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Exhibit 10.43
EMPLOYMENT AGREEMENT
As of March 10, 1997
between
FEDERATED CORPORATE SERVICES, INC.
and
XXXXX X. XXXXXXXX
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT, made in the City of Cincinnati and State of
Ohio, as of the 10th day of March, 1997, between Federated Corporate Services,
Inc., a Delaware corporation (hereinafter called the "Employer"), and XXXXX X.
XXXXXXXX of Greenwich, Connecticut (hereinafter called the "Employee").
In consideration of the premises, it is agreed by and between
the parties hereto as follows:
ARTICLE I
EMPLOYMENT
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1.1 TERMS AND DUTIES. The Employer shall employ the Employee,
and the Employee shall serve the Employer, as an executive for the period (the
"Term") beginning on May 16, 1997 and ending on the later of (a) the date set
forth on Exhibit A hereto and (b) any later date to which the term may have been
extended by agreement of the parties. During the Term the Employee shall
faithfully and in conformity with the directions of the Board of Directors of
the Employer (the "Board") or its delegate perform the duties of his employment
and shall devote to the performance of such duties his full time and attention.
During the Term the Employee shall serve in the office or offices of the
Employer to which the Board may from time to time elect or appoint him. The
Employee shall be excused from performing any services hereunder during periods
of temporary incapacity and during vacations in accordance with the Employer's
disability and vacation policies.
1.2 COMPENSATION. In consideration of his services during the
Term, the Employer shall pay the Employee cash compensation at an annual rate
not less than the greater of his current base salary as set forth on Exhibit A
hereto or the base salary of the Employee most
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recently approved by the Board or its delegate ("Base Compensation"). Employee's
Base Compensation shall be subject to such increases as may be approved by the
Board or its delegate.
1.3 PAYMENT SCHEDULE. The Base Compensation specified in
Section 1.2(a) hereof shall be payable as current salary, in installments not
less frequently than monthly, and at the same rate for any fraction of a month
unexpired at the end of the Term.
1.4 EXPENSES. During the Term the Employee shall be allowed
reasonable traveling expenses and shall be furnished office space, assistance
and accommodations suitable to the character of his position with the Employer
and adequate for the performance of his duties hereunder.
1.5 TERMINATION IN CASE OF DISABILITY. The Employee shall not
be in breach of this Agreement if he shall fail to perform his duties hereunder
because of physical or mental disability. If for a continuous period of 12
months during the Term the Employee fails to render services to the Employer
because of the Employee's physical or mental disability, the Board or its
delegate may end the Term prior to its stated termination date. If there should
be any dispute between the parties as to the Employee's physical or mental
disability at any time, such question shall be settled by the opinion of an
impartial reputable physician agreed upon for the purpose by the parties or
their representatives, or failing agreement within 10 days of a written request
therefor by either party to the other, then one designated by the then president
of the local Academy of Medicine. The written opinion of such physician as to
the matter in dispute shall be final and binding on the parties.
1.6 TERMINATION OF SERVICES. If the Employer notifies the
Employee that his services will no longer be required during the Term, the
Employee shall be entitled (except as otherwise provided in Section 1.5 or
Section 1.7 hereof) to continue to receive his Base Compensation for the
remainder of the Term.
1.7 MITIGATION. If the Employee received notice from the
Employer pursuant to Section 1.6 hereof, the Employee (subject to Section 2.4
hereof) shall be free to become actively engaged with another business and shall
use his best efforts to find other comparable
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employment. Upon the payment to the Employee of compensation for employment or
other services by any unaffiliated third party, the Employee shall automatically
cease to be an employee of the Employer. The Employee shall promptly notify the
Employer of any such employment or other services and of the compensation
received, to be received or receivable from his subsequent employer or such
other party attributable to the Term. All Base Compensation otherwise payable to
the Employee by the Employer under this Agreement during the remainder of the
Term shall be reduced to the extent of his similar compensation received, to be
received or receivable from such other employment or other services.
1.8 TERMINATION FOR CAUSE. The Employer may terminate the
employment of the Employee and this Agreement and all of its obligations
hereunder, except for obligations accrued but unpaid to the effective date of
termination, for Cause upon notice given pursuant to this Section. As used in
this Agreement, the Term "Cause" shall mean:
(a) an intentional act of fraud, embezzlement, theft
or any other material violation of law in connection with the Employee's duties
or in the course of his employment with the Employer;
(b) intentional wrongful damage to material assets of
the Employer;
(c) intentional wrongful disclosure of material
confidential information of the Employer;
(d) intentional wrongful engagement in any
competitive activity which would constitute a material breach of the duty of
loyalty; or
(e) intentional breach of any stated material
employment policy of the Employer.
No act, or failure to act, on the part of an Employee
shall be deemed "intentional" if it was due primarily to an error in judgment or
negligence, but shall be deemed "intentional" only if done, or omitted to be
done, by the Employee not in good faith and without reasonable belief that his
action or omission was in or not opposed to the best interest of the
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Employer. Failure to meet performance standards or objectives of the Employer
shall not constitute Cause for purposes hereof.
1.9 ELECTION OF BENEFITS. If the Employee receives notice from
the Employer pursuant to Section 1.6 hereof, the Employee shall have the right
to elect to receive (in lieu of the payments hereunder specified in such Section
1.6) any benefits that may be payable to him pursuant to any severance plan of
the Employer applicable to him. If no such election is made, the amounts
specified in such Section 1.6 shall be payable as specified therein, no benefit
shall be payable to the Employee under such severance plan, and the Employee
hereby expressly waives any benefits that might otherwise by due him under such
severance plan.
ARTICLE II
CERTAIN OBLIGATIONS OF THE EMPLOYEE
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2.1 NO PARTICIPATION IN OTHER BUSINESSES. During the Term
(except as otherwise expressly provided in Section 1.7 hereof) the Employee
shall not, without the consent of the Board or its delegate, become actively
associated with or engage in any business other than that of the Employer or a
division or affiliate of the Employer, and he shall do nothing inconsistent with
his duties to the Employer. If the Employee shall breach his obligations under
this Section, he shall promptly reimburse the Employer for any monies paid by
the Employer in connection with his relocation during the Term or in
contemplation of the signing of this Agreement, including, without limitation,
any bonus or relocation expenses paid for or incurred by the Employer,
including, without limitation, carrying costs for property purchased from or on
behalf of the Employee. Any such reimbursement shall be in addition to any other
remedy for breach of this Agreement that the Employer may be entitled to at law
or in equity.
2.2 TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee shall
not (either during the Term or thereafter) without the consent of the Employer
disclose to anyone outside of the Employer, or use in other than the Employer's
business, trade secrets or confidential infor-
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mation relating to the Employer's business in any way obtained by him while
employed by the Employer.
2.3 NONCOMPETITION. It is recognized by the Employee and the
Employer that Employee's duties hereunder will entail the receipt of trade
secrets and confidential information, which include not only information
concerning the Employer's current operations, procedures, suppliers and other
contacts, but also its short-range and long-range plans, and that such trade
secrets and confidential information have been developed by the Employer and its
affiliates at substantial cost and constitute valuable and unique property of
the Employer. Accordingly, the Employee acknowledges that the foregoing makes it
reasonably necessary for the protection of the Employer's business interests
that the Employee not compete with the Employer or any of its affiliates during
the Term and for a reasonable and limited period thereafter. Therefore, during
the Term and for a period of one year thereafter, the Employee shall not have an
investment of $100,000 or more in a Competing Business (as hereinafter defined)
and shall not render personal services to any such Competing Business in any
manner, including, without limitation, as owner, partner, director, trustee,
officer, employee, consultant or advisor thereof. The noncompete provisions of
this section shall not be applicable to Employee if he has been notified
pursuant to Section 1.6 hereof that his services will no longer be required
during the Term or if Employee has been advised that his services will no longer
be required after the expiration of the Term.
If the Employee shall breach the covenants contained
in this Section 2.3 or in Section 2.2 hereof, the Employer shall have no further
obligation to make any payment to the Employee pursuant to this Agreement and
may recover from the Employee all such damages as it may be entitled to at law
or in equity. In addition, the Employee acknowledges that any such breach is
likely to result in immediate and irreparable harm to the Employer for which
money damages are likely to be inadequate. Accordingly, the Employee consents to
injunctive and other appropriate equitable relief upon the institution of
proceedings therefor by the Employer in order to protect the Employer's rights
hereunder. Such relief may include, without limitation, an injunction to prevent
the Employee from disclosing any trade secrets or confidential information
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concerning the Employer to any Competing Business, to prevent any Competing
Business from receiving from the Employee or using any such trade secrets or
confidential information and/or to prevent any such Competing Business from
retaining or seeking to retain any other employees of the Employer. Employer
agrees, however, that it will not seek injunctive relief for the purposes of
preventing Employee from competing with Employer after the expiration of the
Term. The provisions of the foregoing sentence shall not apply, however, to
injunctions of the type described in the preceding sentence.
(a) As used in this Agreement, the term "affiliate"
shall mean, with respect to a particular person, a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such person.
(b) As used in this Agreement, the term "Competing
Business" shall mean any business which:
(i) at the time of determination, is
substantially similar to the whole or a substantial part of the business
conducted by the Employer or any of its divisions or affiliates;
(ii) at the time of determination, is
operating a store or stores which, during its or their fiscal year preceding the
determination, had aggregate net sales, including sales in leased and licensed
departments, in excess of $10,000,000, if such store or any of such stores is or
are located in a city or within a radius of 25 miles from the outer limits of a
city where the Employer or any of its division's or affiliates, is operating a
store or stores which, during its or their fiscal year preceding the
determination, had aggregate net sales, including sales in leased and licensed
departments, in excess of $10,000,000; and
(iii) had aggregate net sales at all its
locations, including sales in leased and licensed departments and sales by its
divisions and affiliates, during its fiscal year preceding that in which the
Employee made such an investment therein, or first rendered personal services
thereto, in excess of $25,000,000.
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2.4 CONFLICTS OF INTEREST. The Employee shall not engage in
any activity that would violate the Conflict of Interest or Business Ethics
Statement signed from time to time by the Employee.
ARTICLE III
MISCELLANEOUS
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3.1 ASSIGNMENT. This Agreement may be assigned by the Employer
to any of its affiliates. This Agreement shall not otherwise be assignable by
the Employer without the consent of the Employee, except that, if the Employer
shall merge or consolidate with, or transfer all or any substantial portion of
its assets, including goodwill, to another corporation or other form of business
organization, this Agreement shall (or, in the case of any such transfer, may)
be assigned to and shall bind and run to the benefit of the successor of the
Employer resulting from such merger, consolidation or transfer. The Employee may
not assign, pledge or encumber his interest in this Agreement or any part
hereof.
3.2 GOVERNING LAW. This Agreement has been executed on behalf
of the Employer by an officer of the Employer located in the City of Cincinnati,
Ohio. This Agreement and all questions arising in connection herewith shall be
governed by the internal substantive laws of the State of Ohio. The Employer and
the Employee each consent to the jurisdiction of, and agree that any controversy
between them arising out of this Agreement shall be brought in, the United
States District Court for the Southern District of Ohio, Western Division; the
Court of Common Pleas for Xxxxxxxx County, Ohio; or such other court venued
within Xxxxxxxx County, Ohio as may have subject matter jurisdiction over the
controversy.
3.3 SEVERABILITY. If any portion of this Agreement is held to
be invalid or unenforceable, such holding shall not affect any other portion of
this Agreement.
3.4 ENTIRE AGREEMENT. This Agreement comprises the entire
agreement between the parties hereto and as of the date hereof, supersedes,
cancels and annuls any and all prior agreements between the parties hereto. This
Agreement may not be modified, renewed or
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extended orally, but only by a written instrument referring to this Agreement
and executed by the parties hereto.
3.5 GENDER AND NUMBER. Words in the masculine herein may be
interpreted as feminine or neuter, and words in the singular as plural, and vice
versa, where the sense requires.
3.6 NOTICES. Any notice or consent required or permitted to be
given under this Agreement shall be in writing and shall be effective when given
by personal delivery or five business days after being sent by certified U.S.
mail, return receipt requested, to the Secretary of Federated Department Stores,
Inc. at its principal place of business in the City of Cincinnati or to the
Employee at his last known address as shown on the records of the Employer.
3.7 WITHHOLDING TAXES. The Employer may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
3.8 WAIVER AND RELEASE. In consideration of the Employer's
entering into this Agreement, and the receipt of other good and valuable
consideration, the sufficiency of which is expressly acknowledged, the Employee,
for himself and his successors, assigns, heirs, executors and administrators,
hereby waives and releases and forever discharges the Employer and its
affiliates and their officers, directors, agents, employees, shareholders,
successors and assigns from all claims, demands, damages, actions and causes of
action whatsoever which he now has on account of any matter, whether known or
unknown to him and whether or not previously disclosed to the Employee or the
Employer, that relates to or arises out of (a) any existing or former employment
agreement (written or oral) entered into between the Employee and the Employer
or any of its affiliates (or any amendment or supplement to any such agreement),
(b) any agreement providing for a payment or payments or extension of the
employment relationship triggered by a merger or sale or other disposition of
the stock or assets or restructuring of the Employer or any affiliate of the
Employer, or (c) any applicable severance plan.
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IN WITNESS WHEREOF, the parties hereto have hereunto and to a
duplicate hereof set their signatures as of March 10, 1997.
FEDERATED CORPORATE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Title: President
XXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
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EXHIBIT A
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to
EMPLOYMENT AGREEMENT
Effective as of May 16, 1997
Name: Xxxxx X. Xxxxxxxx
End of Term: May 16, 2000
Annual Base
Compensation: $1 million
Stock Options: Effective as March 28, 1997 (the Grant Date"), Federated
Department Stores, Inc. ("Federated") will grant to Employee
options for 250,000 shares, with options for 75,000 shares
vesting on each of the first two anniversaries of the Grant Date
and options for 100,000 shares vesting on the third anniversary
of the Grant Date; the purchase price under each of said options
shall be 100% of the closing price of said stock on the New York
Stock Exchange on March 27, 1997; the grant of stock options is
subject to the terms of the Non-Qualified Stock Option Agreement
substantially in the form attached hereto.
Bonus: Employee shall participate in the annual and long-term bonus
programs of the Employer under its 1992 Incentive Bonus Plan, as
such may be amended from time to time, with the award,
commencing in respect of the 1997 annual performance period and
the 1997-1999 long-term performance period, calculated by
applying the applicable payout percent rate to the Employee's
then annual base compensation at the commencement of the annual
or long-term performance period, as the case may be.
Date: As of March 10, 1997
