EXHIBIT 10.1
SERVICES AGREEMENT
This Services Agreement (this "Agreement") is made as of December 14,
2001 by and among: (i) Meridian Ventures, LLC, a Nevada limited liability
company controlled by Xxxxxx X. Xxxxx ("Meridian"), and Xxxxxx X. Xxxxx
("Xxxxx"), jointly and severally; and (ii) Hanover Direct, Inc. (the "Company"),
a Delaware corporation.
1. Provision of Services. Meridian shall provide for the
benefit of the Company the services of Xxxxx. In connection therewith,
Xxxxx shall serve as the President and Chief Executive Officer (the
"President/CEO") and as a member of the Company's Board of Directors
(the "Board of Directors"), its Executive Committee (the "Executive
Committee") and its Nominating Committee (the "Nominating Committee").
2. Responsibilities. The President/CEO shall act and serve
during the term of this Agreement as the President and Chief Executive
Officer of the Company and shall report to the Board of Directors. The
employment responsibilities of the President/CEO will include those
normally held by the president and chief executive officer of a
corporation of a similar size and nature to the Company. The
President/CEO shall devote his full-time efforts (which shall mean an
average of 50 hours per work week, excluding reasonable vacation,
personal, sick time or de minimus non-conflicting time for Meridian) in
connection with his role as President, Chief Executive Officer and
member of the Executive and Nominating Committees. All employees and
officers shall report directly or indirectly to the President/CEO.
3. Term. Subject to paragraph 6, the term of this Agreement
(the "Agreement Term") and the term for services of Xxxxx shall
commence as of December 14, 2001 and shall terminate on March 31, 2003;
provided, however, that, on or prior to February 1, 2003, the Company
may extend the Agreement Term on a day to day basis upon written notice
to Xxxxx provided that thereafter either party may terminate the
Agreement and the Agreement Term with 60 days notice to the other
party.
4. Compensation. The following compensation shall be payable
pursuant to this Agreement:
(a) In consideration for providing the services of Xxxxx
as President/CEO, during the Agreement Term, Meridian
shall receive, in addition to the other consideration
provided in this Agreement, compensation at the rate
of $75,000 per month for the services of Xxxxx
payable in advance during the first week of each
month (the "Base Fee").
(b) The compensation payable to Meridian under this
Agreement is in consideration for the services of
Xxxxx. To the extent permitted by applicable law, and
except as otherwise provided herein, the Company
shall not be obligated to provide Xxxxx (and Meridian
and Xxxxx specifically decline) any employee benefits
(for example, health, 401K, pension, or other
benefits provided by the Company to its employees,
etc.) under this Agreement; provided, however, that
the Company has extended the benefits of its Key
Executive Eighteen Month Compensation Continuation
Plan effective as of April 25, 2001, as amended (the
"Change of Control Plan"), and its transaction bonus
program (each as referred to in Exhibit 1) to Xxxxx.
Notwithstanding the foregoing, the Company will allow
Xxxxx during the Agreement Term to avail himself of
any Company employee discount offered to other
employees generally. In addition, the Company has
guaranteed to Xxxxx a target bonus for fiscal 2001
pursuant to the Company's 2001 Management Incentive
Plan equal to $300,000 which shall be payable in one
lump sum on or about April 1, 2002 (or on the date of
closing of any transaction which constitutes a Change
of Control (as hereinafter defined), if earlier) so
long as Xxxxx is providing services to the Company
hereunder on December 29, 2001 (or on the date of
closing of such a transaction, if earlier). Xxxxx
shall be eligible to receive a maximum bonus for
fiscal 2001 pursuant to the Company's 2001 Management
Incentive Plan equal to up to $600,000 (including the
target bonus described in the previous sentence)
which shall be payable as set forth in the previous
sentence if he achieves the maximum goals set for him
by the Board of Directors (as set forth on Exhibit 2
hereto). Xxxxx shall receive a bonus for fiscal 2002
under the Company's 2002 Management Incentive Plan
determined in a manner consistent with bonuses
awarded to all other Class 7 participants under such
Plan for such period, subject to all of the terms and
conditions applicable generally to Class 7
participants thereunder.
(c) In addition to the payments required by paragraph
4(a), during the Agreement Term the Company shall pay
Meridian a flat fee of $15,000 per month, which shall
represent 20% of the comparable compensation in
paragraph 4(a) for Xxxxx and is deemed to cover
Meridian over-head (including legal and accounting),
health care costs, payroll costs, and other expenses
(the "Flat Fee"). If, notwithstanding paragraph 4(b),
applicable law requires the Company to provide Xxxxx
with any employee benefits (other than the Company
employee discount given Xxxxx), the value of such
benefits shall be offset against the Flat Fee.
(d) The Company shall reimburse Meridian for the
reasonable out-of-pocket expenses of the
President/CEO (such as travel, meals, communications
and lodging) which are incurred during the Agreement
Term on behalf of the Company on appropriate
business. Meridian shall submit invoices and
documentation for such reimbursable expenses on a
monthly basis, and the Company shall process payment
of the same upon receipt in accordance with its
customary procedures.
(e) The Company shall provide a personal secretary to be
interviewed and selected by Xxxxx to assist Xxxxx in
the performance of his duties as
2
President/CEO during the Agreement Term. The
secretary shall be employed by the Company at its
cost.
(f) The Company shall promptly reimburse Meridian and
Xxxxx for their reasonable legal fees in the event
that either of them shall consult with their counsel
during the Agreement Term in connection with their
fiduciary responsibilities to the Company under the
Agreement.
(g) Upon the closing of any transaction which constitutes
a "Change of Control" (as defined in paragraph 5),
provided that Xxxxx is then employed by the Company,
the Company shall make a lump sum cash payment to
Meridian on the date of such closing of $900,000
pursuant to the Change of Control Plan, $300,000
pursuant to the transaction bonus program and at
least $300,000 in target bonus (plus any amount of
maximum bonus) payable pursuant to the Company's 2001
Management Incentive Plan as described in paragraph
4(b). The lump sum cash payment referred to in this
paragraph 4(g) shall be in lieu of any cash payment
pursuant to paragraph 6(b)(iii) as a result of a
termination of this Agreement pursuant to paragraph
6(a)(v) and in lieu of the aggregate amount of Base
Fees and Flat Fees to which Meridian would have
otherwise been entitled through the end of the
Agreement Term.
(h) Provided that this Agreement shall be in effect on
June 30, 2002, the Company shall make a lump sum cash
payment to Meridian on such date of $450,000.
(i) During the Agreement Term, solely at the expense of
the Company, Xxxxx shall be entitled to engage the
services of Meridian personnel from time to time at
their then current rates, in his discretion, to
assist him in performing his duties under this
Agreement.
5. Stock Options. Pursuant to paragraph 5 of the Services
Agreement made as of December 5, 2000 by and among Meridian, Xxxxx and
the Company (the "Prior Services Agreement"), the Company granted Xxxxx
and certain individuals who were providing consulting services to the
Company under the Prior Services Agreement ("Consultants") stock
options (the "2000 Options") for an aggregate four million (4,000,000)
shares of the common stock of the Company (the "Shares"). If not
already covered by a Registration Statement on Form S-8 relating to the
Company's 2000 Management Stock Option Plan, all Shares underlying the
2000 Options shall be registered by the Company utilizing a
Registration Statement on Form S-8 (or other similar form) prior to
December 24, 2001. All 2000 Options shall terminate upon any
termination of the Agreement pursuant to paragraph 6(a)(i) or 6(a)(iv).
All outstanding 2000 Options shall vest and become exercisable upon any
termination of the Agreement pursuant to paragraph 6(a)(ii), 6(a)(v) or
6(a)(vi). Further, and notwithstanding anything to the contrary
contained herein, provided that this Agreement shall then be in effect,
one-half (1/2) of Xxxxx'x 2000 Option and all of the Consultants'
Options shall vest and become exercisable on December 4, 2001, and the
remaining portion of Xxxxx'x 2000 Option shall
3
vest and become exercisable, provided that this Agreement shall then be
in effect, on June 30, 2002.
In addition to the 2000 Options, upon his execution of this
Agreement, the Company shall xxxxx Xxxxx and certain members, officers
or employees of, or consultants, contractors or subcontractors to,
Meridian, additional stock options under and subject to the terms and
conditions of the Company's 2000 Management Stock Option Plan (the
"2001 Options") for an aggregate of one million (1,000,000) Shares,
with an exercise price equal to the fair market value of a Share as of
the close of business on the date hereof. Allocation of the 2001
Options shall be as follows: Xxxxxx X. Xxxxx (an option for 500,000
Shares); Xxxxxx Xxxxxxx (an option for 300,000 Shares); Xxxx Xxx (an
option for 100,000 Shares); and Xxxx X. Xxxxx (an option for 100,000
Shares). If not already covered by a Registration Statement on Form S-8
relating to the Company's 2000 Management Stock Option Plan, all Shares
underlying the 2001 Options shall be registered by the Company
utilizing a Registration Statement on Form S-8 (or other similar form)
prior to March 31, 2003. The 2001 Options shall not be vested and
exercisable until March 31, 2003 (provided that this Agreement shall
then be in effect), upon which date (and under such circumstances) the
2001 Options shall become fully vested and exercisable. The 2001
Options shall terminate on the earlier of March 31, 2006 or upon any
termination of the Agreement pursuant to paragraph 6(a)(i) or 6(a)(iv).
The 2001 Options shall vest and become exercisable upon any termination
of the Agreement pursuant to paragraph 6(a)(ii), 6(a)(v) or 6(a)(vi).
In addition, and notwithstanding anything to the contrary
contained herein, all of the 2000 Options and the 2001 Options
(collectively, the "Options") shall vest and become exercisable upon
the earliest to occur of (i) Xxxxx'x resignation "For Good Reason" (as
defined below), (ii) the Company's termination of Xxxxx'x services
hereunder without being "For Cause" (as defined below), (iii) a "Change
of Control" (as defined below), or (iv) the expiration of the Agreement
Term. Options which vest and become exercisable pursuant to this
paragraph 5 shall remain exercisable for a 3-year period (or the date
of their earlier exercise). In the event of a vesting resulting from a
termination of the Agreement pursuant to paragraph 6(a)(v), such
vesting shall take place sufficiently in advance of such termination
(but subject to its occurrence) to permit each optionee to take all
steps reasonably necessary to exercise his Options and to deal with the
Shares purchased under the Options so that those Shares may be treated
in the same manner in connection with the transaction described in
paragraph 6(a)(v) as the Shares of other shareholders.
For purposes of this Agreement, the following terms shall have
the following meanings:
"For Good Reason" shall mean the voluntary termination by
Xxxxx of his employment with the Company on account of any of the
following actions: (i) a substantial and material diminution of Xxxxx'x
duties or responsibilities for the Company, (ii) a material and
substantial diminution of Xxxxx'x base salary or any long-term
incentive opportunity (each as in effect as of the first day of the
Agreement Term), (iii) the Company's requiring Xxxxx to regularly
report to work at a facility that is more than 30 miles from the
facility at which Xxxxx regularly reported as of the first day of the
4
Agreement Term, (iv) decisions or actions by the Board of Directors,
committees or individual members of the Board that materially impede
Xxxxx'x ability to take actions to increase value for all shareholders
of the Company, (v) the failure of the Company to provide Xxxxx with
the number of paid vacation days to which he would otherwise be
entitled in accordance with the vacation policy of the Company, or (vi)
any action by the Company that adversely affects in a material way
Xxxxx'x participation in or materially reduces Xxxxx'x benefits under
any of such of the Company's employee benefit or compensation plans;
provided, however, that in all cases, in order to terminate his
employment with the Company For Good Reason, Xxxxx must notify the
Company in writing that Good Reason exists within 60 days of his
knowledge of the event or events constituting Good Reason. The Company
shall thereafter have 30 days within which to cure Xxxxx'x otherwise
Good Reason (the "Cure Period"). Unless Xxxxx'x Good Reason is cured
during the Cure Period, his termination For Good Reason shall become
effective on the first business day following the conclusion of the
Cure Period.
"For Cause" shall mean the involuntary termination of Xxxxx'x
employment with the Company on account of his (i) willful and continued
failure to perform his regular duties for the Company, (ii) commission
of an act of fraud relating to and adversely affecting the Company, or
(iii) conviction of a felony in connection with his employment with the
Company.
"Change of Control" shall mean the first to occur of any of
the events described in clauses (i) through (iii) below, following the
first day of the Agreement Term:
(i) When any Person becomes, through an acquisition, the
beneficial owner of shares of the Company having at least 50% of the
total number of votes that may be cast for the election of directors of
the Company (the "Voting Shares"); provided, however, that the
following acquisitions shall not constitute a Change of Control:
(A) if a Person owns less than 50% of the voting
power of the Company and that Person's ownership increases above 50%
solely by virtue of an acquisition of stock by the Company, then no
Change of Control shall have occurred, unless and until that Person
subsequently acquires one or more additional shares representing voting
power of the Company; or
(B) any acquisition by a Person who as of the first
day of the Agreement Term owned at least 33% of the Voting Shares.
(ii)(A) Notwithstanding the foregoing, a Change of Control
will occur when the shareholders of the Company approve any of the
following (each, a "Transaction"):
(I) any reorganization, merger, consolidation or
other business combination of the Company;
(II) any sale of 50% or more of the market value of
the Company's assets (for this purpose, said 50% amount shall be deemed
to be $107.6 million); or
5
(III) a complete liquidation or dissolution of the
Company.
(B) Notwithstanding clause (ii)(A) above, shareholder approval
of either of the following types of Transactions will not give rise to
a Change of Control:
(I) a Transaction involving only the Company and one
or more of its subsidiaries; or
(II) a Transaction immediately following which the
shareholders of the Company immediately prior to the Transaction
continue to have a majority of the voting power in the resulting
entity.
(iii) When, within any 24 month period, persons who were
directors of the Company (each, a "Director") immediately before the
beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death or disability) to constitute at least a
majority of the Board of Directors or the board of directors of any
successor to the Company. For purposes of this clause (iii), any
Director who was not a Director as of the first day of the Agreement
Term shall be deemed to be an Incumbent Director if such Director was
elected to the Board of Directors by, or on the recommendation of, or
with the approval of, at least a majority of the members of the Board
of Directors or the Nominating Committee who, at the time of the vote,
qualified as Incumbent Directors either actually or by prior operation
of this clause (iii), and any persons (and their successors from time
to time) who are designated by a holder of 33% or more of the Voting
Shares to stand for election and serve as Directors in lieu of other
such designees serving as Directors on the first day of the Agreement
Term shall be considered Incumbent Directors. Notwithstanding the
foregoing, any director elected to the Board of Directors to avoid or
settle a threatened or actual proxy contest shall not, under any
circumstances, be deemed to be an Incumbent Director.
6. Termination. The following provisions shall relate to the
termination of this Agreement:
(a) The Agreement, the Agreement Term, the term for
services of Xxxxx and the engagement of Meridian and
Xxxxx hereunder will terminate upon the first to
occur of the following: (i) the tenth day after
written notice by the Company to Meridian and Xxxxx
with respect to any material breach by Meridian or
Xxxxx of the terms of this Agreement or Willful
Misconduct (as defined below) committed by Meridian
or Xxxxx; (ii) the tenth day after written notice by
Meridian and Xxxxx to the Company that the Company is
in material breach of this Agreement; (iii) the
expiration of the Agreement Term; (iv) the death or
permanent disability of Xxxxx; (v) the first day
after the acquisition of the Company (whether by
merger or the acquisition of all of its outstanding
capital stock) or the tenth day after the sale of 50%
or more of the market value of the Company's assets
(for this purpose, said 50% amount shall be deemed to
be $107.6 million); or (vi) the day the Company
terminates the engagement of Meridian and Xxxxx when
there
6
has been no Willful Misconduct or material breach of
the Agreement by either Meridian or Xxxxx.
(b) The parties agree that Meridian and Xxxxx will have
been unable to pursue alternative, profitable
opportunities in order to take on this engagement,
that Meridian and Xxxxx would suffer substantial
financial damage if either party were to exercise its
rights of termination hereunder, and that the amount
of damages to Meridian and Xxxxx would be difficult,
if not impossible, to calculate accurately.
Accordingly, the parties agree that if pursuant to
this paragraph 6, Meridian, Xxxxx or the Company
shall at any time cause this Agreement to terminate
or the Agreement shall otherwise terminate, then the
Company shall pay Meridian an amount as set forth
below. In the event of the termination of this
Agreement as provided in paragraph 6(a), Meridian
shall receive hereunder the Base Fee and the Flat Fee
through the end of the month in which the date of
termination has occurred, plus a termination payment
as follows:
(i) If the termination is pursuant to
paragraph 6(a)(i) or 6(a)(iv)
above, no amount shall be due and
owing to Meridian;
(ii) If the termination is pursuant to
paragraph 6(a)(iii) above, Meridian
shall be entitled to receive a lump
sum payment equal to $450,000 in
severance pay and at least $300,000
in target or maximum bonus pursuant
to the Company's 2002 Management
Incentive Plan, as described in
paragraph 4(b); or
(iii) If the termination is pursuant to
paragraph 6(a)(ii) or 6(a)(vi),
Meridian shall be entitled to
receive a lump sum payment equal to
(A) the aggregate amount of Base
Fees and Flat Fees to which it
would have otherwise been entitled
through the end of the Agreement
Term plus (B) $600,000 in severance
pay and at least $300,000 in target
or maximum bonus pursuant to the
Company's 2001 or 2002 Management
Incentive Plan, as applicable
(based upon the termination date
and the terms and conditions of the
applicable Management Incentive
Plan), as described in paragraph
4(b). If the termination is
pursuant to paragraph 6(a)(v) and
the amount realized in the
transaction described therein is
less than $0.50 per Share (or the
equivalent of $0.50 per Share), and
if and only if the Change of
Control Plan shall not then be in
effect, Meridian shall be entitled
to receive a lump sum payment equal
to the aggregate amount of Base
Fees and Flat Fees to which it
would have otherwise been entitled
through the end of the Agreement
Term. If the termination is
pursuant to paragraph 6(a)(v) and
the amount realized in the
transaction described therein
7
equals or exceeds $0.50 per Share
(or the equivalent of $0.50 per
Share), and if and only if the
Change of Control Plan shall not
then be in effect, Meridian shall
be entitled to receive a lump sum
payment equal to the greater of the
aggregate amount of Base Fees and
Flat Fees to which it would have
otherwise been entitled through the
end of the Agreement Term or the
sum of $1,000,000. If the
termination is pursuant to
paragraph 6(a)(v) and the Change of
Control Plan is then in effect, no
amount shall be payable hereunder
pursuant to either of the
immediately preceding two
sentences, and Xxxxx shall be
entitled to receive his benefit
under the Change of Control Plan
plus the other amounts described in
paragraph 4(g).
(c) The parties agree that the amounts established
hereunder are liquidated damages reasonable under the
terms and circumstances of this Agreement (but
excluding amounts due under paragraph 8 which shall
continue to survive the termination of this
Agreement), the payment of which shall fully satisfy
and discharge any obligation of the Company to pay
(i) any further compensation under paragraph 4 and
(ii) any compensation for lost opportunity costs
incurred by Meridian or Xxxxx as a result of either
party entering into this Agreement.
(d) In addition, upon termination of this Agreement for
any reason, the Company shall reimburse Meridian in
accordance with paragraph 4(d) for all reasonable
reimbursable expenses incurred by Meridian prior to
the time of termination.
(e) Any amounts payable to Meridian pursuant to this
paragraph 6 shall be paid in a lump sum within five
business days after the termination date of this
Agreement; provided, however, that, if the party
receiving a notice pursuant to paragraph 6(a)(i) or
6(a)(ii) notifies the other party that a dispute
exists concerning the termination, then, for purposes
of paragraphs 5 and 6, the deemed date of termination
of this Agreement shall be the date on which the
dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment,
order or decree of an arbitrator or court of
competent jurisdiction (which, in either case, is not
appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been
perfected); provided further that the date of
termination of this Agreement shall be extended by a
notice of dispute only if such notice is given in
good faith and the party giving such notice pursues
the resolution of such dispute with reasonable
diligence. To the extent permitted by applicable law,
any such dispute and any other controversy arising
under or in connection with this Agreement, except
(at the Company's election) a dispute or controversy
under paragraph 9, shall be settled exclusively by
binding arbitration in New York, New York, in
accordance with the Employment Dispute Resolution
Rules then in effect
8
with the American Arbitration Association. Judgment
may be entered on the arbitrator's award in any court
having jurisdiction.
7. Insurance. The Company shall maintain in force during the
term of this Agreement, directors' and officers' liability insurance
("D&O Insurance") with limits not less than five million dollars
($5,000,000) on terms and conditions currently provided for under the
Company's existing insurance policy, and shall use reasonable efforts
to name Xxxxx as an insured thereunder. A copy of the policy shall be
furnished to Xxxxx for his information annually.
8. Indemnity. If Meridian, Xxxxx or any member, officer or
employee of, or consultant, contractor or subcontractor to, Meridian
who serves as a consultant to the Company ("Indemnitee") is threatened
with or made a party to, or called as a witness or deposed or
subpoenaed in, any action, suit or other legal, administrative or
governmental proceeding or other legal process by reason that
Indemnitee is or was deemed a consultant, officer, employee or other
agent of the Company or any of its affiliates, the Company shall
defend, indemnify and hold Indemnitee harmless to the maximum extent
allowed by applicable law and the Company's Certificate of
Incorporation and By-Laws against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, disbursements
and expenses, including counsel fees reasonably incurred by Indemnitee
in connection therewith, to the extent the same are not paid under the
D&O Insurance ("Indemnified Liability" or "Indemnified Liabilities");
provided however, that Indemnitee shall not be entitled to
indemnification hereunder to the extent any such liability, obligation,
loss, damage, penalty, action, judgment, suit, claim, disbursement or
expense results from the gross negligence, willful misconduct or
criminal conviction ("Willful Misconduct") of Indemnitee as determined
by a court of competent jurisdiction. Indemnitee represents and
warrants that it or he has not received notice of any claim which might
constitute an Indemnified Liability hereunder. The Company represents
that it has not received any notice of any claim against Indemnitee
that would constitute an Indemnified Liability hereunder. Payments
under this indemnity in respect of indemnified settlements or judgments
shall be paid at the time of final settlement or final judgment (from
which no appeal may be taken), or, in respect of counsel fees or costs
of defense, which shall be limited to one counsel for all Indemnitees,
shall be paid at the time such fees or costs are incurred.
With the prior written consent of the Company, which shall not
be unreasonably withheld, Indemnitee shall have the right to pay or
compromise and adjust all Indemnified Liabilities not manifestly
without merit. The Company shall have the right to pay or compromise
without Indemnitee's consent Indemnified Liabilities other than those
which arise from or are related to any criminal action, suit or
proceeding. Notwithstanding anything to the contrary contained in the
preceding sentence, Indemnitee's consent shall be required for any
settlement which contains a stipulation to, or admission or
acknowledgement of, any liability or wrongdoing on the part of
Indemnitee.
This paragraph 8 shall survive the termination of this
Agreement.
9
9. Confidentiality. Meridian and Xxxxx shall at all times both
during its and his engagement hereunder and after termination thereof
regard and preserve as confidential all trade secrets and other
confidential information pertaining to the business of the Company that
have been or may be obtained by Meridian or Xxxxx by reason of the
performance of the terms of this Agreement. Meridian and Xxxxx agree
that all documents, reports, manuals, drawings, designs, tools,
equipment, plans, proposals, marketing and sales plans, customer lists,
or materials made by the Company or coming into Meridian's or Xxxxx'x
possession by reason of its or his performance under this Agreement,
are the property of the Company and shall not be used by Meridian or
Xxxxx in any way prohibited by this Agreement. Except as expressly
provided herein, during the Agreement Term and after termination
thereof, Meridian and/or Xxxxx shall not deliver, reproduce, publish or
in any way allow, after due care, information describing any trade
secrets or other confidential documents or things to be delivered or
used by any third party without specific direction or written consent
of the Company or in response to lawful process. Immediately upon
termination of this Agreement, Meridian and Xxxxx shall promptly
deliver to the Company all documents, tools, equipment, drawings,
blueprints, manuals, material and significant or confidential letters
and notes, reports, price lists, customer lists and copies thereof, and
all other materials relating to the Company's business and which are in
the possession of or under the control of Meridian or Xxxxx.
Confidential information as defined above shall exclude information or
materials that become generally available to the public other than
through disclosure by Meridian, Xxxxx or any employee of Meridian in
violation of this Agreement.
This paragraph 9 shall survive the termination of the
Agreement.
10. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the internal laws of the state of New
Jersey.
11. Modification. This Agreement may only be modified by
mutual agreement.
12. Assignment. This Agreement is a personal service contract
and may not be assigned by either party.
13. Notices. All notices required or permitted by this
Agreement shall be in writing and shall be personally delivered or
faxed to the parties at their addresses set forth below or to such
different addresses as such parties shall direct by notice sent in
accordance with this paragraph.
If to Xxxxxx X. Xxxxx or Meridian Ventures, LLC:
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Tel.: 000-000-0000
Fax: 000-000-0000
10
with copies to:
Xxxxxx X. Xxxxxxxxx, Esq.
Rosenfeld, Wolff, Xxxxxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
If to the Company:
Corporate Counsel
Hanover Direct, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
and
Chief Administrative Officer
Hanover Direct, Inc.
000 Xxxxx Xxxx, Xxxxxxxx 00
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
with copies to:
Xxxxx Xxxxxx, Esq.
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: 000-000-0000
Fax.: 000-000-0000
14. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
15. Attorneys' Fees. Xxxxx shall be entitled to reimbursement
for reasonable attorneys' fees and disbursements incurred in connection
with the review of, and advice with respect to the execution or
extension of, or administration of, this Agreement; provided, however,
that the aggregate amount of such reimbursement shall not exceed
$25,000. If any legal action or proceeding or arbitration proceeding is
brought either for the enforcement of this Agreement or because of an
alleged dispute, breach, default, or material misrepresentation in
connection with any of the provisions of the Agreement, the
11
successful or prevailing party shall be entitled, in addition to any
other relief to which it may be entitled, to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding
including fees and costs incurred on appeal and in collecting any
judgment, and the arbitrator or court shall so provide in its judgment.
16. Consent to Jurisdiction. Subject to their agreement to
binding arbitration in paragraph 6(e), the Company, Meridian and Xxxxx
each hereby irrevocably consent to the jurisdiction of the courts of
the State of New Jersey for all purposes in connection with any legal
action or proceeding which arises out of or relates to this Agreement
and agree that any legal action or proceeding instituted under this
Agreement shall be brought only in such courts and that such courts
shall have jurisdiction as provided above, except that the Company
shall be entitled to enforce its rights under paragraph 9 in any court
of competent jurisdiction.
17. Successors and/or Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to
include the successors and/or assigns and/or personal representatives
of such party, and this Agreement shall inure to the benefit of and
shall be binding on the parties hereto and the successors and/or
assigns and/or personal representatives of each such party.
18. Entire Agreement. This Agreement (together with those
agreements listed on Exhibit 1 hereto) sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein
and supersedes all prior agreements (including but not limited to the
Prior Services Agreement), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written,
by any officer, employee or representative of any party hereto, other
than the indemnification obligations in paragraph 8 of the Prior
Services Agreement and the obligations contained in the agreements
listed on Exhibit 1 hereto.
12
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
HANOVER DIRECT, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
And Chief Financial Officer
MERIDIAN VENTURES, LLC
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, as an individual
13
EXHIBIT 1
WRITTEN AGREEMENTS BETWEEN THE COMPANY AND XXXXX
RE: COMPENSATION AND BENEFITS
Hanover Direct, Inc. Key Executive Eighteen Month Compensation Continuation Plan
effective as of April 25, 2001, as amended
Transaction Bonus in the event of a Change of Control as set forth in a letter
agreement between the Company and Xxxxx dated May 14, 2001
2001 Management Incentive Plan
14
EXHIBIT 2
2001 MANAGEMENT INCENTIVE PLAN MAXIMUM BONUS GOAL
15% per dollar of 2001 EBITDA in excess of $12.4 million (before deducting
extraordinary legal and advisory fees related to one-time transactions during
the period) limited to a maximum bonus of $300,000 (in addition to the $300,000
target bonus described in Section 4(b) hereof).
15
