EXHIBIT 10.15(C)
HARCOURT GENERAL, INC.
00 XXXXXXXX XXXXXX
XXXXXXXX XXXX, XXXXXXXXXXXXX 00000
December 17, 1996
Xx. Xxxxxx X. Xxxx, Xx.
President and Chief Executive Officer
Harcourt General, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Dear Xxx:
This letter agreement sets forth the understandings you and Harcourt
General, Inc. (the "Company") have reached in connection with your separation
from employment by the Company. For good and valuable consideration, receipt
of which is hereby acknowledged, you and the Company agree as follows:
1. Reference is made to the Employment Agreement dated as of
November 15, 1991 between you and the Company, as the same was extended
pursuant to Paragraph 1.01 thereof (such Agreement, as extended, being
referred to herein as the "Employment Agreement"). You hereby resign as an
employee, officer and director of the Company and each subsidiary of the
Company (including NMG), effective as of the close of business on January 15,
1997 (the "Separation Date"), and the Company hereby accepts your resignation.
2. The Company shall make the following cash payments to you (or, in
the event of your death, to your beneficiary or beneficiaries determined under
paragraph 18 below):
a. the sum of $2,830,769.16, payable in 46 bi-weekly installments
of $61,538.46 each, commencing on January 23, 1997, subject to the deferral of
a portion thereof as provided in paragraph 3 below;
b. the sum of $3,200,000, of which $1,600,000 shall be paid in the
first week of January 1998, and $1,600,000 shall be paid in the first week of
January 1999, subject to the deferral of a portion thereof as provided in
paragraph 3 below; and
c. the sum of $800,000, payable in 12 monthly installments of
$66,666.67 each, commencing on November 30, 1998.
3. Fifteen percent of each amount otherwise payable to you under
paragraphs 2.a. and 2.b. above shall be deferred and credited to an account
maintained for your benefit on the books of the Company (your "deferral
account"), and the Company will credit matching deferrals to your deferral
account in an amount equal to 3 percent of each amount otherwise payable to
you under paragraph 2.a. or 2.b. above, as of the last day of the month in
which such amount would otherwise have been payable. As of the last day of
each calendar quarter, your deferral account will be credited with interest on
the balance of the account from time to time during the quarter at an annual
rate equal to the average prime interest rate published in the Eastern Edition
of the Wall Street Journal on the last business day of the calendar quarter
(or, if two or more such rates are published, the mean of such rates),
increased by 2 percentage points. The amount of your deferral account will be
paid to you on or about January 15, 1999 in the form of a single lump sum
payment. In the event of your death prior to the complete distribution of
your deferral account, the balance of such account will be paid as soon as
practicable to your beneficiary or beneficiaries determined under paragraph 18
below in the form of a single lump sum payment. The Account established for
your benefit under the Company's Key Employee Deferred Compensation Plan shall
continue to be maintained, and bear interest, in accordance with such Plan
until January 15, 1999, whereupon the amount of such Account shall be paid to
you (or your beneficiary) in a lump sum.
4. Commencing on November 1, 1998, and continuing for the rest of
your life, you will be entitled to receive retirement payments in the amount
of $118,958.33 per month. If you die after this letter agreement takes effect
and are survived by your spouse, she will be entitled to receive retirement
payments commencing on the later of November 1, 1998 or the first day of the
month following your death and continuing for the rest of her life, in the
amount of $59,479.17 per month. Any payment for a month to you or your spouse
under the Harcourt General, Inc. Retirement Plan ("HGRP") will be counted
toward the applicable monthly amount under the preceding sentences, and the
balance of such amount will be paid by the Company. In the event you elect to
receive (and do receive) benefits under the HGRP in the form of a single lump
sum payment, the monthly payments to you and your spouse under the HGRP shall
be assumed to be those that would have been paid commencing on the first day
of the month after the date of such lump sum payment either (x) in the form of
a joint and 50% survivor annuity if you are married on such date or (y) in the
form of a straight life annuity if you are not married on such date. Upon
the later of your death or that of your surviving spouse, your beneficiary or
beneficiaries, determined under paragraph 18 below, will be entitled to
receive the benefit, if any, described in Paragraph 4.03(c) of the Employment
Agreement. In addition, the benefits provided by this paragraph 4 will be
offset against (and reduce to zero) any benefits payable to you or your
surviving spouse, or to any other beneficiary, under the Company's
Supplemental Executive Retirement Plan.
5. Commencing on the Separation Date, you will be entitled to
participate in the plans and programs and to enjoy the benefits set forth in
Paragraph 4.02 (a) of the Employment Agreement, except that until October 31,
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1998 you will be entitled to participate in the Company's Matching Gift
Program as though you were still President and Chief Executive Officer of the
Company. Upon your death, your surviving spouse and each of your children
(until he or she attains the age of 22) shall be entitled to enjoy the
benefits set forth in Paragraph 4.02(b) of the Employment Agreement.
6. All of your stock options and related stock appreciation rights
shall remain exercisable in accordance with their terms until November 26,
2001.
7. You agree to repay all loans made to you by the Company on or
before the Separation Date, except that the loan in the original principal
amount of $1,018,980 shall be paid in accordance with its payment schedule of
$63,286.25 on each of January 15, 1997 and April 15, 1997. You and the
Company hereby agree you shall no longer be deemed eligible to borrow from the
Company, whether pursuant to the Company's Key Executive Stock Purchase Loan
Plan, the Employment Agreement, or otherwise.
8. The Company shall provide you with the basic life insurance
referred to in Paragraph 4.02(a)(ii) of the Employment Agreement and the
Company agrees to make all required premium payments with respect thereto upon
receiving advice of the results of any required physical exam and the premium
payment required. You may assign your interest in such policy (including the
right to designate the beneficiary) to an irrevocable trust. In addition, the
Company will make the final premium payment with respect to the Supplemental
Life Insurance referred to in paragraph 4.04 of the Employment Agreement upon
receipt of advice from the insurer of the premium payment required whereupon
such policy shall be fully paid-up.
9. Through October 31, 1998, the Company will continue to provide you
with the automobile currently maintained for you by the Company and will pay
for all expenses associated with your use of such automobile. On or before
October 31, 1998, you may purchase the automobile currently provided to you by
the Company at its then depreciated book value.
10. All payments provided for in this letter agreement shall be
reduced by any taxes or other amounts required to be withheld by the Company
under applicable laws, including any taxes required to be withheld with
respect to other benefits provided to you hereunder.
11. Except with respect to its obligations under the HGRP, (i) the
Company shall not be required to set aside or segregate any of its assets of
any kind to meet any of its obligations hereunder; (ii) all of the Company's
obligations hereunder shall be reflected by book entries only, and neither you
nor your spouse nor any other beneficiary shall have any rights on account of
this letter agreement to any specific assets of the Company; and (iii) any
rights that you, your spouse or any other beneficiary may have on account of
this letter agreement shall be those of an unsecured general creditor. No
benefit payable under this letter agreement, and no interest or rights
hereunder belonging to yourself, your spouse or any other beneficiary, shall
be subject to the claims of any creditor or to attachment, garnishment or
other legal process, nor shall you, your spouse or any other beneficiary have
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any right to alienate, anticipate, commute, pledge, encumber or assign any
interest or rights under this letter agreement.
12. You agree that, until December 31, 1997, you shall not serve as an
officer, director, employee or consultant (with or without compensation) to,
any national specialty apparel chain, designer boutique, or any other
companies as to which you and the Company have agreed in writing. In the
event that any provision of this paragraph 12 shall be determined by any court
of competent jurisdiction to be unenforceable by reason of its being extended
over too great a time, too large a geographic area or too great a range of
activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be
enforceable.
13. You acknowledge that in the course of your duties you have been
entrusted with confidential information of a proprietary nature, including but
not limited to financial and statistical information regarding affairs of the
Company and its subsidiaries, supplier and subcontractor lists, price and cost
information, business plans and programs, merchandising opportunities,
expansion plans, methods, techniques, marketing and other data, designs and
knowhow, developed or obtained by the Company or its subsidiaries
(collectively, "Proprietary Information"), and agree that you shall not,
directly or indirectly, use or disclose Proprietary Information to any third
party (except, prior to the Separation Date, as required for the proper
performance of your duties on behalf of the Company). Proprietary
Information also includes all information received by the Company or any of
its subsidiaries from others with any understanding that such information will
not be disclosed. For this purpose, Proprietary Information shall not
include (i) information which is part of the public domain (other than by your
act), or (ii) any information required to be disclosed by law.
14. You agree that, until December 31, 1997, you will not solicit or
induce any Employee to discontinue employment with the Company or any of its
subsidiaries (including NMG). The term "Employee" means any person who is an
employee of the Company or any of its subsidiaries (including NMG) between the
date this letter agreement takes effect and December 31, 1997.
15. The Company may not assign all or any part of its obligations
under this letter agreement, and will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this letter agreement to the same extent that the Company
would be required to perform it if no such succession had taken place. This
letter agreement shall inure to the benefit of and be enforceable by and
binding upon (i) any such successors and (ii) your personal and legal
representatives, executors, administrators, heirs and beneficiaries.
16. The Company shall indemnify you for all losses, damages, costs,
expenses, liabilities, judgments and amounts paid in settlement in connection
with any claim, action, suit, proceeding or investigation in which you are a
party or threatened to be made a party by reason of the fact that you were an
officer, director or employee of the Company or any of its subsidiaries at
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least to the same extent that the Company indemnifies its current officers and
directors for such matters under its By-Laws.
17. (a) For valuable consideration you agree that this letter
agreement shall be in complete and final settlement of any and all causes of
action, rights or claims that you have had in the past, now have, or might now
have, in any way related to, connected with or arising out of your employment
or its termination or the Employment Agreement or pursuant to Title VII of the
Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination
in Employment Act, the Massachusetts fair employment practices statute or any
other federal, state or local employment law, regulation or other requirement,
and you hereby release and forever discharge the Company and all of its
subsidiaries (including without limitation NMG and its subsidiaries) and all
of their respective past and present directors, officers, shareholders,
employees, agents, successors, assigns and all others connected with any of
them, both individually and in their official capacities, from any and all
such causes of action, rights or claims. Excluded from the scope of this
release of claims is any claim arising hereafter under the terms of this
letter agreement or under any plan or option agreement referred to herein.
(b) The Company hereby releases and forever discharges you from
any and all causes of action, rights or claims which it now has or may now
have against you; provided, however, that this release and discharge shall not
constitute a release or discharge of any of your obligations under this letter
agreement.
18. You may designate in a writing filed with the Company one or more
persons (including your estate) as the beneficiary or beneficiaries of the
benefits provided for under this letter agreement after your death. You may
change such designation from time to time (other than the designation of an
irrevocable insurance trust as a beneficiary of life insurance policies
insuring your life), and the last such designation in writing filed with the
Company will control. If you have failed to file a designation of
beneficiary by the time of your death, or if all designated beneficiaries have
predeceased you, the amounts payable under this agreement shall be paid to
your estate. Different beneficiaries may be designated to receive different
benefits hereunder.
19. In consideration of the payments to be made in accordance with
paragraph 2.c. above, you agree to provide consulting services to the Company,
if, as and when requested by the person succeeding you as the chief executive
officer of the Company, for a maximum of one business day a month at mutually
convenient times, for a period of one year commencing on the Separation Date.
Such consulting shall not require that you have access to material non-public
information of the Company. The Company shall reimburse all reasonable out-
of-pocket expenses incurred by you in connection with such services. If you
agree to render such services for a period exceeding one day in any month, the
Company shall pay you $4,000 for each excess day. If during such period you
become employed by a governmental agency or body and applicable governmental
regulations preclude you from continuing to render such services to the
Company, you shall be relieved of your obligations under this paragraph 19.
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20. The Company shall reimburse you for your reasonable legal fees
incurred in connection with the preparation and execution of this letter
agreement.
21. You shall not be required to mitigate the amount of any payment or
benefit under this letter agreement by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this letter
agreement be reduced by any compensation or other fees earned by you as a
result of employment by another employer, by services to a third party or
(except for the amounts due under paragraph 7 hereof) by offset against any
amount claimed to be owed by you to the Company.
22. This letter agreement contains the entire agreement between you
and the Company, and, except as expressly provided for herein (including the
plans, programs, options and benefits referred to herein), supersedes all
prior oral and written agreements and understandings and commitments between
you and the Company (including without limitation the Employment Agreement)
relating to this letter agreement or your employment with the Company. No
amendment to this letter agreement shall be made except by a written
instrument signed by you and by a duly authorized officer of the Company.
The Company encourages you to seek the advice of an attorney before signing
this letter agreement. In signing this letter agreement, you represent and
warrant that you have signed it voluntarily and with a full understanding of
its terms and that you have had a full and sufficient opportunity of at least
21 days to consider this letter agreement and to consult with an attorney
before signing it.
23. All notices required by this letter agreement shall be in writing
and delivered by hand, overnight courier against receipt, or by registered or
certified mail, postage prepaid, in your case, addressed to 00 Xxxxx Xxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, and in the Company's case, addressed to its
Chairman of the Board of Directors, at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxxxxxxx 00000 and shall be effective upon actual receipt. Either you
or the Company may from time to time designate a new address by notice given
to and actually received by the other.
24. You may revoke this letter agreement at any time during the seven-
day period immediately following the date of your signing it by so notifying
the Secretary of the Company in writing during that period. If you do not
revoke it, then, at the expiration of the seven-day revocation period, this
letter agreement shall take effect as a legally-binding agreement between you
and the Company on the basis set forth above.
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25. This letter agreement shall be governed by the law of the
Commonwealth of Massachusetts without regard to its law regarding choice of
law.
HARCOURT GENERAL, INC.
By /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
AGREED:
/s/ Xxxxxx X. Xxxx, Xx.
Xxxxxx X. Xxxx, Xx.
Dated: December 17, 1996
The Neiman Marcus Group, Inc. hereby agrees to the continuation as
provided above of the benefits referred to in Paragraph 4.02(a)(iv) of the
Employment Agreement.
The Neiman Marcus Group, Inc.
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
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