Exhibit 10.1
SERVICES AGREEMENT
This Services Agreement (this "Agreement") is made as of the first day
of August, 2001 by and among: (i) Meridian Ventures, LLC, a Nevada limited
liability company controlled by Thomas C. Shull ("Meridian"), and Thomas C.
Shull ("Shull"), jointly and severally; and (ii) Hanover Direct, Inc. (the
"Company"), a Delaware corporation.
1. Provision of Services. Meridian shall provide for the
benefit of the Company the services of Shull and the services of up to
two additional consultants (the "Consultants") who shall provide
services equivalent to those which would be provided by up to two
full-time consultants. In connection therewith, Shull shall serve as the
President and Chief Executive Officer (the "President/CEO") and as a
member of the Company's Board of Directors (the "Board of Directors"),
its Executive Committee (the "Executive Committee") and its Nominating
Committee (the "Nominating Committee").
2. Responsibilities. The President/CEO shall act and serve
during the term of this Agreement as the President and Chief Executive
Officer of the Company and shall report to the Board of Directors. The
employment responsibilities of the President/CEO will include those
normally held by the president and chief executive officer of a
corporation of a similar size and nature to the Company. The
President/CEO shall devote his full-time efforts (which shall mean an
average of 50 hours per work week, excluding reasonable vacation,
personal, sick time or de minimus non-conflicting time for Meridian) in
connection with his role as President, Chief Executive Officer and
member of the Executive and Nominating Committees. All employees and
officers shall report directly or indirectly to the President/CEO.
3. Term. Subject to paragraph 6, the term of this Agreement
(the "Agreement Term") and the term for services of Shull and the
Consultants shall commence as of August 1, 2001 and shall terminate on
June 30, 2002; provided, however, that, on or prior to May 1, 2002, the
Company may extend the Agreement Term on a day to day basis upon written
notice to Shull provided that thereafter either party may terminate the
Agreement and the Agreement Term with 60 days notice to the other party.
4. Compensation. The following compensation shall be
payable pursuant to this Agreement:
(a) In consideration for providing the services of Shull as
President/CEO and the services of the Consultants,
during the Agreement Term, Meridian shall receive, in
addition to the other consideration provided in this
Agreement, compensation at the rate of $75,000 per month
for the services of Shull and up to an additional
$60,000 per month for the aggregate services of the
Consultants payable in advance during the first week of
each month (the "Base Fee").
(b) The compensation payable to Meridian under this
Agreement is in consideration for the services of Shull
and services of the Consultants. To
the extent permitted by applicable law, and except as
otherwise provided herein, the Company shall not be
obligated to provide Shull or any Consultant (and
Meridian, Shull and Meridian on behalf of each other
Meridian employee serving hereunder as a Consultant
specifically decline) any employee benefits (for
example, health, 401K, pension, or other benefits
provided by the Company to its employees, etc.) under
this Agreement; provided, however, that the Company has
extended the benefits of its Key Executive Eighteen
Month Compensation Continuation Plan effective as of
April 25, 2001, as amended (the "Change of Control
Plan"), and its transaction bonus program (each as
referred to in Exhibit 1) to Shull. Notwithstanding the
foregoing, the Company will allow Shull during the
Agreement Term to avail himself of any Company employee
discount offered to other employees generally. In
addition, the Company has guaranteed to Shull a target
bonus for fiscal 2001 pursuant to the Company's 2001
Management Incentive Plan equal to $300,000 which shall
be payable in one lump sum on or about April 1, 2002 (or
on the date of closing of any transaction which
constitutes a Change of Control (as hereinafter
defined), if earlier) so long as Shull is providing
services to the Company hereunder on December 29, 2001
(or on the date of closing of such a transaction, if
earlier). Shull shall be eligible to receive a maximum
bonus for fiscal 2001 pursuant to the Company's 2001
Management Incentive Plan equal to up to $600,000
(including the target bonus described in the previous
sentence) which shall be payable as set forth in the
previous sentence if he achieves the maximum goals set
for him by the Board of Directors (as set forth on
Exhibit 2 hereto).
(c) In addition to the payments required by paragraph 4(a),
during the Agreement Term the Company shall pay Meridian
a flat fee of up to $21,000 per month, which shall
represent 20% of the comparable compensation in
paragraph 4(a) for Shull and 10% of the comparable
compensation in paragraph (4)(a) for the Consultants and
is deemed to cover Meridian over-head (including legal
and accounting), health care costs, payroll costs, and
other expenses (the "Flat Fee"). If, notwithstanding
paragraph 4(b), applicable law requires the Company to
provide Shull or any Consultants with any employee
benefits (other than the Company employee discount given
Shull), the value of such benefits shall be offset
against the Flat Fee.
(d) The Company shall reimburse Meridian for the reasonable
out-of-pocket expenses of the President/CEO and any
Consultants (such as travel, meals, communications and
lodging) which are incurred during the Agreement Term on
behalf of the Company on appropriate business. Meridian
shall submit invoices and documentation for such
reimbursable expenses on a monthly basis, and the
Company shall process payment of the same upon receipt
in accordance with its customary procedures.
(e) The Company shall provide a personal secretary to be
interviewed and selected by Shull to assist Shull in the
performance of his duties as
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President/CEO during the Agreement Term. The secretary
shall be employed by the Company at its cost.
(f) The Company shall promptly reimburse Meridian and Shull
for their reasonable legal fees in the event that either
of them shall consult with their counsel during the
Agreement Term in connection with their fiduciary
responsibilities to the Company under the Agreement,
provided that such fees shall not without the prior
written approval of the Executive Committee (which shall
not be unreasonably withheld) exceed $20,000 (except
that such $20,000 cap shall not limit the fees payable
pursuant to paragraph 8 hereof).
(g) The Consultants shall have the right to accept another
engagement during the Agreement Term, provided such
engagement does not lessen the ability of Meridian and
Shull to perform their services hereunder or conflict
with the obligations of Meridian and Shull hereunder or
present a conflict of interest with respect to the
Company. Neither paragraph 2 nor any of the preceding
subparagraphs of this paragraph 4 will be affected by
this right given to the Consultants.
(h) Upon the closing of any transaction which constitutes a
"Change of Control" (as defined in paragraph 5),
provided that Shull is then employed by the Company, the
Company shall make a lump sum cash payment to Meridian
on the date of such closing of $900,000 pursuant to the
Change of Control Plan, $300,000 pursuant to the
transaction bonus program and at least $300,000 in
target bonus (plus any amount of maximum bonus) payable
pursuant to the Company's 2001 Management Incentive Plan
as described in paragraph 4(b) . The lump sum cash
payment referred to in this paragraph 4(h) shall be in
lieu of any cash payment pursuant to paragraph 6(b)(iii)
as a result of a termination of this Agreement pursuant
to paragraph 6(a)(v) and in lieu of the aggregate amount
of Base Fees and Flat Fees to which Meridian would have
otherwise been entitled through the end of the Agreement
Term.
5. Stock Options. Pursuant to paragraph 5 of the Services
Agreement made as of December 5, 2000 by and among Meridian, Shull and
the Company (the "Prior Services Agreement"), the Company granted Shull
and the Consultants stock options (the "Options") for an aggregate four
million (4,000,000) shares of the common stock of the Company (the
"Shares"). All Shares underlying the Options shall be registered by the
Company utilizing a Registration Statement on Form S-8 (or other similar
form) prior to December 4, 2001. All Options shall terminate upon any
termination of the Agreement pursuant to paragraph 6(a)(i) or 6(a)(iv).
All outstanding Options shall vest and become exercisable upon any
termination of the Agreement pursuant to paragraph 6(a)(ii), 6(a)(v) or
6(a)(vi). Further, and notwithstanding anything to the contrary
contained herein, provided that this Agreement shall then be in effect,
one-half (1/2) of Shull's Options and all of the Consultants' Options
shall vest and become exercisable on December 4, 2001, and Shull's
remaining Options shall vest and become exercisable, provided that this
Agreement shall then be in effect, on June 30, 2002. In addition, and
notwithstanding
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anything to the contrary contained herein, all of the Options shall vest
and become exercisable upon the earliest to occur of (i) Shull's
resignation "For Good Reason" (as defined below), (ii) the Company's
termination of Shull's services hereunder without being "For Cause" (as
defined below), (iii) a "Change of Control" (as defined below), or (iv)
the expiration of the Agreement Term. Options which vest and become
exercisable pursuant to this paragraph 5 shall remain exercisable for a
3-year period (or the date of their earlier exercise). In the event of a
vesting resulting from a termination of the Agreement pursuant to
paragraph 6(a)(v), such vesting shall take place sufficiently in advance
of such termination (but subject to its occurrence) to permit each
optionee to take all steps reasonably necessary to exercise his Options
and to deal with the Shares purchased under the Options so that those
Shares may be treated in the same manner in connection with the
transaction described in paragraph 6(a)(v) as the Shares of other
shareholders.
For purposes of this Agreement, the following terms shall have
the following meanings:
"For Good Reason" shall mean the voluntary termination by Shull
of his employment with the Company on account of any of the following
actions: (i) a substantial and material diminution of Shull's duties or
responsibilities for the Company, (ii) a material and substantial
diminution of Shull's base salary or any long-term incentive opportunity
(each as in effect as of the first day of the Agreement Term), (iii) the
Company's requiring Shull to regularly report to work at a facility that
is more than 30 miles from the facility at which Shull regularly
reported as of the first day of the Agreement Term, (iv) decisions or
actions by the Board of Directors, committees or individual members of
the Board that materially impede Shull's ability to take actions to
increase value for all shareholders of the Company, (v) the failure of
the Company to provide Shull with the number of paid vacation days to
which he would otherwise be entitled in accordance with the vacation
policy of the Company, or (vi) any action by the Company that adversely
affects in a material way Shull's participation in or materially reduces
Shull's benefits under any of such of the Company's employee benefit or
compensation plans; provided, however, that in all cases, in order to
terminate his employment with the Company For Good Reason, Shull must
notify the Company in writing that Good Reason exists within 60 days of
his knowledge of the event or events constituting Good Reason. The
Company shall thereafter have 30 days within which to cure Shull's
otherwise Good Reason (the "Cure Period"). Unless Shull's Good Reason is
cured during the Cure Period, his termination For Good Reason shall
become effective on the first business day following the conclusion of
the Cure Period.
"For Cause" shall mean the involuntary termination of Shull's
employment with the Company on account of his (i) willful and continued
failure to perform his regular duties for the Company, (ii) commission
of an act of fraud relating to and adversely affecting the Company, or
(iii) conviction of a felony in connection with his employment with the
Company.
"Change of Control" shall mean the first to occur of any of the
events described in clauses (i) through (iii) below, following the first
day of the Agreement Term:
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(i) When any Person becomes, through an acquisition, the
beneficial owner of shares of the Company having at least 50% of the
total number of votes that may be cast for the election of directors of
the Company (the "Voting Shares"); provided, however, that the following
acquisitions shall not constitute a Change of Control:
(A) if a Person owns less than 50% of the voting
power of the Company and that Person's ownership increases above 50%
solely by virtue of an acquisition of stock by the Company, then no
Change of Control shall have occurred, unless and until that Person
subsequently acquires one or more additional shares representing voting
power of the Company; or
(B) any acquisition by a Person who as of the first
day of the Agreement Term owned at least 33% of the Voting Shares.
(ii)(A) Notwithstanding the foregoing, a Change of Control will
occur when the shareholders of the Company approve any of the following
(each, a "Transaction"):
(I) any reorganization, merger, consolidation or
other business combination of the Company;
(II) any sale of 50% or more of the market value of
the Company's assets (for this purpose, said 50% amount shall be deemed
to be $107.6 million); or
(III) a complete liquidation or dissolution of the
Company.
(B) Notwithstanding clause (ii)(A) above, shareholder approval
of either of the following types of Transactions will not give rise to a
Change of Control:
(I) a Transaction involving only the Company and one
or more of its subsidiaries; or
(II) a Transaction immediately following which the
shareholders of the Company immediately prior to the Transaction
continue to have a majority of the voting power in the resulting entity.
(iii) When, within any 24 month period, persons who were
directors of the Company (each, a "Director") immediately before the
beginning of such period (the "Incumbent Directors") shall cease (for
any reason other than death or disability) to constitute at least a
majority of the Board of Directors or the board of directors of any
successor to the Company. For purposes of this clause (iii), any
Director who was not a Director as of the first day of the Agreement
Term shall be deemed to be an Incumbent Director if such Director was
elected to the Board of Directors by, or on the recommendation of, or
with the approval of, at least a majority of the members of the Board of
Directors or the Nominating Committee who, at the time of the vote,
qualified as Incumbent Directors either actually or by prior operation
of this clause (iii), and any persons (and their successors from time to
time) who are designated by a holder of 33%
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or more of the Voting Shares to stand for election and serve as
Directors in lieu of other such designees serving as Directors on the
first day of the Agreement Term shall be considered Incumbent Directors.
Notwithstanding the foregoing, any director elected to the Board of
Directors to avoid or settle a threatened or actual proxy contest shall
not, under any circumstances, be deemed to be an Incumbent Director.
6. Termination. The following provisions shall relate to
the termination of this Agreement:
(a) The Agreement, the Agreement Term, the term for services
of Shull and the engagement of Meridian and Shull
hereunder will terminate upon the first to occur of the
following: (i) the tenth day after written notice by the
Company to Meridian and Shull with respect to any
material breach by Meridian or Shull of the terms of
this Agreement or Willful Misconduct (as defined below)
committed by Meridian or Shull; (ii) the tenth day after
written notice by Meridian and Shull to the Company that
the Company is in material breach of this Agreement;
(iii) the expiration of the Agreement Term; (iv) the
death or permanent disability of Shull; (v) the first
day after the acquisition of the Company (whether by
merger or the acquisition of all of its outstanding
capital stock) or the tenth day after the sale of 50% or
more of the market value of the Company's assets (for
this purpose, said 50% amount shall be deemed to be
$107.6 million); or (vi) the day the Company terminates
the engagement of Meridian and Shull when there has been
no Willful Misconduct or material breach of the
Agreement by either Meridian or Shull.
(b) The parties agree that Meridian and Shull will have been
unable to pursue alternative, profitable opportunities
in order to take on this engagement, that Meridian and
Shull would suffer substantial financial damage if
either party were to exercise its rights of termination
hereunder, and that the amount of damages to Meridian
and Shull would be difficult, if not impossible, to
calculate accurately. Accordingly, the parties agree
that if pursuant to this paragraph 6, Meridian, Shull or
the Company shall at any time cause this Agreement to
terminate or the Agreement shall otherwise terminate,
then the Company shall pay Meridian an amount as set
forth below. In the event of the termination of this
Agreement as provided in paragraph 6(a), Meridian shall
receive hereunder the Base Fee and the Flat Fee through
the end of the month in which the date of termination
has occurred, plus a termination payment as follows:
(i) If the termination is pursuant to
paragraph 6(a)(i) or 6(a)(iv) above, no
amount shall be due and owing to
Meridian;
(ii) If the termination is pursuant to
paragraph 6(a)(iii) above, Meridian
shall be entitled to receive a lump sum
payment equal to $600,000 in severance
pay and at least $300,000 in target or
maximum bonus pursuant to the Company's
2001
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Management Incentive Plan as described
in paragraph 4(b); or
(iii) If the termination is pursuant to
paragraph 6(a)(ii) or 6(a)(vi), Meridian
shall be entitled to receive a lump sum
payment equal to (A) the aggregate
amount of Base Fees and Flat Fees to
which it would have otherwise been
entitled through the end of the
Agreement Term plus (B) $600,000 in
severance pay and at least $300,000 in
target or maximum bonus pursuant to the
Company's 2001 Management Incentive Plan
as described in paragraph 4(b). If the
termination is pursuant to paragraph
6(a)(v) and the amount realized in the
transaction described therein is less
than $0.50 per Share (or the equivalent
of $0.50 per Share), and if and only if
the Change of Control Plan shall not
then be in effect, Meridian shall be
entitled to receive a lump sum payment
equal to the aggregate amount of Base
Fees and Flat Fees to which it would
have otherwise been entitled through the
end of the Agreement Term. If the
termination is pursuant to paragraph
6(a)(v) and the amount realized in the
transaction described therein equals or
exceeds $0.50 per Share (or the
equivalent of $0.50 per Share), and if
and only if the Change of Control Plan
shall not then be in effect, Meridian
shall be entitled to receive a lump sum
payment equal to the greater of the
aggregate amount of Base Fees and Flat
Fees to which it would have otherwise
been entitled through the end of the
Agreement Term or the sum of $1,000,000.
If the termination is pursuant to
paragraph 6(a)(v) and the Change of
Control Plan is then in effect, no
amount shall be payable hereunder
pursuant to either of the immediately
preceding two sentences, and Shull shall
be entitled to receive his benefit under
the Change of Control Plan plus the
other amounts described in paragraph
4(h).
(c) The parties agree that the amounts established hereunder
are liquidated damages reasonable under the terms and
circumstances of this Agreement (but excluding amounts
due under paragraph 8 which shall continue to survive
the termination of this Agreement), the payment of which
shall fully satisfy and discharge any obligation of the
Company to pay (i) any further compensation under
paragraph 4 and (ii) any compensation for lost
opportunity costs incurred by Meridian or Shull as a
result of either party entering into this Agreement.
(d) In addition, upon termination of this Agreement for any
reason, the Company shall reimburse Meridian in
accordance with paragraph 4(d) for all reasonable
reimbursable expenses incurred by Meridian prior to the
time of termination.
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(e) Any amounts payable to Meridian pursuant to this
paragraph 6 shall be paid in a lump sum within five
business days after the termination date of this
Agreement; provided, however, that, if the party
receiving a notice pursuant to paragraph 6(a)(i) or
6(a)(ii) notifies the other party that a dispute exists
concerning the termination, then, for purposes of
paragraphs 5 and 6, the deemed date of termination of
this Agreement shall be the date on which the dispute is
finally resolved, either by mutual written agreement of
the parties or by a final judgment, order or decree of
an arbitrator or court of competent jurisdiction (which,
in either case, is not appealable or with respect to
which the time for appeal therefrom has expired and no
appeal has been perfected); provided further that the
date of termination of this Agreement shall be extended
by a notice of dispute only if such notice is given in
good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence. To
the extent permitted by applicable law, any such dispute
and any other controversy arising under or in connection
with this Agreement, except (at the Company's election)
a dispute or controversy under paragraph 9, shall be
settled exclusively by binding arbitration in New York,
New York, in accordance with the Employment Dispute
Resolution Rules then in effect with the American
Arbitration Association. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
7. Insurance. The Company shall maintain in force during
the term of this Agreement, directors' and officers' liability insurance
("D&O Insurance") with limits not less than five million dollars
($5,000,000) on terms and conditions currently provided for under the
Company's existing insurance policy, and shall use reasonable efforts to
name Shull as an insured thereunder. A copy of the policy shall be
furnished to Shull for his information annually.
8. Indemnity. If Meridian, Shull or any member, officer or
employee of, or consultant, contractor or subcontractor to, Meridian who
serves as Consultant to the Company (including, without limitation, John
F. Shull, Paul Jen, Peter Schweinfurth, Edward Lambert or Evan M. Dudik)
("Indemnitee") is threatened with or made a party to, or called as a
witness or deposed or subpoenaed in, any action, suit or other legal,
administrative or governmental proceeding or other legal process by
reason that Indemnitee is or was deemed a consultant, officer, employee
or other agent of the Company or any of its affiliates, the Company
shall defend, indemnify and hold Indemnitee harmless to the maximum
extent allowed by applicable law and the Company's Certificate of
Incorporation and By-Laws against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, disbursements and
expenses, including counsel fees reasonably incurred by Indemnitee in
connection therewith, to the extent the same are not paid under the D&O
Insurance ("Indemnified Liability" or "Indemnified Liabilities");
provided however, that Indemnitee shall not be entitled to
indemnification hereunder to the extent any such liability, obligation,
loss, damage, penalty, action, judgment, suit, claim, disbursement or
expense results from the gross negligence, willful misconduct or
criminal conviction ("Willful Misconduct") of Indemnitee as determined
by a court of competent jurisdiction. Indemnitee represents
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and warrants that it or he has not received notice of any claim which
might constitute an Indemnified Liability hereunder. The Company
represents that it has not received any notice of any claim against
Indemnitee that would constitute an Indemnified Liability hereunder.
Payments under this indemnity in respect of indemnified settlements or
judgments shall be paid at the time of final settlement or final
judgment (from which no appeal may be taken), or, in respect of counsel
fees or costs of defense, which shall be limited to one counsel for all
Indemnitees, shall be paid at the time such fees or costs are incurred.
With the prior written consent of the Company, which shall not
be unreasonably withheld, Indemnitee shall have the right to pay or
compromise and adjust all Indemnified Liabilities not manifestly without
merit. The Company shall have the right to pay or compromise without
Indemnitee's consent Indemnified Liabilities other than those which
arise from or are related to any criminal action, suit or proceeding.
Notwithstanding anything to the contrary contained in the preceding
sentence, Indemnitee's consent shall be required for any settlement
which contains a stipulation to, or admission or acknowledgement of, any
liability or wrongdoing on the part of Indemnitee.
This paragraph 8 shall survive the termination of this
Agreement.
9. Confidentiality. Meridian and Shull shall at all times
both during its and his engagement hereunder and after termination
thereof regard and preserve as confidential all trade secrets and other
confidential information pertaining to the business of the Company that
have been or may be obtained by Meridian or Shull by reason of the
performance of the terms of this Agreement. Meridian and Shull agree
that all documents, reports, manuals, drawings, designs, tools,
equipment, plans, proposals, marketing and sales plans, customer lists,
or materials made by the Company or coming into Meridian's or Shull's
possession by reason of its or his performance under this Agreement, are
the property of the Company and shall not be used by Meridian or Shull
in any way prohibited by this Agreement. Except as expressly provided
herein, during the Agreement Term and after termination thereof,
Meridian and/or Shull shall not deliver, reproduce, publish or in any
way allow, after due care, information describing any trade secrets or
other confidential documents or things to be delivered or used by any
third party without specific direction or written consent of the Company
or in response to lawful process. Immediately upon termination of this
Agreement, Meridian and Shull shall promptly deliver to the Company all
documents, tools, equipment, drawings, blueprints, manuals, material and
significant or confidential letters and notes, reports, price lists,
customer lists and copies thereof, and all other materials relating to
the Company's business and which are in the possession of or under the
control of Meridian or Shull. Confidential information as defined above
shall exclude information or materials that become generally available
to the public other than through disclosure by Meridian, Shull or any
employee of Meridian in violation of this Agreement.
This paragraph 9 shall survive the termination of the Agreement.
10. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the internal laws of the state of New
Jersey.
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11. Modification. This Agreement may only be modified by
mutual agreement.
12. Assignment. This Agreement is a personal service
contract and may not be assigned by either party.
13. Notices. All notices required or permitted by this
Agreement shall be in writing and shall be personally delivered or faxed
to the parties at their addresses set forth below or to such different
addresses as such parties shall direct by notice sent in accordance with
this paragraph.
If to Thomas C. Shull or Meridian Ventures, LLC:
28 Leeward Lane
Riverside, CT 06878
Tel.: 203-637-7659
Fax: 203-637-5576
with copies to:
Morton M. Rosenfeld, Esq.
Rosenfeld, Wolff, Aronson & Klein
2049 Century Park East, Suite 3090
Los Angeles, California 90067
Tel.: 310-556-1221
Fax: 310-556-0401
If to the Company:
Corporate Counsel
Hanover Direct, Inc.
1500 Harbor Boulevard
Weehawken, New Jersey 07087
Tel.: 201-863-7300
Fax: 201-272-3468
with copies to:
Sarah Hewitt, Esq.
Brown Raysman Millstein Felder & Steiner LLP
900 Third Avenue
New York, New York 10022
Tel.: 212-895-2000
Fax.: 212-895-2900
14. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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15. Attorneys' Fees. Shull shall be entitled to
reimbursement for reasonable attorneys' fees and disbursements incurred
in connection with the review of, and advice with respect to the
execution or extension of, or administration of, this Agreement;
provided, however, that the aggregate amount of such reimbursement shall
not exceed $8,000. If any legal action or proceeding or arbitration
proceeding is brought either for the enforcement of this Agreement or
because of an alleged dispute, breach, default, or material
misrepresentation in connection with any of the provisions of the
Agreement, the successful or prevailing party shall be entitled, in
addition to any other relief to which it may be entitled, to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding including fees and costs incurred on appeal and in collecting
any judgment, and the arbitrator or court shall so provide in its
judgment.
16. Consent to Jurisdiction. Subject to their agreement to
binding arbitration in paragraph 6(e), the Company, Meridian and Shull
each hereby irrevocably consent to the jurisdiction of the courts of the
State of New Jersey for all purposes in connection with any legal action
or proceeding which arises out of or relates to this Agreement and agree
that any legal action or proceeding instituted under this Agreement
shall be brought only in such courts and that such courts shall have
jurisdiction as provided above, except that the Company shall be
entitled to enforce its rights under paragraph 9 in any court of
competent jurisdiction.
17. Successors and/or Assigns. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed
to include the successors and/or assigns and/or personal representatives
of such party, and this Agreement shall inure to the benefit of and
shall be binding on the parties hereto and the successors and/or assigns
and/or personal representatives of each such party.
18. Entire Agreement. This Agreement (together with those
agreements listed on Exhibit 1 hereto) sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein
and supersedes all prior agreements (including but not limited to the
Prior Services Agreement), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written,
by any officer, employee or representative of any party hereto, other
than the indemnification obligations in paragraph 8 of the Prior
Services Agreement and the obligations contained in the agreements
listed on Exhibit 1 hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
HANOVER DIRECT, INC.
By: /s/ Brian C. Harriss
----------------------------------
Name: Brian C. Harriss
Title: Executive Vice President
MERIDIAN VENTURES, LLC
By: /s/ Thomas C. Shull
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Thomas C. Shull, President
By: /s/ Thomas C. Shull
----------------------------------
Thomas C. Shull, as an individual
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EXHIBIT 1
WRITTEN AGREEMENTS BETWEEN THE COMPANY AND SHULL
RE: COMPENSATION AND BENEFITS
Hanover Direct, Inc. Key Executive Eighteen Month Compensation Continuation Plan
effective as of April 25, 2001, as amended
Transaction Bonus in the event of a Change of Control as set forth in a letter
agreement between the Company and Shull dated May 14, 2001
2001 Management Incentive Plan
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EXHIBIT 2
2001 MANAGEMENT INCENTIVE PLAN MAXIMUM BONUS GOAL
15% per dollar of 2001 EBITDA in excess of $12.4 million (before deducting
extraordinary legal and advisory fees related to one-time transactions during
the period) limited to a maximum bonus of $300,000.
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