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Exhibit 10.7
LINENS 'N THINGS, INC.
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EMPLOYMENT AGREEMENT FOR XXXXX XXXXXXXXXXX
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LINENS 'N THINGS, INC.
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EMPLOYMENT AGREEMENT FOR XXXXX XXXXXXXXXXX
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1. Definitions.................................................... 1
2. Term of Employment............................................. 2
3. Position, Duties and Responsibilities.......................... 2
4. Base Salary.................................................... 3
5. Annual Incentive Awards........................................ 3
6. Long-Term Stock Incentive Programs............................. 3
7. Employee Benefit Programs...................................... 3
8. Disability..................................................... 4
9. Reimbursement of Business and Other Expenses................... 5
10. Termination of Employment...................................... 5
11 Confidentiality; Cooperation with Regard to Litigation......... 15
12. Non-competition................................................ 16
13. Non-solicitation of Employees.................................. 17
14. Remedies....................................................... 17
15. Resolution of Disputes......................................... 17
16. Indemnification................................................ 17
17. Excise Tax Gross-Up............................................ 18
18. Effect of Agreement on Other Benefits.......................... 20
19. Assignability; Binding Nature.................................. 20
20. Representation................................................. 21
21. Entire Agreement............................................... 21
22. Amendment or Waiver............................................ 21
23. Severability................................................... 21
24. Survivorship................................................... 21
25. Beneficiaries/References....................................... 21
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26. Governing Law/Jurisdiction..................................... 22
27. Notices........................................................ 22
28. Headings....................................................... 23
29. Counterparts................................................... 23
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EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 31st day of October, 1996 by
and between Linens 'n Things, Inc., a Delaware corporation (together with its
successors and assigns, the "Company"), and Xxxxx Xxxxxxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive pursuant to an
agreement embodying the terms of such employment (this "Agreement") and the
Executive desires to enter into this Agreement and to accept such employment,
subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1 . Definitions.
(a) "Approved Early Retirement" shall have the meaning set
forth in Section 10(f) below.
(b) "Base Salary" shall have the meaning set forth in Section
4 below.
(c) "Board" shall have the meaning set forth in Section 3(a)
below.
(d) "Cause" shall have the meaning set forth in Section 10(b)
below.
(e) "Change in Control" shall have the meaning set forth in
Section 10(c) below.
(f) "Committee" shall have the meaning set forth in Section 4
below.
(g) "Confidential Information" shall have the meaning set
forth in Section 11(c) below.
(h) "Constructive Termination Without Cause" shall have the
meaning set forth in Section 10(c) below.
(i) "Effective Date" shall have the meaning set forth in
Section 2(a) below.
(j) "Normal Retirement" shall have the meaning set forth in
Section 10(f) below.
(k) "Original Term of Employment" shall have the meaning set
forth in Section 2(a) below.
(l) "Renewal Term" shall have the meaning set forth in Section
2(a) below.
(m) "Restriction Period" shall have the meaning set forth in
Section 12(b) below.
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(n) "Severance Period" shall have the meaning set forth in
Section 10(c)(ii) below, except as provided otherwise in
Section 10(e) below.
(o) "Subsidiary" shall have the meaning set forth in Section
11(d) below.
(p) "Term of Employment" shall have the meaning set forth in
Section 2(a) below.
(q) "Termination Without Cause" shall have the meaning set
forth in Section 10(c) below.
2. Term of Employment.
(a) The term of the Executive's employment under this Agreement
shall commence on the date on which shares of common stock of the Company are
first sold to the public pursuant to an initial public offering (the "Effective
Date") and end on the fourth anniversary of such date (the "Original Term of
Employment"), unless terminated earlier in accordance herewith. The Original
Term of Employment shall be automatically renewed for successive one-year terms
(the "Renewal Terms") unless at least 180 days prior to the expiration of the
Original Term of Employment or any Renewal Term, either Party notifies the other
Party in writing that he or it is electing to terminate this Agreement at the
expiration of the then current Term of Employment. "Term of Employment" shall
mean the Original Term of Employment and all Renewal Terms.
(b) Notwithstanding anything in this Agreement to the contrary,
at least one year prior to the expiration of the Original Term of Employment,
upon the written request of the Company or the Executive, the Parties shall meet
to discuss this Agreement and may agree in writing to modify any of the terms of
this Agreement.
3. Position, Duties and Responsibilities.
(a) Generally. Executive shall serve as a senior executive of the
Company. Executive shall have and perform such duties, responsibilities, and
authorities as shall be specified by the Company from time to time and as are
customary for a senior executive of a publicly held corporation of the size,
type, and nature of the Company as they may exist from time to time and as are
consistent with such position and status. Executive shall devote substantially
all of his business time and attention (except for periods of vacation or
absence due to illness), and his best efforts, abilities, experience, and talent
to his position and the businesses of the Company.
(b) Other Activities. Anything herein to the contrary
notwithstanding, nothing in this Agreement shall preclude the Executive from (i)
serving on the boards of directors of a reasonable number of other corporations
or the boards of a reasonable number of trade associations and/or charitable
organizations, (ii) engaging in charitable activities and community affairs, and
(iii) managing his personal investments and affairs, provided that such
activities do not materially interfere with the proper performance of his duties
and responsibilities under this Agreement.
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4. Base Salary.
The Executive shall be paid an annualized salary, ("Base Salary")
payable in accordance with the regular payroll practices of the Company, of not
less than $279,000, subject to review for increase at the discretion of the
Compensation Committee (the "Committee") of the Company's Board of Directors
(the "Board").
5. Annual Incentive Awards.
The Executive shall participate in the Company's annual incentive
compensation plan with a target annual incentive award opportunity of no less
than 40% of Base Salary and a maximum annual incentive award opportunity of 80%
of Base Salary. Payment of annual incentive awards shall be made at the same
time that other senior-level executives receive their incentive awards.
6. Long-Term Incentive Programs.
The Executive shall be eligible to participate in the Company's
long-term incentive compensation programs (including stock options and stock
grants).
7. Employee Benefit Programs.
(a) General Benefits. During the Term of Employment, the
Executive shall be entitled to participate in such employee pension and welfare
benefit plans and programs of the Company as are made available to the Company's
senior-level executives or to its employees generally, as such plans or programs
may be in effect from time to time, including, without limitation, health,
medical, dental, long-term disability, travel accident and life insurance plans.
(b) Deferral of Compensation. The Company shall implement
deferral arrangements, reasonably acceptable to Executive and the Company,
permitting Executive to elect to defer receipt, pursuant to written deferral
election terms and forms (the "Deferral Election Forms"), of all or a specified
portion of (i) his annual Base Salary and annual incentive compensation under
Sections 4 and 5, (ii) long term incentive compensation under Section 6 and
(iii) shares acquired upon exercise of options to purchase Company common stock
that are acquired in an exercise in which Executive pays the exercise price by
the surrender of previously acquired shares, to the extent of the net additional
shares otherwise issuable to Executive in such exercise; provided, however, that
such deferrals shall not reduce Executive's total cash compensation in any
calendar year below the sum of (i) the FICA maximum taxable wage base plus (ii)
the amount needed, on an after-tax basis, to enable Executive to pay the 1.45%
medicare tax imposed on his wages in excess of such FICA maximum taxable wage
base.
In accordance with such duly executed Deferral Election Forms,
the Company shall credit to a bookkeeping account (the "Deferred Compensation
Account") maintained for Executive on the respective payment date or dates,
amounts equal to the compensation subject to deferral, such credits to be
denominated in cash if the compensation would have been paid in cash but for the
deferral or in shares if the compensation would have been paid in shares but for
the deferral. An amount of cash equal in value to all cash-denominated amounts
credited to Executive's account and a number of shares of Company common stock
equal to the number of shares credited to Executive's account pursuant to this
Section 7(b) shall be transferred as soon as practicable following such
crediting by the Company to, and shall be held and invested by, an independent
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trustee selected by the Company and reasonably acceptable to Executive (a
"Trustee") pursuant to a "rabbi trust" established by the Company in connection
with such deferral arrangement and as to which the Trustee shall make
investments based on Executive's investment objectives (including possible
investment in publicly traded stocks and bonds, mutual funds, and insurance
vehicles). Thereafter, Executive's deferral accounts will be valued by reference
to the value of the assets of the "rabbi trust". The Company shall pay all costs
of administration or maintenance of the deferral arrangement, without deduction
or reimbursement from the assets of the "rabbi trust."
Except as otherwise provided under Section 10, in the event of
Executive's termination of employment with the Company or as otherwise
determined by the Committee in the event of hardship on the part of Executive,
upon such date(s) or event(s) set forth in the Deferral Election Forms
(including forms filed after deferral but before settlement in which Executive
may elect to further defer settlement), the Company shall promptly pay to
Executive cash equal to the value of the assets then credited to Executive's
deferral accounts, less applicable withholding taxes, and such distribution
shall be deemed to fully settle such accounts; provided, however, that the
Company may instead settle such accounts by directing the Trustee to distribute
Company common stock and/or other assets of the "rabbi trust." The Company and
Executive agree that compensation deferred pursuant to this Section 7(b) shall
be fully vested and nonforfeitable; however, Executive acknowledges that his
rights to the deferred compensation provided for in this Section 7(b) shall be
no greater than those of a general unsecured creditor of the Company, and that
such rights may not be pledged, collateralized, encumbered, hypothecated, or
liable for or subject to any lien, obligation, or liability of Executive, or be
assignable or transferable by Executive, otherwise than by will or the laws of
descent and distribution, provided that Executive may designate one or more
beneficiaries to receive any payment of such amounts in the event of his death.
8. Disability.
(a) During the Term of Employment, as well as during the
Severance Period, the Executive shall be entitled to disability coverage as
described in this Section 8(a). In the event the Executive becomes disabled, as
that term is defined under the Company's Long-Term Disability Plan, the
Executive shall be entitled to receive pursuant to the Company's Long-Term
Disability Plan or otherwise, and in place of his Base Salary, an amount equal
to 60% of his Base Salary, at the annual rate in effect on the commencement date
of his eligibility for the Company's long-term disability benefits
("Commencement Date") for a period beginning on the Commencement Date and ending
with the earlier to occur of (A) the Executive's attainment of age 65 or (B) the
Executive's commencement of retirement benefits from the Company in accordance
with Section 10(f) below. If (i) the Executive ceases to be disabled during the
Term of Employment (as determined in accordance with the terms of the Long-Term
Disability Plan), (ii) his position or another senior executive position is then
vacant and (iii) the Company requests in writing that he resume such position,
he may elect to resume such position by written notice to the Company within 15
days after the Company delivers its request. If he resumes such position, he
shall thereafter be entitled to his Base Salary at the annual rate in effect on
the Commencement Date and, for the year he resumes his position, a pro rata
annual incentive award. If he ceases to be disabled during the Term of
Employment and does not resume his position in accordance with the preceding
sentence, he shall be treated as if he voluntarily terminated his employment
pursuant to Section 10(d) as of the date the Executive ceases to be disabled. If
the Executive is not offered his position or another senior executive position
after he ceases to be disabled during the Term of Employment, he shall be
treated as if his employment was terminated Without Cause pursuant to Section
10(c) as of the date the Executive ceases to be disabled.
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(b) The Executive shall be entitled to a pro rata annual
incentive award for the year in which the Commencement Date occurs based on 40%
of Base Salary paid to him during such year prior to the Commencement Date,
payable in a lump sum not later than 15 days after the Commencement Date. The
Executive shall not be entitled to any annual incentive award with respect to
the period following the Commencement Date. If the Executive recommences his
position in accordance with Section 8(a), he shall be entitled to a pro rata
annual incentive award for the year he resumes such position and shall
thereafter be entitled to annual incentive awards in accordance with Section 5
hereof.
(c) During the period the Executive is receiving disability
benefits pursuant to Section 8(a) above, he shall continue to be treated as an
employee for purposes of all employee benefits and entitlements in which he was
participating on the Commencement Date, including without limitation, the
benefits and entitlements referred to in Sections 6 and 7 above, except that the
Executive shall not be entitled to receive any annual salary increases or any
new long-term incentive plan grants following the Commencement Date.
9. Reimbursement of Business and Other Expenses.
The Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, and the
Company shall promptly reimburse him for all business expenses incurred in
connection therewith, subject to documentation in accordance with the Company's
policy.
10. Termination of Employment.
(a) Termination Due to Death. In the event the Executive's
employment with the Company is terminated due to his death, his estate or his
beneficiaries, as the case may be, shall be entitled to and their sole remedies
under this Agreement shall be:
(i) Base Salary through the date of death, which shall
be paid in a single lump sum not later than 15 days
following the Executive's death;
(ii) pro rata annual incentive award for the year in
which the Executive's death occurs assuming that
the Executive would have received an award equal to
40% of Base Salary for such year, which shall be
payable in a lump sum promptly (but in no event
later than 15 days) after his death;
(iii) elimination of all restrictions on any deferred
stock awards outstanding at the time of his death;
(iv) immediate vesting of all outstanding stock options
and the right to exercise such stock options for a
period of one year following death (or such longer
period as may be provided in stock options granted
to other similarly situated executive officers of
the Company) or for the remainder of the exercise
period, if less;
(v) immediate vesting of all outstanding long-term
incentive awards and a pro rata payment of such
awards based on target performance,
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payable in a cash lump sum promptly (but in no
event later than 15 days) after his death;
(vi) the balance of any incentive awards earned as of
December 31 of the prior year (but not yet paid),
which shall be paid in a single lump sum not later
than 15 days following the Executive's death;
(vii) settlement of all deferred compensation
arrangements in accordance with the Executive's
duly executed Deferral Election Forms; and
(viii) other or additional benefits then due or earned in
accordance with applicable plans and programs of
the Company.
(b) Termination by the Company for Cause.
(i) "Cause" shall mean:
(A) the Executive's willful and material breach
of Sections 11, 12 or 13 of this Agreement;
(B) the Executive is convicted of a felony
involving moral turpitude; or
(C) the Executive engages in conduct that
constitutes willful gross neglect or willful
gross misconduct in carrying out his duties
under this Agreement, resulting, in either
case, in material harm to the financial
condition or reputation of the Company.
For purposes of this Agreement, an act or failure to act on Executive's part
shall be considered "willful" if it was done or omitted to be done by him not in
good faith, and shall not include any act or failure to act resulting from any
incapacity of Executive.
(ii) A termination for Cause shall not take effect
unless the provisions of this paragraph (ii) are
complied with. The Executive shall be given written
notice by the Company of its intention to terminate
him for Cause, such notice (A) to state in detail
the particular act or acts or failure or failures
to act that constitute the grounds on which the
proposed termination for Cause is based and (B) to
be given within 90 days of the Company's learning
of such act or acts or failure or failures to act.
The Executive shall have 20 days after the date
that such written notice has been given to him in
which to cure such conduct, to the extent such cure
is possible. If he fails to cure such conduct, the
Executive shall then be entitled to a hearing
before the Committee of the Board at which the
Executive is entitled to appear. Such hearing shall
be held within 25 days of such notice to the
Executive, provided he requests such hearing within
10 days of the written notice from the Company of
the intention to terminate him for Cause. If,
within five days following such hearing, the
Executive is furnished written notice by the Board
confirming that, in its judgment,
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grounds for Cause on the basis of the original
notice exist, he shall thereupon be terminated for
Cause.
(iii) In the event the Company terminates the Executive's
employment for Cause, he shall be entitled to and
his sole remedies under this Agreement shall be:
(A) Base Salary through the date of the
termination of his employment for Cause,
which shall be paid in a single lump sum not
later than 15 days following the Executive's
termination of employment;
(B) any incentive awards earned as of December
31 of the prior year (but not yet paid),
which shall be paid in a single lump sum not
later than 15 days following the Executive's
termination of employment;
(C) settlement of all deferred compensation
arrangements in accordance with the
Executive's duly executed Deferral Election
Forms; and
(D) other or additional benefits then due or
earned in accordance with applicable plans
or programs of the Company.
(c) Termination Without Cause or Constructive Termination Without
Cause Prior to Change in Control. In the event the Executive's employment with
the Company is terminated without Cause (which termination shall be effective as
of the date specified by the Company in a written notice to the Executive),
other than due to death, or in the event there is a Constructive Termination
Without Cause (as defined below), in either case prior to a Change in Control
(as defined below) the Executive shall be entitled to and his sole remedies
under this Agreement shall be:
(i) Base Salary through the date of termination of the
Executive's employment, which shall be paid in a
single lump sum not later than 15 days following
the Executive's termination of employment;
(ii) Base Salary, at the annualized rate in effect on
the date of termination of the Executive's
employment (or in the event a reduction in Base
Salary is a basis for a Constructive Termination
Without Cause, then the Base Salary in effect
immediately prior to such reduction), for a period
of 12 months (the "Severance Period");
(iii) pro rata annual incentive award for the year in
which termination occurs equal to 40% of Base
Salary (determined in accordance with Section
10(c)(ii) above) for such year, payable in a lump
sum promptly (but in no event later than 15 days)
following termination;
(iv) the balance of any incentive awards earned as of
December 31 of the prior year (but not yet paid),
which shall be paid in a single lump
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sum not later than 15 days following the
Executive's termination of employment;
(v) settlement of all deferred compensation
arrangements in accordance with the Executive's
duly executed Deferral Election Forms;
(vi) continued participation in all medical, health and
life insurance plans at the same benefit level at
which he was participating on the date of the
termination of his employment until the earlier of:
(A) the end of the Severance Period; or
(B) the date, or dates, he receives equivalent
coverage and benefits under the plans and
programs of a subsequent employer (such
coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit,
basis); provided that (1) if the Executive
is precluded from continuing his
participation in any employee benefit plan
or program as provided in this clause (vi)
of this Section 10(c), he shall receive cash
payments equal on an after-tax basis to the
cost to him of obtaining the benefits
provided under the plan or program in which
he is unable to participate for the period
specified in this clause (vi) of this
Section 10(c), (2) such cost shall be deemed
to be the lowest reasonable cost that would
be incurred by the Executive in obtaining
such benefit himself on an individual basis,
and (3) payment of such amounts shall be
made quarterly in advance; and
(vii) other or additional benefits then due or earned in
accordance with applicable plans and programs of
the Company.
"Termination Without Cause" shall mean the Executive's employment
is terminated by the Company for any reason other than Cause (as defined in
Section 10(b)) or due to death.
"Constructive Termination Without Cause" shall mean a termination
of the Executive's employment at his initiative as provided in this Section
10(c) following the occurrence, without the Executive's written consent, of one
or more of the following events (except as a result of a prior termination):
(A) an assignment of any duties to Executive
which are inconsistent with his status as a
senior executive of the Company;
(B) a decrease in annual Base Salary or target
annual incentive award opportunity below 40%
of Base Salary;
(C) any other failure by the Company to perform
any material obligation under, or breach by
the Company of any material
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provision of, this Agreement that is not
cured within 30 days; or
(D) any failure to secure the agreement of any
successor corporation or other entity to the
Company to fully assume the Company's
obligations under this Agreement.
In addition, following a Change in Control, "Constructive Termination Without
Cause" shall also mean a termination of the Executive's employment at his
initiative as provided in this Section 10(c) following the occurrence, without
the Executive's written consent, of a relocation of his principal place of
employment outside a 35-mile radius of his principal place of employment as in
effect immediately prior to such Change in Control.
A "Change in Control" shall be deemed to have occurred if:
(i) any Person (other than the Company, any trustee or
other fiduciary holding securities under any
employee benefit plan of the Company, or any
company owned, directly or indirectly, by the
stockholders of the Company immediately prior to
the occurrence with respect to which the evaluation
is being made in substantially the same proportions
as their ownership of the common stock of the
Company) becomes the Beneficial Owner (except that
a Person shall be deemed to be the Beneficial Owner
of all shares that any such Person has the right to
acquire pursuant to any agreement or arrangement or
upon exercise of conversion rights, warrants or
options or otherwise, without regard to the sixty
day period referred to in Rule 13d-3 under the
Exchange Act), directly or indirectly, of
securities of the Company or any Significant
Subsidiary (as defined below), representing 25% or
more of the combined voting power of the Company's
or such subsidiary's then outstanding securities;
provided, however, that such event shall not
constitute a Change in Control unless or until the
percentage of such securities owned beneficially,
directly or indirectly, by such Person is equal to
or more than all such securities owned
beneficially, directly or indirectly, by Melville
Corporation;
(ii) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board, and any new director (other
than a director designated by a person who has
entered into an agreement with the Company to
effect a transaction described in clause (i),
(iii), or (iv) of this paragraph) whose election by
the Board or nomination for election by the
Company's stockholders was approved by a vote of at
least two- thirds of the directors then still in
office who either were directors at the beginning
of the two-year period or whose election or
nomination for election was previously so approved
but excluding for this purpose any such new
director whose initial assumption of office occurs
as a result of either an actual or threatened
election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened
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solicitation of proxies or consents by or on behalf
of an individual, corporation, partnership, group,
associate or other entity or Person other than the
Board, cease for any reason to constitute at least
a majority of the Board; provided, however, that
such event shall not constitute a Change in Control
unless or until the percentage of voting securities
of the Company owned beneficially, directly or
indirectly, by Melville Corporation is less than
50% of all such outstanding securities;
(iii) the consummation of a merger or consolidation of
the Company or any subsidiary owning directly or
indirectly all or substantially all of the
consolidated assets of the Company (a "Significant
Subsidiary") with any other entity, other than a
merger or consolidation which would result in the
voting securities of the Company or a Significant
Subsidiary outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving or resulting entity)
more than 50% of the combined voting power of the
surviving or resulting entity outstanding
immediately after such merger or consolidation;
(iv) the stockholders of the Company approve a plan or
agreement for the sale or disposition of all or
substantially all of the consolidated assets of the
Company (other than such a sale or disposition
immediately after which such assets will be owned
directly or indirectly by the stockholders of the
Company in substantially the same proportions as
their ownership of the common stock of the Company
immediately prior to such sale or disposition) in
which case the Board shall determine the effective
date of the Change in Control resulting therefrom;
or
(v) any other event occurs which the Board determines,
in its discretion, would materially alter the
structure of the Company or its ownership.
For purposes of this definition:
(A) The term "Beneficial Owner" shall have the
meaning ascribed to such term in Rule 13d-3
under the Exchange Act (including any
successor to such Rule).
(B) The term "Exchange Act" means the Securities
Exchange Act of 1934, as amended from time
to time, or any successor act thereto.
(C) The term "Person" shall have the meaning
ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including "group" as
defined in Section 13(d) thereof.
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(d) Voluntary Termination. In the event of a termination of
employment by the Executive on his own initiative after delivery of 10 business
days advance written notice, other than a termination due to death, a
Constructive Termination Without Cause, or Approved Early Retirement or Normal
Retirement pursuant to Section 10(f) below, the Executive shall have the same
entitlements as provided in Section 10(b)(iii) above for a termination for
Cause, provided that at the Company's election, furnished in writing to the
Executive within 15 days following such notice of termination, the Company shall
in addition pay the Executive 140% of his Base Salary for a period of 12 months
following such termination in exchange for the Executive not engaging in
competition with the Company or any Subsidiary as set forth in Section 12(a)
below. Notwithstanding any implication to the contrary, the Executive shall not
have the right to terminate his employment with the Company during the Term of
Employment except in the event of a Constructive Termination Without Cause,
Approved Early Retirement, or Normal Retirement, and any voluntary termination
of employment during the Term of Employment in violation of this Agreement shall
be considered a material breach; provided, however, if the Company elects to pay
the Executive 140% of his Base Salary in accordance with this Section 10(d), the
Company shall waive any and all claims it may have against the Executive for any
breach of this Agreement relating to his voluntary termination of employment
unless the Executive is found by a court of competent jurisdiction not to be in
compliance with Section 12(a) below; provided further, however, that,
notwithstanding anything contained in the foregoing to the contrary, it is not
the intention of the Company to waive any claims it may have against any third
parties relating to a voluntary termination by the Executive in violation of
this Agreement.
(e) Termination Without Cause; Constructive Termination Without
Cause or Voluntary Termination Following Change in Control. In the event the
Executive's employment with the Company is terminated by the Company without
Cause (which termination shall be effective as of the date specified by the
Company in a written notice to the Executive), other than due to death, or in
the event there is a Constructive Termination Without Cause (as defined above),
in either case within two years following a Change in Control (as defined
above), the Executive shall be entitled to and his sole remedies under this
Agreement shall be:
(i) Base Salary through the date of termination of the
Executive's employment, which shall be paid in a
single lump sum not later than 15 days following
the Executive's termination of employment;
(ii) an amount equal to two times the Executive's Base
Salary, at the annualized rate in effect on the
date of termination of the Executive's employment
(or in the event a reduction in Base Salary is a
basis for a Constructive Termination Without Cause,
then the Base Salary in effect immediately prior to
such reduction), payable in a cash lump sum
promptly (but in no event later than 15 days)
following the Executive's termination of
employment;
(iii) an amount equal to 40% of such Base Salary
(determined in accordance with Section 10(e)(ii)
above) multiplied by two, payable in a cash lump
sum promptly (but in no event later than 15 days)
following the Executive's termination of
employment;
(iv) elimination of all restrictions on any deferred
stock awards outstanding at the time of termination
of employment;
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(v) immediate vesting of all outstanding stock options
and the right to exercise such stock options during
the Severance Period or for the remainder of the
exercise period, if less;
(vi) immediate vesting of all outstanding long-term
incentive awards and a pro rata payment of such
awards based on target performance, payable in a
cash lump sum promptly (but in no event later than
15 days) following the Executive's termination of
employment;
(vii) the balance of any incentive awards earned as of
December 31 of the prior year (but not yet paid),
which shall be paid in a single lump sum not later
than 15 days following the Executive's termination
of employment;
(viii) settlement of all deferred compensation
arrangements in accordance with Executive's duly
executed Deferral Election Forms;
(ix) continued participation in all medical, health and
life insurance plans at the same benefit level at
which he was participating on the date of
termination of his employment until the earlier of:
(A) the end of the Severance Period; or
(B) the date, or dates, he receives equivalent
coverage and benefits under the plans and
programs of a subsequent employer (such
coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit,
basis); provided that (1) if the Executive
is precluded from continuing his
participation in any employee benefit plan
or program as provided in this clause (ix)
of this Section 10(e), he shall receive cash
payments equal on an after-tax basis to the
cost to him of obtaining the benefits
provided under the plan or program in which
he is unable to participate for the period
specified in this clause (ix) of this
Section 10(e), (2) such cost shall be deemed
to be the lowest reasonable cost that would
be incurred by the Executive in obtaining
such benefit himself on an individual basis,
and (3) payment of such amounts shall be
made quarterly in advance; and
(x) other or additional benefits then due or earned in
accordance with applicable plans and programs of
the Company.
For purposes of any termination pursuant to this Section 10(e), the term
"Severance Period" shall mean the period of 24 months following the termination
of the Executive's employment.
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16
(f) Approved Early Retirement or Normal Retirement. Upon the
Executive's Approved Early Retirement or Normal Retirement (each as defined
below), the Executive shall be entitled to and his sole remedies under this
Agreement shall be:
(i) Base Salary through the date of termination of the
Executive's employment, which shall be paid in a
single lump sum not later than 15 days following
the Executive's termination of employment;
(ii) pro rata annual incentive award for the year in
which termination occurs, based on performance
valuation at the end of such year and payable in a
cash lump sum promptly (but in no event later than
15 days) thereafter;
(iii) continued vesting (as if the Executive remained
employed by the Company) of any deferred stock
awards outstanding at the time of his termination
of employment;
(iv) continued vesting of all outstanding stock options
and the right to exercise such stock options for a
period of one year following the later of the date
the options are fully vested or the Executive's
termination of employment (or such longer period as
may be provided in stock options granted to other
similarly situated executive officers of the
Company) or for the remainder of the exercise
period, if less;
(v) continued vesting (as if the Executive remained
employed by the Company) of all outstanding
long-term incentive awards and payment of such
awards based on valuation at the end of the
performance period, payable in a cash lump sum
promptly (but in no event later than 15 days)
thereafter;
(vi) the balance of any incentive awards earned as of
December 31 of the prior year (but not yet paid),
which shall be paid in a single lump sum not later
than 15 days following the Executive's termination
of employment;
(vii) settlement of all deferred compensation
arrangements in accordance with the Executive's
duly executed Deferral Election Forms;
(viii) continued participation in all medical, health and
life insurance plans at the same benefit level at
which he was participating on the date of the
termination of his employment until the earlier of:
(A) the Executive's attainment of age 60; or
(B) the date, or dates, he receives
substantially equivalent coverage and
benefits under the plans and programs of a
subsequent employer (such coverage and
benefits to be determined on a
coverage-by-coverage, or benefit-by-
- 13 -
17
benefit, basis); provided that (1) if the
Executive is precluded from continuing his
participation in any employee benefit plan
or program as provided in this clause (viii)
of this Section 10(f), he shall receive cash
payments equal on an after-tax basis to the
cost to him of obtaining the benefits
provided under the plan or program in which
he is unable to participate for the period
specified in this clause (viii) of this
Section 10(f), (2) such cost shall be deemed
to be the lowest cost that would be incurred
by the Executive in obtaining such benefit
himself on an individual basis, and (3)
payment of such amounts shall be made
quarterly in advance; and
(ix) other or additional benefits then due or earned in
accordance with applicable plans and programs of
the Company.
"Approved Early Retirement" shall mean the Executive's voluntary
termination of employment with the Company at or after attaining age 55 but
prior to attaining age 60, if such termination is approved in advance by the
Committee.
"Normal Retirement" shall mean the Executive's voluntary
termination of employment with the Company at or after attaining age 60.
(g) No Mitigation; No Offset. In the event of any termination of
employment, the Executive shall be under no obligation to seek other employment;
amounts due the Executive under this Agreement shall not be offset by any
remuneration attributable to any subsequent employment that he may obtain.
(h) Nature of Payments. Any amounts due under this Section 10 are
in the nature of severance payments considered to be reasonable by the Company
and are not in the nature of a penalty.
(i) No Further Liability; Release. In the event of the
Executive's termination of employment, payment made and performance by the
Company in accordance with this Section 10 shall operate to fully discharge and
release the Company and its directors, officers, employees, subsidiaries,
affiliates, stockholders, successors, assigns, agents and representatives from
any further obligation or liability with respect to the Executive's rights under
this Agreement. Other than payment and performance under this Section 10, the
Company and its directors, officers, employees, subsidiaries, affiliates,
stockholders, successors, assigns, agents and representatives shall have no
further obligation or liability to the Executive or any other person under this
Agreement in the event of the Executive's termination of employment. The Company
shall have the right to condition the last payment of any severance or other
amounts pursuant to this Section 10 upon the delivery by the Executive to the
Company of a release in the form satisfactory to the Company releasing any and
all claims the Executive may have against the Company and its directors,
officers, employees, subsidiaries, affiliates, stockholders, successors,
assigns, agents and representatives arising out of this Agreement.
- 14 -
18
11. Confidentiality: Cooperation with Regard to Litigation.
(a) During the Term of Employment and thereafter, the Executive
shall not, without the prior written consent of the Company, disclose to anyone
(except in good faith in the ordinary course of business to a person who will be
advised by the Executive to keep such information confidential) or make use of
any Confidential Information except in the performance of his duties hereunder
or when required to do so by legal process, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) that requires him to
divulge, disclose or make accessible such information. In the event that the
Executive is so ordered, he shall give prompt written notice to the Company in
order to allow the Company the opportunity to object to or otherwise resist such
order.
(b) During the Term of Employment and thereafter, Executive shall
not disclose the existence or contents of this Agreement beyond what is
disclosed in the proxy statement or documents filed with the government unless
and to the extent such disclosure is required by law, by a governmental agency,
or in a document required by law to be filed with a governmental agency or in
connection with enforcement of his rights under this Agreement. In the event
that disclosure is so required, the Executive shall give prompt written notice
to the Company in order to allow the Company the opportunity to object to or
otherwise resist such requirement. This restriction shall not apply to such
disclosure by him to members of his immediate family, his tax, legal or
financial advisors, any lender, or tax authorities, or to potential future
employers to the extent necessary, each of whom shall be advised not to disclose
such information.
(c) "Confidential Information" shall mean all information
concerning the business of the Company or any Subsidiary relating to any of
their products, product development, trade secrets, customers, suppliers,
finances, and business plans and strategies. Excluded from the definition of
Confidential Information is information (i) that is or becomes part of the
public domain, other than through the breach of this Agreement by the Executive
or (ii) regarding the Company's business or industry properly acquired by the
Executive in the course of his career as an executive in the Company's industry
and independent of the Executive's employment by the Company or Melville
Corporation. For this purpose, information known or available generally within
the trade or industry of the Company or any Subsidiary shall be deemed to be
known or available to the public.
(d) "Subsidiary" shall mean any corporation controlled directly
or indirectly by the Company.
(e) The Executive agrees to cooperate with the Company, during
the Term of Employment and thereafter (including following the Executive's
termination of employment for any reason), by making himself reasonably
available to testify on behalf of the Company or any Subsidiary in any action,
suit, or proceeding, whether civil, criminal, administrative, or investigative,
and to assist the Company, or any Subsidiary, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board
or its representatives or counsel, or representatives or counsel to the Company,
or any Subsidiary as requested; provided, however that the same does not
materially interfere with his then current professional activities. The Company
agrees to reimburse the Executive, on an after-tax basis, for all expenses
actually incurred in connection with his provision of testimony or assistance.
- 15 -
19
12. Non-competition.
(a) During the Restriction Period (as defined in Section 12(b)
below), the Executive shall not engage in Competition with the Company or any
Subsidiary. "Competition" shall mean engaging in any activity, except as
provided below, for a Competitor of the Company or any Subsidiary, whether as an
employee, consultant, principal, agent, officer, director, partner, shareholder
(except as a less than one percent shareholder of a publicly traded company) or
otherwise. A "Competitor" shall mean (i) Bed Bath & Beyond, Inc., Strouds, Inc.,
Home Express Inc. and Home Place Inc. (and any successor or successors thereto);
(ii) any specialty retailer if 40% or more of its revenues (based on the most
recent quarterly or annual financial statements available) are derived from the
sale of home textiles or housewares; (iii) any corporation, other entity, or
start-up corporation or other entity engaged primarily or organized for the
purpose of engaging primarily in the sale of home textiles or housewares having
a total capitalization (equity and/or long-term debt) in excess of $30,000,000
or revenues (based on the most recent quarterly or annual financial statements
available) in excess of $25,000,000. If the Executive commences employment or
becomes a consultant, principal, agent, officer, director, partner, or
shareholder of any entity that is not a Competitor at the time the Executive
initially becomes employed or becomes a consultant, principal, agent, officer,
director, partner, or shareholder of the entity, future activities of such
entity shall not result in a violation of this provision unless (x) such
activities were contemplated by the Executive at the time the Executive
initially became employed or becomes a consultant, principal, agent, officer,
director, partner, or shareholder of the entity or (y) the Executive commences
directly or indirectly overseeing or managing the activities of an entity which
becomes a Competitor during the Restriction Period, which activities are
competitive with the activities of the Company or Subsidiary. The Executive
shall not be deemed indirectly overseeing or managing the activities of such
Competitor which are competitive with the activities of the Company or
Subsidiary so long as he does not regularly participate in discussions with
regard to the conduct of the competing business.
(b) For the purposes of this Section 12, "Restriction Period"
shall mean the period beginning with the Effective Date and ending with:
(i) in the case of a termination of the Executive's
employment without Cause or a Constructive
Termination Without Cause, the Restriction Period
shall terminate immediately upon the Executive's
termination of employment;
(ii) in the case of a termination of the Executive's
employment for Cause, the first anniversary of such
termination;
(iii) in the case of a voluntary termination of the
Executive's employment pursuant to Section 10(d)
above followed by the Company's election to pay the
Executive (and subject to the payment of) 140% of
his Base Salary, as provided in Section 10(d)
above, the first anniversary of such termination;
(iv) in the case of a voluntary termination of the
Executive's employment pursuant to Section 10(d)
above which is not followed by the Company's
election to pay the Executive such 140% of Base
Salary, the date of such termination; or
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20
(v) in the case of Approved Early Retirement or Normal
Retirement pursuant to Section 10(f) above, the
remainder of the Term of Employment.
13. Non-solicitation of Employees.
During the period beginning with the Effective Date and ending
one year following the termination of the Executive's employment, the Executive
shall not induce employees of the Company or any Subsidiary to terminate their
employment; provided, however, that the foregoing shall not be construed to
prevent the Executive from engaging in generic nontargeted advertising for
employees generally. During such period, the Executive shall not hire, either
directly or through any employee, agent or representative, any employee of the
Company or any Subsidiary or any person who was employed by the Company or any
Subsidiary within 180 days of such hiring.
14. Remedies.
In addition to whatever other rights and remedies the Company may
have at equity or in law, if the Executive breaches any of the provisions
contained in Sections 11, 12 or 13 above, the Company (a) shall have the right
to immediately terminate all payments and benefits due under this Agreement and
(b) shall have the right to seek injunctive relief. The Executive acknowledges
that such a breach of Sections 11,12 or 13 would cause irreparable injury and
that money damages would not provide an adequate remedy for the Company;
provided, however, the foregoing shall not prevent the Executive from contesting
the issuance of any such injunction on the ground that no violation or
threatened violation of Section 11, 12 or 13 has occurred.
15. Resolution of Disputes.
Any controversy or claim arising out of or relating to this
Agreement or any breach or asserted breach hereof or questioning the validity
and binding effect hereof arising under or in connection with this Agreement,
other than seeking injunctive relief under Section 14, shall be resolved by
binding arbitration, to be held at an office closest to the Company's principal
offices in accordance with the rules and procedures of the American Arbitration
Association, except that disputes arising under or in connection with Sections
11, 12 and 13 above shall be submitted to the federal or state courts in the
State of New Jersey. Judgment upon the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof. Pending the resolution of
any arbitration or court proceeding, the Company shall continue payment of all
amounts and benefits due the Executive under this Agreement. All costs and
expenses of any arbitration or court proceeding (including fees and
disbursements of counsel) shall be borne by the respective party incurring such
costs and expenses, but the Company shall reimburse the Executive for such
reasonable costs and expenses in the event he substantially prevails in such
arbitration or court proceeding.
16. Indemnification.
(a) Company Indemnity. The Company agrees that if the Executive
is made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director, officer or
employee of the Company or any Subsidiary or is or was serving at the request of
the Company or any Subsidiary as a director, officer, member, employee or agent
of
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21
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is the Executive's alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Company's Board or, if greater, by
the laws of the State of Delaware against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a
director, member, officer, employee or agent of the Company or other entity and
shall inure to the benefit of the Executive's heirs, executors and
administrators. The Company shall advance to the Executive all reasonable costs
and expenses to be incurred by him in connection with a Proceeding within 20
days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by the Executive to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. The provisions of this Section
16(a) shall not be deemed exclusive of any other rights of indemnification to
which the Executive may be entitled or which may be granted to him, and it shall
be in addition to any rights of indemnification to which he may be entitled
under any policy of insurance.
(b) No Presumption Regarding Standard of Conduct. Neither the
failure of the Company (including its Board, independent legal counsel or
stockholders) to have made a determination prior to the commencement of any
proceeding concerning payment of amounts claimed by the Executive under Section
16(a) above that indemnification of the Executive is proper because he has met
the applicable standard of conduct, nor a determination by the Company
(including its Board, independent legal counsel or stockholders) that the
Executive has not met such applicable standard of conduct, shall create a
presumption that the Executive has not met the applicable standard of conduct.
(c) Liability Insurance. The Company agrees to continue and
maintain a directors and officers' liability insurance policy covering the
Executive to the extent the Company provides such coverage for its other
executive officers.
17. Excise Tax Gross-Up.
If the Executive becomes entitled to one or more payments (with a
"payment" including, without limitation, the vesting of an option or other
non-cash benefit or property), whether pursuant to the terms of this Agreement
or any other plan, arrangement, or agreement with the Company or any affiliated
company (the "Total Payments"), which are or become subject to the tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(or any similar tax that may hereafter be imposed) (the "Excise Tax"), the
Company shall pay to the Executive at the time specified below an additional
amount (the "Gross-up Payment") (which shall include, without limitation,
reimbursement for any penalties and interest that may accrue in respect of such
Excise Tax) such that the net amount retained by the Executive, after reduction
for any Excise Tax (including any penalties or interest thereon) on the Total
Payments and any federal, state and local income or employment tax and Excise
Tax on the Gross-up Payment provided for by this Section 17, but before
reduction for any federal, state, or local income or employment tax on the Total
Payments, shall be equal to the sum of (a) the Total Payments, and (b) an amount
equal to the product of any deductions disallowed for federal, state, or local
income tax purposes because of the inclusion of the Gross-up Payment in the
Executive's
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22
adjusted gross income multiplied by the highest applicable marginal rate of
federal, state, or local income taxation, respectively, for the calendar year in
which the Gross-up Payment is to be made. For purposes of determining whether
any of the Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax:
(i) The Total Payments shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless, and except to the
extent that, in the written opinion of independent
compensation consultants, counsel or auditors of
nationally recognized standing ("Independent Advisors")
selected by the Company and reasonably acceptable to the
Executive, the Total Payments (in whole or in part) do not
constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable
compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the
base amount within the meaning of Section 280G(b)(3) of
the Code or are otherwise not subject to the Excise Tax;
(ii) The amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of the Total Payments or (B) the
total amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying
clause (i) above); and
(iii) The value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Independent Advisors
in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.
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 calendar year in which the
Gross-up Payment is to be made; (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 (determined without regard to limitations on
deductions based upon the amount of the Executive's adjusted gross income); and
(C) to have otherwise allowable deductions for federal, state, and local income
tax purposes at least equal to those disallowed because of the inclusion of the
Gross-up Payment in the Executive's adjusted gross income. In the event that 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 applied 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 (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-up Payment), the Company shall make an additional Gross-up Payment in
respect of such excess
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23
(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 Total 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 the Independent Advisors, of the minimum amount of
such payments and shall pay 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). If more than one Gross-up
Payment is made, the amount of each Gross-up Payment shall be computed so as not
to duplicate any prior Gross-up Payment. 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.
18. Effect of Agreement on Other Benefits.
Except as specifically provided in this Agreement, the existence
of this Agreement shall not be interpreted to preclude, prohibit or restrict the
Executive's participation in any other employee benefit or other plans or
programs in which he currently participates.
19. Assignability: Binding Nature.
This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs (in the case of the
Executive) and permitted assigns. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
rights or obligations may be assigned or transferred in connection with the sale
or transfer of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale or transfer of assets as described in the
preceding sentence, it shall take whatever action it legally can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law, except as provided in Section 25 below.
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20. Representation.
The Company represents and warrants that it is fully authorized
and empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization.
21. Entire Agreement.
This Agreement contains the entire understanding and agreement
between the Parties concerning the subject matter hereof and, as of the
Effective Date, supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the Parties with
respect thereto, including, without limitation any prior change in control
agreement between the Parties or between the Executive and Melville Corporation.
22. Amendment or Waiver.
No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. Except as set forth herein, no delay or omission to
exercise any right, power or remedy accruing to any Party shall impair any such
right, power or remedy or shall be construed to be a waiver of or an
acquiescence to any breach hereof. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or an authorized
officer of the Company, as the case may be.
23. Severability.
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
24. Survivorship.
The respective rights and obligations of the Parties hereunder
shall survive any termination of the Executive's employment to the extent
necessary to the intended preservation of such rights and obligations.
25. Beneficiaries/References.
The Executive shall be entitled, to the extent permitted under
any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
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25
26. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and interpreted
in accordance with the laws of New Jersey without reference to principles of
conflict of laws. Subject to Section 15, the Company and the Executive hereby
consent to the jurisdiction of any or all of the following courts for purposes
of resolving any dispute under this Agreement: (i) the United States District
Court for New Jersey or (ii) any of the courts of the State of New Jersey. The
Company and the Executive further agree that any service of process or notice
requirements in any such proceeding shall be satisfied if the rules of such
court relating thereto have been substantially satisfied. The Company and the
Executive hereby waive, to the fullest extent permitted by applicable law, any
objection which it or he may now or hereafter have to such jurisdiction and any
defense of inconvenient forum.
27. Notices.
Any notice given to a Party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:
If to the Company: Linens 'n Things, Inc.
0 Xxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Secretary
If to the Executive: Xxxxx Xxxxxxxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
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26
28. Headings.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
29. Counterparts.
This Agreement may be executed in two or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
LINENS 'N THINGS, INC.
XXXXX X. XXXXX
By:_______________________________
Name: Xxxxx X. Xxxxx
Title: Vice President, Human Resources
EXECUTIVE
XXXXX XXXXXXXXXXX
__________________________________
Xxxxx Xxxxxxxxxxx
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