Exhibit 10.9
AGREEMENT
THIS AGREEMENT, made as of the latest date set forth above the
signatures of the parties (the "Effective Date"), by MAZEL STORES, INC., an Ohio
corporation, with its principal place of business at 200 Helen Street, South
Plainfield, New Jersey 07080 (the "Company") and JERRY D. SOMMERS, an individual
residing at 8634 Pickerington Road, Pickerington, Ohio 43147-9663 (the
"Executive").
WITNESSETH:
WHEREAS, the Company and Executive are parties to an employment
agreement dated February 25, 2000, effective as of November 1, 2000 (the
"Employment Agreement");
WHEREAS, Executive filed a lawsuit against the Company styled as JERRY
D. SOMMERS V. MAZEL STORES, INC., Case No. 02-CVH04-3813, Franklin County, Ohio
Court of Common Pleas on April 8, 2002 ("Lawsuit");
WHEREAS, Company and Executive have agreed to terminate the Employment
Agreement as of the Effective Date and pursuant to the terms and conditions of
this Agreement in settlement of all claims;
WHEREAS, Executive has been given twenty-one days after receipt of this
Agreement within which to consider it before signing it.
NOW, THEREFORE, the parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT. The parties agree that the Executive's
employment with the Company and all of its Affiliates (as defined in the
Employment Agreement), is hereby terminated as of the Effective Date. Executive
further resigns as an officer and director of the Company as of the Effective
Date. Executive agrees to execute and deliver to the Secretary of the Company a
letter evidencing and affirming such resignations, each as of the Effective
Date.
2. SEVERANCE PAYMENT. In consideration of the terms set forth in this
Agreement, the Company agrees to pay Executive, concurrently with the execution
and delivery of this Agreement, the sum of Seven Hundred Twenty-Eight Thousand
Dollars ($728,000), subject to all applicable federal, state and local
withholding taxes ("Severance Pay"). Notwithstanding the foregoing, due to
Executive's right to revoke the release and waiver of claims under the ADEA (as
set forth in Section 5(A) herein), thereby relieving the Company of its
obligation to provide Executive the Separation Pay, the Company's obligation to
provide Executive with the Severance Pay will take effect eight days after
Executive has signed this Agreement (assuming that Executive fails to revoke the
release of his ADEA claims); provided, however, that Executive provides a notice
confirming that he is not revoking the release of his ADEA claim.
Therefore, upon execution and delivery of this Agreement, the Company
shall deposit the Severance Pay with Executive's legal counsel, Gary D.
Greenwald to be held in escrow during
the ADEA Waiting Period. Upon receipt of a written notice from Executive eight
days after Executive has signed this Agreement stating that Executive did not
revoke his release and waiver of claims under the ADEA, Gary D. Greenwald shall
immediately distribute the Severance Pay to Executive and shall have no further
obligations to Company or Executive regarding the Severance Pay. If Executive
does revoke the release of his ADEA claims (or fails to provide notice before
May 22, 2002 confirming that he is not revoking the release of his ADEA claim),
Gary D. Greenwald shall immediately return the Severance Pay to the Company.
In addition to the Severance Pay, the Company shall pay to Executive
any accrued, but unpaid salary due to Executive as of April 15, 2002, but not
for any period beyond April 15, 2002.
3. REPURCHASE OF EXECUTIVE'S SHARES. In consideration of the terms set
forth in this Agreement, the Company will repurchase one hundred thousand
(100,000) common shares of the Company (the "Shares") that are owned as of the
Effective Date by the Executive for a price per share equal to Three Dollars and
50/100 ($3.50). The Company agrees to pay said amount to Executive concurrently
with the execution and delivery of (i) this Agreement and (ii) Executive's share
certificate(s) representing his ownership of the Shares ("Certificate"). This
payment shall be in addition to the amounts set forth in Section 2 hereof.
Notwithstanding any provision to the contrary herein, the parties agree that
Company's agreement to buy and Executive's agreement to sell the Shares is not
contingent upon Executive's release of his ADEA claim. The parties further agree
that Executive shall deliver the Certificate to the Company within one day of
signing this Agreement and Company shall pay Executive the consideration set
forth in this Section 3 by wire transfer upon receipt of the Certificate.
4. DISMISSAL OF LAWSUIT WITH PREJUDICE. In consideration of the terms
set forth in this Agreement, Executive shall cause his counsel to file an entry
with the Franklin County Court of Common Pleas dismissing with prejudice the
Lawsuit.
5. RELEASE OF CLAIMS AND COVENANT NOT TO SUE.
A. In further consideration for the amounts to be paid by the
Company to Executive hereunder, Executive does hereby release and forever
discharge the Company and each Affiliate and their respective directors,
officers, executives, shareholders, agents (including, but not limited to,
accountants and attorneys) (such individuals, the Company, and the Affiliates
are hereunder collectively referred to as "Related Parties") from all claims,
causes of action and liabilities of every kind and description whatsoever, known
and unknown, foreseen and unforeseen, suspected and unsuspected, asserted or
unasserted, which Executive has or may have against them or any of them by
reason of any fact, matter or thing from the beginning of the world to the date
of this Agreement, with the sole exception of: (i) claims arising out of the
breach of any of Company's obligations under this Agreement; (ii) payment of
medical claims in accordance with the terms of the Company's insurance policy
for services rendered prior to the Effective Date; and (iii) payments due
Executive under the Company's 401(k) Plan (collectively, the "Retained Claims").
Without limiting the generality of the preceding sentence, Executive does hereby
release the Released Parties from all claims, causes of action and liabilities
arising
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from or relating to: (i) his employment or other association with the Company or
with any Affiliate; (ii) any right which Executive has, had or may have had to
receive any sum of money of the Company or of any Affiliate; (iii) any rights or
claims which Executive may have against the Company or any Affiliate for any
cause whatsoever; (iv) any claims for salary, bonuses, vacation pay, fringe
benefits, director's fees, business expenses and allowances or severance pay;
(v) claims based on oral or written contracts; (vi) claims arising under any
federal or state statutes, including but not limited to, claims asserting
discrimination on account of age, race, color, sex, religion, national origin or
veteran or handicap status and claims under the Age Discrimination in Employment
Act of 1967 ("ADEA"), as amended, ERISA, Title VII of the 1964 Civil Rights Act
and the Older Worker Benefit Protection Act; (vii) claims for damages for breach
of contract or implied contract; (viii) claims based on personal injury,
including, without limitation, infliction of emotional distress; (ix) wrongful
termination or breach of covenant of good faith and fair dealing; (x) claims
asserting defamation, interference with contract or business relationships or
promissory estoppel; and (xi) claims relating to Executive's ownership,
acquisition and/or sale of Company stock
Executive covenants and agrees that he will never assert a claim or
institute any cause of action or file a charge based on claims, causes of action
and liabilities of every kind and description whatsoever, known and unknown,
foreseen and unforeseen, suspected and unsuspected, asserted or unasserted,
which Executive has or may have against the Company, any Affiliate, or any other
Released Party by reason of any fact, matter or thing from the beginning of the
world to the date of this Agreement (except for Retained Claims) with any court
of law or administrative tribunal, and further agrees that should he violate the
foregoing covenant not to sue by asserting a claim, instituting an action or
filing a charge against the Company, any Affiliate, or any other Released Party
which is prohibited under this Agreement, Executive will pay all of Company's
costs and expenses (including, without limitation, attorneys' fees) of defending
against the suit incurred by the Company or any other Released Party. Executive
acknowledges and agrees that the monetary benefits provided in this Agreement
constitute sufficient consideration for the Release and Covenant Not to Sue
contained herein, that there are substantial benefits to Executive, and
Executive further acknowledges that he has voluntarily and knowingly entered
into this Agreement with the benefit of advice and counsel of his choice and a
full understanding of its terms and meanings.
Executive acknowledges that the Company has notified him that, under
federal law: (i) Executive has twenty-one (21) days from the date of execution
by Executive of this Agreement to consider the release and covenant to sue
solely with respect to claims arising under the ADEA; and (ii) the release of
claims and covenant not to sue under the ADEA are not enforceable for a period
of seven (7) days following the execution by Executive of this Agreement ("ADEA
Waiting Period") and may be revoked by Executive during such time. Revocation of
the release of claims under ADEA may be effected by Executive solely by
notifying the Company in writing of his election to revoke and delivering such
notice to the Company within the aforesaid ADEA Waiting Period. Such revocation
shall not affect any of the other terms and provisions of this Agreement.
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B. In consideration for Executive's agreements, obligations and
covenants contained in this Agreement, the Company does hereby release and
forever discharge Executive and his heirs, executors, administrators, personal
representatives, successors and permitted assigns, from all claims, causes of
action and liabilities of every kind and description whatsoever, known and
unknown, foreseen and unforeseen, suspected or unsuspected, asserted or
unasserted, which the Company has or may have against Executive by reason of any
fact, matter or thing from the beginning of the world to the date of this
Agreement, except for claims arising out of the breach by Executive of any of
his obligations, representations, warranties and covenants under this Agreement.
Without limiting the generality of the preceding sentence, the Company does
hereby release Executive from all claims, causes of action and liabilities
arising from or relating to Executive's previous employment (including his
services as a director) with the Company and/or the circumstances giving rise to
the execution and delivery of this Agreement. The Company covenants and agrees
that it will never assert or institute any cause of action or file a charge
arising from or relating to Executive's previous employment with the Company
and/or the circumstances giving rise to the execution and delivery of this
Agreement, and further agrees that should the Company violate the foregoing
covenant not to sue by instituting an action or filing a charge against
Executive which is prohibited under this Agreement, Company will pay all costs
and expenses (including, without limitation, attorneys' fees) of defending
against the suit incurred by Executive.
6. INDEMNIFICATION. The Company agrees to indemnify the Executive from
and against any loss, expense, damage or injury suffered or sustained by
Executive by reason of any acts, omissions, or alleged acts or omissions,
arising out of his activities on behalf of the Company or in furtherance of the
interests of the Company, including but not limited to, any judgment, award,
settlement, reasonable attorney's fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; providing that the acts, omissions or alleged acts or omission, upon
which such actual or threatened action, proceeding or claim is based were not
performed or omitted fraudulently or in bad faith or as a result of willful
misconduct by Executive or as a result of a breach of fiduciary duty; and
provided that Executive reasonably believed that the acts, omissions or alleged
acts or omissions were in the best interests of the Company and/or its
Affiliates.
7. NON-COMPETITION; TERMINATION OF EXISTING EMPLOYMENT AGREEMENT. By
this Agreement, the parties agree to the termination of the Employment Agreement
as of the Effective Date. Notwithstanding the terms of the Employment Agreement,
the non-competition provision of Section 6.1 thereof shall terminate as of the
Effective Date.
Notwithstanding the foregoing, Executive covenants and agrees that
during the period commencing on the Effective Date and ending on the date
October 31, 2003 (the "Restricted Period"), the Executive shall not become or
serve as an officer, director or employee of Big Lots, Inc. ("Non-Compete
Provision"). Executive acknowledges that the Non-Compete Provision is
reasonable, fair and equitable in scope, terms and duration, and is necessary to
protect the legitimate business interests of the Company. Executive covenants
that he will not challenge the enforceability of the Non-Compete Provision nor
will he raise any equitable defense to its enforcement.
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8. RETURN OF COMPANY PROPERTY. Executive covenants and agrees to
return, on or before the Effective Date, all records and other property of the
Company, including, but not limited to, all keys, credit cards, Dictaphones,
portable telephones, confidential records, and other property in Executive's
hands or under his control as of the Effective Date.
9. STOCK OPTIONS. All of Executive's unexercised, non-vested stock
options for Common Stock of the Company shall terminate on the Effective Date.
Vested options shall expire in accordance with the terms of their respective
option grant.
10. COBRA COVERAGE. The Executive has decided to elect COBRA coverage
and Company shall provide coverage to Executive at a rate not to exceed 100% of
premiums.
11. CONFIDENTIALITY. Executive agrees to keep the substance of the
negotiations and the terms and conditions of this agreement strictly
confidential. Executive further agrees not to disclose the substance of the
negotiations or the terms and conditions of this agreement, except to his tax,
financial, and/or legal advisors or members of his immediate family, each of
whom will also have an obligation of confidentiality. Notwithstanding the
foregoing, the Company acknowledges and agrees that prior to the inclusion of
this Section in the Agreement, Executive has disclosed the substance of his
negotiations and the proposed terms and conditions of this Agreement to Brady
Churches and that said disclosure shall not be considered a breach of this
Agreement.
12. NON-DISPARAGEMENT. The Company agrees not to disparage Executive's
professional or personal reputation. Executive agrees not to disparage the
Company or the professional or personal reputation of any Company officer,
director or employee. The Executive and the Company agree to respond to
inquiries regarding Executive's departure with a mutually agreed upon statement.
If a prospective employer contacts the Company regarding Executive's employment,
a senior executive of the Company will provide a positive account of Executive's
service to the Company. Otherwise, only title and dates of employment will be
released without Executive's advance written consent.
13. MISCELLANEOUS.
A. NOTICES. All notices, request, demands or other communications
hereunder must be in writing executed by an authorized representative of the
party responsible therefor, and must be given either by hand delivery or
telecopy or other telecommunications device capable of creating a written record
(confirmed by registered or certified mail or by overnight courier):
If to Company: Mazel Stores, Inc.
200 Helen Street
South Plainfield, New Jersey 07080
ATTN: Peter J. Hayes
Telecopier Number: (908) 222-9741
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With a copy to: Kirkland & Ellis
Citigroup Center
153 East 53rd Street
New York, New York 10022-4675
ATTN: Yosef J. Riemer, Esq.
Telecopier Number: (212) 446-4900
If to Executive: Jerry Sommers
8634 Pickerington Road
Pickerington, Ohio 43147-9663
With a copy to: Shayne & Greenwald Co., L.P.A.
221 South High Street
Columbus, Ohio 43215-4503
ATTN: Gary D. Greenwald, Esq.
Telecopier Number: (614) 221-4070
B. COUNTERPARTS. This Agreement may be executed simultaneously 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. The parties agree
that facsimile signatures shall be accepted as originals for all purposes under
this Agreement.
C. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes and cancels any and all prior discussions, correspondence, agreements
or understandings (whether oral or written) between the parties hereto with
respect to such matters, including, but not limited to, the Employment Agreement
(which shall be null and void and of no further force and effect).
D. BINDING EFFECT/NON-ASSIGNABILITY. This Agreement shall inure to the
benefit of and shall bind the Company and its successors and assigns (whether by
way of sale of assets, merger, consolidation, combination, reorganization,
bankruptcy or other proceedings), and Executive, his heirs, representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, this Agreement and the rights and obligations of Executive
hereunder are personal to Executive and may not be assigned or delegated to any
Third Party.
E. SEVERABILITY. All provisions of this Agreement are intended to be
severable. In the event any provision or restriction contained herein is held to
be invalid or unenforceable in any respect, in whole or in part, such finding
shall in no way affect the Agreement. The parties hereto further agree that any
such invalid or unenforceable provision shall be deemed modified so that it
shall be enforced to the greatest extent permissible under law, and to the
extent that any court of competent jurisdiction determines any restriction
herein to be overly broad or unenforceable, such court is hereby empowered and
authorized to limit such restriction so that it is enforceable for the longest
duration of time and greatest scope possible.
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F. GOVERNING LAW/DISPUTE RESOLUTION. This Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio. All
controversies, claims or disputes arising out of or related to this Agreement
shall be settled before a single arbitrator in Columbus, Ohio under the
commercial rules of the American Arbitration Association then in effect, and
judgment upon such award rendered by the arbitrator may be entered in any court
of competent jurisdiction. The arbitrator's fees shall be split equally among
the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated above their signatures.
Executed by the Company on May ___, 2002
MAZEL STORES, INC.
By: ____________________________________
Print Name:_____________________________
Title:__________________________________
Executed by Executive on May ___, 2002
________________________________________
Jerry D. Sommers
________________________________________
Gary D. Greenwald, as to Section 2 only
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