Exhibit 10.6
AGREEMENT
THIS AGREEMENT, made as of February 12, 2002 (the "Effective Date"), by
MAZEL STORES, INC., an Ohio corporation, with its principal place of business at
00000 Xxxxxx Xxxx, Xxxxx, Xxxx 00000 (the "Company") and XXXX XXXXXXX, an
individual residing at 0000 Xxxxxxx Xxxxx, Xxx Xxxxxx, Xxxx 00000 (the
"Employee").
WITNESSETH:
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WHEREAS, the Company and Employee are parties to an employment
agreement dated November 1, 2000 (the "Employment Agreement");
WHEREAS, the Company and MZ Wholesale Acquisition, LLC ("Buyer") have
entered into an agreement pursuant to which Buyer is purchasing the Wholesale
Division of the Company; ;
WHEREAS, Employee is the Executive Vice President - Wholesale;
WHEREAS, Employee will become an employee of Buyer;
NOW, THEREFORE, the parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT. The parties agree that the Employee's
employment with the Company and all of its Affiliates (as defined in the
Employment Agreement), is hereby terminated as of the Effective Date. Employee
further resigns as an officer of the Company and each of its Affiliates as of
the Effective Date. Employee agrees to execute and deliver to the Secretary of
the Company and of each Company's Affiliates, a letter evidencing and affirming
such resignation, each as of the Effective Date.
2. PAYMENT. In consideration of the terms set forth in this Agreement,
the Company agrees to pay Employee, concurrently with the execution and delivery
of this Agreement, the sum of Two Hundred Fifty Thousand Dollars ($250,000),
subject to all applicable federal, state and local withholding taxes. In
addition, in the event prior to October 31, 2003, any person, other than ZS
Fund, Xxxxxx Xxxxxxx, or Xxxxx Xxxxx, or any of their affiliates, becomes the
owner of more than fifty percent (50%) of the Company's then outstanding Common
Shares, Employee shall be entitled to an additional payment of One Hundred
Thousand Dollars ($100,000), subject to all applicable federal, state and local
withholding taxes.
3. PUT OPTION. The Company agrees that, within five (5) business days
of its receipt from the Employee of a request that it repurchase Employee's
shares in the Company, the Company will repurchase up to 65,270 Common Shares of
the Company (the "Shares") that are owned as of the Effective Date (less any
Shares redeemed pursuant to Section 4 below) by the Employee for a price per
share equal to Three Dollars ($3.00).
The Company agrees that the Employee may transfer this put option, in whole or
in part, to any transferee of the Shares provided such transferee is Employee's
spouse, linear descendant, a trust or other entity whose beneficiaries are the
Employee, his spouse or linear descendant, or any combination thereof. The
Employee's put option shall expire on October 31, 2003. The Company's obligation
under this Section 3 is secured by a letter of credit in favor of Employee.
4. REPAYMENT OF NOTE. Employee is the debtor to the Company on a
Promissory Note dated December 31, 1996, the indebtedness, including interest,
totals $34,835.00 as of the Effective Date (the "Indebtedness"). Upon execution
of this Agreement, Employee shall deliver to the Company a certificate for
11,612 shares of Common Stock of the Company, together with a signed stock
power. On or prior to April 30, 2002, Employee shall (A) deliver $34,835.00 in
immediate available funds to the Company in full satisfaction of the
Indebtedness or (B) advise the Company to retain the 11.612 shares in full
satisfaction of the Indebtedness. If Employee fails to elect option A, he shall
automatically be deemed to have elected option B. If employee elects Option A,
the Company shall immediately return to Employee the certificate for the 11,612
shares and the stock power. If Employee on the date of execution of this
Agreement delivers a certificate for more than 11,612 shares, the Company shall
cause its transfer agent to split the certificate into two certificates: one for
11,612 shares and the second for the remaining shares. The Company shall cause
the second certificate to be immediately delivered to Employee.
5. RELEASE OF CLAIMS AND COVENANT NOT TO XXX.
A. In further consideration for the amounts to be paid by the
Company to Employee hereunder, Employee does hereby release and forever
discharge the Company and each Affiliate and their respective directors,
officers, Employees, shareholders, agents (including, but not limited to,
accountants and attorneys) (such individuals, the Company, and the Affiliates
are hereunder collectively referred to as "Released Parties") from all claims,
causes of action and liabilities of every kind and description whatsoever, known
and unknown, foreseen and unforeseen, suspected and unsuspected, asserted or
unasserted, which Employee has or may have against them or any of them by reason
of any fact, matter or thing from the beginning of the world to the date of this
Agreement, except for claims arising out of the breach of any of Company's
obligations under this Agreement. Without limiting the generality of the
preceding sentence, Employee does hereby release the Released Parties from all
claims, causes of action and liabilities arising from or relating to: (i) his
employment or other association with the Company or with any Affiliate; (ii) any
right which Employee has, had or may have had to receive any sum of money of the
Company or of any Affiliate; (iii) any rights or claims which Employee may have
against the Company or any Affiliate for any cause whatsoever; (iv) any claims
for salary, bonuses, vacation pay, fringe benefits, director's fees, business
expenses and allowances or severance pay; (v) claims based on oral or
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written contracts; (vi) claims arising under any federal or state statutes,
including but not limited to, claims asserting discrimination on account of age,
race, color, sex, religion, national origin or veteran or handicap status and
claims under the Age Discrimination in Employment Act of 1967 ("ADEA"), as
amended, ERISA, Title VII of the 1964 Civil Rights Act and the Older Worker
Benefit Protection Act; (vii) claims for damages for breach of contract or
implied contract; (viii) claims based on personal injury, including, without
limitation, infliction of emotional distress; (ix) wrongful termination or
breach of covenant of good faith and fair dealing; and (x) claims asserting
defamation, interference with contract or business relationships or promissory
estoppel.
Employee covenants and agrees that he will never assert a claim or
institute any cause of action or file a charge based on claims, causes of action
and liabilities of every kind and description whatsoever, known and unknown,
foreseen and unforeseen, suspected and unsuspected, asserted or unasserted,
which Employee has or may have against the Company, any Affiliate, or any other
Released Party by reason of any fact, matter or thing from the beginning of the
world to the date of this Agreement (except for claims arising out of the breach
of any of Company's obligations under this Agreement) with any court of law or
administrative tribunal, and further agrees that should he violate the foregoing
covenant not to xxx by asserting a claim, instituting an action or filing a
charge against the Company, any Affiliate, or any other Released Party which is
prohibited under this Agreement, Employee will pay all of Company's costs and
expenses (including, without limitation, attorneys' fees) of defending against
the suit incurred by the Company or any other Released Party. Employee
acknowledges and agrees that the monetary benefits provided in this Agreement
constitute sufficient consideration for the Release and Covenant Not to Xxx
contained herein in that there are substantial benefits to Employee, and
Employee further acknowledges that he has voluntarily and knowingly entered into
this Agreement with the benefit of advice and counsel of his choice and a full
understanding of its terms and meanings.
Employee acknowledges that the Company has notified him that, under
federal law: (i) Employee has twenty-one (21) days from the date of execution by
Employee of this Agreement to consider the release and covenant not to xxx
solely with respect to claims arising under the ADEA; and (ii) the release of
claims and covenant not to xxx under the ADEA are not enforceable for a period
of seven (7) days following the execution by Employee of this Agreement and may
be revoked by Employee during such time. Revocation of the release of claims
under ADEA and covenant not to xxx under ADEA may be effected by Employee solely
by notifying the Company in writing of his election to revoke and delivering
such notice to the Company within the aforesaid seven (7) day period. Such
revocation shall not affect any of the other terms and provisions of this
Agreement.
B. In consideration for Employee's agreements, obligations and
covenants contained in this Agreement, the Company does hereby release and
forever
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discharge Employee and his heirs, executors, administrators, personal
representatives, successors and permitted assigns, from all claims, causes of
action and liabilities of every kind and description whatsoever, known and
unknown, foreseen and unforeseen, suspected or unsuspected, asserted or
unasserted, which the Company has or may have against Employee by reason of any
fact, matter or thing from the beginning of the world to the date of this
Agreement, except for claims arising out of the breach by Employee of any of his
obligations, representations, warranties and covenants under this Agreement.
Without limiting the generality of the preceding sentence, the Company does
hereby release Employee from all claims, causes of action and liabilities
arising from or relating to Employee's previous employment or other association
with the Company and/or the circumstances giving rise to the execution and
delivery of this Agreement. The Company covenants and agrees that it will never
assert or institute any cause of action or file a charge arising from or
relating to Employee's previous employment or other association with the Company
and/or the circumstances giving rise to the execution and delivery of this
Agreement, and further agrees that should the Company violate the foregoing
covenant not to xxx by instituting an action or filing a charge against Employee
which is prohibited under this Agreement, Company will pay all costs and
expenses (including, without limitation, attorneys' fees) of defending against
the suit incurred by Employee.
6. NON-COMPETITION; TERMINATION OF EXISTING EMPLOYMENT AGREEMENT. By
this Agreement, the parties agree to the termination of the Employment Agreement
as of the Effective Date. Notwithstanding the terms of the Employment Agreement,
the non-competition provision of Section 6.1 thereof shall terminate as of the
Effective Date.
7. RETURN OF COMPANY PROPERTY. Employee covenants and agrees to return,
on or before the Effective Date, all records and other property of the Company,
including, but not limited to, all keys, credit cards, Dictaphones, portable
telephones, confidential records, and other property in the Employee's hands or
under his control as of the Effective Date.
8. STOCK OPTIONS. All of Employee's unexercised, non-vested stock
options for Common Stock of the Company shall terminate on the Effective Date.
Vested options shall expire in accordance with the terms of the option grant.
Notwithstanding the foregoing, the 7,000 non-qualified stock options granted on
December 21, 2000 (the 2000 Option Grant) shall fully vest as of the Effective
Date and the Employee shall have until October 31, 2003 to exercise such
options. The 2000 Option Grants shall expire on November 1, 2003, unless earlier
exercised.
9. REHIRE. In the event Buyer or its successor or assign liquidates or
ceases operations and, as a consequence, Buyer, its successor or assign can no
longer pay Employee the salary contemplated, as of the date hereof, by the
parties, then the Company agrees to offer Employee reemployment at a salary of
at least $312,000 per annum. This agreement to offer reemployment shall expire
on October 31, 2003.
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10. MISCELLANEOUS.
A. NOTICES. All notices, request, demands or other communications
hereunder must be in writing executed by an authorized representative of the
party responsible therefor, and must be given either by hand delivery or telex,
telecopy, telefax or other telecommunications device capable of creating a
written record (confirmed by registered or certified mail or by overnight
courier):
If to Company: Mazel Stores, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
ATTN: Xxxxx X. Xxxxx
Telecopier Number: (000) 000-0000
With a copy to: Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., L.P.A.
2600 Tower at Erieview
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to Employee: Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxx Xxxxxx, Xxxx 00000
Telecopier Number: (614)
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With a copy to: Shayne & Xxxxxxxxx Co., L.P.A.
000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
B. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.'
C. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes and cancels any and all prior discussions, correspondence, agreements
or understandings (whether oral or written) between the parties hereto with
respect to such matters, including, but not limited to, the Employment Agreement
(which shall be null and void and of no further force and effect).
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D. BINDING EFFECT/NON-ASSIGNABILITY. This Agreement shall inure to the
benefit of and shall bind the Company and its successors and assigns (whether by
way of sale of assets, merger, consolidation, combination, reorganization,
bankruptcy or other proceedings), and Employee, his heirs, representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, this Agreement and the rights and obligations of Employee
hereunder are personal to Employee and may not be assigned or delegated to any
Third Party.
E. SEVERABILITY. All provisions of this Agreement are intended to be
severable. In the event any provision or restriction contained herein is held to
be invalid or unenforceable in any respect, in whole or in part, such finding
shall in no way affect the Agreement. The parties hereto further agree that any
such invalid or unenforceable provision shall be deemed modified so that it
shall be enforced to the greatest extent permissible under law, and to the
extent that any court of competent jurisdiction determines any restriction
herein to be overly broad or unenforceable, such court is hereby empowered and
authorized to limit such restriction so that it is enforceable for the longest
duration of time and greatest scope possible.
F. GOVERNING LAW/JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio. Any
claim or action arising hereunder shall be litigated exclusively in the Courts
of Common Pleas, Franklin County, Ohio or federal courts situated in the
Southern District of Ohio, and each party irrevocably consents and submits to
the personal and subject matter jurisdiction of said courts.
IN WITNESS WHEREOF, the parties hereto have set their hands effective
as of the date written above.
MAZEL STORES, INC.
By: ____________________________________
Xxxxx X. Xxxxx,
Chief Employee Officer
__________________________________________
XXXX XXXXXXX
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