Exhibit 10.26
January 15, 1999
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of February 3, 1999, by
and between Xxxx Stores, Inc. (the "Company") and Xxxxxxx Xxxxxxx (the
"Executive"). The Executive is presently employed by the Company as its Vice
Chairman of the Board of Directors of the Company (the "Board") and Chief
Executive Officer, and it is now the intention for the Company and the Executive
to enter into a written employment agreement. Accordingly, the Company and the
Executive hereby agree as follows:
1. TERM. The employment of the Executive by the Company will continue as
of the date hereof and end on February 3, 2003, unless extended or terminated in
accordance with this Agreement. During August 2001, and during August every
other year thereafter (every two years) for so long as the Executive is employed
by the Company, upon the written request of the Executive, the Board shall
consider extending the Executive's employment with the Company. Such request
must be delivered to the Chairman of the Compensation Committee no later than
the July 31st which precedes the August in which the requested extension will be
considered. The Board shall advise the Executive, in writing, on or before the
September 1st following its consideration of the Executive's written request,
whether it approves of such extension. The failure of the Board 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 continue to serve as the Vice
Chairman of the Board and Chief Executive Officer of the Company with overall
responsibility for its corporate policy making, organization and operation, and
accomplishment of its plans and objectives. The Executive shall report directly
to the Board. 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. It is intended that the Executive shall be elected Chairman of the Board
(in addition to his continuing to serve as Chief Executive Officer of the
Company) when the current Chairman vacates that office. The failure to so elect
the Executive Chairman of the Board shall constitute Good Reason for the
purposes of paragraph 7(e) hereof.
3. PLACE OF PERFORMANCE. The Executive shall be employed at the Company's
New York buying office, except for required travel on the Company's business to
an extent substantially consistent with present business travel obligations.
4. COMPENSATION AND RELATED MATTERS.
(a) SALARY. During his employment, the Company shall pay the Executive
a salary of not less than $800,000 per annum. 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 from time to time by the Board in
accordance with normal business practices of the Company.
(b) CHANGE OF CONTROL. In the event of a Change of Control (as defined
in paragraph 7(f) hereof), (i) 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 accordance with the terms of the
applicable stock grant agreements and (ii) the Company shall pay to the
Executive as additional salary an amount equal to $1,500,000 per year during the
period commencing on the effective date of the Change of Control and expiring
two years thereafter (the "Remaining Term"), which shall be payable in equal
installments during the then Remaining Term in accordance with the Company's
normal payroll policies applicable for senior officers. Notwithstanding
paragraph 1 hereof to the contrary, the Executive's employment by the Company
under this Agreement shall continue until the later of (a) the expiration of the
Remaining Term and (b) the expiration of any extension pursuant to Section 1.
(c) BONUS. During his employment, the Company shall continue to pay the
Executive an annual bonus in accordance with the terms of the existing 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).
(d) 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.
(e) 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 or benefits of 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 subparagraphs (a), (b) and (c).
(f) 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.
(g) 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 during the term of this Agreement and
for a period of six months following the date of any termination, except for
termination as described in paragraphs 7(a) [Death], 7(c) [Illegal or Grossly
Negligent Conduct], or 7(h) [Non-Renewal]. Upon mutual agreement between the
Company and the Executive, the office space furnished during the six month
period following termination may be at a location other than the Company's New
York buying office.
(h) EXCISE TAX GROSS-UP. If the Executive becomes entitled to one or
more payments (with a "payment" including the vesting of restricted stock, a
stock option, or other non-cash benefit or property), whether pursuant to the
terms of this Agreement or any other plan or agreement with the Company or any
affiliated company (collectively, "Change of Control Payments"), which are or
become subject to the tax ("Excise Tax") imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the
Executive at the time specified below such amount (the "Gross-up Payment") as
may be necessary to place the Executive in the same after-tax position as if no
portion of the Change of Control Payments and any amounts paid to the Executive
pursuant to this paragraph 4(h) had been subject to the Excise Tax. The Gross-
up Payment shall include, without limitation, reimbursement for any penalties
and interest that may accrue in respect of such Excise Tax. For purposes of
determining the amount of the Gross-up Payment, the Executive shall be deemed:
(A) to pay federal income taxes at the highest marginal rate of federal income
taxation for the year in which the Gross-up Payment is to be made; and (B) to
pay any applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year. If the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time the Gross-up Payment is made, the Executive shall repay to
the Company at the time that the amount of such reduction in Excise Tax is
finally determined (but, if previously paid to the taxing authorities, not prior
to the time the amount of such reduction is refunded to the Executive or
otherwise realized as a benefit by the Executive) the portion of the Gross-up
Payment that would not have been paid if such Excise Tax had been used in
initially calculating the Gross-up Payment, plus interest on the amount of such
repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time the Gross-up Payment
is made, the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest and penalties payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Gross-up Payment provided for above shall be paid on the 30th day
(or such earlier date as the Excise Tax becomes due and payable to the taxing
authorities) after it has been determined that the Change of Control Payments
(or any portion thereof) are subject to the Excise Tax; PROVIDED, HOWEVER, that
if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined by counsel or auditors selected by the Company
and reasonably acceptable to the Executive, of the minimum amount of such
payments. The Company shall pay to the Executive the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code). The Company
shall have the right to control all proceedings with the Internal Revenue
Service that may arise in connection with the determination and assessment of
any Excise Tax and, at its sole option, the Company may pursue or forego any and
all administrative appeals, proceedings, hearings, and conferences with any
taxing authority in respect of such Excise Tax (including any interest or
penalties thereon); PROVIDED, HOWEVER, that the Company's control over any such
proceedings shall be limited to issues with respect to which a Gross-up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest any other issue raised by the Internal Revenue Service or any other
taxing authority. The Executive shall cooperate with the Company in any
proceedings relating to the determination and assessment of any Excise Tax and
shall not take any position or action that would materially increase the amount
of any Gross-up Payment hereunder.
5. OFFICES. The Executive agrees to serve, if elected or appointed
thereto, in one or more executive offices of any of the Company's subsidiaries,
provided that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is currently provided by the
Company's by-laws and applicable state law.
6. 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.
7. 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 full-time basis, the Executive's employment shall
terminate. A termination of employment pursuant to this paragraph 7(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 if
the Executive either (i) continuously fails to substantially perform his duties
hereunder (unless such failure is a result of a disability as defined in
paragraph (b)) or (ii) intentionally engages in illegal or grossly negligent
conduct which is materially injurious to the Company monetarily or otherwise. A
termination for Cause shall not take effect unless: (1) the Executive is given
written notice by the Company of its intention to terminate him for Cause; (2)
the notice specifically identifies the particular act or acts or failure or
failures to act which are the basis for such termination; (3) the notice is
given within 90 days of the Company's learning of such act or acts or failure or
failures to act; and (4) the Executive fails to substantially cure such conduct,
to the extent such cure is possible, within 60 days after the date that such
written notice is given to him.
(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 reasons other than those set forth
in subsections (a)[Death], (b) [Disability] or (c)[For Cause] of this paragraph.
(e) TERMINATION BY THE 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, or (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
Executive is relocated more than 40 miles from the Company's New York City
office without his prior written consent, or (iv) the Executive is not elected
Chairman of the Board as provided in paragraph 2 hereof.
(f) TERMINATION FOLLOWING CHANGE OF CONTROL. The Executive may
terminate his employment with the Company for Good Reason within one year after
a Change of Control. A Change in Control shall be deemed to have occurred if:
(i) any person or group (within the meaning of Rule 13d-3 of the rules and
regulations promulgated under the Securities Exchange Act of 1934, as amended)
shall acquire, in one or a series of transactions, whether through sale of stock
or merger, ownership of stock of the Company that possesses more than 30 percent
of the total fair market value or total voting power of the stock of the Company
or any successor to 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 and after such sale, exchange, or transfer, directly or indirectly, are
the beneficial owners of at least a majority of the voting stock of the
corporation(s) to which the assets were transferred).
(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 7(e) [For Good Reason] 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 fails 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 9(e). The parties hereto shall have no
further obligations to each other thereafter except as set forth in paragraphs 6
and 13.
8. 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 if 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 7(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 7(h)
[Non-Renewal], the parties' employment relationship shall terminate on the last
day of the term of this Agreement without any notice.
9. COMPENSATION AND BENEFITS UPON TERMINATION.
(a) DISABILITY, WITHOUT CAUSE OR FOR GOOD REASON. If the Executive's
employment terminates pursuant to paragraphs 7(b)[Disability], (d)[Without
Cause], or (e)[For Good Reason], the Executive shall be entitled to the
following:
(i) SALARY. The Company shall continue to pay the Executive
his then-current salary through the remaining term of this Agreement as defined
in paragraph 1.
(ii) BONUS. The Company shall continue to pay the Executive
an annual bonus(es) throughout such remaining term. Each such bonus shall be
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 100% of the targeted amounts for those bonuses in the prior
year and 100% of such targeted amounts for the then-current year. 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.
(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 in accordance with the terms of the applicable stock
grant agreements.
The Company shall have no further obligations to the Executive as a result of
such termination except as set forth in paragraph 13.
(b) FOR CAUSE. If the Executive's employment is terminated for Cause
(as defined in paragraph 7(c), he shall receive only the post-termination
compensation and benefits described in paragraph 9(d) [Compensation and Benefits
Upon Termination - Death or Voluntary Termination].
(c) CHANGE OF CONTROL. If the Executive's employment is terminated
either by the Company Without Cause (as defined in paragraph 7(d) or by the
Executive for Good Reason (as defined in paragraph 7(a)) within one year of a
Change of Control (as defined in paragraph 7(f)), the Executive shall be
entitled to the following (in addition to any other payments or benefits
provided for in paragraphs 4(b) and (h)):
(i) LUMP SUM PAYMENT. The Company shall pay to the Executive
(or his designee or estate), immediately upon such termination, a lump sum
amount equal to: (A) the sum of the Executive's then current salary (excluding
any payments under paragraph 4(b)) and
the greater of the most recent bonus paid to the Executive under the Management
Incentive Plan or the target bonus for the fiscal year of the Company in which
such termination occurs; times (B) the greater of two or the number of years
(including partial years computed on a per day basis) remaining in the term of
the Agreement under paragraph 1.
(ii) STOCK OPTIONS. Upon such termination, the Executive
shall immediately become vested in any unvested stock options granted to the
Executive by the Company.
(iii) RESTRICTED STOCK. Upon a Change of Control, the
Executive shall become vested in any shares of restricted stock granted to the
Executive in accordance with paragraph 4(b) hereof.
(d) DEATH OR VOLUNTARY TERMINATION. If the Executive's employment
terminates pursuant to paragraphs 7(a)[Death] or 7(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 shall continue to vest
only through the date on which his employment terminates 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 shall 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 paragraphs 7(a) or 7(g).
(e) NON-RENEWAL. If the Agreement expires as set forth in paragraph
7(h)[Non-Renewal], the Company shall have no further obligations to the
Executive except as set forth in paragraph 13 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 in accordance with the terms
of the applicable stock grant agreements.
10. EMPLOYMENT RESTRICTION.
(a) NON-COMPETE. 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 February 1, 2003, the
Executive agrees that for a period of 36 months following his voluntary
termination pursuant to paragraph 7(g) [Voluntary Termination], 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 subparagraph shall not prohibit the Executive from making any
investment of 1% or less of the equity securities of any publicly-traded
corporation or limited partnership that is engaged in any business of the type
or character engaged in by the Company. The foregoing restrictions shall have no
force or effect in the event that: (i) the Executive's employment with the
Company is terminated either by the Company pursuant to paragraphs 7(c)[with
Cause] or 7(d)[Without Cause] or by the Executive pursuant or paragraphs 7(e)
[Termination by the Executive for Good Reason] or 7(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.
(b) NON-SOLICITATION OF EMPLOYEES. During the term of the Executive's
employment with the Company and for a period of 36 months 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.
11. EXERCISE OF STOCK OPTIONS FOLLOWING TERMINATION. If the Executive's
employment terminates pursuant to paragraphs 7(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.
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. 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.
14. 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 Xxxxxxx
c/o Ross Stores, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company: Xxxx Stores, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
15. 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 of 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. To the
extent that this Agreement is in any way inconsistent with any prior or
contemporaneous restricted stock or stock option agreements between the parties,
this Agreement shall control. No agreements or representations, oral or
otherwise, with respect to the subject matter hereof have been made by either
party which are not set for the expressly in this Agreement.
16. GOVERNING LAW - SEVERABILITY. The validity, interpretation,
construction, performance, and enforcement of this Agreement shall be governed
by the laws of the State of New York without reference to New York's choice of
law rules. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
17. MITIGATION NOT REQUIRED. In the event the Executive's employment with
the Company terminates for any reason, the Executive shall not be obligated to
seek other employment following such termination. Any amounts due the Executive
under this Agreement shall be offset by any remuneration attributable to any
subsequent employment that he may obtain.
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 New York, New York by an
arbitrator mutually agreed upon by the parties hereto or, in the absence of such
agreement, by an arbitrator selected in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, 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. Notwithstanding the foregoing, if
either the Company or the Executive shall request, such arbitration shall be
conducted by a panel of three arbitrators, one selected by the Company, one
selected by the Executive, and the third selected by agreement of the first two,
or, in the absence of such agreement, in accordance with such Rules.
20. ATTORNEY'S FEES. Each party shall bear its own attorney's 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 Executive from designating in writing one or more beneficiaries to
receive any amount that may be payable after Executive's death and shall not
preclude the legal representative of Executive's estate from assigning any right
hereunder to the person or persons entitled 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.
By:
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Xxxxxxx Xxxxxxx
