EX-10.10 3 l94893aexv10w10.txt EXHIBIT 10.10 Exhibit 10.10 AGREEMENT THIS AGREEMENT, made as of June 10, 2002 (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 BRADY J. CHURCHES, an individual residing at 1677 Taylor Corner Circle, Columbus, Ohio 43004 (the "Executive"). WITNESSETH: ----------- WHEREAS, the Company and Executive were parties to an employment agreement dated February 25, 2000, effective as of August 14, 2000 (the "Employment Agreement"); WHEREAS, Executive filed a lawsuit against the Company styled as BRADY J. CHURCHES V. MAZEL STORES, INC., Case No. 02-CVH 04-4337, Franklin County, Ohio Court of Common Pleas on April 19, 2002 alleging, among other things, the Company constructively and effectively terminated Churches employment; WHEREAS, the Company alleges that Churches voluntarily terminated his employment with the Company and commenced employment with Value City Stores, Inc.; WHEREAS, it is deemed prudent and advisable to avoid the uncertainty and burden of further litigation and to settle and forever resolve disputes and claims that Churches claims or may claim in the future on account of or in connection with any acts or omissions of the Company or any of its directors, officers or employees, prior to the date of this Agreement in connection with or arising out of Churches' employment with the Company and disputes and claims that the Company claims or may claim in the future on account of or in connection with any acts or omissions of Churches prior to the date of this Agreement; and WHEREAS, Executive has been given twenty-one (21) 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 16 Agreement), terminated as of February 2, 2002. Executive further resigns as a director and officer of the Company and as an officer and director of each of its Affiliates as of the Effective Date. Executive agrees to execute and deliver to the Secretary of the Company a letter evidencing and affirming such resignations 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 Five Hundred Thousand Dollars ($500,000), 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 4(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 (on the condition 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 June 30, 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. 3. DISMISSAL OF LAWSUIT WITH PREJUDICE. In consideration of the terms set forth in this Agreement, Executive shall cause his counsel to 17 file an entry with the Franklin County Court of Common Pleas dismissing with prejudice the Lawsuit. 4. 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 "Released 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 February 2, 2002; 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 from or relating to: (i) his employment or other association with the Company 18 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 19 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 filling a charge against the Company, any Affiliates, 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 an 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 receipt by Executive of this Agreement to consider and release and covenant not 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 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. 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 20 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. 5. 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 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, 21 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 omissions, upon which such actual or threatened action, proceeding or claims 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. 6. NON-COMPETITION; TERMINATION OF EXISTING EMPLOYMENT AGREEMENT. By this Agreement, the parties agree that the termination of the Employment Agreement occurred on February 2, 2002. Notwithstanding the terms of the Employment Agreement, the non-competition provision of Section 6.1 thereof shall terminate as of the Effective Date. 7. STOCK OPTIONS. The parties confirm that as of the Effective Date, all of Executive's unexercised, non-vested or vested stock options for Common Stock of the Company have expired. 8. 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. 9. 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. 10. MISCELLANEOUS. 22 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, NJ 07080 ATTN: Peter J. Hayes Telecopier Number: (908) 222-9741 With a copy to: Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A. 2600 Tower at Erieview 1301 East Ninth Street Cleveland, Ohio 44114-1824 Attention: Michael A. Ellis, Esq. Telecopier Number: (216) 623-4912 If to Executive: Brady Churches 1677 Taylor Corner Circle Columbus, Ohio 43004 Telecopier Number: (614) 239-2331 With a copy to: Shayne & Greenwald Co., L.P.A. 221 S. High Street Columbus, Ohio 43215 Attention: 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.' 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 23 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. F. GOVERNING LAW/JURISDICTION AND VENUE. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. Any claim or action arising hereunder 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 arbitrators' fee shall be split equally among the parties. IN WITNESS WHEREOF, the parties hereto have set their hands as of the date written above. MAZEL STORES, INC. By: ------------------------------ Peter J. Hayes, Chief Executive Officer ---------------------------------- BRADY J. CHURCHES 24