SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30,1998
(June 1,1998)
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)
<PAGE>
Item 5: OTHER EVENTS
Ames Department Stores, Inc. (the "Company") announced
on June 30, 1998 that it had entered into an employment
agreement with Joseph R. Ettore, effective June 1, 1998, to
retain his services as the Company's Chief Executive Officer
and President. That agreement supercedes in its entirety
the prior Employment Agreement dated June 1, 1996. A copy of
the employment agreement dated June 1, 1998 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 June 1, 1998
between Ames Department Stores, Inc. and
Joseph R. Ettore.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
- ----------- ---------------------------------- --------
10 Employment Agreement dated June 1, 5
1998 between Ames Department
Stores, Inc. and Joseph R. Ettore
<PAGE>
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: June 30, 1998 By: /s/ Joseph R. Ettore
--------------------
Joseph R. Ettore
President, Director, and
Chief Executive Officer
Dated: June 30, 1998 By: /s/ Rolando de Aguiar
---------------------
Rolando de Aguiar
Executive Vice President,
Chief Financial Officer
Dated: June 30, 1998 By: /s/ Greg Lambert
----------------
Greg Lambert
Senior Vice President, Finance
<PAGE>
Exhibit 10
EMPLOYMENT AGREEMENT
Agreement, dated as of June 1, 1998 between AMES DEPARTMENT STORES,
INC., a Delaware corporation (the "Company"), and JOSEPH R. ETTORE, (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the business of operating
self-service retail discount department stores (the "Business"); and
WHEREAS, the Company desires to retain the services of the Executive in
the capacities of Chief Executive Officer and President of the Company, and the
Executive desires to provide such services in such capacities to the Company, on
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the Company and the Executive have heretofore entered into a
certain Employment Agreement, dated as of June 1, 1996 (the "Old Agreement"),
and the parties intend that the Old Agreement will be superseded 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. Old Agreement Superseded. The parties acknowledge and agree that the
Old Agreement is hereby rendered null and void and superseded in its entirety by
the provisions hereof, except for any payment obligations which have accrued
thereunder through the date hereof.
2. 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 June 1, 1998 and ending on May 31, 2004, unless terminated earlier
as provided herein (the "Term of Employment"). The Company hereby agrees to
notify the Executive not later than February 1, 2004, whether the Company
intends to seek to negotiate an extension of the Term of Employment.
3. Duties. During the Term of Employment, the Executive shall serve as
the Company's Chief Executive Officer and President. In addition, while it is
understood that the right to elect directors of the Company is by law vested in
the stockholders of the Company, it is nevertheless contemplated, subject to
such right, that the Executive shall, at all times during the Term of
Employment, be a member of the Board of Directors of the Company; provided that
the failure of the Executive to be elected a director or to retain a
directorship of the Company shall not constitute a breach of this Agreement by
the Company. As chief executive officer, the Executive shall be the most senior
officer of the Company, with all supervisory authority and power over the other
senior officers of the Company, including principal responsibility for
recommendations to the Board of Directors of the Company regarding the hiring
and termination of other senior officers and with such other powers, duties and
responsibilities with respect to the business of the Company as are customary to
his offices and positions or as the Board of Directors of the Company may
reasonably request consistent therewith.
The Executive shall serve the Company faithfully and to the best of his
ability in such capacities, devoting substantially all of his business time,
attention, knowledge, energy and skills to such employment.
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.
4. 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):
<PAGE>
(a) a base salary, payable in accordance with the Company's standard
payroll practices for senior executive officers, of $1,000,000 per annum for the
period commencing as of the date hereof through May 31, 2002, and thereafter for
the balance of the Term of Employment of $1,250,000 per annum ("Base Salary");
(b) an annual bonus of up to a maximum of 75% of the Executive's Base
Salary then in effect, 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;
(c) in consideration of the Executive's surrender of his right under
the Old Agreement to acquire 50,000 shares of common stock, par value $.01 per
share, of the Company (the "Common Stock") in accordance with the Company's 1994
Management Stock Option Plan (the "1994 Plan"), a one-time, non-refundable
lump-sum cash payment, which shall be deemed to be earned in full upon the
execution and delivery of this Agreement and which shall be payable in full upon
such execution and delivery, equal to (x) 50,000 multiplied by (y) the
difference between the Average Stock Price (as hereinafter defined), determined
based on the 20 trading days prior to the date of this Agreement, and $2.00. For
purposes of this Agreement, the "Average Stock Price" means the average closing
sale price per share on any national securities exchange or on the National
Association of Securities Dealers Automated Quotation System - National Market
System ("NASDAQ-NMS") on which the Common Stock is listed or reported through,
as the case may be, for the 20 trading days prior to the applicable date, as the
context requires;
(d) in consideration of the Executive's surrender of his right under
the Old Agreement to acquire 125,000 shares of Common Stock in accordance with
the 1994 Plan, (i) a Stock Award (as defined in the 1998 Plan referred to below)
granted and which shall be deemed to be earned and vested in full as of the date
hereof, of 70,200 shares of Common Stock in accordance with the Company's 1998
Stock Incentive Plan (the "1998 Plan"), and (ii) the Company shall pay a bonus
(the "Bonus") to the Executive equal to an amount in cash equal to the product
of (x) 64,800, and (y) the per share closing price of the Common Stock on the
date hereof. From the Bonus, the Company shall withhold the estimated federal
and state income taxes payable by the Executive with respect to the Stock Award
and the Bonus;
(e) in consideration of the Executive's surrender of his right under
the Old Agreement to acquire 125,000 shares of Common Stock in accordance with
the 1994 Plan, 125,000 stock appreciation rights ("SARs"), granted and which
shall be deemed to be earned and vested in full as of the date hereof. The
Company shall make a payment to the Executive, from time to time promptly upon
Executive's request, of an amount equal to (x) the number of SARs which the
Executive elects to exercise on or after May 31, 1999 multiplied by (y) the
difference between (i) $2.00 and (ii) the Average Stock Price as of the date of
such election. The SARs shall be exercisable for a period equal to the earlier
of 30 days after the termination of the Executive's employment with the Company
for any reason or ten years from the date hereof;
(f) stock options (the "New Options") under the 1998 Plan, with a term
of ten years, to acquire up to 200,000 shares (the "New Option Shares") of
Common Stock, all of which shall be granted on the date hereof, but which shall
vest and become exercisable (except as may otherwise be provided under the 1998
Plan) on May 31, 2003;
(g) reimbursement to the Executive of $12,000 per year for the cost of
maintaining $500,000 of life insurance, plus additional life insurance
underwritten by the Company's present insurer (or another insurer reasonably
acceptable to the Company and the Executive) in the face amount of $500,000;
provided that the Executive shall assist the Company in procuring such insurance
by submitting to reasonable medical examinations and by filling out, executing
and delivering such applications and other instruments in writing as may
reasonably be required by any insurer to which the Company may apply;
(h) the right to participate in any savings and stock option plans or
programs and in any medical, dental, disability, retirement, insurance, savings,
vacation, holiday, paid sick leave or other plans as in effect from time to time
for the benefit of the Company's senior executive officers;
(i) the right to participate in any long-term incentive program as in
effect from time to time for the benefit of senior executive officers
implemented by the Company or any of its subsidiaries;
(j) one-time, lump-sum cash payments of (i) $450,000, which shall be
payable on June 30, 1999, and (ii) $550,000, which shall be payable at the end
of the Term of Employment, unless, prior to such dates, 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 (j);
(k) an annual automobile allowance, payable in equal monthly
installments during the Term of Employment, in an amount in accordance with the
policies and procedures of the Company as in effect from time to time for senior
executive officers, but not less than $1,800 per month;
<PAGE>
(l) 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; and
(m) paid vacation in accordance with the policies and procedures of the
Company as in effect from time to time for senior executive officers.
5. Termination.
(a) Permanent Disability. During the Term of Employment hereunder, the
Company shall maintain a disability insurance policy which shall pay to the
Executive 60% of his Base Salary during any period of disability up to
Executive's age 65; provided that the Executive shall assist the Company in
procuring such insurance by submitting to reasonable medical examinations and by
filling out, executing and delivering such applications and other instruments in
writing as may reasonably be required by any insurer to which the Company may
apply; and provided, further, that the Executive shall be insurable at standard
rates. In the event of the permanent disability (as hereinafter defined) of the
Executive during the Term of Employment, the Company shall have the right, upon
written notice to the Executive, to terminate the Executive's employment
hereunder, effective upon the giving of such notice (or such later date as shall
be specified in such notice). Upon such termination, the Company shall have no
further obligations hereunder, except to pay the Executive any amounts or
provide the Executive any benefits to which the Executive may otherwise have
been entitled under the Company's permanent disability insurance referred to
above, and the Executive shall continue to have the obligations provided for in
Sections 7 and 8. For purposes of this paragraph, "permanent disability" means
any disability as defined under the Company's disability insurance policy
referred to Section 4(h).
(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, 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 his obligations under Section 7 or
8;
(ii)conviction of the Executive for any felony;
(iii) a material breach of, or the willful failure or refusal by
the Executive to perform and discharge, his duties,
responsibilities or obligations under this Agreement without
Good Reason (other than under Sections 7 and 8 hereof, which
shall be governed by clause (i) above, and other than by
reason of permanent disability or death) that is not corrected
within 30 days of written notice thereof to the Executive by
the Company, such notice to state with specificity the nature
of the breach, failure or refusal; provided that if such
breach, failure or refusal cannot reasonably be corrected
within 30 days of written notice thereof, correction shall be
commenced by the Executive within such period and may be
corrected within a reasonable period thereafter; or (iv) any
substantiated, willful act by the Executive intended to result
in substantial personal enrichment of the Executive at the
expense of the Company or any of its affiliates or which has a
material adverse impact on the business or reputation of the
Company or any of its affiliates.
(d) Without Cause. The Company shall have the right to terminate the
Executive's employment under this Agreement without Cause and upon written
notice, in which case the Executive's employment under this Agreement shall
terminate on the date specified in such notice (except that the Executive shall
continue to have the obligations provided for in Sections 7 and 8(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 for the balance of the Term of
Employment and (B) the annual bonus payable to the Executive under Section 4(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 5(d).
<PAGE>
(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 7 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 4(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 5(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 5(e).
For purposes of this Agreement, "Good Reason" means:
(i) the assignment to the Executive of any duties inconsistent in
any material respect with the Executive's positions (including
status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by
Section 3 of this Agreement; or
(ii) the termination of employment of the Executive without Cause
or the occurrence of any of the circumstances constituting
Good Reason under clause (i) of this definition after a Change
in Control (as hereinafter defined).
For purposes of this Agreement, a "Change in Control" means the
occurrence of any one of the following events: (a) any person or other entity
(other than any of the Company's subsidiaries), including any person as defined
in Section 13(d)(3) of the Exchange Act, becoming the beneficial owner, as
defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of more than
fifty percent (50%) of the total combined voting power of all classes of capital
stock of the Company ordinarily entitled to vote for the election of directors
of the Company, (b) the sale of all or substantially all of the property or
assets of the Company (other than a sale to any of the Company's subsidiaries),
(c) the consolidation or merger of the Company with another corporation (other
than with any of the Company's subsidiaries or in which the Company is the
surviving corporation), the consummation of which would result in the occurrence
of an event described in clause (a) above or (d) a change in the Board of
Directors of the Company occurring with the result that the members of the Board
of Directors of the Company on the date hereof (the "Incumbent Directors") no
longer constitute a majority of such Board of Directors, provided that any
person becoming a director whose election or nomination for election was
supported by a majority of the Incumbent Directors shall be considered an
Incumbent Director for purposes hereof.
6. 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.
7. 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).
<PAGE>
(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 7.
(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 7, 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 7 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.
8. Covenant Not to Compete. Subject to the last sentence of this
Section 8, the Executive agrees that until May 31, 2004, 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 8(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; Target; Caldor; and Bradlees; provided that
nothing in this Section 8(b) shall be construed to preclude the Executive from
making any investments in the securities of any such business enterprise to the
extent that such enterprise's securities are actively traded on a national
securities exchange or in the over-the-counter market in the United States or on
any foreign securities exchange and represent, at the time of acquisition, not
more than 3% of the aggregate voting power of such business enterprise.
<PAGE>
Notwithstanding the foregoing, the Executive shall not be subject to
the terms and provisions of paragraph (b) of this Section 8 in the case of a
termination of employment of the Executive by the Company without Cause or by
the Executive for Good Reason.
9. 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 7 or
8 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 7 or 8
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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
<PAGE>
15. Assignability. The obligations of the Executive may not be
delegated and, except with respect to the designation of beneficiaries in
connection with any of the benefits payable to the Executive hereunder, the
Executive may not, without the Company's written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest therein. Any such attempted delegation or disposition
shall be null and void and without effect. The Company and the Executive agree
that this Agreement and all of the Company's rights and obligations hereunder
may be assigned or transferred by the Company to and shall be assumed by and
binding upon any successor to the Company. The term "successor" means, with
respect to the Company or any of its subsidiaries, any corporation or other
business entity which, by merger, consolidation, purchase of the assets or
otherwise, including after a Change in Control, acquires all or a material part
of the assets of the Company. The rights and obligations under this Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and their
respective heirs, representatives, successors and permitted assigns.
16. Severability. If any provision of this Agreement or any part
thereof, including, without limitation, Sections 7 and 8, 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 7 or 8, 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.
17. Notices. All notices to the Company or the Executive permitted or
required hereunder shall be in writing and shall be delivered personally, by
telecopier or by courier service providing for next-day delivery or sent by
registered or certified mail, return receipt requested, to the following
addresses:
The Company:
Ames Department Stores, Inc.
2418 Main Street
Rocky Hill, Connecticut 06067
Tel: (203) 257-2000
Attn: Chairman of the Board of Directors
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Attn: Jeffrey J. Weinberg, Esq.
The Executive:
Joseph R. Ettore
(At such residence address as is reflected in the records of
the Company or as provided by the Executive as forth below.)
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party. Any such notice
shall be deemed given, if delivered personally, upon receipt; if telecopied,
when telecopied; if sent by courier service providing for next-day delivery, the
next business day following deposit with such courier service; and if sent by
certified or registered mail, 3 days after deposit (postage prepaid) with the
U.S. mail service.
18. 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.
<PAGE>
19. Effective Date. This Agreement shall be effective as of the date
first written above. 20. 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.
21. 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.
22. Expenses. All reasonable attorneys' fees and expenses incurred by
the Executive in connection with the negotiation, execution and delivery of this
Agreement up to $4,000 shall be borne by the Company.
23. 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.
24. Officers' and Directors' Insurance. During the Term of Employment,
the Company shall maintain customary directors' and officers' liability
insurance if such insurance is available to the Company at reasonable costs.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
AMES DEPARTMENT STORES, INC.
By: /s/ Paul M Buxbaum
Paul M. Buxbaum
Chairman of the Board of Directors
/s/ Joseph R. Ettore
Joseph R. Ettore
