Exhibit 10X
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this "Agreement"), dated as of June 9, 1999, is
by and between TOYS "R" US, INC., a Delaware corporation (the "Company"), and
XXXXX XXX XXXX (the "Executive").
RECITALS
WHEREAS, pursuant to a Retention Agreement dated as of February 25, 1998
between the Company and the Executive (the "Retention Agreement"), Executive is
employed by the Company as President - Toys "R" Us -- U.S. Merchandising and
Marketing; and
WHEREAS, pursuant to a Stock Unit Agreement dated as of February 25, 1998
between the Company and the Executive (the "Stock Unit Agreement"), on February
25, 1998, the Company granted Executive 30,000 Stock Units (the "Stock Units");
and
WHEREAS, pursuant to the Company's 1994 Stock Option and Performance
Incentive Plan (the "Plan"), on May 17, 1995, the Company granted Executive
options to acquire 47,200 shares of Common Stock (the "May 17, 1995 Grant"),
10,000 shares of common stock on May 30, 1995 (the "May 30, 1995 Grant"), 15,000
shares of common stock on March 14, 1996 (the "March 14, 1996 Grant"), 20,000
shares of common stock on November 3, 1997 (the "November 3, 1997 Grant"),
80,000 shares of common stock on March 13, 1998 (the "March 13, 1998 Grant"),
240,000 shares of common stock on September 8, 1998 (the "September 8, 1998
Grant") and 90,000 shares of common stock on April 7, 1999 (the "April 7, 1999
Grant"); and
WHEREAS, Executive desires to resign, for personal reasons, his employment
with the Company and his position as President - Toys "R" Us -- U.S.
Merchandising and Marketing and all other officer and employee positions, if
any, held by Executive in the Company and any of its subsidiaries effective as
of June 9, 1999 (the "Termination Date"); and
WHEREAS, the parties desire to set forth their respective rights and
obligations in respect of Executive's resignation from the above positions;
NOW, THEREFORE, in consideration of the covenants and conditions set forth
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties, intending to be legally bound,
agree as follows:
AGREEMENT
1. Resignation.
(a) Effective as of the Termination Date, Executive will resign from his
position as President - Toys "R" Us -- U.S. Merchandising and Marketing and all
other officer and employee positions, if any, held by Executive in the Company
and any of its subsidiaries. It
is agreed by the parties that, on and as of the Termination Date, all rights and
obligations of Executive and the Company with respect to such employment shall
terminate.
(b) On the Termination Date, Executive will deliver to the Company a letter
of resignation in the form of Exhibit A hereto and a certificate of release in
the form of Exhibit B hereto.
2. Benefits. In consideration of the agreements of Executive herein,
Executive will be entitled to the benefits set forth in this Section 2.
(a) Salary. From the Termination Date through the second anniversary of the
Termination Date and regardless of whether Executive obtains other employment,
the Company will pay Executive $26,875 per month, such amount to be payable in
accordance with the Company's regular payroll policies as in effect from time to
time. All payments to Executive under this Section 2(a) will be less applicable
withholdings for federal, state and local taxes.
(b) Prorated Bonus. The Company will pay Executive the bonus which
Executive would have been entitled to receive for fiscal year 1999, prorated at
4/12ths of the actual amount that would have been earned by Executive, and
payable on or about April 1, 2000.
(c) Relocation Expenses. If, during the two year period commencing on the
Termination Date the Executive relocates his household to an area other than
Northeastern New Jersey for any reason, the Company will reimburse the
Executive's relocation expenses, up to a maximum reimbursement of thirty
thousand dollars ($30,000). A new employer would be expected to pay relocation
costs if such a program exists for newly-hired executives.
(d) Health Benefits. From the Termination Date until the earlier to occur
of (i) the second anniversary of the Termination Date or (ii) the date Executive
commences employment with another employer which offers health benefits, the
Company will permit Executive to continue to participate in the medical,
prescription and dental plans maintained by the Company from time to time at a
level commensurate with the level at which senior executives of the Company
participate.
(e) Stock Units. Executive hereby forfeits all of the Stock Units in their
entirety, except 7,500 of such Units which will vest on February 25, 2003,
irrespective of the fact that the Executive is no longer employed by the
Company, subject to the achievement of the performance objective set forth on
Exhibit A to the Stock Unit Agreement. Except as modified by the preceding
sentence, the Stock Unit Agreement shall continue in full force and effect.
(f) Stock Options. The stock options granted to Executive as part of the
Plan will be treated as follows: Executive shall retain all of the options
granted pursuant to the May 17, 1995 Grant, the May 30, 1995 Grant and the March
14, 1996 Grant; the Executive shall also retain 6,333 of the 20,000 options
granted in the November 3, 1997 Grant; 20,000 of the 80,000 options granted in
the March 13, 1998 Grant; 36,000 of the 240,000 options granted in the September
8, 1998 Grant; and 5,000 of the 90,000 options granted in the April 7, 1999
Grant. All stock options retained by Executive pursuant to this paragraph (d)
shall be subject to the terms and conditions (including vesting requirements) of
the original grants; provided, however, Executive shall vest in options on the
scheduled vesting date, irrespective of the fact that
2
Executive is no longer employed by the Company and Executive shall have the
period for exercise of such options preserved. All stock options not retained by
Executive pursuant to this paragraph shall be deemed terminated and canceled as
of the Termination Date.
(g) Life Insurance. From the Termination Date until the earlier to occur of
(i) the second anniversary of the Termination Date or (ii) the date Executive
commences employment with another employer which in the normal course of
business would provide these benefits, the Company will permit Executive to
continue to participate in the Company's basic life insurance and accidental
death and dismemberment policy for a benefit equal to two times the annual
compensation payable by the Company pursuant to Section 2(a) of this Agreement.
(h) SERP. Upon the vesting of Executive's interest in the Company's
Supplemental Executive Retirement Plan on February 1, 2001, Executive shall be
entitled to his interest in such plan. The Company will make no further
contributions to this Plan. Payment shall be made to Executive in a lump sum
(with interest from the date of this Agreement through February 1, 2001) as soon
as practicable after such date. (i) Automobile. Executive will retain use of the
automobile currently leased for him by the Company until the earlier to occur of
(i) Automobile. Executive will retain use of the automobile currently
leased for him by the Company until the earlier to occur of (i) June 1, 2001 or
(ii) the date Executive commences employment with another employer.
(j) Profit Sharing/401(k). Executive will no longer participate in the
Company's Profit Sharing/401(k) plan. Distribution may occur as soon after the
separation date as practicable.
(k) The Executive's Residence Petition. The Company shall continue to
sponsor given the Executive is on the payroll and functions in a consulting
capacity, to the extent permitted by law, the Permanent Residence petition.
(l) No Other Benefits. Executive acknowledges that he is not entitled to
receive benefits from the Company other than as set forth in this Section 2,
except for any benefits afforded Executive by applicable law.
(m) Effectiveness of Payments. No payments shall be made under this Section
2 until this Agreement becomes effective pursuant to Section 20 hereof.
3. Termination of All Existing Agreements. All rights and obligations of
the Company and the Executive under any employment agreement, arrangement or
understanding and any other agreement between the Company and the Executive are
hereby canceled and terminated as of the Termination Date without liability of
any party hereunder, except that this Agreement, the Stock Unit Agreement (as
modified by Section 2(c) above) and the Partnership Option Agreements dated as
of May 17, 1995, May 30, 1995, March 14, 1996, November 3, 1997, March 13, 1998,
September 8, 1998 and April 7, 1999, between the Company and Executive (as
modified by Section 2(d) above) shall continue in full force and effect.
4. No Solicitation of Employees or Customers. Executive hereby represents
and warrants that during the six month period preceding the date of this
Agreement he has not (i) solicited any customers of the Company or induced any
customer of the Company to enter into a
3
business relationship with Executive or any other person or (ii) solicited for
employment or induced any person employed by the Company to terminate
employment. During the two year period commencing on the Termination Date, the
Executive shall not, directly or indirectly, (i) employ or seek to employ any
person who is as of the Termination Date, or was at any time during the six
month period preceding the Termination Date, an officer, general manager, or
director or equivalent or more senior level employee of the Company or any of
its subsidiaries or otherwise solicit, encourage, cause or induce any such
employee of the Company or any of its subsidiaries to terminate such employee's
employment with the Company or such subsidiary for the employment of another
company (including for this purpose the contracting with any person who was an
independent contractor (excluding consultant) of the Company during such period)
or (ii) take any action that would interfere with the relationship of the
Company or its subsidiaries with their suppliers and franchisees without, in
either case, the prior written consent of the Company, or engage in any other
action or business that would have a material adverse effect on the Company.
5. Non-competition and Consulting.
(a) During the two year period commencing on the Termination Date (the
"Consulting Period"), the Executive shall not, directly or indirectly and,
provided that prior written consent is requested of the Executive and no
response is received from the Company within 14 business days, approval shall be
deemed to be granted:
(x) engage in any managerial, administrative, advisory, consulting or
operational or sales activities in Restricted Business anywhere in the
Restricted Area, including, without limitation, as a director or partner of such
Restricted Business, or
(y) organize, establish, operate, own, manage or control or have a direct
or indirect investment or ownership interest in a Restricted Business or in any
corporation, partnership (limited or general), limited liability company
enterprise or other business entity that engages in a Restricted Business
anywhere in the Restricted Area.
(b) During the Consulting Period, the Executive shall:
(x) be available to render services to the Company as an independent
contractor/consultant but not as an employee of the Company; and
(y) perform such duties as may be reasonably requested in writing from time
to time during the Consulting Period by the Company's Chief Executive Officer,
provided that such duties shall not conflict with the duties of the Executive
for a new employer if such employment does not violate the terms of Section
5(a). The Company will reimburse Executive for his reasonable expenses incurred
in rendering such duties.
(c) Nothing in this Section 5 shall prohibit or otherwise restrict the
Executive from acquiring or owning, directly or indirectly, for passive
investment purposes not intended to circumvent this Agreement, securities of any
entity engaged, directly or indirectly, in a Business if either (i) such entity
is a public entity and the Executive (A) is not a controlling Person of, or a
member of a group that controls, such entity and (B) owns, directly or
indirectly, no more than 3% of any class of equity securities of such entity or
(ii) such entity is not a public entity and the
4
Executive (A) is not a controlling Person of, or a member of a group that
controls, such entity and (B) does not own, directly or indirectly, more than 1%
of any class of equity securities of such entity.
(d) For purposes of this Section 5, "Restricted Business" shall mean the
retail store or mail order business or internet business or any business, in
each case if it is involved in the manufacture or marketing of toys, juvenile or
baby products, juvenile furniture or children's clothing or any other business
in which the Company may be engaged on the Termination Date. "Restricted Area"
means any country in which the Company or its subsidiaries owns or franchises
any retail store operations or otherwise has operations on the Termination Date.
6. Retained Property. No later than the Termination Date, Executive shall
return all property of the Company in his possession, including, but not limited
to, credit cards, security key cards, telephone cards, car service cards,
computer software or hardware, Company identification cards, Company records and
copies of records, correspondence and copies of correspondence and other books
or manuals issued by the Company. Executive also warrants that he has no debts
to or loans from the Company. Notwithstanding the foregoing, Executive shall
have the right to retain (i) duplicate photocopies of books and records of the
Company that do not fall within the category of "Confidential Information" (as
defined below), (ii) all personal property of the Executive located on the
premises of the Company, and (iii) Executive will be provided the opportunity to
purchase the current Company computer equipment currently in use by the
Executive at a fair price to be determined by the Company.
7. Confidentiality. Executive acknowledges that he has had and through the
Termination Date will continue to have access to Confidential Information (as
hereinafter defined) of the Company. Executive agrees not to disclose,
communicate or divulge to, or use for the direct or indirect benefit of, any
person (including Executive), firm, association or other entity (other than the
Company or its affiliates) any Confidential Information. "Confidential
Information" includes, but is not limited to, customer and vendor lists,
database, computer programs, frameworks, models, marketing programs, sales,
financial, marketing, training and technical information, business methods,
business policies, procedures, techniques, research or development projects or
results, trade secrets (which Executive agrees include the Company's customer
and prospective customer lists), pricing policies, business plans, computer
software, intellectual property, information concerning how the Company creates,
develops, acquires or maintains its products and marketing plans, targets its
potential customers, and operates its retail and other businesses, and any other
information not otherwise available to the general public. If any person
(including any government employee) requests the disclosure or release of
Confidential Information, Executive shall (i) promptly notify the Company of
such request so that the Company may, at its own expense, pursue any available
remedies to prevent the disclosure or release of such Confidential Information
and (ii) furnish the Company a copy of all written materials pertaining to such
request for Confidential Information as the Company shall deem appropriate.
8. No Inducements. Executive warrants that he is entering into this
Agreement voluntarily, and that, except as set forth herein, no promises or
inducements for this Agreement have been made, and he is entering into this
Agreement without reliance upon any statement or representation by any of the
Company and its affiliates, and its and their present and
5
former stockholders, directors, officers, employees, agents, attorneys,
successors and assigns or any other person, concerning any fact material hereto.
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements or understandings between the parties arising out
of or relating to the Executive's employment and the cessation thereof. This
Agreement may only be changed by written agreement executed by the parties.
10. Governing Law. This Agreement shall be governed by the laws of the
State of New Jersey, without giving effect to the conflicts of law principles
thereof.
11. Representations and Warranties. Each party represents and warrants to
the other party that (i) the execution and delivery of this Agreement has been
duly authorized and all actions necessary for the due execution of this
Agreement have been taken, (ii) this Agreement constitutes the legal, valid and
binding obligation of the parties, and (iii) this Agreement has been executed
and delivered as its own free act and deed and not as the result of duress by
the other party hereto. Executive specifically acknowledges that he has been
advised to consult legal counsel prior to executing this Agreement, and has been
afforded the opportunity of at least 21 days to consider this Agreement.
12. Non-Disparagement. Executive covenants and agrees not to engage in any
act or say anything that is intended, or may reasonably be expected to harm the
reputation, business, prospects or operations of the Company, its officers,
directors, stockholders or employees. The Company agrees that it will engage in
no act which is intended, or may reasonably be expected to harm the reputation,
business or prospects of Executive.
13. Public Announcement. Except as required by law, Executive agrees not to
make any public disclosure with respect to this Agreement, the events leading up
to this Agreement, and the transactions contemplated by this Agreement.
14. No Admissions. Nothing contained in this Agreement shall be considered
an admission by either party of any wrongdoing or liability under any Federal,
state or local statute, public policy, tort law, contract law, common law or
otherwise.
15. Expenses. Each party shall pay its own costs incident to the
negotiation, preparation, performance, execution, and enforcement of this
Agreement, and all fees and expenses of its or his counsel, accountants, and
other consultants, advisors and representatives for all activities of such
persons undertaken in connection with this Agreement.
16. Cooperation. Upon reasonable notice, Executive agrees to cooperate
reasonably with the Company and its affiliated corporation entities in the
defense of any claim asserted against them and as to which Executive has, or may
have, knowledge. The Company agrees to reimburse Executive for any reasonable
and ordinary expenses, including the advancement of reasonable attorneys fees,
incurred in connection with such cooperation.
17. No Third Party Claims. Executive represents and warrants that no other
person or entity has, or to the best knowledge of Executive, claims, any
interest in any potential
6
claims, demands, causes of action, obligations, damages or suits pursuant to
this Agreement; that he is the owner of all other claims, demands, causes of
action, obligations, damages or suits pursuant to this Agreement; that he has
full and complete authority to execute this Agreement; and that he has not sold,
assigned, transferred, conveyed or otherwise disposed of any claim, demand,
cause of action, obligation or liability subject to this Agreement.
18. No Third Party Beneficiaries. Except as expressly stated herein, the
parties do not intend to make any person or entity who is not a party to this
Agreement a beneficiary hereof, and this Agreement should not be construed as
being made for the benefit of any person or entity not expressly provided for
herein.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be one and the same instrument.
20. Acceptance and Revocation. Executive shall have a period of twenty-one
(21) days from the date of receipt of this Agreement to review and accept this
Agreement. Executive shall have seven (7) days following his execution of this
Agreement during which time he may revoke this Agreement by providing the
Company with written notice of the revocation. This Agreement shall become
effective and enforceable after the expiration of seven (7) days following
Executive's execution of the Agreement, and is not enforceable until after the
seven-day revocation period expires.
21. Future Employment. Executive hereby waives any right to reinstatement
or future employment with the Company following the Termination Date.
22. Arbitration. Except as otherwise provided for herein, any controversy
arising under, out of, in connection with, or relating to, this Agreement, and
any amendment hereof, or the breach hereof or thereof, shall be determined and
settled by arbitration in New York, New York, by a three person panel mutually
agreed upon, or in the event of a disagreement as to the selection of
arbitrators, in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association. Any award rendered therein shall specify the
findings of fact of the arbitrator or arbitrators and the reasons of such award,
with references to and reliance on relevant law. Any such award shall be final
and binding on each and all of the parties thereto and their personal
representatives, and judgment may be entered thereon in any court having
jurisdiction thereof.
23. Employment Inquiries. All employment inquiries in regard to Executive
shall be referred to the Head of Human Resources at the time the inquiry is
made.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
TOYS "R" US, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President - Human Resources
EXECUTIVE
/s/ Xxxxx Xxx Xxxx
------------------------------------------
Xxxxx Xxx Xxxx
Original Document issued to Xxxxx Xxx Xxxx on June 7, 1999
8
June 9, 1999
Board of Directors
Toys "R" Us, Inc.
Ladies and Gentlemen:
I, Xxxxx Xxx Xxxx, hereby resign for personal reasons from (i) my positions
as President - Toys "R" Us U.S. Merchandising and Marketing of Toys "R" Us,
Inc., (the "Company"), its subsidiaries and affiliates and (ii) all officer or
employee positions held by me in the Company, its subsidiaries and affiliates,
all effective as of June 9, 1999.
Very truly yours,
Xxxxx Xxx Xxxx
RELEASE
Except as specifically provided in the following paragraph, and in
consideration of and except for the obligations of the Company set forth in the
Separation Agreement dated as of June 9, 1999 (the "Agreement") and in
consideration of the Agreement which provides for payments and other benefits to
Xxxxx Xxx Xxxx (the "Releasor"), in addition to payments and benefits to which
the Releasor would otherwise be entitled, the Releasor, on behalf of the
Releasor and the Releasor's heirs, executors and assigns, hereby releases and
forever discharges Toys "R" Us, Inc. (the "Company"), its past and present
stockholders, its past and present divisions, subsidiaries, affiliates and
related entities, its successors and assigns and all past and present directors,
officers, employees, agents, heirs, executors and administrators and the heirs
and assigns, and any and all employee pension benefit or welfare benefit plans
of the Company, including current and former trustees and administrators of such
employee pension benefit and welfare plans (collectively, the "Releasees"), from
all actions, causes of action in law or in equity, administrative proceedings,
suits, claims, debts, liens, sums of money, charges, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions,
claims, and demands whatsoever, in law, admiralty or equity, whether known or
unknown, which against the Releasees the Releasor or the Releasor's successors
and assigns ever had, now have or hereafter can, shall or may have, for, upon,
or by reason of any matter, cause or thing whatsoever from the beginning of the
world to the date of this Release, including without limitation, any claims the
Releasor may have arising from or relating to the Releasor's employment or
termination from employment with the Company, including a release of any rights
or claims the Releasor may have under Title VII of the Civil Rights Act of 1964,
as amended, and the Civil Rights Act of 1991 (which
prohibit discrimination in employment based upon race, color, sex, religion, and
national origin); the Americans with Disabilities Act of 1990, as amended, and
the Rehabilitation Act of 1973 (which prohibit discrimination based upon
disability); the Family and Medical Leave Act of 1993 (which prohibits
discrimination based on requesting or taking a family or medical leave); Section
1981 of the Civil Rights Act of 1866 (which prohibits discrimination based upon
race); Section 1985(3) of the Civil Rights Act of 1871 (which prohibits
conspiracies to discriminate); the Employee Retirement Income Security Act of
1974, as amended (which prohibits discrimination with regard to benefits); any
other federal, state or local laws against discrimination; or any other federal,
state, or local statute, or common law relating to employment, wages, hours, or
any other terms and conditions of employment. This includes a release by the
Releasor of any claims for wrongful discharge, breach of contract, torts or any
other claims in any way related to the Releasor's employment with or resignation
or termination from the Company. This release also includes a release of any
claims for age discrimination under the Age Discrimination in Employment Act, as
amended ("ADEA"). The ADEA requires that the Releasor be advised to consult with
an attorney before the Releasor waives any claim under ADEA. In addition, the
ADEA provides the Releasor with at least 21 days to decide whether to waive
claims under ADEA and seven days after the Releasor signs the Agreement to
revoke that waiver.
This release does not encompass any rights or claims under the ADEA that
may arise after the date of the Releasor's signing of the Agreement, and shall
in no way be construed to affect either party's right to enforce any and all
terms of the Agreement. THIS LANGUAGE MEANS THAT, BY SIGNING THIS RELEASE, THE
RELEASOR HAS WAIVED ANY RIGHTS HE MAY HAVE TO BRING A LAWSUIT OR MAKE ANY CLAIM
AGAINST
2
THE RELEASEES BASED ON ANY ACTS OR OMISSIONS TAKEN BY THE RELEASEES UP TO JUNE
9, 1999.
Releasor represents and warrants that he has not assigned or otherwise
transferred any actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
embarrassment, injury to business, injury to reputation, judgments, executions,
claims, or demands whatsoever, whether known or unknown, suspected or
unsuspected, disclosed or undisclosed, fixed or contingent, accrued or
unaccrued, asserted or unasserted, which against the Releasees, the Releasor and
his administrators, agents, successors and assigns ever had, now have or
hereafter can, shall or may have from the beginning of the world to the date of
this Release. Releasor and his administrators, agents, successors and assigns
shall indemnify Releasees, and hold them harmless from, all damages, losses,
costs and expenses which Releasees may suffer or incur as a result of the
assertion against them of any of the foregoing matters which were assigned or
otherwise transferred by Releasor in a transaction which constitutes a breach of
the representation and warranty contained in the immediately preceding sentence.
This Release may not be changed orally.
The Company has informed Executive that it does not know of any conduct
which may cause the Company to take any legal action against the Executive at
this time.
This Release shall be governed by the substantive law of the State of New
Jersey without regard to its principles of conflicts of laws.
3
This release shall in no way be construed to affect Releasor's rights as a
stockholder of the Company.
IN WITNESS WHEREOF, the Releasor has caused this Release to be executed as
of June 9,1999.
_______________________________________
Xxxxx Xxx Xxxx
STATE OF ____________, County of ___________ ss:
On this ______ day of __________, 1999, before me personally came XXXXX
XXX XXXX, to me known and known to me to be the individual described in and who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
_______________________________________
Notary Public
4
