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): April 2,1999
(March 23,1999)
Ames Department Stores, Inc.
(Exact Name of Registrant As Specified In Charter)
Delaware
(State Or Other Jurisdiction Of Incorporation)
1-5380 04-2269444
(Commission File Number) (IRS Employer Identification No.)
2418 Main Street; Rocky Hill, Connecticut 06067-2598
(Address Of Principal Executive Offices) (Zip Code)
(860) 257-2000
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name Or Former Address, If Changed Since Last Report)
Item 5: OTHER EVENTS
Ames Department Stores, Inc. (the "Company") announced
on April 1, 1999 that it had entered into an employment
agreement with Rolando de Aguiar, effective March 23, 1999, to
retain his services as the Company's Executive Vice President
and Chief Financial and Administrative Officer. That agreement
supercedes in its entirety the prior Employment Agreement
dated as of April 1, 1998. A copy of the employment agreement
dated as of March 23, 1999 is attached as Exhibit 10
and is incorporated by reference herein.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit: 10 Employment Agreement dated as of March 23, 1999 between
Ames Department Stores, Inc. and Rolando de Aguiar.
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
10 Employment Agreement dated as of March 23, 1999 between 5
Ames Department Stores, Inc. and Rolando de Aguiar
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.
Registrant
Dated: April 1, 1999 By: /s/ Joseph R. Ettore
--------------------
Joseph R. Ettore
President, Director, and
Chief Executive Officer
Dated: April 1, 1999 By: /s/ Rolando de Aguiar
---------------------
Rolando de Aguiar
Executive Vice President,
Chief Financial and
Administrative Officer
Exhibit 10
EMPLOYMENT AGREEMENT
Agreement, dated as of March 23, 1999, between AMES DEPARTMENT
STORES, INC., a Delaware corporation (the "Company"), and ROLANDO de AGUIAR,
residing at 21 Deanne Lynn Circle, Windsor, Connecticut 06095 (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 Executive Vice President and Chief Financial and
Administrative Officer 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;
WHEREAS, the Company and Executive have heretofore entered
into a certain Employment Agreement, dated as of April 1, 1998 (the "Old
Agreement"), and the parties hereto intend that the Old Agreement will be
superceded by 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 March 23, 1999 and
ending on May 31, 2003, unless terminated earlier as provided herein (the "Term
of Employment"). 2. Duties. During the Term of Employment, the Executive shall
serve as the Company's Executive Vice President and Chief Financial and
Administrative Officer. As such officer, the Executive shall report to the
Company's President and Chief Executive Officer and shall have such powers,
duties and responsibilities with respect to the business of the Company as are
customary to his offices and positions or as the President and Chief Executive
Officer or 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.
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 (i)
$400,000 for the period from March 23, 1999 through and including March 31, 2002
and (ii) $500,000 for the period from April 1, 2002 through and including May
31, 2003 (with respect to each period, the "Base Salary" for such period); (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, up to 50% of Executive's Base
Salary for each such fiscal year; (c) a one-time, lump-sum cash payment of
$75,000, which shall be payable at the end of the Term of Employment, unless,
prior to such date, the Executive terminates his employment other than for Good
Reason or his employment is terminated by the Company for Cause, in which case
no payments will be made pursuant to this paragraph (c); (d) an option (the
"Option") to acquire 75,000 shares (the "Option Shares") of common stock, par
value $.01 per share, of the Company (the "Common Stock"), of which 25% shall be
exercisable on March 31 of each year of the Term of Employment, commencing on
March 31, 2000, at a price per share equal to the closing price on the
NASDAQ-National Market System on the date hereof; (e) 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 generally available for the
benefit of the Company's senior executive officers; (f) the right to participate
in any long-term incentive program as in effect from time to time and generally
available for the benefit of senior executive officers implemented by the
Company or any of its subsidiaries; (g) an annual automobile allowance in an
amount and payable 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
$15,200 per year; (h) 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; (i) three (3) weeks paid vacation per year in accordance with the
policies and procedures of the Company as in effect from time to time for senior
executive officers; and (j) 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 the Executive's base salary then in effect;
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. 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 be 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(e). (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.
For purposes of this Agreement, "Cause" means:
(i) fraud or embezzlement on the part of the Executive or material breach by the
Executive of any of his obligations under this Agreement; (ii) Executive shall
have committed any act of gross negligence in the performance of his duties or
obligations hereunder or any material act of malfeasance, disloyalty, dishonesty
or breach of trust against the Company; (iii) conviction of the Executive for
any felony; (iv) 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 (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 (v) 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, (B)
the annual bonus payable to the Executive under Section 3(b) prorated to the
effective date of termination, and (C) payments provided for in Section 3(c)
hereof, (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 8(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 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 for the balance of the Term of
Employment 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 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. (f) Change in Control. The Executive shall be entitled to
participate in the Company's Key Employee Continuity Plan (or any successor or
replacement plan) and, upon a Change in Control of the Company (as defined
therein), shall be entitled to the greatest of the benefits provided by (x) the
Company's Key Employee Continuity Plan, (y) any such successor or replacement
plan and (z) the benefits provided by this Agreement. 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 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 May 31, 2003 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; Pamida; Target; and Bradlees; 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.
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. 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. 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 of the Company,
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. 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: President
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Attn: Jeffrey J. Weinberg, Esq.
The Executive:
Rolando de Aguiar
21 Deanne Lynn Circle
Windsor, Connecticut 06095
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 delivery; 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. 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. The
Old Agreement is hereby rendered null and void and superceded in its entirety by
the provisions hereof, except for any payment designations which have accrued
thereunder from the date hereof. 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 attorneys' fees
and expenses incurred by the Executive in connection with the negotiation,
execution and delivery of this Agreement shall be borne by the Executive. 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 cost.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
AMES DEPARTMENT STORES, INC.
By /s/ Joseph Ettore
Joseph Ettore
President and Chief Executive
Officer
/s/ Rolando de Aguiar
Rolando de Aguiar
OPTION TERMS
Expiration Date: Ten years from the date of issuance thereof
(the "Expiration Date"), unless terminated earlier as provided
below (the "Option Term").
Exercisability: Subject to the provisions on termination
below, each Option shall be exercisable on a cumulative basis
during the relevant Option Term.
In no event may any 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, each 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 each 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, each 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), each 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, each
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;
(d) if the Executive's employment with the
Company and its subsidiaries is terminated by the
Company without Cause (as defined in the Employment
Agreement), each 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, each 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.
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: Each Option is not transferable, except
by will or the laws of descent and distribution, and may
not be pledged or hypothecated in any manner.