SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 9,1998
(April 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
On April 1, 1998, Ames Department Stores, Inc. (the
"Company") entered into an employment agreement with Rolando
de Aguiar to retain his services as the Company's Executive
Vice President-Chief Financial Officer. That agreement calls
for his services to commence on April 14, 1998. A copy of the
employment agreement dated April 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 April 1, 1998 between
Ames Department Stores, Inc. and Rolando de
Aguiar.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
- ----------- ------- --------
10 Employment Agreement dated April 1, 1998 between Ames 5
Department Stores, Inc. and Rolando de Aguiar
<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: April 9, 1998 By: /s/ Joseph R. Ettore
--------------------
Joseph R. Ettore
President, Director, and
Chief Executive Officer
Dated: April 9, 1998 By: /s/ Gregory D. Lambert
----------------------
Gregory D. Lambert
Senior Vice President,
Finance
Dated: April 9, 1998 By: /s/ Mark von Mayrhauser
-----------------------
Mark von Mayrhauser
Vice President, Controller
<PAGE>
Exhibit 10
EMPLOYMENT AGREEMENT
--------------------
Agreement, dated as of April 1, 1998, between AMES DEPARTMENT STORES,
INC., a Delaware corporation (the "Company"), and ROLANDO de AGUIAR, (the
"Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company is engaged in the business of operating
self-service retail discount department stores (the "Business"); and
WHEREAS, the Company desires to retain the services of the Executive in
the capacities of Executive Vice President-Chief Financial Officer of the
Company, and the Executive desires to provide such services in such capacities
to the Company, on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Employment and Term. The Company hereby employs the Executive, and
the Executive hereby accepts employment by the Company, in the capacities and on
the terms and subject to the conditions set forth herein, for the period
commencing on April 14, 1998 and ending on April 14, 2001, unless terminated
earlier as provided herein (the "Term of Employment").
2. Duties. During the Term of Employment, the Executive shall serve as
the Company's Executive Vice President-Chief Financial Officer. As such officer,
the Executive shall report to the Company's President and Chief Executive
Officer and shall have such powers, duties and responsibilities with respect to
the business of the Company as are customary to his offices and positions or as
the President and Chief Executive Officer or the Board of Directors of the
Company may reasonably request consistent therewith.
The Executive shall serve the Company faithfully and to the best of his
ability in such capacities, devoting substantially all of his business time,
attention, knowledge, energy and skills to such employment.
The Executive shall reside during the business week and be based at the
Company's offices in Rocky Hill, Connecticut or in the same geographic region,
but the Executive shall travel as reasonably required in connection with the
performance of his duties hereunder. If elected, the Executive also shall serve
during any part of the Term of Employment as any other officer of the Company or
as an officer or director of any of the Company's subsidiaries without any
additional compensation other than as specified in this Agreement.
3. Compensation and Benefits. As full and complete compensation to the
Executive for his execution and delivery of this Agreement and performance of
the services required hereunder, the Company shall pay, grant or provide the
Executive, and the Executive agrees to accept, the following salary and other
compensation and benefits (all such amounts to be calculated in United States
dollars):
<PAGE>
(a) a Base Salary, payable in accordance with the Company's
standard payroll practices for senior executive officers, of no less
than $280,000, which amount shall be reviewable for the second and
third years of this agreement;
(b) an annual bonus, payable with respect to each full fiscal
year of the Company during the Term of Employment, or pro rata portion
thereof, in each case based upon the performance of the Company for
each applicable full fiscal year of the Company and otherwise in
accordance with the Company's Annual Incentive Compensation Plan, in
effect from time to time, up to 40% of Executive's Base Salary for each
such fiscal year;
(c) a one-time, lump-sum cash payment of $25,000, which shall
be payable upon the Executive's reporting for work and which shall be
refundable to the Company on a pro rata basis in the event the
Executive voluntarily terminates his employment during the first twelve
(12) months;
(d) an option (the "Option") to acquire 30,000 shares (the
"Option Shares") of common stock, par value $.01 per share, of the
Company (the "Common Stock") of which 10,000 shares each are
exercisable on April 14 of 1999, 2000 and 2001, respectively, at a
price equal to the closing price of the Common Stock on April 13, 1998
as reported on NASDAQ in accordance with the Company's 1994 Management
Stock Option Plan or such later plan as may be approved by the
shareholders and as more particularly described in Schedule 3(d)
hereto;
(e) the right to receive 35,000 restricted shares (the
"Restricted Shares") of Common Stock pursuant to the Company's 1995
Long Term Incentive Plan (the "Plan"), a copy of which is attached
hereto, which shares shall vest in accordance with the provisions of
the Plan on April 13, 2001, and to participate in any other long-term
incentive program as in effect from time to time and generally
available for the benefit of senior executive officers implemented by
the Company or any of its subsidiaries;
(f) the right to participate in any medical, dental,
disability, retirement, insurance, savings, vacation, holiday, paid
sick leave or other plans as in effect from time to time generally
available for the benefit of the Company's senior executive officers;
(g) an annual automobile allowance in an amount and payable in
accordance with the policies and procedures of the Company as in effect
from time to time for senior executive officers, but not less than
$15,200 per year;
(h) prompt reimbursement for all reasonable business-related
expenses incurred by the Executive, in accordance with the policies and
procedures of the Company as in effect from time to time for senior
executive officers; and
(i) three (3) weeks paid vacation per year in accordance with
the policies and procedures of the Company as in effect from time to
time for senior executive officers.
4. Termination.
(a) Permanent Disability. 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 in Section 3(e), and the
Executive shall continue to have the obligations provided for
in Sections 6 and 7. For purposes of this paragraph,
"permanent disability" means any disability as defined under
the Company's disability insurance policy referred to in
Section 3(e).
<PAGE>
(b) Death. In the event of the death of the Executive during
the Term of Employment, this Agreement shall automatically
terminate and the Company shall have no further obligations
hereunder, except to pay the Executive's beneficiary or legal
representative any amounts or provide any benefits to which
the Executive may otherwise have been entitled prorated to the
date of death.
(c) Cause. The Company shall have the right, upon written
notice to the Executive, to terminate the Executive's
employment under this Agreement for Cause (as hereinafter
defined), effective upon the giving of such notice (or such
later date as shall be specified in such notice), and the
Company shall have no further obligations hereunder, except to
pay the Executive any amounts or provide the Executive any
benefits to which the Executive may otherwise have been
entitled prorated to the effective date of termination.
For purposes of this Agreement, "Cause" means:
(i) fraud or embezzlement on the part of the
Executive or material breach by the Executive of any of his
obligations under this Agreement;
(ii) Executive shall have committed any act of gross
negligence in the performance of his duties or obligations
hereunder or any material act of malfeasance, disloyalty,
dishonesty or breach of trust against the Company;
(iii) conviction of the Executive for any felony;
(iv) a material breach of, or the willful failure or
refusal by the Executive to perform and discharge, his duties,
responsibilities or obligations under this Agreement (other
than under Sections 6 and 7 hereof, which shall be governed by
clause (i) above, and other than by reason of permanent
disability or death) that is not corrected within 30 days of
written notice thereof to the Executive by the Company, such
notice to state with specificity the nature of the breach,
failure or refusal; provided that if such breach, failure or
refusal cannot reasonably be corrected within 30 days of
written notice thereof, correction shall be commenced by the
Executive within such period and may be corrected within a
reasonable period thereafter; or
(v) any substantiated, willful act by the Executive
intended to result in substantial personal enrichment of the
Executive at the expense of the Company or any of its
affiliates or which has a material adverse impact on the
business or reputation of the Company or any of its
affiliates.
(d) Without Cause. The Company shall have the right to
terminate the Executive's employment under this Agreement
without Cause and upon written notice, in which case the
Executive's employment under this Agreement shall terminate on
the date specified in such notice (except that the Executive
shall continue to have the obligations provided for in
Sections 6 and 7(a)) and the Company shall have no further
obligations hereunder, except (i) to pay the Executive,
promptly following such termination, an amount equal to (A)
his Base Salary when it would otherwise be payable for the
duration of the Term and (B) the annual bonus payable to the
Executive under Section 3(b) prorated to the effective date of
termination, (ii) to cause the Option to vest in full as of
the date of termination and to remain exercisable until the
end of the option period set forth in the Option, (iii) if the
date of termination is later than April 14, 2000, to cause the
Restricted Shares to vest as of the vesting date set forth in
3(e) above notwithstanding the fact the Executive is not
actively employed by the Company on that date; and (iv) to
maintain coverage of the Executive in the Company's medical
plan for a period of one (1) year after the date of
termination, as such plan is in effect during such period for
the benefit of the Company's senior executive officers, in
lieu of any other compensation, payment or other benefits to
which the Executive may otherwise be entitled under this
Agreement. There shall be no mitigation for any amounts
payable by the Company pursuant to this Section 4(d).
<PAGE>
5. Resignation Upon Termination. Upon the termination of the
Executive's employment hereunder for any reason the Executive agrees that he
shall be deemed to have resigned from all offices and directorships held by him
in the Company or any of its subsidiaries immediately.
6. Confidentiality; Ownership. (a) During the Term of Employment and
thereafter, the Executive shall keep secret and retain in strictest confidence
and not divulge disclose, discuss, copy or otherwise use or suffer to be used in
any manner, except in connection with the Business of the Company and the
businesses of any of its subsidiaries or affiliates, any Protected Information
in any Unauthorized manner or for any Unauthorized purpose (as such terms are
hereinafter defined).
(i) "Protected Information" means trade secrets,
confidential or proprietary information and all supplier and
customer lists, market research, databases, computer programs
and software, operating procedures, knowledge of the
organization, products (including prices, costs, sales or
content), machinery, contracts, financial information or
measures, business plans, details of consultant contracts, new
personnel acquisition plans, business acquisition plans,
business relationships and other information owned, developed
or possessed by the Company or its subsidiaries or affiliates,
except as required in the course of performing duties
hereunder; provided that Protected Information shall not
include information (a) that is considered by law, custom or
otherwise to be generally known in the industry of the
Company; (b) developed by the Executive individually or
jointly with others prior to the commencement of employment
under Section 2; and (c) that becomes generally known to the
public or the trade without violation of this Section 6.
(ii) "Unauthorized" means: (A) in contravention of
the policies or procedures of the Company or any of its
subsidiaries or affiliates; (B) otherwise inconsistent with
the measures taken by the Company or any of its subsidiaries
or affiliates to protect their interests in any Protected
Information; (C) in contravention of any lawful instruction or
directive, either written or oral, of an employee of the
Company or any of its subsidiaries or affiliates empowered to
issue such instruction or directive; or (D) in contravention
of any duty existing under law or contract. Notwithstanding
anything to the contrary contained in this Section 6, the
Executive may disclose any Protected Information to the extent
required by court order or decree or by the rules and
regulations of a governmental agency or as otherwise required
by law; provided that the Executive shall provide the Company
with prompt notice of such required disclosure in advance
thereof so that the Company may seek an appropriate protective
order in respect of such required disclosure.
(b) The Executive acknowledges that all developments,
including, without limitation, inventions, patentable or otherwise,
discoveries, improvements, patents, trade secrets, designs, reports,
computer software, flow charts and diagrams, procedures, data,
documentation, ideas and writings and applications thereof relating to
the Business or planned business of the Company or any of its
subsidiaries or affiliates that, alone or jointly with others, the
Executive may conceive, create, make, develop, reduce to practice or
acquire during the Term of Employment (collectively, the
"Developments") are works made for hire and shall remain the sole and
exclusive property of the Company and the Executive hereby assigns to
the Company all of his right, title and interest in and to all such
Developments. The Executive shall promptly and fully disclose all
future material Developments to the Board of Directors of the Company
and, at any time upon request and at the expense of the Company, shall
execute, acknowledge and deliver to the Company all instruments that
the Company shall prepare, give evidence and take all other actions
that are necessary or desirable in the reasonable opinion of the
Company to enable the Company to file and prosecute applications for
and to acquire, maintain and enforce all letters patent, trademark
registrations or copyrights covering the Developments in all countries
in which the same are deemed necessary by the Company. All memoranda,
notes, lists, drawings, records, files, computer tapes, programs,
software, source and programming narratives and other documentation
(and all copies thereof) made or compiled by the Executive or made
available to the Executive concerning the Developments or otherwise
concerning the Business or planned business of the Company or any of
its subsidiaries or affiliates shall be the property of the Company or
such subsidiaries or affiliates and shall be delivered to the Company
or such subsidiaries or affiliates promptly upon the expiration or
termination of the Term of Employment.
<PAGE>
(c) The provisions of this Section 6 shall, without any
limitation as to time, survive the expiration or termination of the
Executive's employment hereunder, irrespective of the reason for any
termination.
7. Covenant Not to Compete. Subject to the last sentence of this
Section 7, the Executive agrees that until April 14, 2001 the Executive shall
not, directly or indirectly, without the prior written consent of the Company:
(a) solicit, entice, persuade or induce any employee,
consultant, agent or independent contractor of the Company or of any of
its subsidiaries or affiliates to terminate his or her employment with
the Company or such subsidiary or affiliate, to become employed by any
person, firm or corporation other than the Company or such subsidiary
or affiliate or approach any such employee, consultant, agent or
independent contractor for any of the foregoing purposes, or authorize
or assist in the taking of any such actions by any third party (for
purposes of this Section 7(a), the terms "employee," "consultant,"
"agent" and "independent contractor" shall include any persons with
such status at any time during the six months preceding any
solicitation in question); or
(b) directly or indirectly engage, or participate, or make any
financial investment in, or become employed by or render consulting,
advisory or other services to or for any of the following business
enterprises (or their respective successors-in-interest, including,
without limitation, by change of name): K-Mart; Wal-Mart; Hills;
Target; Caldor; and Bradlees; provided that nothing in this Section
7(b) shall be construed to preclude the Executive from making any
investments in the securities of any such business enterprise to the
extent that such enterprise's securities are actively traded on a
national securities exchange or in the over-the-counter market in the
United States or on any foreign securities exchange and represent, at
the time of acquisition, not more than 3% of the aggregate voting power
of such business enterprise.
Notwithstanding the foregoing, the Executive shall not be
subject to the terms and provisions of paragraph (b) of this Section 7
in the case of a termination of employment of the Executive by the
Company without Cause.
8. Specific Performance. The Executive acknowledges that the services
to be rendered by the Executive are of a special, unique and extraordinary
character and, in connection with such services, the Executive will have access
to confidential information vital to the Company's Business and the businesses
of its subsidiaries and affiliates. By reason of this, the Executive consents
and agrees that if the Executive violates any of the provisions of Section 6 or
7 hereof, the Company and its subsidiaries and affiliates would sustain
irreparable injury and that money damages will not provide adequate remedy to
the Company and that the Company shall be entitled to have Section 6 or 7
specifically enforced by any court having equity jurisdiction. Nothing contained
herein shall be construed as prohibiting the Company or any of its subsidiaries
or affiliates from pursuing any other remedies available to it for such breach
or threatened breach, including the recovery of damages from the Executive.
9. Indemnification. To the fullest extent permitted or required by the
laws of the State of Delaware, the Company shall indemnify and hold harmless the
Executive, in accordance with the terms of such laws, if the Executive is made a
party, or threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the Executive is or was an officer or
director of the Company or any subsidiary or affiliate of the Company, in which
capacity the Executive is or was serving at the Company's request and in
furtherance of the Company's best interests, against expenses (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding, which indemnification shall include the protection of the applicable
indemnification provisions of the Amended and Restated Certificate of
Incorporation and the Amended and Restated By-laws of the Company from time to
time in effect.
10. Deductions and Withholding; Expenses. The Executive agrees that the
Company or its subsidiaries or affiliates, as applicable, shall withhold from
any and all compensation paid to and required to be paid to the Executive
pursuant to this Agreement, all Federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with applicable
statutes or regulations from time to time in effect and all amounts required to
be deducted in respect of the Executive's coverage under applicable employee
benefit plans. For purposes of this Agreement and calculations hereunder, all
such deductions and withholdings shall be deemed to have been paid to and
received by the Executive.
11. Entire Agreement. This Agreement embodies the entire agreement of
the parties with respect to the Executive's employment and supersedes any other
prior oral or written agreements, arrangements or understandings between the
Executive and the Company. This Agreement may not be changed or terminated
orally but only by an agreement in writing signed by the parties hereto.
12. Waiver. The waiver by the Company of a breach of any provision of
this Agreement by the Executive shall not operate or be construed as a waiver of
any subsequent breach by him. The waiver by the Executive of a breach of any
provision of this Agreement by the Company shall not operate or be construed as
a waiver of any subsequent breach by the Company.
13. Governing Law; Jurisdiction.
(a) This Agreement shall be subject to, and governed by, the
laws of the State of New York applicable to contracts made and to be
performed therein.
(b) Any action to enforce any of the provisions of this
Agreement shall be brought in a court of the State of New York located
in the Borough of Manhattan of the City of New York or in a Federal
court located within the Southern District of New York. The parties
consent to the jurisdiction of such courts and to the service of
process in any manner provided by New York law. Each party irrevocably
waives any objection which it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in such
court and any claim that such suit, action or proceeding brought in
such court has been brought in an inconvenient forum and agrees that
service of process in accordance with the foregoing sentences shall be
deemed in every respect effective and valid personal service of process
upon such party.
14. Assignability. The obligations of the Executive may not be
delegated and, except with respect to the designation of beneficiaries in
connection with any of the benefits payable to the Executive hereunder, the
Executive may not, without the Company's written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest therein. Any such attempted delegation or disposition
shall be null and void and without effect. The Company and the Executive agree
that this Agreement and all of the Company's rights and obligations hereunder
may be assigned or transferred by the Company to and shall be assumed by and
binding upon any successor to the Company. The term "successor" means, with
respect to the Company or any of its subsidiaries, any corporation or other
business entity which, by merger, consolidation, purchase of the assets or
otherwise, including after a Change in Control, acquires all or a material part
of the assets of the Company.
15. Severability. If any provision of this Agreement or any part
thereof, including, without limitation, Sections 6 and 7, as applied to either
party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or remaining part thereof, which shall be
given full effect without regard to the invalid or unenforceable part thereof,
or the validity or enforceability of this Agreement.
If any court construes any of the provisions of Section 6 or 7, or any
part thereof, to be unreasonable because of the duration of such provision or
the geographic scope thereof, such court may reduce the duration or restrict or
redefine the geographic scope of such provision and enforce such provision as so
reduced, restricted or redefined.
16. Notices. All notices to the Company or the Executive permitted or
required hereunder shall be in writing, shall be effective upon receipt or
refusal and shall be delivered personally, 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: (860) 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:
Rolando de Aguiar
(At such residence address as is reflected in the records of
the Company or as provided by the Executive as set 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.
17. No Conflicts. The Executive hereby represents and warrants to the
Company that his execution, delivery and performance of this Agreement and any
other agreement to be delivered pursuant to this Agreement will not (i) require
the consent, approval or action of any other person or (ii) violate, conflict
with or result in the breach of any of the terms of, or constitute (or with
notice or lapse of time or both, constitute) a default under, any agreement,
arrangement or understanding with respect to the Executive's employment to which
the Executive is a party or by which the Executive is bound or subject. The
Executive hereby agrees to indemnify and hold harmless the Company, its
directors, officers, employees, agents, representatives and affiliates (and such
affiliates' directors, officers, employees, agents and representatives) from and
against any and all losses, liabilities or claims (including, interest,
penalties and reasonable attorneys' fees, disbursements and related charges)
based upon or arising out of the Executive's breach of any of the foregoing
representations and warranties.
18. Effective Date. This Agreement shall be effective as of the date
first written above.
19. Paragraph Headings. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
21. Expenses. All attorneys' fees and expenses incurred by the
Executive in connection with the negotiation, execution and delivery of this
Agreement shall be borne by the Executive.
22. Attorneys' Fees. In the event any litigation or controversy arises
out of or in connection with this Agreement between the parties hereto, the
non-prevailing party in such litigation or controversy shall be responsible for
the attorneys' fees, expenses and suit costs of both parties, including those
associated with any applicable or post-judgment collection proceedings.
23. Officers' and Directors' Insurance. During the Term of Employment,
the Company shall maintain customary directors' and officers' liability
insurance if such insurance is available to the Company at reasonable 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/ JOSEPH ETTORE
Joseph Ettore
President and Chief Executive Officer
/s/ ROLANDO DE AGUIAR
Rolando de Aguiar
<PAGE>
SCHEDULE 3(d)
OPTION TERMS
------------
Expiration Date: Ten years from the date of issuance thereof (the
"Expiration Date"), unless terminated earlier as provided below (the "Option
Term").
Exercisability: Subject to the provisions on termination below, each
Option shall be exercisable on a cumulative basis during the relevant Option
Term.
In no event may any Option be exercised for less than one hundred
Option Shares (unless the number being purchased is the total balance).
Termination: If the Executive's employment is terminated prior to the
Expiration Date, each Option shall, to the extent not theretofore
exercised,terminate and become null and void, except to the extent described
below; provided that none of the events described below shall extend the period
of exercisability of each Option beyond the Expiration Date:
(a) if the Executive dies while employed by the Company and
its subsidiaries or during either the thirty (30) day or three (3)
month period, whichever is applicable, specified in clauses (b), (c)
and (d) below, each Option shall be exercisable for all option Shares
that the Executive is entitled to purchase at the time of the
Executive's death, at any time up to and including one (1) year after
his death, by the Executive's legatee, distributee, guardian or legal
or personal representative;
(b) if the Executive's employment with the Company and its
subsidiaries is terminated by reason of "permanent disability" (as
defined in the Employment Agreement), each Option shall be exercisable
for all Option Shares that the Executive is entitled to purchase at the
effective date of termination of employment by reason of permanent
disability, at any time up to and including thirty (30) days after such
effective date;
(c) if the Executive's employment with the Company and its
subsidiaries is terminated by reason of voluntary retirement after
retirement age in accordance with the Company's practices or by reason
of the expiration of the Employment Agreement, each Option shall be
exercisable for all remaining Option Shares, whether or not then
exercisable for such Option Shares, at any time up to and including
three (3) months after the effective date of termination of employment;
(d) if the Executive's employment with the Company and its
subsidiaries is terminated by the Company without Cause (as defined in
the Employment Agreement), each Option shall, to the extent not
theretofore exercised, immediately become exercisable and shall remain
exercisable until expiration of the Option Term; and
(e) if the Executive's employment with the Company and its
subsidiaries is terminated for any reason other than as provided in
clauses (a), (b), (c) or (d) above, each Option shall be exercisable
for all Option Shares that the Executive is entitled to purchase at the
effective date of termination of employment, at any time up to and
including thirty (30) days after the effective date of such
termination.
Other Restrictions: In order to comply with applicable securities laws,
the Option Shares, when issued, will bear appropriate legends giving notice of
applicable restrictions on transfer under such laws.
Non-Transferable: Each Option is not transferable, except by will or
the laws of descent and distribution, and may not be pledged or hypothecated in
any manner.
