SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 21, 1994
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(June 06, 1994)
AMES DEPARTMENT STORES, INC.
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(Exact Name of Registrant As Specified In Its Charter)
DELAWARE
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(State Or Other Jurisdiction Of Incorporation)
1-5380 04-2269444
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(Commission File Number) (IRS Employer Identification No.)
2418 Main Street; Rocky Hill, Connecticut 06067-0801
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(Address Of Principal Executive Offices) (Zip Code)
(203) 257-2000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name Or Former Address, If Changed Since Last Report)
Exhibit Index on Page 3
Page 1 of 19 (Including Exhibit)
ITEM 5: OTHER EVENTS
On June 6, 1994, Ames Department Stores, Inc. (the "Company") entered
into an employment agreement with Joseph Ettore to retain his
services as the Company's President and Chief Executive Officer.
That agreement, as amended, calls for his services to commence on
June 9, 1994. A copy of the employment agreement and the amendment
thereto dated June 9, 1994 is attached as Exhibit 10 and is
incorporated by reference herein. In addition, at its meeting on
June 15, 1994, the Company's Board of Directors elected Mr. Ettore as
a Director effective July 1, 1994.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit: 10 Employment Agreement dated June 6, 1994 and
Amendment thereto dated June 9, 1994 between
Ames Department Stores, Inc. and Joseph Ettore.
Page 2 of 19
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT PAGE NO.
----------- ------- --------
10 Employment Agreement dated June 6, 1994 5
and Amendment thereto dated June 9, 1994
between Ames Department Stores, Inc. and
Joseph Ettore.
Page 3 of 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMES DEPARTMENT STORES, INC.
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Registrant
Dated: June 21, 1994 By: /S/ WILLIAM C. NAJDECKI
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William C. Najdecki
Senior Vice President,
Chief Accounting Officer
Page 4 of 19
Exhibit 10
EMPLOYMENT AGREEMENT
Agreement, dated as of June 6, 1994, between AMES DEPARTMENT STORES,
INC., a Delaware corporation (the "Company"), and JOSEPH ETTORE, residing at
15 Michael Lane, Scotch Plains, New Jersey 07076 (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the business of operating
self-service retail discount department stores (the "Business"); and
WHEREAS, the Company desires to retain the services of the
Executive in the capacities of Chief Executive Officer and President of the
Company, and the Executive desires to provide such services in such capacities
to the Company, on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and obligations hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs the
Executive, and the Executive hereby accepts employment by the Company, in the
capacities and on the terms and subject to the conditions set forth herein,
for the period commencing on July 1, 1994 and ending on June 30, 1997, unless
terminated earlier as provided herein (the "Term of Employment"). The Company
hereby agrees to notify the Executive not later than December 31, 1996,
whether the Company intends to seek to negotiate an extension of the Term of
Employment.
2. DUTIES. During the Term of Employment, the Executive shall
serve as the Company's Chief Executive Officer and President. In addition,
while it is understood that the right to elect directors of the Company is by
law vested in the stockholders of the Company, it is nevertheless
contemplated, subject to such right, that the Executive shall, at all times
during the Term of Employment, be a member of the Board of Directors of the
Company; PROVIDED that the failure of the Executive to be elected a director
or to retain a directorship of the Company shall not constitute a breach of
this Agreement by the Company. As chief executive officer, the Executive shall
be the most senior officer of the Company, with all supervisory authority and
power over the other senior officers of the Company, including principal
responsibility for recommendations to the Board of Directors of the Company
regarding the hiring and termination of other senior officers and with such
other powers, duties and responsibilities with respect to the business of the
Company as are customary to his offices and positions or as the Board of
Directors of the Company may reasonably request consistent therewith.
The Executive shall serve the Company faithfully and to the best
of his ability in such capacities, devoting substantially all of his business
time, attention, knowledge, energy and skills to such employment.
Page 5 of 19
The Executive shall reside during the business week and be based at the
Company's offices in Rocky Hill, Connecticut or in the same geographic region,
but the Executive shall travel as reasonably required in connection with the
performance of his duties hereunder. If elected, the Executive also shall
serve during any part of the Term of Employment as any other officer of the
Company or as an officer or director of any of the Company's subsidiaries
without any additional compensation other than as specified in this Agreement.
3. COMPENSATION AND BENEFITS. As full and complete compensation to
the Executive for his execution and delivery of this Agreement and performance
of the services required hereunder, the Company shall pay, grant or provide the
Executive, and the Executive agrees to accept, the following salary and other
compensation and benefits (all such amounts to be calculated in United States
dollars):
(a) a base salary, payable in accordance with the Company's standard
payroll practices for senior executive officers, of $750,000 per annum ("Base
Salary");
(b) an annual bonus, payable with respect to each full fiscal year of
the Company during the Term of Employment, or pro rata portion thereof, in each
case based upon the performance of the Company for each applicable full fiscal
year of the Company and otherwise in accordance with the Company's Annual
Incentive Compensation Plan, in effect from time to time, but not less than
$75,000 for the fiscal year ending January 28, 1995;
(c) a one-time, non-refundable lump-sum cash payment of $350,000,
which shall be deemed to be earned in full upon the execution and delivery of
this Agreement and which shall be payable in full on the commencement of
employment under Section 1;
(d) an option (the "Option") to acquire up to 200,000 shares (the
"Option Shares") of common stock, par value $.01 per share, of the Company (the
"Common Stock") in accordance with the Company's 1994 Management Stock Option
Plan, subject to approval of such plan by the stockholders of the Company at
its annual meeting to be held on June 15, 1994;
(e) reimbursement to the Executive of $12,000 per year for the cost of
maintaining $500,000 of life insurance, plus additional life insurance
underwritten by the Company's present insurer (or another insurer reasonably
acceptable to the Company and the Executive) in the face amount of $500,000;
PROVIDED that the Executive shall assist the Company in procuring such
insurance by submitting to reasonable medical examinations and by filling out,
executing and delivering such applications and other instruments in writing as
may reasonably be required by any insurer to which the Company may apply;
(f) the right to participate in any savings and stock option plans or
programs and in any medical, dental, disability, retirement, insurance,
savings, vacation, holiday, paid sick leave or other plans as in effect from
time to time for the benefit of the Company's senior executive officers;
(g) the right to participate in any long-term incentive program as in
effect from time to time for the benefit of senior executive officers
implemented by the Company or any of its subsidiaries;
Page 6 of 19
(h) an annual automobile allowance, payable in equal monthly
installments during the Term of Employment, in an amount in accordance with the
policies and procedures of the Company as in effect from time to time for
senior executive officers, but not less than $1,800 per month;
(i) prompt reimbursement for all reasonable business-related expenses
incurred by the Executive, in accordance with the policies and procedures of
the Company as in effect from time to time for senior executive officers;
(j) paid vacation in accordance with the policies and procedures of
the Company as in effect from time to time for senior executive officers; and
(k) a living allowance of $30,000 per year during the Term of
Employment, payable in equal monthly installments of $2,500, plus an additional
payment of $5,000 for the first month of the Term of Employment.
4. TERMINATION.
(a) PERMANENT DISABILITY. During the Term of Employment hereunder,
the Company shall maintain a disability insurance policy which shall pay to the
Executive 60% of his Base Salary during any period of disability up to
Executive's age 65; PROVIDED that the Executive shall assist the Company in
procuring such insurance by submitting to reasonable medical examinations and
by filling out, executing and delivering such applications and other
instruments in writing as may reasonably be required by any insurer to which
the Company may apply; and PROVIDED, FURTHER, that the Executive shall be
insurable at standard rates. In the event of the permanent disability (as
hereinafter defined) of the Executive during the Term of Employment, the
Company shall have the right, upon written notice to the Executive, to
terminate the Executive's employment hereunder, effective upon the giving of
such notice (or such later date as shall be specified in such notice). Upon
such termination, the Company shall have no further obligations hereunder,
except to pay the Executive any amounts or provide the Executive any benefits
to which the Executive may otherwise have been entitled under the Company's
permanent disability insurance referred to above, and the Executive shall
continue to have the obligations provided for in Sections 6 and 7. For
purposes of this paragraph, "permanent disability" means any disability as
defined under the Company's disability insurance policy referred to Section
3(f).
(b) DEATH. In the event of the death of the Executive during the Term
of Employment, this Agreement shall automatically terminate and the Company
shall have no further obligations hereunder, except to pay the Executive's
beneficiary or legal representative any amounts or provide any benefits to
which the Executive may otherwise have been entitled prorated to the date of
death.
(c) CAUSE. The Company shall have the right, upon written notice to
the Executive, to terminate the Executive's employment under this Agreement for
Cause (as hereinafter defined), effective upon the giving of such notice (or
such later date as shall be specified in such notice), and the Company shall
have no further obligations hereunder, except to pay the Executive any amounts
or provide the Executive any benefits to which the Executive may otherwise have
been entitled prorated to the effective date of termination.
Page 7 of 19
For purposes of this Agreement, "Cause" means:
(i) fraud or embezzlement on the part of the Executive or
material breach by the Executive of his obligations under Section 6 or 7;
(ii) conviction of the Executive for any felony;
(iii) a material breach of, or the willful failure or refusal by
the Executive to perform and discharge, his duties, responsibilities or
obligations under this Agreement without Good Reason (as hereinafter defined)
(other than under Sections 6 and 7 hereof, which shall be governed by clause
(i) above, and other than by reason of permanent disability or death) that is
not corrected within 30 days of written notice thereof to the Executive by the
Company, such notice to state with specificity the nature of the breach,
failure or refusal; PROVIDED that if such breach, failure or refusal cannot
reasonably be corrected within 30 days of written notice thereof, correction
shall be commenced by the Executive within such period and may be corrected
within a reasonable period thereafter; or
(iv) any substantiated, willful act by the Executive intended to
result in substantial personal enrichment of the Executive at the expense of
the Company or any of its affiliates or which has a material adverse impact on
the business or reputation of the Company or any of its affiliates.
(d) WITHOUT CAUSE. The Company shall have the right to terminate the
Executive's employment under this Agreement without Cause and upon written
notice, in which case the Executive's employment under this Agreement shall
terminate on the date specified in such notice (except that the Executive shall
continue to have the obligations provided for in Sections 6 and 7(a)) and the
Company shall have no further obligations hereunder, except (i) to pay the
Executive, promptly following such termination, an amount equal to (A) his Base
Salary when it would otherwise be payable and (B) the annual bonus payable to
the Executive under Section 3(b) prorated to the effective date of termination,
(ii) to cause the Option to vest in full as of the date of termination and to
remain exercisable until the end of the option period set forth in the Option,
and (iii) to maintain coverage of the Executive in the Company's medical plan
for a period of one (1) year after the date of termination, as such plan is in
effect during such period for the benefit of the Company's senior executive
officers, in lieu of any other compensation, payment or other benefits to which
the Executive may otherwise be entitled under this Agreement. There shall be
no mitigation for any amounts payable by the Company pursuant to this Section
4(d).
(e) GOOD REASON. The Executive shall have the right to terminate his
employment under this Agreement for Good Reason upon at least three months'
prior written notice thereof to the Company given within 30 days of the first
occurrence of any event constituting Good Reason, in which case the Executive's
employment under this Agreement shall terminate on the date specified in such
notice. In the event of any termination of employment by the Executive for
Good Reason, the Executive shall have no further obligations under this
Agreement other than the obligations provided for in Sections 6 and 7(a). The
failure by the Executive to give such written notice in such 30-day period
shall preclude the Executive from terminating his employment for Good Reason
with respect to such occurrence. In the event of any termination of employment
Page 8 of 19
by the Executive for Good Reason, the Company shall have no further obligations
hereunder, except (i) to pay the Executive, promptly following such
termination, an amount equal to (A) his Base Salary when it would otherwise be
payable and (B) the annual bonus payable to the Executive under Section 3(b)
prorated to the effective date of termination, (ii) to cause the Option to vest
in full as of the date of termination and to remain exercisable until the end
of the option period set forth in the Option, and (iii) to maintain coverage of
the Executive in the Company's medical plan for a period of one (1) year after
the date of termination, as such plan is in effect during such period for the
benefit of the Company's senior executive officers, in lieu of any other
compensation, payment or other benefits to which the Executive may otherwise be
entitled under this Agreement. There shall be no mitigation for any amounts
payable by the Company pursuant to this Section 4(e). It is understood and
agreed that, during the three-month period following the Executive's delivery
of notice of termination for Good Reason to the Company, the Executive shall
cooperate fully with the Company to effect the orderly transfer of the
Executive's duties to another person or persons. Notwithstanding anything to
the contrary contained herein, upon receipt of the Executive's notice of
termination for Good Reason, the Company shall have the right to cause the
Executive's termination to become effective prior to the end of the three-month
period or the date specified in the notice therefor by giving at least two
business days' notice thereof to the Executive; PROVIDED that the Company shall
continue to pay the Executive's Base Salary until the end of the third month
after such notice is given and such amount shall not be offset against any
other amounts payable under this Section 4(e).
For purposes of this Agreement, "Good Reason" means:
(i) the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's positions (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 of this Agreement; or
(ii) the termination of employment of the Executive without
Cause or the occurrence of any of the circumstances constituting Good Reason
under clause (i) of this definition after a Change in Control (as hereinafter
defined).
For purposes of this Agreement, a "Change in Control" means the
occurrence of any one of the following events: (a) any person or other entity
(other than any of the Company's subsidiaries), including any person as defined
in Section 13(d)(3) of the Exchange Act, becoming the beneficial owner, as
defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of more than
fifty percent (50%) of the total combined voting power of all classes of
capital stock of the Company ordinarily entitled to vote for the election of
directors of the Company, (b) the sale of all or substantially all of the
property or assets of the Company (other than a sale to any of the Company's
subsidiaries), (c) the consolidation or merger of the Company with another
corporation (other than with any of the Company's subsidiaries or in which the
Company is the surviving corporation), the consummation of which would result
in the occurrence of an event described in clause (a) above or (d) a change in
the Board of Directors of the Company occurring with the result that the
members of the Board of Directors of the Company on the date hereof (the
Page 9 of 19
"Incumbent Directors") no longer constitute a majority of such Board of
Directors, provided that any person becoming a director whose election or
nomination for election was supported by a majority of the Incumbent Directors
shall be considered an Incumbent Director for purposes hereof.
5. RESIGNATION UPON TERMINATION. Upon the termination of the
Executive's employment hereunder for any reason the Executive agrees that he
shall be deemed to have resigned from all offices and directorships held by him
in the Company or any of its subsidiaries immediately.
6. CONFIDENTIALITY; OWNERSHIP. (a) During the Term of Employment and
thereafter, the Executive shall keep secret and retain in strictest confidence
and not divulge disclose, discuss, copy or otherwise use or suffer to be used
in any manner, except in connection with the Business of the Company and the
businesses of any of its subsidiaries or affiliates, any Protected Information
in any Unauthorized manner or for any Unauthorized purpose (as such terms are
hereinafter defined).
(i) "Protected Information" means trade secrets, confidential or
proprietary information and all supplier and customer lists, market research,
databases, computer programs and software, operating procedures, knowledge of
the organization, products (including prices, costs, sales or content),
machinery, contracts, financial information or measures, business plans,
details of consultant contracts, new personnel acquisition plans, business
acquisition plans, business relationships and other information owned,
developed or possessed by the Company or its subsidiaries or affiliates, except
as required in the course of performing duties hereunder; PROVIDED that
Protected Information shall not include information (a) that is considered by
law, custom or otherwise to be generally known in the industry of the Company;
(b) developed by the Executive individually or jointly with others prior to the
commencement of employment under Section 2; and (c) that becomes generally
known to the public or the trade without violation of this Section 6.
(ii) "Unauthorized" means: (A) in contravention of the policies
or procedures of the Company or any of its subsidiaries or affiliates; (B)
otherwise inconsistent with the measures taken by the Company or any of its
subsidiaries or affiliates to protect their interests in any Protected
Information; (C) in contravention of any lawful instruction or directive,
either written or oral, of an employee of the Company or any of its
subsidiaries or affiliates empowered to issue such instruction or directive; or
(D) in contravention of any duty existing under law or contract.
Notwithstanding anything to the contrary contained in this Section 6, the
Executive may disclose any Protected Information to the extent required by
court order or decree or by the rules and regulations of a governmental agency
or as otherwise required by law; PROVIDED that the Executive shall provide the
Company with prompt notice of such required disclosure in advance thereof so
that the Company may seek an appropriate protective order in respect of such
required disclosure.
(b) The Executive acknowledges that all developments, including,
without limitation, inventions, patentable or otherwise, discoveries,
improvements, patents, trade secrets, designs, reports, computer software, flow
charts and diagrams, procedures, data, documentation, ideas and writings and
applications thereof relating to the Business or planned business of the
Page 10 of 19
Company or any of its subsidiaries or affiliates that, alone or jointly with
others, the Executive may conceive, create, make, develop, reduce to practice
or acquire during the Term of Employment (collectively, the "Developments") are
works made for hire and shall remain the sole and exclusive property of the
Company and the Executive hereby assigns to the Company all of his right, title
and interest in and to all such Developments. The Executive shall promptly and
fully disclose all future material Developments to the Board of Directors of
the Company and, at any time upon request and at the expense of the Company,
shall execute, acknowledge and deliver to the Company all instruments that the
Company shall prepare, give evidence and take all other actions that are
necessary or desirable in the reasonable opinion of the Company to enable the
Company to file and prosecute applications for and to acquire, maintain and
enforce all letters patent, trademark registrations or copyrights covering the
Developments in all countries in which the same are deemed necessary by the
Company. All memoranda, notes, lists, drawings, records, files, computer
tapes, programs, software, source and programming narratives and other
documentation (and all copies thereof) made or compiled by the Executive or
made available to the Executive concerning the Developments or otherwise
concerning the Business or planned business of the Company or any of its
subsidiaries or affiliates shall be the property of the Company or such
subsidiaries or affiliates and shall be delivered to the Company or such
subsidiaries or affiliates promptly upon the expiration or termination of the
Term of Employment.
(c) The provisions of this Section 6 shall, without any limitation as
to time, survive the expiration or termination of the Executive's employment
hereunder, irrespective of the reason for any termination.
7. COVENANT NOT TO COMPETE. Subject to the last sentence of this
Section 7, the Executive agrees that until June 30, 1997 the Executive shall
not, directly or indirectly, without the prior written consent of the Company:
(a) solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of the Company or of any of its subsidiaries or
affiliates to terminate his or her employment with the Company or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than the Company or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party (for purposes of this Section 7(a), the terms "employee," "consultant,"
"agent" and "independent contractor" shall include any persons with such status
at any time during the six months preceding any solicitation in question); or
(b) directly or indirectly engage, or participate, or make any
financial investment in, or become employed by or render consulting, advisory
or other services to or for any of the following business enterprises (or their
respective successors-in-interest, including, without limitation, by change of
name): K-Mart; Wal-Mart; Hills; Rose's; Target; Caldor; Bradlee; and Jamesway;
PROVIDED that nothing in this Section 7(b) shall be construed to preclude the
Executive from making any investments in the securities of any such business
enterprise to the extent that such enterprise's securities are actively traded
on a national securities exchange or in the over-the-counter market in the
United States or on any foreign securities exchange and represent, at the time
of acquisition, not more than 3% of the aggregate voting power of such business
enterprise.
Page 11 of 19
Notwithstanding the foregoing, the Executive shall not be subject to
the terms and provisions of paragraph (b) of this Section 7 in the case of a
termination of employment of the Executive by the Company without Cause or by
the Executive for Good Reason.
8. SPECIFIC PERFORMANCE. The Executive acknowledges that the services
to be rendered by the Executive are of a special, unique and extraordinary
character and, in connection with such services, the Executive will have access
to confidential information vital to the Company's Business and the businesses
of its subsidiaries and affiliates. By reason of this, the Executive consents
and agrees that if the Executive violates any of the provisions of Section 6 or
7 hereof, the Company and its subsidiaries and affiliates would sustain
irreparable injury and that money damages will not provide adequate remedy to
the Company and that the Company shall be entitled to have Section 6 or 7
specifically enforced by any court having equity jurisdiction. Nothing
contained herein shall be construed as prohibiting the Company or any of its
subsidiaries or affiliates from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages from the
Executive.
9. INDEMNIFICATION. To the fullest extent permitted or required by
the laws of the State of Delaware, the Company shall indemnify and hold
harmless the Executive, in accordance with the terms of such laws, if the
Executive is made a party, or threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that the Executive is or
was an officer or director of the Company or any subsidiary or affiliate of the
Company, in which capacity the Executive is or was serving at the Company's
request and in furtherance of the Company's best interests, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, which indemnification shall include the protection
of the applicable indemnification provisions of the Amended and Restated
Certificate of Incorporation and the Amended and Restated By-laws of the
Company from time to time in effect.
10. DEDUCTIONS AND WITHHOLDING; EXPENSES. The Executive agrees that
the Company or its subsidiaries or affiliates, as applicable, shall withhold
from any and all compensation paid to and required to be paid to the Executive
pursuant to this Agreement, all Federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with
applicable statutes or regulations from time to time in effect and all amounts
required to be deducted in respect of the Executive's coverage under applicable
employee benefit plans. For purposes of this Agreement and calculations
hereunder, all such deductions and withholdings shall be deemed to have been
paid to and received by the Executive.
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of
the parties with respect to the Executive's employment and supersedes any other
prior oral or written agreements, arrangements or understandings between the
Executive and the Company. This Agreement may not be changed or terminated
orally but only by an agreement in writing signed by the parties hereto.
Page 12 of 19
12. WAIVER. The waiver by the Company of a breach of any provision of
this Agreement by the Executive shall not operate or be construed as a waiver
of any subsequent breach by him. The waiver by the Executive of a breach of
any provision of this Agreement by the Company shall not operate or be
construed as a waiver of any subsequent breach by the Company.
13. GOVERNING LAW; JURISDICTION.
(a) This Agreement shall be subject to, and governed by, the laws of
the State of New York applicable to contracts made and to be performed therein.
(b) Any action to enforce any of the provisions of this Agreement
shall be brought in a court of the State of New York located in the Borough of
Manhattan of the City of New York or in a Federal court located within the
Southern District of New York. The parties consent to the jurisdiction of such
courts and to the service of process in any manner provided by New York law.
Each party irrevocably waives any objection which it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in
such court and any claim that such suit, action or proceeding brought in such
court has been brought in an inconvenient forum and agrees that service of
process in accordance with the foregoing sentences shall be deemed in every
respect effective and valid personal service of process upon such party.
14. ASSIGNABILITY. The obligations of the Executive may not be
delegated and, except with respect to the designation of beneficiaries in
connection with any of the benefits payable to the Executive hereunder, the
Executive may not, without the Company's written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest therein. Any such attempted delegation or
disposition shall be null and void and without effect. The Company and the
Executive agree that this Agreement and all of the Company's rights and
obligations hereunder may be assigned or transferred by the Company to and
shall be assumed by and binding upon any successor to the Company. The term
"successor" means, with respect to the Company or any of its subsidiaries, any
corporation or other business entity which, by merger, consolidation, purchase
of the assets or otherwise, including after a Change in Control, acquires all
or a material part of the assets of the Company.
15. SEVERABILITY. If any provision of this Agreement or any part
thereof, including, without limitation, Sections 6 and 7, as applied to either
party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or remaining part thereof, which shall be
given full effect without regard to the invalid or unenforceable part thereof,
or the validity or enforceability of this Agreement.
If any court construes any of the provisions of Section 6 or 7, or any
part thereof, to be unreasonable because of the duration of such provision or
the geographic scope thereof, such court may reduce the duration or restrict or
redefine the geographic scope of such provision and enforce such provision as
so reduced, restricted or redefined.
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16. NOTICES. All notices to the Company or the Executive permitted or
required hereunder shall be in writing and shall be delivered personally, by
telecopier or by courier service providing for next-day delivery or sent by
registered or certified mail, return receipt requested, to the following
addresses:
The Company:
Ames Department Stores, Inc.
2418 Main Street
Rocky Hill, Connecticut 06067
Tel: (203) 257-2000
Attn: Chairman of the Board of Directors
with a copy to:
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Attn: Jeffrey J. Weinberg, Esq.
The Executive:
Joseph Ettore
15 Michael Lane
Scotch Plains, New Jersey 07076
with a copy to:
Esanu Katsky Korins & Siger
605 Third Avenue
New York, New York 10158
Tel: (212) 953-6000
Fax: (212) 953-6899
Attn: Roy M. Korins, Esq.
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party. Any such notice
shall be deemed given, if delivered personally, upon receipt; if telecopied,
when telecopied; if sent by courier service providing for next-
day delivery, the next business day following deposit with such courier
service; and if sent by certified or registered mail, 3 days after deposit
(postage prepaid) with the U.S. mail service.
Page 14 of 19
17. NO CONFLICTS. The Executive hereby represents and warrants to the
Company that his execution, delivery and performance of this Agreement and any
other agreement to be delivered pursuant to this Agreement will not (i) require
the consent, approval or action of any other person or (ii) violate, conflict
with or result in the breach of any of the terms of, or constitute (or with
notice or lapse of time or both, constitute) a default under, any agreement,
arrangement or understanding with respect to the Executive's employment to
which the Executive is a party or by which the Executive is bound or subject.
The Executive hereby agrees to indemnify and hold harmless the Company, its
directors, officers, employees, agents, representatives and affiliates (and
such affiliates' directors, officers, employees, agents and representatives)
from and against any and all losses, liabilities or claims (including,
interest, penalties and reasonable attorneys' fees, disbursements and related
charges) based upon or arising out of the Executive's breach of any of the
foregoing representations and warranties.
18. EFFECTIVE DATE. This Agreement shall be effective as of the date
first written above.
19. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
21. EXPENSES. All reasonable attorneys' fees and expenses incurred by
the Executive in connection with the negotiation, execution and delivery of
this Agreement up to $7,000 shall be borne by the Company.
22. ATTORNEYS' FEES. In the event any litigation or controversy
arises out of or in connection with this Agreement between the parties hereto,
the non-prevailing party in such litigation or controversy shall be responsible
for the attorneys' fees, expenses and suit costs of both parties, including
those associated with any applicable or post-judgment collection proceedings.
23. OFFICERS' AND DIRECTORS' INSURANCE. During the Term of
Employment, the Company shall maintain customary directors' and officers'
liability insurance if such insurance is available to the Company at reasonable
costs.
Page 15 of 19
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
AMES DEPARTMENT STORES, INC.
By /S/ PAUL M. BUXBAUM
-------------------------------
Paul M. Buxbaum
Chairman of the Board
of Directors
/S/ JOSEPH ETTORE
------------------------------
Joseph Ettore
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SCHEDULE 3(d)
OPTION TERMS
Expiration Date:June 30, 2000 (the "Expiration Date"), unless terminated
earlier as provided below (the "Option Term").
Exercisability:Subject to the provisions on termination below, the Option shall
be exercisable on a cumulative basis during the Option Term at a rate of
20% per annum, commencing July 1, 1995.
In no event may the Option be exercised for less than one
hundred Option Shares (unless the number being purchased is
the total balance).
Termination:If the Executive's employment is terminated prior to the Expiration
Date, the Option shall, to the extent not theretofore exercised,
terminate and become null and void, except to the extent described
below; PROVIDED that none of the events described below shall extend
the period of exercisability of the Option beyond the Expiration
Date:
(a) if the Executive dies while employed by the Company and its
subsidiaries or during either the thirty (30) day or three
(3) month period, whichever is applicable, specified in
clauses (b), (c) and (d) below, the Option shall be
exercisable for all Option Shares that the Executive is
entitled to purchase at the time of the Executive's death,
at any time up to and including one (1) year after his
death, by the Executive's legatee, distributee, guardian or
legal or personal representative;
(b)if the Executive's employment with the Company and its
subsidiaries is terminated by reason of "permanent
disability" (as defined in the Employment Agreement), the
Option shall be exercisable for all Option Shares that the
Executive is entitled to purchase at the effective date of
termination of employment by reason of permanent
disability, at any time up to and including thirty (30)
days after such effective date;
(c) if the Executive's employment with the Company and its
subsidiaries is terminated by reason of voluntary
retirement after retirement age in accordance with the
Company's practices or by reason of the expiration of
the Employment Agreement, the Option shall be
exercisable for all remaining Option Shares, whether
or not then exercisable for such Option Shares, at any
time up to and including three (3) months after the
effective date of termination of employment;
Page 17 of 19
(d) if the Executive's employment with the Company and its
subsidiaries is terminated (i) by the Company without
Cause (as defined in the Employment Agreement), or
(ii) by the Executive for "Good Reason" (as defined in
the Employment Agreement), the Option shall, to the
extent not theretofore exercised, immediately become
exercisable and shall remain exercisable until
expiration of the Option Term; and
(e) if the Executive's employment with the Company and its
subsidiaries is terminated for any reason other than
as provided in clauses (a), (b), (c) or (d) above, the
Option shall be exercisable for all Option Shares that
the Executive is entitled to purchase at the effective
date of termination of employment, at any time up to
and including thirty (30) days after the effective
date of such termination.
In addition, upon the occurrence of a "Change in Control"
(as defined in the Employment Agreement) during the Option
Term, the Option shall become immediately exercisable as to
all remaining Option Shares, whether or not the Option is
then exercisable for such Option Shares, at any time during
the Option Term to the extent of any then unexercised
portion thereof.
Other
Restrictions:In order to comply with applicable securities laws, the Option
Shares, when issued, will bear appropriate legends giving notice of
applicable restrictions on transfer under such laws.
Non-Transferable:The Option is not transferable, except by will or the laws of
descent and distribution, and may not be pledged or hypothecated in any
manner.
Page 18 of 19
AMENDMENT TO EMPLOYMENT AGREEMENT
By Agreement dated as of June 6, 1994 between Ames Department Stores,
Inc., a Delaware Corporation (the "Company") and Joseph R. Ettore (the
"Executive"), the Company and the Executive entered into an Employment
Agreement. The Company and Executive have further agreed to modify the
Term of Employment, as defined in the Employment Agreement to provide
that the term commence on June 9, 1994.
In witness whereof, the parties have duly executed this Amendment as of
June 9, 1994.
Ames Department Stores, Inc.
by /S/ DAVID H. LISSY
-------------------------
David H. Lissy
Senior Vice President
/S/ JOSEPH R. ETTORE
-------------------------
Joseph R. Ettore
Page 19 of 19