EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of March 1, 1999,
by and between Xxxx Stores, Inc. (the "Company") and Xxxxxxx
Xxxxxxxx (the "Executive").
1. Term. The employment of the EXECUTIVE by the Company will
commence as of the effective date hereof and end on March 1,
2002, unless extended or terminated in accordance with this
Agreement. For so long as the EXECUTIVE is employed by the
Company, upon the written request of the EXECUTIVE, the Company's
Chief Executive Officer shall request that the Board of Directors
of the Company ("Board") consider extending the EXECUTIVE's
employment with the Company. The initial such request must be
delivered to the Chief Executive Officer no later than February
1, 2001 and subsequent requests must be delivered at least twelve
months before the end of any extended term of this Agreement.
The Chief Executive Officer shall advise the EXECUTIVE, in
writing, within thirty (30) days following the EXECUTIVE's
written request, whether the requested extension has been
approved. The failure of the Chief Executive Officer to provide
such written advice shall constitute approval of the EXECUTIVE's
request for extension. If the EXECUTIVE's request for an
extension is approved, this Agreement shall be extended two
additional years.
2. Position and Duties. The EXECUTIVE shall serve as the
Senior Vice President, Stores of the Company. The EXECUTIVE
shall report directly to the Company's Chief Operating Officer.
The EXECUTIVE shall devote substantially all of his working time
and efforts to the business and affairs of the Company. During
the term of his employment, the EXECUTIVE may engage in outside
activities provided those activities do not conflict with his
duties and responsibilities hereunder, and provided further that
the EXECUTIVE gives written notice to the Board of any
significant outside business activity in which he plans to become
involved, whether or not such activity is pursued for profit.
The EXECUTIVE may not render services to or invest in any
business competitive with any existing or contemplated business
of the Company except with respect to personal investments in
securities, limited partnerships or similar passive investment
interests that are publicly traded subject to the restrictions
set forth in paragraph 9.
3. Place of Performance. The EXECUTIVE shall be employed at
the Company's offices in Newark, California except for required
travel on the Company's business.
4. Compensation and Related Matters.
a. Salary. During his employment, the Company shall pay the
EXECUTIVE a monthly salary of $33, 333.33, less applicable
withholding ($400,000.00 on an annualized basis). This salary
shall be payable in equal installments in accordance with the
Company's normal payroll practices applicable to senior officers.
Subject to the first sentence of this paragraph, the EXECUTIVE's
salary may be adjusted upward from time to time by the Company in
accordance with normal business practices of the Company. In
the event of the occurrence of a Change of Control (as defined in
paragraph 6(f) hereof), then during the period commencing on the
effective date of the Change of Control and expiring two years
thereafter (the "Remaining
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Term"), the EXECUTIVE shall receive as additional salary the
aggregate amount of $500,000 per year (the "Additional Salary")
which shall be payable in equal installments during the Remaining
Term in accordance with the Company's normal payroll policies
applicable for senior officers. The provisions of paragraph 1
("Term") of the Agreement notwithstanding, the EXECUTIVE's
employment by the Company under this Agreement shall continue
until the later of (a) the expiration of the Remaining Term or
(b) the expiration of any extension pursuant to paragraph 1. If
any portion of the Additional Salary is subject to the tax
("Excise Tax") imposed by Section 4999 of the Internal Revenue
Code, the Company shall reimburse the EXECUTIVE in such amounts
so that, after deduction of any Excise Taxes paid by the
EXECUTIVE and any federal, state or local income tax and Excise
Taxes paid upon such reimbursements, the net amounts retained by
the EXECUTIVE are equal to the Additional Salary. For all
purposes of paragraph 8 hereof ("Compensation and Benefits Upon
Termination"), the Additional Salary shall be included within the
term "salary" as used in such paragraph 8. The EXECUTIVE's
entitlement to this Additional Salary is expressly conditioned
upon the EXECUTIVE's compliance with the terms of this Agreement.
b. Bonus. During his employment the Company shall pay the
EXECUTIVE an annual bonus in accordance with the terms of a bonus
incentive plan that covers the EXECUTIVE (or any replacement plan
of substantially equivalent or greater value that may
subsequently be established and in effect at the time for such
action).
c. Expenses. During his employment the EXECUTIVE shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing services hereunder,
including all reasonable expenses of travel and living while away
from home, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by
the Company.
d. Other Benefits. The EXECUTIVE shall be entitled to continue
to participate in all of the Company's employee benefit plans and
arrangements in effect on the date hereof in which the EXECUTIVE
now participates (including without limitation each pension and
retirement plan and arrangement, supplemental pension and
retirement plan, deferred compensation plan, short-term and
long-term incentive plan, stock option plan, life insurance and
health-and-accident plan and arrangement, medical insurance plan,
physical examination program, dental care plan, accidental death
and disability plan, survivor income plan, relocation plan,
financial, tax and legal counseling programs, and vacation plan).
The Company shall not make any changes in such plans or
arrangements which would adversely affect the EXECUTIVE's rights
or benefits thereunder, unless such change occurs pursuant to a
program applicable to all senior executives of the Company and
does not result in a proportionately greater reduction in the
rights of, or benefits to, the EXECUTIVE as compared with any
other senior executive of the Company. The EXECUTIVE shall be
entitled to participate in or receive benefits under any employee
benefit plan or arrangement made available by the Company in the
future to its executives and key management employees, subject
to, and on a basis consistent with, the terms, conditions and
overall administration of such plans and arrangements. Except as
otherwise specifically provided herein, nothing paid to the
EXECUTIVE under any plan or arrangement presently in effect or
made available in the future shall be in lieu of the salary or
bonus payable under subsections (a) and (b).
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e. Vacations. The EXECUTIVE shall be entitled to the number of
vacation days in each calendar year, and to compensation in
respect of earned but unused vacation days, determined in
accordance with the Company's vacation plan. The EXECUTIVE shall
also be entitled to all paid holidays given by the Company to its
executives. Unused vacation days shall not be forfeited once
they have been earned and, if still unused at the time of the
EXECUTIVE's termination of employment with the Company, shall be
promptly paid to the EXECUTIVE at their then-current value, based
on the EXECUTIVE's rate of pay at the time of his termination of
employment.
f. Services Furnished. The Company shall furnish the EXECUTIVE
with office space and such services as are suitable to the
EXECUTIVE's position and adequate for the performance of his
duties.
5. Confidential Information.
a. The EXECUTIVE agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not
employed by the Company, or not engaged to render services to the
Company, any confidential information obtained while in the
employ of the Company, including, without limitation, any of the
Company's inventions, processes, methods of distribution or
customers or trade secrets; provided, however, that this
provision shall not preclude the EXECUTIVE from use or disclosure
of information known generally to the public or from disclosure
required by law or court order.
b. The EXECUTIVE agrees that upon leaving the Company's employ
he will make himself reasonably available to answer questions
from Company officers regarding his former duties and
responsibilities and the knowledge he obtained in connection
therewith. In addition, he will not take with him, without the
prior written consent of any officer authorized to act in the
matter by the Board, any study, memoranda, drawing, blueprint,
specification or other document of the Company, its subsidiaries,
affiliates and divisions, which is of a confidential nature
relating to the Company, its subsidiaries, affiliates and
divisions.
c. The EXECUTIVE understands and agrees that his obligation
pursuant to this paragraph 5 shall survive the termination of
this Agreement and his termination of employment for any reason
under this Agreement.
6. Termination. The EXECUTIVE's employment may be terminated
during the term of this Agreement only as follows:
a. Death. The EXECUTIVE's employment shall terminate upon his
death.
b. Disability. If, as a result of the EXECUTIVE's incapacity
due to physical or mental illness, the EXECUTIVE shall have been
absent from his duties hereunder on a full-time basis for the
entire period of six consecutive months, and within thirty days
after written notice of termination is given by the Company or
the EXECUTIVE (which may occur before or after the end of such
six-month period), the EXECUTIVE shall not have returned to the
performance of his duties hereunder on a full-time basis, the
EXECUTIVE's employment shall terminate. A
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termination of employment pursuant to this paragraph 6(b) shall
be deemed an involuntary termination for purposes of this
Agreement or any plan or practice of the Company.
c. Cause. The Company may terminate the EXECUTIVE's employment
for Cause. The Company shall have "Cause" to terminate the
EXECUTIVE's employment upon (A) the continued failure by the
EXECUTIVE to substantially perform his duties hereunder (other
than a failure resulting from a disability as defined in
subsection (b)) after written notice is delivered by the Company
that specifically identifies the manner in which the EXECUTIVE
has not substantially performed his duties, or (B) the engaging
by the EXECUTIVE in knowing, illegal or grossly negligent conduct
which is materially injurious to the Company monetarily or
otherwise.
d. Without Cause. The Company may terminate the EXECUTIVE's
employment at any time without cause. A termination "without
cause" is a termination of the EXECUTIVE's employment by the
Company for any reason other than those set forth in subsections
(a)[Death], (b)[Disability] or (c)[For Cause] of this paragraph.
e. Termination by Executive for Good Reason. The EXECUTIVE may
terminate his employment with the Company for Good Reason which
shall be deemed to occur if he terminates his employment within
six months after (i) written notice of a failure by the Company
to comply with any material provision of this Agreement which
failure has not been cured within ten days after such written
notice of noncompliance has been given by the EXECUTIVE to the
Company; (ii) a significant diminishment in the nature or scope
of the authority, power, function or duty attached to the
position which the EXECUTIVE currently maintains without the
express written consent of the EXECUTIVE; or (iii) the Company
requires that the EXECUTIVE relocate his place of employment or
residence outside of the San Francisco Bay Area.
f. Termination Following Change of Control. The EXECUTIVE may
terminate his employment with the Company within six months after
a Change of Control, which shall be deemed to have occurred in
the event of: (i) the direct or indirect sale or exchange by the
stockholders of the Company of all or substantially all of the
stock of the Company, in a single or series of related
transactions, after which sale or exchange the stockholders of
the Company immediately prior to such transactions do not retain,
directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Company; (ii) a merger in
which the Company is a party after which merger the stockholders
of the Company do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
surviving company; or (iii) the sale, exchange, or transfer of
all or substantially all of the Company's assets (other than a
sale, exchange, or transfer to one or more corporations where the
stockholders of the Company before such sale, exchange, or
transfer retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the corporation(s)
to which the assets were transferred). Provided, however, that
the EXECUTIVE shall not be entitled to terminate his employment
under this subsection in the event that the purchaser of the
Company, or any successor by merger, consolidation or otherwise,
or the entity to which all or a significant portion of the
Company's assets have been transferred, shall have expressly
assumed in writing all duties and obligations of the Company
under this Agreement.
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g. Voluntary Termination. The EXECUTIVE may voluntarily
terminate his employment with the Company at any time. A
termination of employment by the EXECUTIVE pursuant to paragraph
6(e)[For Good Reason] or (f)[Change of Control] shall not be
deemed a voluntary termination by the EXECUTIVE for purposes of
this Agreement or any plan or practice of the Company but shall
be deemed an involuntary termination.
h. Non-Renewal. If the EXECUTIVE fails to request an
extension of this Agreement in accordance with paragraph 1, or if
the Board shall fail to approve such request, this Agreement
shall automatically expire at the end of its term. Such
expiration shall not entitle the EXECUTIVE to any compensation or
benefits except as earned by the EXECUTIVE through the date of
expiration of this Agreement and set forth in paragraph 8(e).
The parties shall have no further obligations to each other
thereafter except as set forth in paragraphs 5 and 11.
7. Notice and Effective Date of Termination.
a. Notice. Any termination of the EXECUTIVE's employment by
the Company or by the EXECUTIVE during the term of this Agreement
(other than as a result of death) shall be communicated by
written notice of termination to the other party hereto. Such
notice shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the EXECUTIVE's employment under that provision.
b. Date of Termination. The date of termination shall be:
(i) if the EXECUTIVE's employment is terminated by his death,
the date of his death;
(ii) if the EXECUTIVE's employment is terminated pursuant to
paragraph 6(b)[Disability], the date of termination shall be the
31st day following delivery of the notice of termination;
(iii) if the EXECUTIVE's employment is terminated for any
other reason by either party, the date on which a notice of
termination is delivered to the other party; and
(iv) if the Agreement expires pursuant to paragraph 6(h)[Non-
Renewal], the parties' employment relationship shall terminate on
the last day of the term of this Agreement without any notice.
8. Compensation and Benefits Upon Termination.
a. Disability, Without Cause or For Good Reason. If the
EXECUTIVE's employment terminates pursuant to paragraph
6(b)[Disability], (d)[Without Cause] or (e)[For Good Reason], the
Company shall:
(i) Salary: continue to pay the EXECUTIVE his then-current
salary through the remaining term of this Agreement as defined in
paragraph 1;
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(ii) Bonus: continue to pay the EXECUTIVE an annual bonus(es)
throughout such remaining term; each such bonus shall be in an
amount equal to the greater of (A) the EXECUTIVE's bonus during
the year prior to his termination or (B) the bonus that the
EXECUTIVE would have earned under the Company's bonus plan in the
year that he was terminated had he remained in its employment;
provided, however, that such post-termination bonuses shall not
exceed the lesser of the 100% targeted amounts for those bonus
payments in the prior and then-current year, and such bonuses
shall not be paid until due under the Company's present bonus
plan;
(iii) Stock Options: with respect to any stock options
granted to the EXECUTIVE by the Company, the EXECUTIVE shall
immediately become vested in any unvested stock options upon such
termination; and
(iv) Restricted Stock: with respect to any restricted stock
granted to the EXECUTIVE by the Company which has not become
vested as of such termination, the EXECUTIVE shall immediately
become vested in a pro rata portion of such unvested stock
determined on the basis of the number of full months that have
elapsed from the date of grant of such restricted stock. Such
pro rata vesting shall be determined separately with respect to
each portion of any restricted stock grant that is subject to a
different restriction lapse date. That is, for each portion of
any restricted stock grant that is subject to a different
restriction lapse date, the EXECUTIVE shall immediately become
vested in the number of shares that equals (i) the quantity A
divided by B times C minus (ii) the number of shares that have
previously vested [(A/B x C)-D], where A is the number of full
months that have elapsed from the date of grant to and including
the date of termination, B is the number of months between the
date of grant and the restriction lapse date, C is the number of
shares that would otherwise become vested on that restriction
lapse date and D is the number of shares that have previously
vested. As a hypothetical example, presume the EXECUTIVE had
been granted 30,000 shares of restricted stock on March 1, 1999,
and that the restrictions on that grant lapse as to 10,000 shares
on March 1, 2000, 5,000 shares on March 1, 2001, and 15,000
shares on March 1, 2002. If the EXECUTIVE's employment
terminated pursuant to paragraph 6(b) on September 1, 1999 (i.e.,
at a time when no shares had previously vested), the EXECUTIVE
would immediately become vested under this subsection (iv) in
5,000 of the shares whose restrictions were to lapse on March 1,
2000, 1,250 of the shares whose restrictions were to lapse on
March 1, 2001, and 2,500 of the shares whose restrictions were to
lapse on March 1, 2002.
The Company shall have no further obligations to the EXECUTIVE as
a result of such termination except as set forth in paragraph 11.
b. For Cause. If the EXECUTIVE's employment is terminated for
cause as defined in paragraph 6(c)(A)[Failure to Perform], the
EXECUTIVE shall receive the post-termination compensation and
benefits described in paragraph 8(a)[Compensation and Benefits
Upon Disability, Termination Without Cause or For Good Reason].
If the EXECUTIVE's employment is terminated for cause as defined
in paragraph 6(c)(B)[Materially Injurious Conduct], he shall only
receive the post-termination compensation and benefits described
in paragraph 8(d) [Compensation and Benefits Upon Voluntary
Termination].
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c. Change of Control. Upon a Change of Control (whether or
not the EXECUTIVE's employment terminates), the EXECUTIVE shall
immediately become vested in any shares of restricted stock
granted to the EXECUTIVE by the Company which had not vested
prior to the Change of Control. In addition, if the EXECUTIVE's
employment terminates pursuant to paragraph 6(f)[Change of
Control], the Company shall:
(i) Salary: continue to pay the EXECUTIVE his then-current
salary through the remaining term of this Agreement as defined in
paragraph 1;
(ii) Bonus: continue to pay the EXECUTIVE his annual bonus(es)
throughout such remaining term; each such bonus shall be in an
amount equal to the greater of (A) the EXECUTIVE's bonus during
the year prior to his termination or (B) the bonus that the
EXECUTIVE would have earned under the Company's bonus plan in the
year that he was terminated had he remained in its employment;
provided, however, that such post-termination bonuses shall not
exceed the lesser of the 100% targeted amounts for those bonus
payments in the prior and then-current year, and such bonuses
shall not be paid until due under the Company's present bonus
plan; and
(iii) Stock Options: with respect to any stock options
granted to the EXECUTIVE by the Company, the EXECUTIVE shall
immediately become vested in any unvested stock options upon such
termination.
The Company shall reimburse the EXECUTIVE for any excise taxes
paid by the EXECUTIVE pursuant to Internal Revenue Code section
4999 as a result of any "excess parachute payments" that he
receives from the Company as determined under section 280G of
said Code. This reimbursement shall not include any additional
amount to cover the EXECUTIVE's income or other taxes on such
reimbursement. The Company shall have no further obligations to
the EXECUTIVE as a result of such termination except as set forth
in paragraph 11.
d. Death or Voluntary Termination. If the EXECUTIVE's
employment terminates pursuant to paragraph 6(a)[Death] or
6(g)[Voluntary Termination], he (or his designee or his estate)
shall be paid his salary through his termination date and not
thereafter. He (or his designee or his estate) shall not be
entitled to any bonus payments which were not fully earned prior
to his termination date, and he (or his designee or his estate)
shall not be entitled to any pro-rated bonus payment for the year
in which his employment terminates. Any stock options granted to
the EXECUTIVE by the Company will continue to vest only through
the date on which his employment terminates (provided, however,
that if the EXECUTIVE's employment terminates as a result of his
voluntary termination (but not as a result of his death) within
six months after a Change of Control, the EXECUTIVE shall
immediately become fully-vested in any unvested stock options
previously granted to him by the Company) and any restricted
stock that was granted to the EXECUTIVE by the Company that is
unvested as of the date on which his employment terminates will
automatically be reacquired by the Company and the EXECUTIVE (or
his designee or his estate) shall have no further rights with
respect to such restricted stock. The Company shall have no
further obligations to the EXECUTIVE as a result of the
termination of his employment pursuant to paragraph 6(a)[Death]
or 6(g)[Voluntary Termination] except as set forth in paragraph
11.
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e. Non-Renewal. If the Agreement expires as set forth in
paragraph 6(h)[Non-Renewal], the Company shall have no further
obligations to the EXECUTIVE except as set forth in paragraph 11
and except that with respect to any restricted stock granted to
the EXECUTIVE by the Company which has not become vested as of
such expiration date, the EXECUTIVE shall immediately become
vested in a pro rata portion of such unvested stock determined on
the basis of the number of full months that have elapsed from the
date of grant of such restricted stock (as described more fully
in paragraph 8(a)(iv)).
9. Employment and Post-Employment Restrictions. The Company
and the EXECUTIVE acknowledge that the Company has a special
interest in and derives significant benefit from the unique
skills and experience of the EXECUTIVE. In addition, the
EXECUTIVE will use and have access to some of the Company's
proprietary and valuable Confidential Information during the
course of the EXECUTIVE's employment. Accordingly, except as
hereafter noted, during the term of the EXECUTIVE's employment
with the Company and in the event that the EXECUTIVE voluntarily
terminates his employment with the Company prior to March 1,
2002, the EXECUTIVE agrees that for a period of three years
following his voluntary termination pursuant to paragraph 6(g),
he shall not provide any labor, work, services or assistance to
(whether as an officer, director, employee, partner, agent,
owner, independent contractor, stockholder or otherwise)
Burlington Coat Factory Warehouse Corporation, Xxxxxxx Department
Stores, Inc., Filene's Basement Corp., The Federated Stores, The
May Department Stores Company, The TJX Companies, Inc. and Value
City Department Stores, Inc. as well as all subsidiaries,
divisions and/or the surviving entity of any of the above that do
business in the retail industry in the case of a merger or
acquisition. However, this subsection shall not prohibit the
EXECUTIVE from making any investment of 1% or less of the equity
securities of any publicly-traded corporation that is engaged in
any business of the type or character engaged in by the Company.
The preceding sentence shall have no force and effect in the
event that (i) the EXECUTIVE's employment with the Company is
terminated (1) by the Company pursuant to paragraph 6(c)[with
Cause], 6(d)[without Cause] or (2) by the EXECUTIVE pursuant to
either paragraph 6(e)[Termination by the Executive for Good
Reason] or paragraph 6(f)[Termination Following Change of
Control] or (ii) the Company fails to approve or grant an
extension of this Agreement in accordance with paragraph 1
hereof.
During the term of the EXECUTIVE's employment with the
Company and for a period of three years following the termination
of that employment for any reason, the EXECUTIVE shall not
directly or indirectly solicit any other employee of the Company
to terminate his or her employment with the Company.
10. Exercise of Stock Options Following Termination. If the
EXECUTIVE's employment terminates pursuant to paragraph
6(a)[Death] or (b)[Disability], he (or his estate) may exercise
his right to purchase any vested stock under the stock options
granted to him by the Company for up to one year following the
date of his termination, but not later than the termination date
of such options. In all other instances, he may exercise that
right for up to three months following the date of his
termination, but not later than the termination date of such
options. All such purchases must be made by the EXECUTIVE in
accordance with the applicable stock option plans and agreements
between the parties.
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11. Insurance and Indemnity. The Company shall, to the extent
permitted by law, include the EXECUTIVE during the term of this
Agreement under any directors and officers liability insurance
policy maintained for its directors and officers, with coverage
at least as favorable to the EXECUTIVE in amount and each other
material respect as the coverage of other directors and officers
covered thereby. This obligation to provide insurance and
indemnify the EXECUTIVE shall survive expiration or termination
of this Agreement with respect to proceedings or threatened
proceedings based on acts or omissions of the EXECUTIVE occurring
during the EXECUTIVE's employment with the Company or with any
affiliated company. Such obligations shall be binding upon the
Company's successors and assigns and shall inure to the benefit
of the EXECUTIVE's heirs and personal representatives.
12. Successors; Binding Agreement. This Agreement and all
rights of the EXECUTIVE hereunder shall inure to the benefit of
and be enforceable by the EXECUTIVE's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the EXECUTIVE should die
while any amounts would still be payable to him hereunder all
such amounts shall be paid in accordance with the terms of this
Agreement to the EXECUTIVE's written designee, or if there be no
such designee, to the EXECUTIVE's estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been
duly given when delivered or (unless otherwise specified) mailed
by United States registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the EXECUTIVE: Xxxxxxx Xxxxxxxx
c/o Ross Stores, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
If to the Company: Xxxx Stores, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Corporate Secretary
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
14. Modification or Waiver; Entire Agreement. No provision of
this Agreement may be modified or waived except in a document
signed by the EXECUTIVE and the chairman of the Compensation
Committee of the Board or such other person as may be designated
by the Board. This Agreement, along with any stock option or
restricted stock agreements between the parties, constitute the
entire agreement between the parties regarding their employment
relationship. No agreements or representations, oral or
otherwise, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this
Agreement.
15. Governing Law; Severability. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of California. The
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invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision of this Agreement.
16. Severability. In the event any provision of this Agreement
shall be found unenforceable by an arbitrator or a court of
competent jurisdiction, the provision shall be deemed modified to
the extent necessary to allow enforceability of the provision as
so limited, it being intended that the Company shall receive the
benefits contemplated herein to the fullest extent permitted by
law. If a deemed modification is not satisfactory in the
judgment of such arbitrator or court, the unenforceable provision
shall be deemed deleted, and the validity and enforceability of
the remaining provisions shall not be affected thereby.
17. Mitigation. In the event the EXECUTIVE's employment with
the Company terminates for any reason other than death, the
EXECUTIVE shall be obligated to seek other employment following
such termination in order to mitigate payments that the Company
may be required to make to him or for his benefit hereunder.
Such obligation shall not apply during any period in which the
EXECUTIVE is disabled. If the EXECUTIVE obtains other employment
during any period in which he is entitled to receive continued
salary or bonus payments under paragraph 8, any salary or bonus
payments earned by the EXECUTIVE during such period shall reduce
the Company's obligation to pay continued salary and/or bonus
payments under paragraph 8 by the amount of the salary and/or
bonus payments so earned by the EXECUTIVE.
18. Withholding. All payments required to be made by the
Company hereunder to the EXECUTIVE or his estate or beneficiaries
shall be subject to the withholding of such amounts as the
Company may reasonably determine it should withhold pursuant to
any applicable law. To the extent permitted, the EXECUTIVE may
provide all or any part of any necessary withholding by
contributing Company stock with value, determined on the date
such withholding is due, equal to the number of shares
contributed multiplied by the closing Nasdaq price on the date
preceding the date the withholding is determined.
19. Arbitration. In the event of any dispute or claim relating
to or arising out of the parties' employment relationship or this
Agreement (including, but not limited to, any claims of breach of
contract, wrongful termination or age, race, sex, disability or
other discrimination), all such disputes shall be fully, finally
and exclusively resolved by binding arbitration conducted by the
American Arbitration Association in San Francisco, California;
provided, however, that this arbitration provision shall not
apply to any disputes or claims relating to or arising out of the
misuse or misappropriation of the Company's trade secrets or
proprietary information or to any disputes or claims relating to
or arising out of the EXECUTIVE's failure to comply with the
requirements of paragraph 9 regarding Employment and Post-
Employment Restrictions.
20. Attorneys' Fees. Each party shall bear its own attorneys'
fees and costs incurred in any action or dispute arising out of
this Agreement.
21. Miscellaneous. No right or interest to, or in, any payments
shall be assignable by the EXECUTIVE; provided, however, that
this provision shall not preclude the EXECUTIVE from designating
in writing one or more beneficiaries to receive any amount that
may be payable after the EXECUTIVE's death and shall not preclude
the legal representative of the EXECUTIVE's estate from assigning
any right hereunder to the person or persons entitled
11
thereto. This Agreement shall be binding upon and shall inure to
the benefit of the EXECUTIVE, his heirs and legal representatives
and the Company and its successors.
IN WITNESS WHEREOF, the parties have executed this
Employment Agreement effective as of the date and year first
above written.
XXXX STORES, INC.
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Title: President & COO
