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EXHIBIT - 10.16
EMPLOYMENT AGREEMENT
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, XX 00000 (the "Company"), and Xxxxx X. Xxxxx, (the "Executive").
W I T N E S S E T H :
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WHEREAS, the Executive is employed by the Company as its Chairman of the
Board and Chief Executive Officer pursuant to the provisions of an employment
agreement dated as of December 11, 1994 (the "1994 Agreement"), the term of
which ends on January 31, 2000; and
WHEREAS, the Company desires the Executive to continue as its Chairman of
the Board and Chief Executive Officer for a period extending beyond January 31,
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 1994
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:
1. Employment. (a) The Company hereby agrees to continue the employment of
the Executive as its Chairman of the Board and Chief Executive Officer and the
Executive hereby agrees to accept such continued employment with the Company, on
the terms and conditions herein contained.
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(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 and ending on January 31, 2003 (the "Employment Period").
2. Duties. (a) The Executive shall serve during the Employment Period as
Chairman of the Board and Chief Executive Officer of the Company, reporting only
to the Board of Directors (the "Board"). The Executive agrees that in such
offices he shall perform such duties and functions as are commensurate with his
status as Chairman of the Board and Chief Executive Officer of the Company as
may from time to time be determined by the Board. 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 Board, which it may grant or deny in its 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.
(b) Upon request of the Board, the Executive shall also serve as an officer
and director of subsidiaries and affiliates of the Company.
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
less than One Million Dollars ($l,000,000) per annum ("Base Salary").
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(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, provided (i) that the
bonus payable to the Executive at target under the Company's Annual Incentive
Compensation Plan shall be no less than 100 percent of Base Salary and (ii)
that, subject to the provisions of the 1998 Stock Option and Award Plan (the
"1998 Plan") or any other applicable plan, Executive shall, during the
Employment Period, receive an annual stock option grant, at the same time and on
the same terms and conditions as other senior executives of the Company, for a
number of shares no less than the number calculated by dividing 5,000,000 by the
"fair market value" of a share of the Common Stock of the Company on the date of
such grant, as such term is defined in the 1998 Stock Option and Award Plan. The
Company and the Executive recognize that under the provisions of Section 5(b) of
the 1998 Plan, the total number of options and other stock-based grants that may
be made to any individual may not exceed 10 percent of the total number of
shares of Common Stock authorized for issuance under such plan, and that under
the provisions of Section 5(c) of the 1998 Plan, awards of all types granted to
any individual may not exceed 600,000 shares of Common Stock in any "Plan Year",
as defined therein. In the event that, on any date during the term of the
Agreement when stock options are issued to other senior executives of the
Company, there are not sufficient shares available for issuance to the Executive
under the 1998 Plan or under any other similar plans for the Company to grant to
Executive the stock options provided for under clause (ii) of the first sentence
in this paragraph (b), the Company shall seek shareholder approval, at the
annual meeting of shareholders next following, for an amendment to the 1998 Plan
or for a new plan, so that the Company may issue such options to Executive. In
the event that the shareholders of the Company fail to approve such amendment or
new plan, the Company and Executive shall negotiate in good faith to agree upon
an arrangement that will afford Executive a compensation opportunity reasonably
equivalent to both the Executive and the Company to that which would have been
afforded by such stock options that cannot be granted because of the limitations
contained in Section 5(b) or Section 5(c) of the 1998 Plan.
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(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 Employment Period, the Company shall
reimburse the Executive for his net premiums on his current term life insurance
policy for coverage of three million six hundred thousand dollars ($3,600,000)
with Aetna Life Insurance Company.
(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 (4) 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) Within 30 days of the date hereof, the Compensation Committee shall
grant the Executive 275,000 shares of restricted stock under the 1998 Stock
Option and Award Plan (the "Restricted Stock"), such shares to be subject to a
restriction related to Executive's continued employment with the Company, with
such restrictions to lapse in three equal installments on January 31, 2000,
January 31, 2001 and January 31, 2002.
(g) The Executive shall be provided with a car and driver to be used for
business purposes.
(h) 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;
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(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 by 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").
(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.
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6. Disability. If the Board 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 one hundred eighty (180) days from the onset of such
incapacity, the Company may, at its election at any time thereafter 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 Board 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,
stating the grounds for termination and specifying a reasonable date (the
"Meeting Date") on which the Executive shall be given an opportunity if he
desires to discuss such grounds for termination at a meeting of the Board.
(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
(10) days from the Meeting Date (the "Cure Period") to cure the neglect, refusal
or breach, as the case may be, provided that if similar grounds arise again
within one (1) 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), (iii) or (v) of paragraph (d) hereof, it is understood and agreed that
no satisfactory cure is available. If, following discussion with the Executive
of the grounds for his termination at the Board meeting or, if the Executive
does not appear, following the Board meeting, the Company shall continue intent
on discharging the Executive for cause on the grounds specified in clause (i),
(ii)(Y), (iii) or (v) of paragraph (d), the Company shall so notify the
Executive, and such termination shall be effective immediately.
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(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 or (Y) gross negligence;
(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
with regard to the Executive's responsibilities as set forth herein;
(v) the Executive's willful failure to comply with the covenants in Section
10 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:
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(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,
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 Chairman of the Board and Chief Executive
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 Chairman of the Board and Chief Executive 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. 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 ninety (90) days of the date the Executive obtains knowledge
of the Triggering Event referred to as providing such grounds for termination.
Within the thirty (30) day period specified in the Executive's notice to the
Company (the "Cure Period"), 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 ninety (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.
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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, 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, 2003 or two years 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 (g) 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.
(b) In addition to any payments to which 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, as of the date of termination of employment,
making to Executive under the provisions of the second sentence of paragraph
(a), without adjustment for the time value of money, (the "Section 9(a)
Payments") is less than the "Guaranteed Severance Amount", as defined below,
then the Company shall make a lump sum cash payment of the difference between
the Guaranteed Severance Amount and the Section 9(a) Payments within five
business days of the date of the termination of the Employment Period. For
purposes of this paragraph, if the date of the termination of the Employment
Period (the "Termination Date") is earlier than January 31, 2000, the Guaranteed
Severance Amount is $4,500,000; if the Termination Date is February 1, 2000 to
and including January 31, 2001, the Guaranteed Severance Amount is $4,000,000;
if the Termination Date is after January 31, 2001, the Guaranteed Severance
Amount is $3,000,000.
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(c) 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 (h) below.
(d) The Company shall provide the Executive, at no cost to the Executive,
with out-placement at a level commensurate with the Executive's position.
(e) To the extent any shares issued to Executive pursuant to a Restricted
Stock Agreement between the Company and Executive dated January 9, 1995 have not
vested, such shares shall immediately vest, as provided therein.
(f) The Executive shall not be required to mitigate the amount of any
payment provided for in the second sentence of paragraph (a) by seeking other
employment nor shall any amounts to be received by the Executive hereunder be
reduced by any other compensation earned.
(g) The Company shall be entitled to withhold from any payments made to the
Executive under paragraphs (a) and (c) of this Section 9 any amounts required to
be withheld by applicable federal, state or local tax law.
(h) Any amounts being paid to or on behalf of the Executive under this
Section 9 shall immediately cease if the Executive enters into Competition with
the Control Group. For purposes of this Agreement, "Competition" shall mean the:
(i) participating, directly or indirectly, as an individual proprietor,
stockholder, officer, employee, director, 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 any of the entities listed on
Exhibit A hereto or any successor to any such entity, provided, however, that
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such participation shall not include (x) the mere ownership of not more than one
percent (1%) of the total outstanding stock of a publicly held company; or (y)
any activity engaged in with the prior written approval of the Board; or
(ii) intentional recruiting, soliciting or inducing, of 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. (A) In the event of a Change in Control, as defined
in Exhibit B hereto, the Executive shall have the right to terminate the
Employment Period by written notice given within the thirty (30) day period
following three (3) months after such Change in Control. Such Employment Period
shall cease upon the giving of such notice. In such event, or in the event the
Company shall terminate the Executive's employment without cause or the
Executive shall terminate his employment for Good Reason during the one year
period after the Change in Control, the Company shall have no obligation to the
Executive except as follows:
(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 except that subpart (ii) of paragraph (a), subpart (iii) of
paragraph (c) and paragraph (h) of Section 9 shall not apply; provided, however,
that all such amounts shall be payable as a lump sum, without adjustment for the
time value of money, within five business days of the date of termination of the
Employment Period.
(b) Upon a Change in Control the forfeiture period with regard to the
Restricted Stock shall terminate and such Shares shall become immediately
vested.
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(c) 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) and Section 9(b) (the "Section
9 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 Payments to Executive within five
business days of the date of 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.
(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
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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 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.
12. Non-Renewal. In the event 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 of this Section 12) for an
additional one year, then the Company shall, within five business days of the
end of the Employment Period, make a lump sum cash payment to Executive in the
amount of $1,500,000.
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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 Chairman of the Board and Chief Executive
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) hereof or Section 10 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.
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(c) Furthermore, during the Employment Period, or, if fired for cause,
prior to January 31, 2003, the Executive shall not enter into Competition with
the Control Group, as defined in Section 9(h) 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 13 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
and that the Company shall enter into an indemnification agreement with
Executive in the form of its standard indemnification agreement with executive
officers. 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.
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 or 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
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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 Employment 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.
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 mall, postage prepaid, at, in the case of the Company,
the address of such party first given above and, in the case of the Executive,
his principal residence address as shown in the records of the Company. Notice
to the Company shall be addressed to the Chairman of the Compensation Committee
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.
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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. 1994 Agreement. The 1994 Agreement is hereby terminated, effective as
of April 14, 1999, without further obligation of either party to the other, and
shall thereafter be of no force and effect.
20. Miscellaneous. (a) This Employment Agreement represents the entire
understanding of the parties hereto, supersedes any prior understandings or
agreements between the parties, and the terms and provisions of this Employment
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 Employment 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.
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 Employment 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 Employment
Agreement to the Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the day and year first above written.
VENATOR GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------
XXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxx
-----------------------
XXXXX X. XXXXX
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Exhibit A
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List of Competitive Companies
- The Finish Line, Inc.
- Footstar, Inc.
- Xxxxxxxx Sporting Goods, Inc.
- Just For Feet, Inc.
- The Sports Authority, Inc.
- Any entity owning, operating, or franchising Athlete's Foot stores (not
including a general merchandise or department store that solely operates
Athlete's Foot departments as an incidental part of its stores)
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Exhibit B
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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
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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.
farahagmt
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