EXHIBIT (c)(3)
AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT
AMENDMENT NO. 1, dated as of November 2, 1996, to the Employment Agreement,
made as of February 4, 1996 (the "Employment Agreement"), by and between
Eckerd Corporation, a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxx, an individual residing at 000 Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx
00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company, X.X. Penney Company, Inc., a Delaware corporation
("Parent"), and Omega Acquisition Corporation, a Delaware corporation and
wholly owned subsidiary of Parent ("Sub"), are parties to an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement"), pursuant
to which the Company shall merge with Sub and the surviving corporation will
become a wholly owned subsidiary of Parent (the "Merger"); and
WHEREAS, the transactions contemplated by the Merger Agreement will result
in a Change of Control of the Company for purposes of the Employment
Agreement; and
WHEREAS, the Employee, the Company and Parent desire to amend the Employment
Agreement to extend the Employee's term of employment thereunder and to make
certain other changes;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Employee, the Company and Parent hereby
agree as follows, effective as of the Effective Date (as hereinafter defined):
1. Section 2 of the Employment Agreement is hereby amended by (a) replacing
the words "of twelve (12) months" with "until the third anniversary of the
closing of the Merger (as hereinafter defined)", and (b) inserting the
following sentence at the end of such Section:
"As used herein, "Merger" means the merger of the Company with Omega
Acquisition Corporation, a wholly owned subsidiary of X.X. Xxxxxx Company,
Inc. ("Parent"), pursuant to an Agreement and Plan of Merger dated as of
November 2, 1996 (the "Merger Agreement")."
2. Section 3(a) of the Employment Agreement is hereby amended by inserting
the words ", and a member of the Management Committee of Parent," after the
words "Chief Executive Officer, President and Chief Operating Officer" in such
Section.
3. Section 8(a)(i) of the Employment Agreement is hereby amended by
replacing the words "one year after the date hereof" with the words "three
years after the closing of the Merger".
4. Section 11(c) of the Employment Agreement is hereby amended and restated
in its entirety as follows:
(c) Definition of Good Reason.
(i) The Employee shall be entitled to terminate employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean,
without the Employee's express written consent, the occurrence of one
of the following at least one year after a Change of Control:
(a) the demotion of the Employee from his position as Chief
Executive Officer, President and Chief Operating Officer of the
Company, his removal as a member of Parent's management committee or
his ceasing to report directly to the Chief Executive Officer of
Parent;
(b) a reduction by the Company in the Employee's annual Base
Salary as in effect on the date hereof or a material reduction in
the Employee's bonus opportunity through incentive compensation
awards;
(c) any other material breach by the Company of the provisions of
Section 4, 5 or 6 of this Agreement; or
(d) any relocation of the Employee's principal place of business
from the Tampa Bay, Florida area or from the Company's headquarters.
(ii) The Employee's right to terminate his employment pursuant to
this Subsection 11(c) shall not be affected by the Employee's
incapacity due to physical or mental illness, provided that such
incapacity has not resulted in a disability continuing for six
consecutive calendar months as described in Subsection 7(a).
5. The Employment Agreement is hereby further amended by adding a new
Section 22 thereto as follows:
22. Parent Guarantee.
Parent hereby guarantees the performance of the Company's obligations
under this Agreement.
6. This Amendment shall be effective upon the closing of the Merger (the
"Effective Date"), and shall be of no further force or effect if the Merger
Agreement is terminated.
7. Except as expressly amended hereby, the Employment Agreement, and all
rights and obligations of the Employee and the Company thereunder, shall
remain in full force and effect. This Amendment shall not, except as expressly
provided herein, be deemed to be a consent to any waiver or modification of
any terms or provisions of the Employment Agreement.
8. Capitalized terms used in this Amendment and not otherwise defined herein
shall have the meanings assigned to them in the Employment Agreement.
9. This Amendment shall be governed by and construed in accordance with the
laws of the State of Florida without giving effect to the conflicts of law
principles thereof.
10. This Amendment may be executed in one or more counterparts, and by
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Amendment as of the date first above written.
Employee
/s/ Xxxxxxx X. Xxxxxx
_____________________________________
Xxxxxxx X. Xxxxxx
Eckerd Corporation
/s/ Xxxxx X. Xxxxx
By: _________________________________
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
X.X. Penney Company, Inc.
/s/ Xxxxx X. Xxxxxxxxxxxxx
By: _________________________________
Name: Xxxxx X. Xxxxxxxxxxxxx
Title: Vice Chairman and Chief
Executive Officer
