[XXXXXXX XXXXXX LOGO]
June 11, 1998
Xx. Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
RE: EMPLOYMENT AGREEMENT DATED MAY 30,
1996 AS AMENDED BY LETTER DATED
JULY 1, 1997 (THE "EMPLOYMENT
AGREEMENT") AND CHANGE OF CONTROL
AGREEMENT DATED JULY 1, 1997 (THE
"CHANGE OF CONTROL AGREEMENT")
----------------------------------
Dear Xxx:
We are writing to confirm our understanding that we have extended the
term of your Employment Agreement until December 31, 1998 (the "Expiration
Date") at which time your employment with the Company will terminate without
further action by either you or the Company.
From and after the date hereof you shall continue to perform the
functions of CFO, except for involvement in investor relations and mergers and
acquisitions. You agree to focus your efforts on various internal projects
during normal business hours as are assigned to you by written memo from the
Company.
The Company may terminate this Agreement at any time after the date
hereof upon thirty (30) days prior written notice to you ("Notice Period").
During the Notice Period the Company agrees that you may commence a search for
new employment and in connection therewith the Company shall allow you
reasonable time off to search for new employment. If the Company so terminates
this Agreement and you continue working through the expiration of the Notice
Period (unless requested not to do so by the Company) or if you remain employed
by the Company through the Expiration Date, then in either event you shall be
entitled to the following benefits ("Termination Benefits"):
(i) six (6) months severance payable over the six month
period commencing on the Expiration Date or the expiration of the
Notice Period, as the case may be (the "Severance Period") in
accordance with the Company's normal payroll practices;
Xx. Xxxxxx Xxxxxxx
June 11, 1998
Page 2
(ii) Four (4) weeks vacation less any vacation taken by you
after the date hereof in excess of eleven days of vacation currently
accrued;
(iii) Fifteen thousand ($15,000) dollars as reimbursement for
various expenses to be incurred by you in connection with your search
for new employment;
(iv) Continued participation in those Company fringe benefits
now provided to you (as the same may be amended or terminated by the
Company for executives of your classification generally) at the
contribution rates in effect for all employees of your classification
level during the Severance Period;
(v) An acceleration of the vesting of the balance of the
25,000 non-qualified stock option grant issued to you pursuant to
Section 3 of your Employment Agreement; and
(vi) All other stock option grants issued to you shall
continue to vest in accordance with their respective terms until the
Expiration Date or the expiration of the Notice Period, as the case
may be.
If you resign prior to the Expiration Date or if your employment with
the Company is terminated for cause (as that term is defined in the Employment
Agreement) prior to the Expiration Date or prior to the expiration of the
Notice Period, then in either of such events you shall not be entitled to any
of the Termination Benefits outlined in this Agreement or any other benefit
from the Company.
In consideration of the extension of the term of your employment
agreement and the other terms and conditions set forth herein you hereby, for
yourself and your heirs, executors, administrators and assigns (collectively
the "Releasor") forever waive, release and discharge the Company and its
affiliates, successors and assigns, past and present officers, directors,
employees and agents, and any fiduciaries of any employee benefit plan or
policy of the company (collectively, "Releasees"), from any and all claims,
demands, causes of action, fees and liabilities and expenses (inclusive of
attorneys' fees) of any kind whatsoever, whether known or unknown, which you
ever had or now have against Releasees by reason of any actual or alleged act,
omission, transaction, practice, conduct, occurrence, or other matter up to and
including the date of this Agreement, including but not limited to, any claims
under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, the Equal Pay Act, as amended, the Age Discrimination in
Employment Act, as amended, the Americans with Disabilities Act,
Xx. Xxxxxx Xxxxxxx
June 11, 1998
Page 3
the Fair Labor Standard Act, the Employee Retirement Income Security Act, the
Family and Medical Leave Act, and/or any other Federal, state or local law
(statutory or decisional), regulation or ordinance and/or any claims under your
Employment Agreement and/or claims with respect to severance pay, vacation pay,
holiday pay, bonus payments, sick leave, life insurance, group medical
insurance or workmen's compensation or disability claims. You also agree that
the Change of Control Agreement between you and the Company is terminated
effective as of the date hereof, except, that in the event a Change of Control,
as that term is defined in the Change of Control Agreement, occurs, while you
are employed by the Company, all stock option grants issued to you will vest
and become exercisable in accordance with the provisions of Section 2(c) of the
Change of Control Agreement.
In consideration of the extension of the term of your employment
agreement and the other terms and conditions set forth herein the Company
hereby, for itself and its successors and assigns forever waive, release and
discharge you from any and all claims, demands, causes of action, fees and
liabilities and expenses (inclusive of attorneys' fees) of any kind whatsoever,
whether known or unknown, which the Company ever had or now has against you by
reason of any actual or alleged act, omission, transaction, practice, conduct,
occurrence, or other matter up to and including the date of this Agreement.
The foregoing mutual releases shall not be deemed to terminate the
Indemnification Agreement between you and the Company dated June 27, 1996 and
our respective obligations thereunder shall survive the execution and delivery
of this Agreement.
You acknowledge that you have been advised by the Company to consult
an attorney and your financial advisor before signing this Agreement and that
you have executed this Agreement with the waiver and release set forth above
after having the opportunity to consult with an attorney and your financial
advisor and to consider the terms of this Agreement for at least twenty-one
(21) days. You further acknowledge that you have read this Agreement in its
entirety, that you understand all of its terms, and that you knowingly and
voluntarily assent to all of the terms and conditions contained herein
including, without limitation, the waiver and release of your right to claims
arising under the Age Discrimination in Employment Act, as amended.
This Agreement shall not become effective until the eighth day
following your execution of this Agreement and you may at any time prior to the
effective date revoke this Agreement by giving written notice of such
revocation to the Company attention:
Xx. Xxxxxx Xxxxxxx
June 11, 1998
Page 4
Xxxxxxx X. Xxxxxxx, Vice President, Human Resources, 000 Xxxx
Xxxxxx, Xxx Xxxxxxxx, Xxx Xxxx 00000.
We agree not to disparage you and you agree not to disparage the
Company, its officers and directors. If asked for a reference, the Company will
reply substantially as set forth in Exhibit A or in such other manner as is
reasonably acceptable to you.
Except as herein amended, the Employment Agreement is ratified and
confirmed.
This Agreement shall be binding upon and inure to the benefit of the
heirs, trustees, executors, administrators, successors and assigns of the
respective parties. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute the
same instrument. This Agreement shall be governed by and subject to the laws of
the State of New York without giving effect to its conflict of laws rules.
In the event any provision of this Agreement is determined to be
invalid by a court of competent jurisdiction, such determination shall in no
way affect the validity or enforceability of any other provisions herein.
You understand that the Company's obligations to make payments
hereunder are unfunded and that claims for payments by you or any beneficiary
shall be those of a general, unsecured creditor. All payments and benefits
contemplated hereunder shall be subject to withholding in accordance with
applicable Federal, state, or local law, and if any such withholding payment
would be due at any time that insufficient cash is being transferred to you
from which it could be withheld, you agree promptly upon request to pay to the
Company any amount due to be withheld by the Company.
This Agreement contains a complete statement of all the arrangements
between you and the Company with respect to your employment and the termination
of your employment with the Company, and except as set forth herein, supersedes
all existing agreements, whether written or oral, between you and the Company
concerning your employment or such termination.
The Company expressly denies any violation of its prior agreements
with you, or any of its policies, procedures, Federal, state or local laws or
regulations. Accordingly, while this Agreement resolves all issues between the
Company and you relating to any alleged violation of its prior agreements with
you, Company policies or procedures or any Federal, state or local law or
regulation, this Agreement does not constitute an
Xx. Xxxxxx Xxxxxxx
June 11, 1998
Page 5
adjudication or finding on the merits and it is not, and shall not be construed
as, an admission by the Company of any violation of its policies, procedures,
Federal, state or local laws or regulations. Moreover, neither this Agreement
nor anything in this Agreement shall be construed to be or shall be admissible
in any proceeding as evidence of or an admission by the Company of any
violation of its policies, procedures, Federal, state or local laws or
regulations. This Agreement may be introduced, however, in any proceeding to
enforce this Agreement. Such introduction shall be pursuant to an order
protecting its confidentiality.
The parties agree that the prevailing party in any litigation
regarding the enforcement of the terms and conditions of this Agreement shall
be entitled to be reimbursed for the costs incurred by such party in connection
therewith including, without limitation, attorneys fees.
Please acknowledge your agreement with the foregoing by countersigning
the enclosed duplicate copy of this letter.
Sincerely,
XXXXXXX XXXXXX CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx, CEO
Accepted and Agreed:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Exhibit A
To Whom it May Concern:
Xxxxxx Xxxxxxx joined the Xxxxxxx Xxxxxx Corporation on June 28, 1996 as Chief
Financial Officer. In this position he was responsible for the areas of
Corporate Finance, Investor Relations, Budgeting and Forecasting, Inventory
Control/Merchandise Rebuy, Paper Purchasing, and Operations' Finance for the
National Distribution Center, which included Finance, Traffic, Purchasing,
Payroll and Security. He also had administrative responsibility for Internal
Audit.
Xx. Xxxxxxx has been an important factor in the financial management of the
Company during his time here. He was instrumental in the improvement of various
internal controls and procedures throughout the Company. He was a member of the
Management Committee, and actively participated in the strategic management and
direction of the Company. He was well liked by the members of the management
team and his staff.
I appreciate Xx. Xxxxxxx'x contributions to the Xxxxxxx Xxxxxx Corporation and
wish him success in the future.
Sincerely,
