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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of April 14, 1999, by and between Venator Group,
Inc., a New York corporation, having its principal place of business at 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxx X. Xxxxxxx (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Company as its President and
Chief Operating Officer pursuant to the provisions of an employment agreement
dated as of April 30, 1997 (the "1997 Agreement"), the term of which ends on
April 30, 2000; and
WHEREAS, the Company desires the Executive to continue as its President and
Chief Operating Officer for a period extending beyond April 30, 2000, and the
Executive is willing to serve in such capacity beyond such date; and
WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of such continued employment; and
WHEREAS, the Executive and the Company desire to terminate the 1997
Agreement as of April 14, 1999, so that, from and after April 15, 1999, the
terms and conditions of the employment of the Executive with the Company shall
be governed by the provisions of this agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the Company and the Executive agree
as follows:
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1. Employment. (a) The Company hereby agrees to continue the employment of
the Executive as its President and Chief Operating Officer, and the Executive
hereby agrees to accept such continued employment with the Company, on the terms
and conditions herein contained. The Executive shall continue to serve as
President and Chief Operating Officer and as a member of the Board of Directors
of the Company (the "Board").
(b) Except for earlier termination as provided pursuant to this Agreement,
the Executive's employment under this Agreement shall be for a period commencing
on April 15, 1999 (the "Commencement Date"), and ending on January 31, 2002 (the
"Employment Period").
2. Duties. (a) The Executive shall serve during the Employment Period as
President and Chief Operating Officer of the Company, reporting only to the
Chairman of the Board and Chief Executive Officer of the Company (the "CEO").
The Executive agrees that in such offices he shall perform such duties and
functions as are commensurate with his status as President and Chief Operating
Officer of the Company as may from time to time be determined or directed by the
Board or by the CEO. The Executive shall devote substantially all of his working
time, attention, skill, and efforts to the performance of his duties hereunder;
provided, however, that with the prior approval of the CEO, which he may grant
or deny in his sole discretion, the Executive may serve on the boards of
directors of other for-profit corporations, if such service does not conflict
with his duties hereunder or his fiduciary duty to the Company. It is further
understood and agreed that nothing herein shall prevent the Executive from
managing his passive personal investments (subject to applicable Company
policies on permissible investments), and (subject to applicable Company
policies) participating in charitable and civic endeavors, so long as such
activities do not interfere in more than a de minimis manner with the
Executive's performance of his duties hereunder. The services to be performed by
the Executive pursuant to the terms of this Agreement shall be rendered
principally at the Company's principal offices; provided, however, that the
Executive agrees to travel for reasonable periods of time for business purposes
whenever such travel is necessary or appropriate to the performance of his
duties hereunder.
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(b) Upon request of the CEO, the Executive shall also serve as an officer
and director of subsidiaries and affiliates of the Company without additional
compensation.
3. Compensation and Benefits. As full compensation for his services
hereunder, and subject to all the provisions hereof:
(a) During the Employment Period, the Company shall pay the Executive, in
accordance with its normal payroll practices and subject to required
withholding, a salary calculated at such rate per annum as may be fixed by the
Compensation Committee of the Board from time to time, but in no event at a rate
of less than $825,000 per annum ("Base Salary").
(b) During the Employment Period, the Executive shall be eligible to
participate in all bonus, incentive and equity plans that are maintained by the
Company from time to time for its senior executive employees in accordance with
the terms of such plans at the time of participation. Executive shall be
eligible to earn a bonus, at target, under the Annual Incentive Compensation
Plan equal to no less than 75 percent of his Base Salary.
(c) During the Employment Period, the Executive shall be eligible to
participate in all pension, welfare and fringe benefit plans, as well as
perquisites, maintained by the Company from time to time for its senior
executive employees in accordance with their respective terms as in effect from
time to time (other than any special arrangement entered into by contract with
an executive). In addition, during the Executive's active employment during the
Employment Period, the Company shall provide the Executive with life insurance,
with its group term life insurance plan or otherwise, on the life of the
Executive for the benefit of his designated beneficiaries in amount equal to
three times his annual earnings reported as "wages" for Form W-2 purposes (other
than earnings attributable to the exercise of stock options or attributable to
other equity-based incentive plans).
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(d) During the Employment Period, the Executive shall be reimbursed for his
out-of-pocket travel and entertainment expenses in accordance with the Company's
normal policy for senior executive officers, including appropriate
documentation.
(e) The Executive shall be entitled to four weeks vacation for each fiscal
year during the Employment Period to be taken at such time as mutually
convenient to the Executive and the Company. Unused vacation shall be forfeited.
(f) The Company shall provide to Executive a transportation allowance of
$10,000 per year.
(g) The Company shall pay for personal financial planning services for
Executive up to an amount of $15,000 per year.
4. Termination. The Employment Period shall terminate upon the earliest of
the following:
(a) the Executive's death; (b) the Executive's disability in
accordance with Section 6;
(c) the Executive's termination for cause in accordance with Section
7;
(d) the termination of the Executive by the Company without cause;
(e) the termination by the Executive in accordance with Section 8; or
(f) the termination of the Executive in accordance with Section 10.
5. Death. The death of the Executive shall serve to terminate the
Employment Period, in which event the Company shall have no liability or further
obligation except as follows:
(a) The Company shall pay the Executive's estate (or, if properly
designated under an applicable plan or arrangement, his beneficiary) when
otherwise due any unpaid Base Salary for the period prior to such termination of
the Employment Period, any declared but unpaid bonuses, any declared but unpaid
amounts due under any incentive plan, and any other unpaid amounts due the
Executive under employee benefit, fringe benefit or incentive plans
("Entitlements").
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(b) The Executive shall have such rights under any employee benefit, fringe
benefit or incentive plan, including any stock option plan, as provided in such
plans and any grants thereunder ("Rights").
(c) The Executive's estate or his designated beneficiary shall be entitled
to receive those benefits afforded by the Company under its then existing
policies to employees who die while employed by the Company.
6. Disability. If the Company reasonably shall determine that the Executive
has become physically or mentally incapable of performing his material duties as
provided in Section 2 of this Agreement and such incapacity is likely to last
for a period of at least 180 days from the onset of such incapacity, the Company
may, at its election at any time after the date of such onset while the
Executive remains incapable of performing his duties, terminate the Executive's
employment hereunder effective immediately by giving the Executive written
notice of such termination. In such event, the Company shall continue the
Executive as an employee on payroll (but not as an officer hereunder) at his
same Base Salary until he qualifies for the Company's long term disability
policy and the Company shall have no other obligation to the Executive or his
dependents other than Entitlements, Rights, amounts due under the Company's long
term disability plan, and any benefits offered by the Company under its then
policy to employees who become disabled while employed by the Company.
7. Cause. (a) If the Company shall determine that there are grounds for
terminating the Employment Period and discharging the Executive for "cause" (as
hereinafter defined), the Company may, at its election at any time within six
months after the Company shall obtain knowledge of the grounds for termination,
give the Executive notice of its intention to terminate the Executive for cause
and stating the grounds for termination. In the event of any arbitration in
accordance with Section 17 hereof with regard to the Company's determination of
cause, the determination by the Company shall be reviewed on a de novo basis by
the arbitrator(s).
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(b) If the grounds for termination are those specified in clause (ii)(X),
(iv) or (vi) of paragraph (d) hereof, the Executive shall have a period of ten
days from giving of the notice to cure the neglect, refusal, or breach, as the
case may be, provided that if similar grounds arise again within one year of
such cure, no new notice need be given and the Company, at its option, may
immediately terminate the Executive for cause.
(c) If the grounds for termination are those specified in clauses (i),
(ii)(Y), (ii)(Z), (iii) or (v) of paragraph (d) hereof, it is understood and
agreed that no satisfactory cure is available and such termination shall be
effective immediately upon notice by the Company.
(d) For purposes of this Section 7 and Section 9 hereof, the term "cause"
shall mean:
(i) the conviction (or plea of guilty or nolo contendere) of the Executive
of any felony, or of any crime involving fraud, dishonesty or misappropriation,
or moral turpitude or, if any of the foregoing involves the Company or any
subsidiary or affiliate (collectively the "Control Group"), the commission of
any of the foregoing (other than good faith disputes involving expense account
items);
(ii) the Executive's (X) continued willful neglect of his duties and
responsibilities under this Agreement; (Y) grossly negligent conduct in
connection with his duties and responsibilities under this Agreement; or (Z)
gross negligence in connection with his handling of the assets of the Company or
any other member of the Control Group;
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(iii) the Executive's willful misconduct with regard to the Control Group;
(iv) the Executive's refusal to follow the written direction of the Board
or the CEO with regard to the Executive's responsibilities as set forth herein;
(v) the Executive's willful failure to comply with the covenants in Section
13 hereof; or
(vi) material breach of any of the provision of this Agreement by the
Executive.
(e) If the Company shall terminate the Executive's employment pursuant to
this Section 7, it shall have no further liability or obligation hereunder
except as follows:
(i) The Company shall promptly pay the Executive his then current Base
Salary through the effective date of such termination;
(ii) The Executive shall receive the benefits, if any, and have the rights
afforded by the Company under its then existing policies to employees whose
employment is terminated for cause or under the specific terms of any welfare,
pension, fringe benefit or incentive plan.
8. Good Reason. In the event that the Company shall (i) fail to continue
the appointment of the Executive as President and Chief Operating Officer of the
Company, or (ii) reduce the Executive's annual salary below the Base Salary, or
(iii) materially diminish the duties and responsibilities of the Executive as
President and Chief Operating Officer, assign to the Executive duties and
responsibilities inconsistent with his positions, or materially diminish his
authority, or (iv) locate the Executive at other than at the Company's main
executive office, or (v) breach any payment provision of this Agreement (to the
extent not disputed in good faith) or any other material provision of this
Agreement (each of the foregoing hereinafter referred to as a "Triggering
Event"), then the Executive may give notice to the Company of his election to
terminate the Employment Period pursuant to this Section 8, effective thirty
(30) days from the date of such notice, unless the Company shall have cured
prior thereto the default giving rise to his notice of election to terminate.
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Such notice from the Executive shall state the Triggering Event which provides
the grounds for his termination, and such notice must be given, if at all,
within 90 days of the date the Executive obtains knowledge of the Triggering
Event referred to as providing such grounds for termination. Within the 30 day
period specified in the Executive's notice to the Company, the Company shall
have the opportunity to cure the default involved in the Triggering Event
specified by the Executive. If the Employment Period is terminated pursuant to
this Section 8, the Company shall have no liability or further obligation
hereunder except as provided in Section 9 hereof. If the Executive does not give
notice to the Company of his election to terminate within 90 days following the
occurrence of a Triggering Event, then the Executive shall be deemed to have
waived his right to terminate the Employment Period based on such Triggering
Event, but such waiver shall not prejudice his right to terminate pursuant to
this Section 8 based on the occurrence of another Triggering Event occurring
subsequent in time, whether of the same or a different type.
9. Termination. In the event of a termination of the Employment Period
pursuant to Section 8 hereof, or in the event the Company shall terminate the
Employment Period without cause, or if as of January 31, 2002, the Company does
not offer to extend this agreement under the same terms and conditions then
existing (other than with respect to the one-year extension provision under this
Section 9) for an additional one year, then, except as provided in Section 10
hereof, the Company shall have no obligation to the Executive except as follows:
(a) The Executive shall receive his Entitlements and have his Rights.
Thereafter, and during the period until the earliest of (i) the later of January
31, 2002 or one year from the date of termination, (ii) the Executive's death,
or (iii) the Executive's violation of the post employment requirements of
Section 13 hereof, and subject to paragraph (f) below, following the date of
such termination (hereinafter referred to as the "Severance Period"), the
Company shall make payments to the Executive, either bi-weekly or monthly as the
Company shall elect, calculated at the annual rate of Base Salary which the
Executive was receiving pursuant to Section 3(a) hereof immediately prior to
such termination.
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(b) During the Severance Period the Executive shall not be an employee and
shall not be entitled to receive any fringes, perquisites or benefits from the
Company, except the Company shall pay the premiums for his and his dependents'
health coverage under COBRA until the earliest of (i) such time as he commences
other employment, (ii) such time as he or a dependent, as the case may be, is no
longer entitled to COBRA coverage, or (iii) as provided in paragraph (f) below.
(c) The Company shall provide the Executive, at no cost to the Executive,
with out-placement at a level commensurate with the Executive's position.
(d) The Executive shall not be required to mitigate the amount of any
payment provided for in the second sentence of paragraph (a) or in paragraph (b)
by seeking other employment nor shall any amounts to be received by the
Executive hereunder be reduced by any other compensation earned.
(e) The Company shall be entitled to withhold from any payments made to the
Executive under this Section 9 any amounts required to be withheld by applicable
federal, state or local tax law.
(f) Any amounts being paid to or on behalf of the Executive under this
Section 9 (other than vested benefits that are required to be paid under the
Company's tax-qualified pension plans pursuant to the provisions of the Employee
Retirement Income Security Act of 1974, as amended) shall immediately cease if
the Executive enters into Competition with the Control Group. For purposes of
this Agreement, "Competition" shall mean the:
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(i) participating, directly or indirectly, as an individual proprietor,
stockholder, officer, employee, director, consultant, joint venturer, investor,
lender, or in any capacity whatsoever (within the United States of America, or
in any country where the Control Group does business) in activities competitive
with any business of the Control Group, provided, however, that such
participation shall not include (x) the mere ownership of not more than one
percent of the total outstanding stock of a publicly held company; or (y) any
activity engaged in with the prior written approval of the Board; or
(ii) intentionally recruiting, soliciting or inducing, any employee or
employees of the Control Group to terminate their employment with, or otherwise
cease their relationship with, the Control Group where such employee or
employees do in fact so terminate their employment.
If any restriction set forth with regard to Competition is found by any
court of competent jurisdiction, or an arbitrator, to be unenforceable because
it extends for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities, or geographic area as to which it
may be enforceable.
10. Change in Control. In the event of the occurrence of a Change in
Control, as defined in Exhibit A hereto, and (i) the Company shall terminate the
Executive's employment without cause or the Executive shall terminate his
employment for Good Reason (as defined in Section 8 hereof) within one year
following such Change in Control, or (ii) within one year following such Change
in Control the person who is CEO of the Company immediately prior to such Change
in Control ceases to be CEO of the Company, and the Executive, within 90 days of
the date such person shall cease to be CEO of the Company, gives written notice
terminating the Employment Period (and such Employment Period shall cease upon
the giving of such notice), then the Company shall have no obligation to the
Executive except as follows:
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(a) The Executive shall receive all amounts and benefits under Section 9
hereof as if he had terminated his employment for Good Reason pursuant to
Section 8 hereof.
(b) In addition to any payments to which the Executive may be entitled
pursuant to the provisions of paragraph (a) of this section, if the sum of the
payments that the Company would anticipate making to the Executive under the
provisions of the second sentence of Section 9(a) if such payments continued
until the later of January 31, 2002 or one year from the date of termination,
without adjustment for the time value of money (the "Section 9(a) Payments"), is
less than 3 multiplied by Executive's Base Salary (at the rate payable
immediately prior to such Change in Control) plus bonus payable under the Annual
Incentive Compensation Plan at target in the year of the termination of the
Employment Period (the "Change-in-Control Amount"), then the Company shall make
a lump sum cash payment of the difference between the Change-in-Control Amount
and the Section 9(a) Payments to Executive within five business days of the date
of the termination of the Employment Period.
11. Gross-up. (a) In the event that the Executive shall become entitled to
the payments and/or benefits provided by Section 10 or any other amounts
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a change of
ownership covered by Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended (the "Code") or any person affiliated with the Company or such person)
(collectively the "Company Payments"), and such Company Payments will be subject
to the tax (the "Excise Tax") imposed by Section 4999 of the Code (and any
similar tax that may hereafter be imposed), subject to paragraph (f) below, the
Company shall pay to the Executive at the time specified in paragraph (d) below
an additional amount (the "Gross-up Payment") such that the net amount retained
by the Executive, after deduction of any Excise Tax on the Company Payments and
any federal, state and local income tax and Excise Tax upon the Gross-up Payment
provided for by this paragraph (a), but before deduction for any federal, state
or local income tax on the Company Payments, shall be equal to the Company
Payments.
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(b) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and the amount of such Excise Tax, (a) the Total Payments shall be
treated as "parachute payments" within the meaning of section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Code Section 280G(b)(3)) shall be treated as subject to the Excise Tax,
unless and except to the extent that, in the opinion of the Company's
independent certified public accountants appointed prior to any change in
ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected by
such accountants (the "Accountants") such Total Payments (in whole or in part)
either do not constitute "parachute payments", represent reasonable compensation
for services actually rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the "base amount" or are otherwise not subject to the Excise
Tax, and (b) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.
(c) For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive's residence for the
calendar year in which the Company Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the prior Gross-up Payment
attributable to such reduction net of any federal, state, or local income tax
incurred on the original receipt of such portion of the prior Gross-up Payment
(after taking into account the tax benefit, if any, that the Executive receives
on such repayment) (plus the portion of the Gross-up Payment attributable to the
Excise Tax and federal and state and local income tax imposed on the portion of
the Gross-up Payment being repaid by the Executive if such repayment results in
a reduction in Excise Tax or a federal and state and local income tax
deduction), plus interest on the amount of such repayment at the rate provided
in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the
event any portion of the Gross-up Payment to be refunded to the Company has been
paid to any federal, state or local tax authority, repayment thereof (and
related amounts) shall not be required until actual refund or credit of such
portion has been made to the Executive, and interest payable to the Company
shall not exceed the interest received or credited to the Executive by such tax
authority for the period it held such portion. The Executive and the Company
shall mutually agree upon the course of action to be pursued (and the method of
allocating the expense thereof) if the Executive's claim for refund or credit is
denied.
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In the event that the Excise Tax is later determined by the Accountant or
the Internal Revenue Service to exceed the amount taken into account hereunder
at the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.
(d) The Gross-up Payment or portion thereof provided for in paragraph (c)
above shall be paid not later than the thirtieth day following an event
occurring which subjects the Executive to the Excise Tax; provided, however,
that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Accountant, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Code Section 1274(b)(2)(B) of the Code),
subject to further payments pursuant to paragraph (c) hereof, as soon as the
amount thereof can reasonably be determined, but in no event later than the
ninetieth day after the occurrence of the event subjecting the Executive to the
Excise Tax. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth day after demand by
the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(e) The Company shall be responsible for all charges of the Accountant.
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12. Supplemental Executive Retirement Plan. During the Employment Period,
Executive shall participate in the Company's Supplemental Executive Retirement
Plan (the "SERP"). If, at the time of a termination of the Employment Period (a)
pursuant to Section 8 hereof, (b) without cause, (c) pursuant to Section 10
hereof, or (d) on January 31, 2002 (if the Company and Executive have not
entered into an employment agreement extending Executive's employment with the
Company beyond such date) (the "Retirement Events"), the Total Retirement
Benefit, as hereinafter defined, is less than $1,300,000, the Company shall,
effective as of the date of such termination of the Employment Period, increase
the amount of Executive's Account in the SERP by the difference between the
Total Retirement Benefit and $1,300,000. Further, if at any time during the
Employment Period the Board freezes or terminates the SERP or terminates the
participation of Executive thereunder, (i) Executive shall, as of the day
preceding such action, if it is not the case, be deemed to be at least 55 years
of age and have at least five "Years of Service" as defined in the SERP and,
(ii) the Company shall, if the Total Retirement Benefit to which the Executive
would be entitled, as of the day preceding such action, is less than $1,300,000,
increase the amount of Executive's Account in the SERP by the difference between
the Total Retirement Benefit, calculated as of such date, and $1,300,000. For
purposes of this section, Total Retirement Benefit shall be the sum of (a) the
lump sum benefit to which Executive is entitled under the provisions of Section
4.03 (C) (2) of the Venator Group Retirement Plan plus (b) the amount of the
lump sum Excess Cash Balance Benefit payable under the provisions of the Excess
Cash Balance Plan plus (c) the amount of Executive's Account under the SERP,
prior to any adjustment provided for herein. In the event a Retirement Event
occurs and either (i) such Retirement Event occurs before the Executive reaches
age 55 or (ii) such Retirement Event occurs after the Executive has reached age
55 and the Compensation Committee of the Board does not provide the consent
required by Section 2(v) of the SERP to permit Executive's "Retirement", as
defined therein, to occur before he attains age 65, then the Company shall make
a payment to Executive equal to the amount that would have been in Executive's
Account in the SERP following the adjustment, if any, provided for in this
section, such payment to be made to Executive in the same manner, and subject to
the same restrictions, as provided for in the SERP.
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13. Confidential Information, Nondisparagement. (a) In consideration of the
covenants by the Company contained herein, the Executive undertakes and agrees
that during the Employment Period and thereafter he shall hold in a fiduciary
capacity for the benefit of the Control Group all secret or confidential
information, knowledge, or data relating to the Control Group or its business
(which shall be defined as all such information, knowledge, and data coming to
the Executive's attention by virtue of his employment at the Company except that
which is otherwise public knowledge or known within the Company's industry).
During such period, the Executive shall not, without prior written consent of
the Company, unless compelled pursuant to the order of a court or other body
having jurisdiction over such matter or 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. The foregoing shall
not limit the disclosure by the Executive of such information in the course of
the performance of his duties as President and Chief Operating Officer so long
as such disclosure is in good faith.
(b) During the Employment Period and thereafter while the Executive is
receiving any amounts pursuant to Section 9(a), Section 10, or Section 12
hereof, the Executive shall not make any statements or comments (i) to any form
of media or likely to come to the attention of any form of media of a negative
nature that reasonably could be considered to have an adverse impact on the
business or reputation of the Control Group, the Board or any senior officer of
the Control Group, or (ii) to any employee of the Control Group or to any
supplier or customer of the Control Group of a negative nature that reasonably
could be considered to have an adverse impact on the business or reputation of
the Control Group or the Board or any senior officer of the Control Group,
provided that in no event shall the foregoing limitation apply to (i) compliance
with legal process or subpoena, (ii) statements in response to inquiry from a
court or regulatory body, (iii) in rebuttal of media stories with regard to the
Executive, (iv) to a possible future employer in connection with employment
discussions, or (v) in response to inquiry from the Board or the CEO.
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(c) Furthermore, (i) during the Employment Period, (ii) thereafter while
the Executive is receiving any amounts pursuant to Section 9(a) hereof, or,
(iii) if the employment of Executive hereunder is terminated for cause, prior to
January 31, 2002, the Executive shall not enter into Competition with the
Control Group, as defined in Section 9(f) hereof.
(d) Notwithstanding any other provision of this Agreement, in the event of
a breach or threatened breach by the Executive of any provision of this Section,
the Executive and the Company agree that the Company shall be entitled to
injunctive and declaratory relief from a court of competent jurisdiction to
restrain the Executive from committing such breach of the Agreement. Nothing in
this Agreement shall be construed as prohibiting the Company from pursuing any
other remedy or remedies including, without limitation, the recovery of damages.
(e) The provisions of this section shall survive the expiration of this
Agreement or the termination of the Agreement for any reason.
14. Indemnification. The Company agrees that the Executive shall be
entitled to the benefits of the indemnity provisions set forth in the By-laws
from time to time in accordance with their terms both during his employment and
thereafter with regard to his actions as an officer or director of the Company.
In addition, the Company agrees to continue in effect for the benefit of the
Executive during the Employment Period directors' and officers' liability
insurance of the type and in the amount currently maintained by the Company to
the extent such insurance is available at a premium cost which the Company
considers reasonable and, thereafter, with regard to his prior activities as an
officer or director, such insurance as is maintained for active directors and
officers.
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15. Assignment. This Employment Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs (in
the case of the Executive) and permitted assigns. This Agreement is personal to
the Executive and neither this Agreement nor any rights hereunder may be
assigned by the Executive. No rights or obligations of the Company under this
Employment Agreement may be assigned or transferred by the Company except that
such rights or obligations may be assigned or transferred pursuant to a merger
or consolidation in which the Company is not the continuing entity, or pursuant
to a sale of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Employment Agreement, either contractually or as a matter of law. The Company
further agrees that, in the event of a sale as described in the preceding
sentence, it shall use its best efforts to cause such assignee or transferee to
expressly assume the liabilities, obligations, and duties of the Company
hereunder.
16. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, other than injunctive relief pursuant to
Section 13(d) hereof, shall be settled by arbitration in the City of New York,
in accordance with the rules of the American Arbitration Association (the "AAA")
before three arbitrators. The decision of the arbitrators shall be final and
binding on the parties hereto and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The costs
assessed by the AAA for arbitration shall be borne equally by both parties.
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17. Notice. Any notice to either party hereunder shall be in writing, and
shall be deemed to be sufficiently given to or served on such party, for all
purposes, if the same shall be personally delivered to such party, or sent to
such party by registered mail, postage prepaid, at, in the case of the Company,
the address first given above and, in the case of the Executive, his principal
residence address as shown in the records of the Company. Notices to the Company
shall be addressed to the CEO with a copy similarly sent to the General Counsel.
Either party hereto may change the address to which notices are to be sent to
such party hereunder by written notice of such new address given to the other
party hereto. Notices shall be deemed given when received if delivered
personally or three days after mailing if mailed as aforesaid.
18. Applicable Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York applicable to
contracts to be performed therein.
19. 1997 Agreement. The 1997 Agreement is hereby terminated, effective as
of the close of business on April 14, 1999, without further obligation of either
party to the other, and shall thereafter be of no force or effect.
20. Miscellaneous. (a)This Agreement represents the entire understanding
of the parties hereto, supersede any prior understandings or agreements between
the parties, and the terms and provisions of this Agreement may not be modified
or amended except in a writing signed by both parties.
(b) No waiver by either party of any breach by the other party of any
condition or provision contained in this Agreement to be fulfilled or performed
by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time. Except to
the extent otherwise specifically provided herein, any waiver must be in writing
and signed by the Executive or an authorized officer of the Company, as the case
may be.
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21. Beneficiary. The Executive shall be entitled to select (and change, to
the extent permitted under any applicable law) a beneficiary or beneficiaries to
receive any compensation or benefit payable under this Agreement following his
death by giving the Company written notice thereof in accordance with applicable
Company policies. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
VENATOR GROUP, INC.
By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
/s/ Xxxx X. Xxxxxxx
---------------------
XXXX X. XXXXXXX
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Exhibit A
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Change in Control of the Company shall mean any of the following: (i) (A)
the making of a tender or exchange offer by any person or entity or group of
associated persons or entities (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934) (a "Person") (other than the
Company or its subsidiaries) for shares of Common Stock pursuant to which
purchases are made of securities representing at least twenty percent (20%) of
the total combined voting power of the Company's then issued and outstanding
voting securities; (B) the merger or consolidation of the Company with, or the
sale or disposition of all or substantially all of the assets of the Company to,
any Person other than (a) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) fifty percent (50%) or
more of the combined voting power of the voting securities of the Company or
such surviving or parent entity outstanding immediately after such merger or
consolidation; or (b) a merger or capitalization effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the beneficial owner, directly or indirectly (as determined under
Rule 13d-3 promulgated under the Securities Exchange Act of 1934), of securities
representing more than the amounts set forth in (C) below; (C) the acquisition
of direct or indirect beneficial ownership (as determined under Rule 13d-3
promulgated under the Securities Exchange Act of 1934), in the aggregate, of
securities of the Company representing twenty percent (20%) or more of the total
combined voting power of the Company's then issued and outstanding voting
securities by any Person acting in concert as of the date of this Agreement;
provided, however, that the Board of Directors of the Company (referred to
herein as the "Board") may at any time and from time to time and in the sole
discretion of the Board, as the case may be, increase the voting security
ownership percentage threshold of this item (C) to an amount not exceeding forty
percent (40%); or (D) the approval by the shareholders of the Company of any
plan or proposal for the complete liquidation or dissolution of the Company or
for the sale of all or substantially all of the assets of the Company; or
(ii) during any period of not more than two (2) consecutive years, individuals
who at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into agreement
with the Company to effect a transaction described in clause (i)) whose election
by the Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof.
Xxxxxxx
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