TRANS WORLD ENTERTAINMENT CORPORATION EMPLOYMENT
AGREEMENT WITH XXXXXX X. XXXXXXX
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: /s/ XXXX X. XXXXXXXX
------------------------
Xxxx X. Xxxxxxxx
Senior Vice President-Finance
and Chief Financial Officer
(Chief Financial and Accounting Officer)
May 7, 1998 By: /s/ XXXXXX X. XXXXXXX
-------------------------
Xxxxxx X. Xxxxxxx
Chairman, President and Chief Executive
Officer
(Principal Executive Officer)
