EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 1st day
of May, 1995, by and between SEAMAN FURNITURE COMPANY, INC., a Delaware
corporation (the "Company"), and MR. PETER MCGEOUGH, an individual residing at
20 Forrest Drive, Lloyd Neck, New York 11743 (the "Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Employee currently serves as the Chief Administrative and
Financial Officer of the Company pursuant to the provisions of an employment
agreement dated as of October 14, 1992 between the Company and the Employee (the
"Prior Employment Agreement"), and the Company desires to retain the continued
services of the Employee;
WHEREAS, the parties wish to amend and restate the Prior Employment
Agreement to provide the Employee with compensation and other benefits on the
terms and conditions set forth in this Agreement;
WHEREAS, the Employee is willing to accept such continued employment
and perform services for the Company on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Employee hereby
agree as follows:
ARTICLE I
EMPLOYMENT
----------
1.1 Term. The Company hereby employs the Employee as its Chief
----
Administrative and Financial Officer, and the Employee hereby agrees to serve
the Company in such capacity, for a three-year term commencing as of May 1,
1995, and ending on April 30, 1998, subject to automatic renewal following the
initial term for consecutive terms of one year each commencing on the day after
the expiration of the then current term, unless either party elects to terminate
by giving written notice to the other at least ninety (90) days prior to the
expiration of the then current term (the "Termination Date"), unless sooner
terminated pursuant to the provisions of this Agreement (the "Term of
Employment"); provided, however, that any termination of employment by the
-------- -------
Employee (other than for death, Permanent Disability or Good Reason (as such
terms are hereinafter defined)) may only be made upon forty-five (45) days prior
written notice to the Company and any termination of employment by the Employee
for Good Reason may only be made upon ten (10) days prior written notice to the
Company.
1.2 Duties. The Employee shall be employed on a full-time basis and
shall devote all his business time and attention to the performance of services,
duties and responsibilities in connection with his employment as the Chief
Administrative and Financial Officer of the Company. The Employee shall perform
such duties and exercise such powers commensurate with his position as the Chief
Administrative and Financial Officer of the Company, subject to the direction of
the Board of Directors of the Company (the "Board") or its designees and subject
to such restrictions as such Board or its designees may reasonably from time to
time impose. The Employee shall serve as a member of the Board of the Company,
and as an officer or director of any subsidiary or affiliate of the Company if
elected to such positions by the stockholders or board of directors of such
subsidiary or affiliate.
The Employee shall at all times during the Term of Employment
discharge all such duties and responsibilities conscientiously, in good faith
and to the best of his ability, giving to the Company the full benefit of his
knowledge, expertise, skill and judgment. The Employee shall not, without the
prior written consent of the Board, render services of a business, professional
or commercial nature for compensation to any other entity or person other than
the Company nor engage or participate in any trade, business or occupation
whatsoever other than as authorized by the Board in connection with the
performance of his duties hereunder to the Company. (Notwithstanding the
foregoing, nothing herein shall preclude the Employee from owning and leasing a
second home.) Nothing in this Agreement shall preclude the Employee from
participating in charitable, educational, religious and community affairs and
organizations, and similar types of activities, from managing personal
investments made by him in publicly traded equity securities (provided that no
such investment in any class of securities may exceed 5% of the outstanding
securities of such class, without the prior written approval of the Board) or
from serving, subject to the prior written approval of the Board, as a member of
boards of directors or as a trustee of any other corporation, association or
entity, so long as, in the reasonable determination of such Board, such
activities do not interfere with his duties and responsibilities hereunder and
the Board has given its prior written approval thereof.
1.3 Compensation. (a) As compensation for the Employee's services
------------
hereunder, the Company shall pay to the Employee an annual salary of $235,000
(the "Salary"), payable in accordance with the ordinary payroll practices of the
Company. In addition, the Employee acknowledges receipt of a cash bonus of
$275,000 representing the Employee's bonus for the fiscal year ending April 30,
1995.
(b) On each May 1 commencing with May 1, 1996, the Employee's
Salary shall be increased by an amount determined by multiplying $235,000 by a
fraction, the numerator of which is the Consumer Price Index for All Urban
Consumers -- (1982 - 84 = 100) for N.Y. - Northern N.J. - Long Island. NY - NJ -
CT, as published by the Bureau of Labor Statistics of the United States
Department of Labor (the "CPI") for the preceding April, and the
denominator of which is the CPI for April 1995. Once increased, such increased
amount shall constitute the Employee's Salary, subject to any increase pursuant
to Section 1.3(c).
(c) Prior to April 30, 1996, and prior to each April 30
thereafter, the Board shall review the Salary and benefits payable to the
Employee, or for which the Employee is eligible hereunder and, in their
discretion, after consideration of the Employee's performance, the profitability
and financial position of the Company and such other factors as they deem
appropriate, the Board may by a majority vote agree to increase the Salary of
the Employee and/or to pay to the Employee a bonus in respect of the prior
fiscal year of the Company (a "Bonus") as may be deemed appropriate in their
absolute sole discretion and as provided in this Agreement. If the Employee's
Salary is increased, such increased amount shall constitute the Employee's
Salary. Nothing, herein, however, shall be deemed to create an obligation of the
Company to increase the Salary of the Employee pursuant to this Section 1.3(c)
or to pay a Bonus to the Employee at any time other than as provided in Section
1.3(d). Any increase in Salary greater than that contemplated by Section 1.3(b)
or any payment of any Bonus other than as provided in Section 1.3(d) shall be
totally discretionary with the Board.
(d) (i) The Employee shall receive a minimum Bonus for the fiscal
year ending April 30, 1996 (the "1996 Minimum Bonus") calculated pursuant to the
matrix (the "1996 Matrix") set
forth on Exhibit A to this Agreement. The assumptions set forth on Exhibit A are
for illustrative purposes only and are not binding on the Board. The amount of
the 1996 Minimum Bonus shall be calculated by multiplying the relevant
percentage from the 1996 Matrix (based on the Company's actual financial results
for such fiscal year) by the Salary of the Employee. The percentage amounts set
forth in the 1996 Matrix relate solely to the fiscal year ending April 30, 1996
and are the only guaranteed portions of the Bonus. Any Bonus amounts in excess
of the 1996 Minimum Bonus, if any, will be determined by the Board in its sole
discretion, notwithstanding the financial performance of the Company.
(ii) The Employee shall be eligible for a minimum Bonus for each
completed fiscal year of his employment hereunder. During the term hereof and
prior to April 30 of each year, the Board will consult with the Employee in
developing a matrix for the following fiscal year, which matrix will ultimately
be established by the Board in its sole discretion.
(e) Upon the commencement of his employment hereunder and for so
long as he remains employed hereunder, the Company shall provide the Employee
with the exclusive use of a Company-owned automobile suitable for a senior
executive, which automobile shall be replaced not more frequently than every two
(2) years.
(f) The Company shall provide the Employee during the term of his
employment hereunder with coverage under all employee benefit programs, plans
and practices (commensurate with his position in the Company and to the extent
permitted under any employee benefit plan) including the Company's 401(k)
savings plan but excluding any bonus, profit-sharing or similar programs, plans
or practices (but not excluding any qualified pension plan the contributions to
which are not based on profits) in accordance with the terms thereof, which the
Company makes available to its senior executives. The Company shall either
provide the Employee with supplemental medical insurance which shall cover the
cost of any co-payment obligations and/or deductibles with respect to any
medical insurance provided to the Employee by the Company or shall reimburse the
Employee for any such co-payment obligations and/or deductibles. If the Company
maintains a dental insurance policy for its employees generally, the Company
shall either provide the Employee with supplemental dental insurance which shall
cover the cost of any co-payment obligations and/or deductibles with respect to
any dental insurance provided to the Employee by the Company or shall reimburse
the Employee for any such co-payment obligations and/or deductibles. If the
Employee is insurable, the Company shall provide the Employee during the term of
his employment hereunder up to $750,000 of term life insurance payable to the
Employee's designated beneficiary at no cost to the Employee, which
insurance will be in addition to any other life insurance provided or made
available to employees of the Company generally. At the termination of
employment, the Company, at the Employee's request and at his sole expense,
shall use its best efforts to assign whatever interest the Company has in such
term life insurance policy to the Employee to enable the Employee to continue to
maintain such policy.
(g) The Employee shall be entitled to twenty (20) business days paid
vacation in each calendar year or any greater number of vacation days provided
generally to other senior executives of the Company. Any vacation not taken by
the Employee shall not be carried over into subsequent years nor shall the
Employee be entitled to receive any payment in lieu of such unused vacation.
The Employee, in addition, shall be entitled to the perquisites and other fringe
benefits made available to senior executives of the Company, commensurate with
his position with the Company.
(h) The Employee is authorized to incur reasonable, ordinary and
necessary expenses in carrying out his duties and responsibilities under this
Agreement, including, without limitation, expenses for travel, business,
entertainment and similar items related to such duties and responsibilities.
The Company will reimburse the Employee for all such expenses upon presentation
by the Employee from time to time of appropriately
itemized and approved (consistent with the Company's policy) accounts of such
expenditures.
(i) The Company shall grant to the Employee an option to purchase up
to 52,500 shares of the common stock of the Company pursuant to the Amended and
Restated 1992 Stock Option Plan, vesting in equal amounts on each of May 1, 1996
at an exercise price of $24.00 per share, May 1, 1997 at an exercise price of
$29.00 per share and May 1, 1998 at an exercise price of $35.00 per share, in
each case on the terms and conditions set forth in such Plan and in the stock
option agreement to be executed by the Company and the Employee with respect
thereto.
ARTICLE II
TERMINATION OF EMPLOYMENT
-------------------------
2.1 Termination Not for Cause or for Good Reason. (a) The Company may
--------------------------------------------
terminate the Employee's employment at any time for any reason. If the
Employee's employment is terminated by the Company other than (i) for Cause (as
defined in Section 2.4 hereof) or (ii) as a result of the Employee's death or
Permanent Disability (as defined in Section 2.2 hereof), or if the Employee
terminates his employment for Good Reason (as defined in Section 2.1(b) hereof)
prior to the Termination Date, the Employee shall receive such payments under
the Company's applicable plans or programs, including but not limited to those
referred to in Section 1.3(f) hereof, to which he is entitled pursuant to the
terms of such plans or programs. In addition,
the Employee shall be entitled to continue to receive his then current Salary
for a period of two years following the date of termination. Furthermore, the
Employee will be eligible to elect to continue his medical care coverage in
accordance with the requirements of Section 4980B of the Internal Revenue Code
of 1986, as amended ("COBRA").
(b) For the purposes of this Agreement, "Good Reason" shall mean any
of the following (without the Employee's express prior written consent) which
the Company fails to cure within ten (10) days:
(i) Any material breach by the Company of any provision of this
Agreement;
(ii) Any material diminution by the Company of the Employee's
duties or responsibilities, except in connection with the termination
of the Employee's employment for Cause, as a result of Permanent
Disability, as a result of the Employee's death or by the Employee
other than for Good Reason; or
(iii) Any change in control (a "Change in Control"). As used
herein a Change in Control shall be deemed to have occurred if (x) at
any time representatives of Sass Lamle Rubin, M.J. Whitman, L.P. T.
Rowe Price Group, and any of their affiliates, or any one or more of
them, shall not constitute, or have the right to constitute, at least
two members of the Board or (y) any person or "group" (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934 and
Rule 13d-3 promulgated thereunder) becomes a beneficial owner of more
than 50% of the voting stock of the Company.
2.2 Permanent Disability. If the Employee becomes totally and
--------------------
permanently disabled (as defined in the Company's
Long-Term Disability Benefits Plan applicable to senior executive officers as in
effect on the date hereof or, if no such plan exists, permanently disabled shall
mean that by reason of a physical or mental disability or infirmity which has
continued for more than 120 consecutive days or for shorter periods which have
aggregated more than 120 days in any period of 180 consecutive days, the
Employee has been unable to perform the duties contemplated by this Agreement
("Permanent Disability")), then the Board of the Company, in its discretion, or
the Employee may terminate the Employee's employment on written notice thereof,
and the Employee shall receive or commence receiving, as soon as practicable:
(i) amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company maintains
during the term hereof;
(ii) the amount of Salary earned but not yet paid (the "Salary
Payment"); and
(iii) such payments under applicable plans or programs, including
but not limited to those referred to in Section 1.3(f) hereof, to which
he is entitled pursuant to the terms of such plans or programs.
2.3 Death. In the event of the Employee's death during the term of
-----
his employment hereunder, the Employee's estate or designated beneficiaries
shall receive or commence receiving, as soon as practicable:
(i) any death benefits provided under the employee benefit
programs, plans and practices
referred to in Section 1.3(f) hereof, in accordance with their terms;
(ii) the Salary Payment; and
(iii) such payments under applicable plans or programs, including
but not limited to those referred to in Section 1.3(f) hereof, to which
the Employee's estate or designated beneficiaries are entitled pursuant
to the terms of such plans or programs.
2.4 Discharge for Cause; Voluntary Termination by the Employee. The
----------------------------------------------------------
Company shall have the right to terminate the employment of the Employee for
Cause. In the event that the Employee's employment is terminated by the Company
for Cause (as hereinafter defined) or by the Employee other than for Good Reason
or other than as a result of the Employee's Permanent Disability or death, prior
to the Termination Date, the Employee shall only be entitled to receive the
Salary Payment and such payments under plans or programs, including but not
limited to those referred to in Section 1.3(f) hereof, to which the Employee is
entitled pursuant to the terms of such plans or programs. After the termination
of the Employee's employment under this Section 2.4, the obligations of the
Company under this Agreement to make any further payments, or provide any
benefits specified herein, to the Employee other than those referred to in the
preceding sentence shall thereupon cease and terminate. Notwithstanding the
foregoing, if the Employee is terminated for Cause pursuant to Section 2.4(a),
(e)(ii) or (f) at any time within one year following the date (the "Date") that
representatives of any person or "group" (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934 and Rule 13d-3 promulgated
thereunder) (other than those listed in Section 2.1(b)(iii)(x)) (a "Significant
Shareholder"), shall constitute at any time four or more members of the Board
and provided representatives of such Significant Shareholder still constitute
four or more directors on the Board at the time of such termination, the
Employee shall be entitled to receive such amounts and other benefits payable
under Section 2.1(a) for a period commencing with the date of such termination
through the first anniversary of the Date as though such termination had not
been for Cause. As used herein, the term "Cause" shall be limited to (a) gross
negligence or wilful misconduct by the Employee in the performance of his
duties; (b) dishonesty, fraud, embezzlement or misappropriation (other than an
arms's-length dispute relating to the erroneous reporting of an immaterial
amount as an expense), by the Employee relating to the Company or any of its
funds, properties, opportunities or other assets; (c) continuing refusal by the
Employee to perform his duties hereunder or any lawful direction of the Board of
the Company as required under Section 1.2, which is not cured within ten (10)
days after written notice of any such refusal to perform such duties or
direction was given to the Employee; (d) any material breach of the provisions
of Article III of this Agreement by the Employee or any other material breach of
this Agreement by the
Employee which is not cured by the Employee within ten (10) days after written
notice; (e) the indictment or conviction of the Employee for commission of (i)
any felony or (ii) any misdemeanor involving moral turpitude; provided, however,
if the Employee is terminated for Cause pursuant to this Section 2.4(e) and the
indictment is dismissed or the Employee is not found guilty of any such felony
or misdemeanor, the Employee shall be entitled to receive such amounts and other
benefits payable under Section 2.1(a) as though the termination of employment
had not been a termination for Cause; and (f) acting in any manner or making any
statements which a majority of the Board of the Company reasonably determines to
be materially detrimental or materially damaging to the reputation, operations,
prospects or business relations of the Company.
2.5 Termination After a Change in Control. In the event the Employee
--------------------------------------
has not exercised his right to terminate this Agreement pursuant to Section
2.1(b)(iii) and the Employee is terminated for Cause pursuant to Section 2.4(a),
(e)(ii) or (f) within one year following such Change in Control, the Employee
shall be entitled to receive such amounts and other benefits payable under
Section 2.1(a) for a period commencing with the date of such termination through
the first anniversary of the date of such Change in Control as though the
termination of employment had not been a termination for Cause.
2.6 Liquidated Damages. The parties agree that any amounts payable to
------------------
the Employee under this Agreement following his termination of employment shall
constitute liquidated damages. The parties agree that the damages payable to
the Employee in the event of such termination would be difficult to estimate
accurately, the amounts payable bear a reasonable relationship to the amount of
damages anticipated by the parties as of the date hereof and such amounts are
not a penalty. The parties agree that the Employee shall not be obligated to
mitigate damages by seeking other employment and any earnings from subsequent
employment shall not reduce the amounts payable hereunder.
ARTICLE III
CONFIDENTIAL INFORMATION; NON-COMPETITION
-----------------------------------------
3.1 Nondisclosure of Confidential Information;
-----------------------------------------
Non-Competition. (a) The Employee shall not, without the prior written consent
- - ----------------
of the Board of the Company, use, divulge, disclose or make accessible to any
other person, firm, partnership, corporation or other entity any Confidential
Information (as hereinafter defined) pertaining to the business of the Company
or any of its affiliates or subsidiaries, except (i) while employed by the
Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
purported or apparent jurisdiction to order the Employee to divulge, disclose or
make accessible such information. For purposes of this Section 3.1(a),
"Confidential Information" shall mean non-public information concerning the
Company's financial data, strategic business plans, product development (or
other proprietary product data), customer lists, marketing plans, processes,
inventions, devices and other non-public, proprietary and confidential
information of the Company, its affiliates, subsidiaries or its customers, that,
in any case, is not otherwise available to the public.
(b) During the period of his employment by the Company and for one
year thereafter in the event (x) the Employee is terminated by the Company other
than for Cause or the Employee terminates his employment for Good Reason and
therefore continues to receive his then current Salary pursuant to Section
2.1(a) or (y) the Employee is terminated by the Company for Cause or the
Employee terminates his employment other than for Good Reason and the Company,
in its sole discretion, elects to pay the Employee his then current Salary for a
period of one year following his termination, the Employee agrees that, without
the prior written consent of the Board of the Company, (A) he will not, directly
or indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee or in any other capacity,
carry on, be engaged in or
have any financial interest in, any business which is in competition with the
business of the Company and/or its affiliates or subsidiaries and (B) he shall
not, on his own behalf or on behalf of any person, firm or company, directly or
indirectly, solicit or offer employment to any person who has been employed by
the Company or any of its affiliates or subsidiaries at any time during the
twelve (12) months immediately preceding such solicitation or offer.
(c) For purposes of this Article III, a business shall be deemed
to be in competition with the Company if it is principally involved in the
purchase, sale or other dealing in any property or the rendering of any service
purchased, sold, dealt in or rendered by the Company and/or its affiliates or
subsidiaries as a material part of the business of the Company and/or its
affiliates or subsidiaries within the same geographic area in which the Company
and/or its affiliates or subsidiaries principally effect such purchases, sales
or dealings or renders such services; provided, however, that neither the
business of furniture manufacturing nor the business of purchasing fabric from
textile mills and selling such fabric to furniture manufacturers will be deemed
to be in competition with the Company. Nothing in this Article III shall be
construed so as to preclude the Employee from investing directly or indirectly
in any publicly traded equity securities, provided that no such investment in
any class of securities may exceed 5% of the
outstanding securities of such class, without the prior written approval of the
Board.
(d) The Employee and the Company agree that this covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to excise or modify such provision or provisions of this covenant as to the
court shall appear not reasonable and to enforce the remainder of the covenant
as so amended. The Employee agrees that any breach of the covenants contained
in this Article III would irreparably injure the Company. Accordingly, the
Employee agrees that the Company may, in addition to pursuing any other remedies
it may have in law or in equity, obtain an injunction against the Employee from
any court having jurisdiction over the matter restraining any further violation
of this Agreement by the Employee.
ARTICLE IV
MISCELLANEOUS
-------------
4.1 Parties Benefitted; Assignment. This Agreement shall become
------------------------------
effective as of the date hereof and, from and after that time, shall extend to
and be binding upon, and inure to the benefit of, the Employee, his heirs and
his personal representative or representatives, and the Company and its
successors and assigns. Neither this Agreement nor any rights or obligations
hereunder may be assigned by the Employee.
4.2 Notices. Any and all notices, demands, requests or other
-------
communications required or permitted hereunder to be served on, given to or
delivered to any party to this Agreement shall be in writing and shall be deemed
to have been duly given when delivered in person or when dispatched by telegram
or electronic facsimile transfer (confirmed in writing by regular mail
simultaneously dispatched), or, if sent by certified mail return receipt
requested, on the second day after the day of mailing, to the parties at their
respective addresses set forth below:
If to Employee:
Mr. Peter McGeough
20 Forrest Drive
Lloyd Neck, NY 11743
with a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, NY 10036
Attention: Richard R. Reilly, Esq.
If to the Company:
Seaman Furniture Company, Inc.
300 Crossways Park Drive
Woodbury, NY 11797
Attention: General Counsel
with a copy to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: John J. Hyland, Esq.
4.3 Severability. Each section and subsection of this Agreement
------------
constitutes a separate and distinct provision hereof. It is the intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applicable in each
jurisdiction in which enforcement is sought. Accordingly, if any provision of
this Agreement shall be adjudicated to be invalid, ineffective or unenforceable,
the remaining provisions shall not be affected thereby. The invalid,
ineffective or unenforceable provision shall, without further action by the
parties, be automatically amended to effect the original purpose and intent of
the invalid, ineffective or unenforceable provision; provided, however, that
-------- -------
such amendment shall apply only with respect to the operation of such provision
in the particular jurisdiction with respect to which such adjudication is made.
4.4 Amendment. No amendment, supplement, modification, waiver or
---------
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof, nor
shall such waiver constitute a continuing waiver.
4.5 Legal Fees. In the event an action is brought by the Employee to
----------
enforce his rights hereunder and a final (non-appealable) judgment is entered
against the Company, the Company shall pay to the Employee the reasonable legal
fees and
expenses incurred by the Employee in connection with such action, provided the
Employee furnishes to the Company satisfactory evidence of such legal fees and
expenses. In any other event, each party shall bear the costs of any legal fees
and other fees and expenses which may be incurred in respect of enforcing its
respective rights under this Agreement.
4.6 Survivorship. The respective rights and obligations of the
------------
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 4.6 are in addition to the survivorship provisions of
any other section of this Agreement.
4.7 Indemnification. The Company agrees that if the Employee 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 its affiliates or is or was serving at the request of the Company or
its affiliates as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, whether or
not the basis of such Proceeding is the Employee's alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the
Employee shall be indemnified and held harmless by the Company to the fullest
extent permitted or authorized by the
Company's certificate of incorporation or bylaws or, if greater, by the laws of
the State of Delaware, against all cost, expense, liability and loss (including
attorneys' fees) judgments, fines, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Employee in connection therewith, and
such indemnification shall continue as to the Employee even if he has ceased to
be a director, member, employee or agent of the Company or its affiliates or
other entity and shall inure to the benefit of the Employee's heirs, executors
and administrators. The Company shall advance to the Employee all reasonable
costs and expenses incurred by him in connection with a Proceeding within ten
(10) days after receipt by the Company of a written request for such advance.
Such request shall include an undertaking by the Employee 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 indemnification rights provided
by this Section 4.7 shall not be construed to limit any other rights to
indemnification that Employee may have under the Company's certificate of
incorporation, by-laws or pursuant to an indemnification agreement between the
Company and Employee. The Company agrees to maintain a directors' and officers'
liability insurance policy covering the Employee to the extent that the Company
provides such coverage for its other executive officers or its directors.
4.8 Beneficiaries; References. The Employee shall be entitled to
-------------------------
select (and change, to the extent permitted under any applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following the Employee's death, and may change such election, in
either case by giving the Company written notice thereof. In the event of the
Employee's death or a judicial determination of his incompetence, reference in
this Agreement to the Employee shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
4.9 Third Parties. Nothing expressed or implied in this Agreement is
-------------
intended, or shall be construed, to confer upon or give any person or entity
other than the Company and the Employee any rights or remedies under, or by
reason of, this Agreement.
4.10 Currency. Unless stipulated otherwise herein, all references in
--------
this Agreement to "dollars," "money," "payments," or other similar financial or
monetary terms are references to the currency of the United States of America.
4.11 Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding between the parties hereto and supersedes in all respects any
prior or other agreement or understanding between the Company and the Employee
including the Prior Employment Agreement.
4.12 Withholding. The Company shall be entitled to withhold from
-----------
payment any amount of withholding required by law.
4.13 Governing Law. This Agreement and the legal relations among the
-------------
parties hereto shall be governed by and construed in accordance with the
substantive laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
4.14 Headings. The headings of the Articles and Sections of this
--------
Agreement have been inserted solely for convenience of reference and shall in no
way restrict or modify any of the terms or provisions hereof.
4.15 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered by its duly authorized officer, and the Employee had
duly executed and delivered this Agreement, as of the date first written above.
SEAMAN FURNITURE COMPANY, INC.
By:
---------------------------
Name:
Title:
-------------------------------
PETER MCGEOUGH