letter sets forth our understanding and agreement with respect to
your resignation as Senior Vice President and Chief Financial Officer of
Woolworth Corporation (the "Company"), and sets forth the arrangements to which
we have agreed.
1. Termination of Employment. You shall resign as Senior Vice President
and Chief Financial Officer of the Company, and from all other positions you
hold with the Company or any of its subsidiaries, as of April 30, 1997 (the
"Resignation Date"), and you shall execute and deliver a letter of resignation
in the form annexed hereto as Attachment A. Although you shall not be required
to appear regularly for work after the close of business on April 9, 1997, you
shall, as may reasonably be requested by the Company, cooperate in performing
the duties of the Company's Chief Financial Officer during the period prior to
the Resignation Date. From May 1, 1997 to January 31, 1998 (the "Termination
Date") you shall be on permanent leave of absence, whereupon your employment
with the Company shall terminate.
2. Payments. The Company shall make the following payments to you or, in
the event of your death prior to the date of any such payment, to your estate:
a. From the date hereof to January 31, 1998, the Company shall continue
to pay you your base salary, at the rate of $30,417 per month, in accordance
with its normal payroll practices and policies.
b. For each of the months of February, March, and April 1998, the
Company shall make a payment to you, no later than the 30th day of each month,
in the amount of $30,417 per month.
c. You shall receive a lump sum payment under the Company's Annual
Incentive Compensation Plan for 1996 in the amount of $188,067, payable on or
before April 30, 1997. You shall be eligible to receive a payment under the
Long-Term Incentive Compensation Plan for the 1994-96 plan period, which is now
estimated to be in the amount of $-0-, in accordance with the terms of that
plan. You shall not be entitled to receive any payment under the Annual
Incentive Compensation Plan for 1997 or under the Long-Term Incentive
Compensation Plan for any other period.
d. The Company shall promptly reimburse you for your legal fees incurred
in the negotiation and preparation of this agreement, up to a maximum amount of
$5,000.
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e. All amounts payable to you hereunder shall be subject to appropriate
withholding for federal, state, and local income taxes.
3. Stock Option and Stock Purchase Plans. All unexercised stock options
granted to you prior to the date hereof, and not exercised or cancelled on or
before the Termination Date, pursuant to the provisions of the 1986 Woolworth
Stock Option Plan or the 1995 Woolworth Stock Option and Award Plan, as
applicable, (the "Option Plans"), shall remain exercisable, in accordance with
the relevant provisions of the Option Plans. Attached hereto as Attachment B is
a schedule setting forth such stock options. Your "effective date of
termination" for purposes of the Option Plans shall be the Termination Date and
you shall be deemed to have terminated your employment without cause on that
date. In the event of your death prior to May 1, 1998, your estate shall have
the same rights to exercise such stock options, and for the same period, as you
would have had if you had not died.
Your right to participate in the 1994 Woolworth Employees Stock Purchase
Plan shall be in accordance with the terms of such plan and shall cease as of
the Termination Date.
4. Other Benefits.
a. Your participation in the medical, drug, dental, life insurance, and
voluntary accidental death and dismemberment plans for active employees of the
Company shall cease on the Termination Date, subject to your right to continue
coverage under the provisions of COBRA. Your participation in the long-term
disability plan shall cease on April 30, 1997. After April 30, 1997, you shall
not accrue any further benefits under the Woolworth Retirement Plan or the
Woolworth Excess Cash Balance Plan and you shall not participate in or receive
or accrue further benefits under the Woolworth 401(k) Plan. The Company will
continue payment of the premiums for the universal life insurance policy with
MetLife presently in place through the Termination Date, which policy is owned
by you (or, if it is subsequently determined that such policy is owned by the
Company, the Company will arrange to transfer the policy to you).
b. The Company shall provide to you, at its expense, until the earlier
of April 30, 1998 or such time as you shall have secured other full-time
employment, the services of an out-placement consultant of your choice, at a
total cost to the Company not to exceed $15,000.
5. Confidentiality; Non-Competition; Etc.
a. You agree that during any period during which payments are being made
to you hereunder, and thereafter, you shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge, or
data relating to the Company or its business (which shall be defined as all such
information, knowledge and data coming to your attention by virtue of your
employment at the Company except that which is otherwise public knowledge or
known within the Company's industry). During such period, you shall not, without
the prior written consent of the Company, unless compelled pursuant to the order
of a court or other body having jurisdiction over such matter and unless
required by lawful process or subpoena, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
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b. You agree that during the period from the date hereof to April 30,
1998, you will not
(i) participate, directly or indirectly, as an individual proprietor,
stockholder, officer, employee, director, consultant, independent contractor,
advisor, joint venturer, investor, lender, or in any capacity whatsoever (within
the United States of America, or in any country where the Company or any of its
subsidiaries does business) (A) in activities competitive with any business
conducted by Company or any subsidiary or affiliate thereof on the date hereof
or contained in the 1997 strategic plan of the Company, or (B) in activities
undertaken for or on behalf of any person listed in Attachment C, or any
subsidiary or affiliate thereof; provided, however, that such participation
shall not include (x) the mere ownership of not more than one percent (1%) of
the total outstanding stock of a publicly held company; or (y) any activity
engaged in with prior written approval of the Company; or
(ii) intentionally recruit, solicit, or induce any employee or employees
of the Company to terminate their employment with, or otherwise cease their
relationship with, the Company.
c. Both parties agree that they will not make, or cause to be made, any
statements, observations or opinions, or communicate any information (whether
oral or written) that disparages or is likely in any way to harm the reputations
of the other and, in the case of Xx. Xxxxx, the reputation of the directors,
officers, employees, divisions and subsidiaries of the Company; provided,
however, that nothing herein will prohibit or in any way limit compliance by the
Company or you with applicable state and federal securities laws.
d. You acknowledge your obligations under the federal securities laws
not to trade in the Common Stock of other securities of the Company while in
possession of material, non-public information concerning the Company. Further,
you agree that between the date hereof and the Termination Date you will not
engage in any transactions in the Common Stock or other securities of the
Company during the seven trading days preceding and the three trading days
following the planned date of each quarterly release of the Company's earnings.
The Company shall notify you of the planned dates of such earnings releases at
the same time it notifies its executive officers.
e. If you violate the provisions of this Section , or if you fail to
perform the duties of the Company's Chief Financial Officer as specified in
Section 1, you will forfeit your entitlement to any payments pursuant to the
provisions of Sections 2(a), 2(b), or 2(d) and to the continuation of the
services specified in Section 4(b) and the Company shall not have any further
obligation under this letter agreement (provided, however, that any continuing
obligation of the Company under any stock option plan or benefit plan or program
by which you are then covered shall not thereby be affected). In addition, you
agree that the Company shall have such other rights, including but not limited
to injunctive relief, as may be provided under applicable law. You acknowledge
that a violation by you of the provisions of Sections 5(a), 5(b), or 5(c) would
cause irreparable injury to the Company, for which there would be no adequate
remedy at law. Notwithstanding the foregoing, if you violate the provisions set
forth in paragraph (b) of this section after January 31, 1998, the Company may
discontinue the payments specified in Section 2(b) hereof, but shall have no
other rights or remedies against you.
6. Release from Claims. a. In consideration of all of the foregoing,
you, for yourself and for your heirs, executors, administrators, successors, and
assigns, hereby release and forever discharge the Company and its subsidiaries
and affiliates, and their respective officers, directors, employees, or agents,
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from any and all actions, causes of action, claims, demands, and liabilities of
whatsoever nature arising out of, or in connection with, your employment or the
termination of your employment with the Company and any of its subsidiaries and
affiliates, or otherwise, whether known or unknown which you ever had, now have,
or may hereafter have. The foregoing shall include, but not be limited to, any
claim of employment discrimination under the Age Discrimination in Employment
Act of 1967, the New York State Human Rights Law or any other federal or state
labor relations law, equal employment opportunity law, or civil rights law,
regulation or order, and any claims under your employment agreement with the
Company dated July 3, 1995. Federal law requires that we advise you to consult
with an attorney of your choice (at your own cost). In addition, federal law
also provides that you have 21 days from the date of this letter to consider
your decision to agree to the terms of this agreement, including any release of
the Company and its subsidiaries, from liability as provided in this paragraph.
Furthermore, you have the right to change your mind at any time within one week
after signing. In addition, you hereby acknowledge that you have been given full
opportunity to review this letter, including sufficient opportunity for
appropriate review with any advisors selected by you. Notwithstanding any other
provision of this section to the contrary, this Section 6(a) shall not
constitute a release of any and all claims you may have against the Company (i)
for breach of any of the provisions of this letter agreement or (ii) that (X)
arise out of acts or omissions of the Company occurring after the date hereof
and (Y) do not arise out of, or in connection with, your employment or
termination of employment with the Company or any of its subsidiaries or
affiliates.
b. You understand and agree that the payments and benefits provided for
in this agreement shall be in lieu of any and all amounts that would be payable
to you by or on behalf of the Company, including but not limited to all amounts
that would be payable to you under the provisions of the employment agreement
between you and the Company dated July 3, 1995, and that no other amounts will
be paid to you by or on behalf of the Company for any reason whatsoever.
c. The Company acknowledges that, as of the date hereof, it is not aware
of any claim or cause of action that it has against you arising out of or in
connection with your employment with the
Company and any of its subsidiaries and affiliates, or otherwise.
7. Employment Agreement. The employment agreement between you and the
Company dated July 3, 1995 is hereby terminated, without further obligation by
either party to the other, and shall be of no further force or effect.
8. Mitigation. The Company agrees that you shall have no obligation to
mitigate damages hereunder by seeking other employment and that, other than as
provided for in Section 5(e), no reduction of any amounts paid or payable
pursuant to this agreement shall be made should you receive compensation or
benefits from other employment, nor shall any benefits to which you are entitled
by the terms hereof be reduced except as otherwise expressly provided for
herein.
9. Press Release. The Company shall, promptly following the acceptance
of your resignation as Senior Vice President and Chief Financial Officer, issue
a press release in the form of Attachment D and file a Form 8-K with the
Securities and Exchange Commission that has such press release as an exhibit.
Any other public disclosure concerning your resignation as the Company's Senior
Vice President and Chief Financial Officer will be in a form mutually agreed by
the parties, such agreement not to be unreasonably
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withheld; provided, however, that nothing herein will prohibit or in any way
limit compliance by the Company or you with applicable state and federal
securities laws.
10. Assignment. This agreement is binding upon and shall inure to the
benefit of the parties and their respective successors, heirs, and permitted
assigns. Neither this letter agreement, nor any of the rights arising hereunder,
may be assigned by either party, except that, upon written notice to you, the
Company may assign its rights and obligations hereunder to an affiliated or
successor corporation that agrees in writing to be bound hereby. You agree to
execute such additional documents as may be reasonably necessary to carry out
the provisions of this letter agreement.
11. Arbitration. Any controversy or claim arising out of or relating to
this agreement, or the breach thereof, shall be settled by arbitration in the
City of New York, in accordance with the rules of the American Arbitration
Association (the "AAA"). The decision of the arbitrator(s) shall be final and
binding on the parties hereto and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The costs
assessed by the AAA for arbitration shall be borne equally by both parties.
12. Miscellaneous. This letter agreement represents our total
understanding and agreement with regard to the subject matter hereof, and
supersedes any previous discussions or writings. This letter agreement may not
be amended or modified, and no term or provision hereof may be waived or
discharged, unless agreed to in writing by you and the Company. The invalidity
or unenforceability of any provision of this letter agreement shall not affect
the validity or enforceability of any other provision hereof.
The section headings herein are for convenience of reference only and
shall not affect or be utilized in the construction or interpretation of this
agreement.
This letter agreement may be executed in counterparts, each of which,
when so executed, shall be deemed an original and all of which, when taken
together, shall constitute one and the same agreement.
13. Governing Law. This letter agreement shall be governed by, and
construed under, the laws of the State of New York applicable to contracts made
between residents of such state and to be wholly performed in such state.
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If this letter agreement correctly sets forth our agreement, please
execute the duplicate copy of this letter agreement enclosed for that purpose,
and deliver it to us, at which time this letter agreement shall serve as a
binding and enforceable agreement between us.
Very truly yours,
WOOLWORTH CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Agreed:
/s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx
Witnessed:
/s/ Xxxx X. Xxxxxx
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Date: 9 Apr 97
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ATTACHMENT A
April 9, 1997
Board of Directors
Woolworth Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen and Ladies:
I hereby resign my position as Senior Vice President and Chief Financial
Officer of Woolworth Corporation, and from any other position as an officer or
director that I may hold with Woolworth Corporation and or with any subsidiary
or affiliate thereof, effective at the close of business on April 30, 1997.
Yours truly,
Xxxxxx X. Xxxxx
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ATTACHMENT B
WOOLWORTH CORPORATION - working STOCK OPTION PERSONNEL SUMMARY AS OF 05/01/97
Xxxxxx Xxxxx ID: ###-##-####
20 Saddle Hill Road Country: USA
Xxx Xxxxx, XX 00000 Department: Corp
Termination date - 1/30/98
XXXXX XXXXX PLAN/
NUMBER DATE TYPE GRANTED PRICE EXERCISED VESTED CANCELLED UNVESTED OUTSTANDING EXERCISABLE
------ -------- ------ ------- --------- --------- ------- --------- -------- ----------- -----------
003189 07/13/94 86/ISO 12,598 $15.8750 0 12,598 0 0 12,598 12,598
003190 07/13/94 86/NQ 2,402 $15.8750 0 2,402 0 0 2,402 2,402
003200 03/08/95 95/NQ 85,000 $15.3750 0 85,000 0 0 85,000 85,000
003535 04/10/96 95/ISO 19,047 $15.7500 0 6,349 12,698 0 6,349 6,349
003536 04/10/96 95/NQ 23,953 $15.7500 0 7,984 15,969 0 7,984 7,984
------- --------- --------- ------- --------- -------- ----------- -----------
TOTALS 143,000 ($15.5402) 0 114,333 28,667 0 114,333 114,333
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ATTACHMENT C
Nike, Inc.
Reebok
adidas, U.S.A.
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ATTACHMENT D
CONTACT: Xxxxx Xxxxxxx
Vice President
Draft 4/8 Investor Relations
(000) 000-0000
FOR IMMEDIATE RELEASE
WOOLWORTH CORPORATION ANNOUNCES RESIGNATION OF
XXXXXX X. XXXXX, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
NEW YORK, New York, April 9, 1997 - Woolworth Corporation (NYSE:Z) announced
today that Xxxxxx X. Xxxxx, its Senior Vice President and Chief Financial
Officer, will resign effective April 30 to pursue other personal interests. The
Company expects to name a successor to Xxxxx shortly.
"Xxxx Xxxxx, hard work and expert guidance, during a particularly challenging
rebuilding period, contributed to the success of our financial restructuring,
which was completed a year earlier than originally planned," said Xxxxx X.
Xxxxx, Chairman of the Board and Chief Executive Officer. "We thank him for his
efforts and wish him well."
Woolworth Corporation operates nearly 8,000 stores in North America, Europe,
Australia, and Asia, with names such as Foot Locker, Northern Reflections,
Woolworth, After Thoughts, and Champs Sports.
