Employment Agreement - Zale Corp. and Robert J. DiNicola
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"),
dated as of September 7, 1999, is by and between ZALE CORPORATION, a Delaware
corporation ("Company"), and ROBERT J. DINICOLA ("Executive").
WHEREAS, Executive and Company are parties to that certain Employment
Agreement, dated as of August 1, 1997, as amended by that certain Amendment to
Employment Agreement, dated as of October 8, 1998 (the "Existing Agreement");
and
WHEREAS, Executive and Company desire to amend and restate the
Existing Agreement in its entirety as set forth below.
NOW, THEREFORE, in consideration of the foregoing recital and of the
mutual covenants set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Employment. Executive agrees to enter into the continued
employment of the Company, and the Company agrees to employ Executive, on the
terms and conditions set forth in this Agreement. Executive agrees during the
term of this Agreement to devote substantially all of his business time,
efforts, skills and abilities to the performance of his duties as stated in this
Agreement and to the furtherance of the Company's business.
Executive's job title will be Chairman of the Board and his
duties will be those as are designated by the Board of Directors of the Company
("Board"), consistent with the position of Chairman of the Board. Executive
further agrees to serve, without additional compensation, as an officer or
director, or both, of any subsidiary, division or affiliate of the Company or
any other entity in which the Company holds an equity interest, provided,
however, that (a) the Company shall indemnify Executive from liabilities in
connection with serving in any such position to the same extent as his
indemnification rights pursuant to the Company's Certificate of Incorporation,
By-laws and applicable Delaware law, and (b) such other position shall not
materially detract from the responsibilities of Executive pursuant to this
Section 1 or his ability to perform such responsibilities.
2. Compensation.
(a) Base Salary. During the term of Executive's employment with
the Company pursuant to this Agreement, the Company shall pay to Executive as
compensation for his services an annual base salary of not less than $750,000
payable semi-monthly ("Base Salary"). Executive's Base Salary will be payable in
arrears in accordance with the Company's normal payroll procedures and will be
reviewed annually and subject to upward adjustment at the discretion of the
Board or an authorized Committee or representative thereof.
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(b) Incentive Bonus. Executive's incentive compensation program
for the term of this Agreement shall be determined under the Company's Executive
Bonus Program, established by the Board in its discretion. Executive is eligible
to receive up to 50% of his Base Salary in accordance with the terms and
conditions of the Executive Bonus Program.
(c) Vacation. Executive shall be entitled to a reasonable
vacation of not less than 5 weeks each year of the term.
(d) Executive Perquisites. Executive shall be entitled to
receive such executive perquisites and fringe benefits as are provided to the
senior most executives and their families under any of the Company's plans
and/or programs in effect from time to time and such other benefits as are
customarily available to executives of the Company and their families.
(e) Club Membership. The Company shall pay all fees for
membership by Executive in a club of his choice, together with the dues therefor
for use by Executive for conferences, meetings and entertainment within the
scope of his employment.
(f) Tax Withholding. The Company has the right to deduct from
any compensation payable to Executive under this Agreement social security
(FICA) taxes and all federal, state, municipal or other such taxes or charges as
may now be in effect or that may hereafter be enacted or required.
(g) Life Insurance. In addition to the Company's group life
insurance coverage, the Company shall provide Executive with additional life
insurance coverage in the amount of $2,000,000.
(h) Medical Insurance. In addition to the Company's group
medical insurance coverage and/or Executive Medical Insurance Plan ("Medical
Plans"), the Company shall reimburse Executive for all additional medical
expenses incurred by Executive which are defined as reimbursable under the
Company's Medical Plans.
(i) Expense Reimbursements. The Company shall pay or reimburse
Executive for all reasonable business expenses incurred or paid by Executive in
the course of performing his duties hereunder, including but not limited to
reasonable travel expenses for Executive and his spouse. As a condition to such
payment or reimbursement, however, Executive shall maintain and provide to the
Company reasonable documentation and receipts for such expenses.
3. Term. Unless sooner terminated pursuant to Section 4 of this
Agreement, and subject to the provisions of Section 5 hereof, the term of this
Agreement shall commence as of the date hereof and shall continue for an initial
period of two (2) years. At the end of each year during the term, the term of
this Agreement shall be automatically renewed and extended for a period of one
(1) year, unless either party hereto delivers written notice otherwise to the
other party at least ninety (90) days prior to the end of such year.
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4. Termination. Notwithstanding the provisions of Section 3 hereof, but
subject to the provisions of Section 5 hereof, this Agreement (and Executive's
employment hereunder) shall terminate as follows:
(a) Death. This Agreement shall terminate upon the death of
Executive; provided, however, that the Company shall continue to pay (in
accordance with its normal payroll procedures) the Base Salary to Executive's
estate for a period of twelve (12) months after the date of Executive's death.
(b) Termination for Cause. The Company may terminate this Agreement
at any time for "Cause" (as hereinafter defined) by delivering a written
termination notice to Executive. For purposes of this Agreement, "Cause" shall
mean any of: (i) Executive's conviction of a felony or a crime involving moral
turpitude; (ii) Executive commits an act constituting fraud, deceit or material
misrepresentation with respect to the Company; (iii) Executive embezzles funds
or assets from the Company; (iv) Executive becomes addicted to any alcoholic,
controlled or illegal substance or drug; (v) Executive commits any act or
omission which would give the Company the right to terminate Executive's
employment under applicable law; or (vi) Executive fails to correct or cure any
material breach of or default under this Agreement within ten (10) days after
receiving written notice of such breach or default from the Company.
(c) Termination Without Cause. The Company may terminate this
Agreement at any time by delivering a written termination notice to Executive.
(d) Termination by Executive. Executive may terminate this Agreement
at any time by delivering ninety (90) days prior written notice to the Company;
provided, however, that the terms, conditions and benefits specified in Section
5 hereof shall apply or be payable to Executive if such termination occurs for
any of the following reasons:
(i) the assignment to the Executive by the Company of duties
inconsistent with, or the reduction of the powers and functions associated with,
Executive's position, duties, responsibilities and status with the Company or an
adverse change in Executive's title or office, unless such action is the result
of Executive's failure to meet preestablished and objective performance criteria
or termination of employment for Disability or Cause;
(ii) any material breach by the Company of any provision of this
Agreement; or
(iii) Executive elects to retire from his employment with the
Company effective at any time after September 6, 2000.
(e) Termination Following Disability. In the event, Executive becomes
mentally or physically impaired or disabled and is unable to perform his
material duties and responsibilities hereunder for a period of at least ninety
(90) days in the aggregate during any one
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hundred twenty (120) consecutive day period, the Company may terminate this
Agreement by delivering a written termination notice to Executive.
Notwithstanding the foregoing, Executive shall continue to receive his full
salary and benefits under this Agreement for a period of twelve (12) months
after the effective date of such termination.
(f) Payments. Following any expiration or termination of this
Agreement, and in addition to any amounts owed pursuant to Section 5 hereof, the
Company shall pay to Executive all amounts earned by Executive hereunder prior
to the date of such expiration or termination.
5. Certain Termination Benefits. Notwithstanding anything else contained
herein to the contrary, in the event (i) either the Company or Executive elects
not to renew the term of this Agreement pursuant to Section 3 hereof, (ii) this
Agreement is terminated by reason of Executive's death pursuant to Section 4(a),
(iii) the Company terminates this Agreement without cause pursuant to Section
4(c), (iv) Executive terminates this Agreement for Good Reason pursuant to
Section 4(d), or (v) the Company terminates this Agreement due to Executive's
disability pursuant to Section 4(e), then, to the extent applicable:
(a) Stock. On and as of the effective date of the expiration or
termination of this Agreement, all of Executive's outstanding stock options and
restricted stock grants under the Zale Corporation Omnibus Stock Incentive Plan
shall immediately vest.
(b) Supplemental Executive Retirement Plan. On and as of the
effective date of the expiration or termination of this Agreement, all of
Executive's benefits under the Zale Delaware, Inc. Supplemental Executive
Retirement Plan ("SERP") shall immediately vest. In addition, Executive shall
have a period of sixty (60) days after the effective date of such termination or
expiration to require the Company (by delivering written notice thereof) to make
a cash payment to Executive in an amount equal to the value of such benefits, in
which case the Company shall make such payment within ninety (90) days after the
effective date of such termination or expiration. In the event Executive fails
to require the Company to make such cash payment in accordance with the
preceding sentence, then Executive shall be entitled to receive such benefits as
and when provided in the SERP.
(c) Life Insurance. The Company shall continue to provide Executive
with group and additional life insurance coverage until Executive's death
pursuant to Section 2(g).
(d) Medical Insurance. The Company shall continue to provide
Executive and his family with group medical insurance coverage under the
Company's Medical Plans (as the same may change from time to time) or other
substantially similar health insurance, as well as all additional medical
expenses incurred by Executive which are defined as reimbursable under such
Medical Plans; provided, however, that the Company shall no longer be required
to provide Executive or his spouse, respectively, with such coverage on the date
that each qualifies for Medicare coverage.
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(e) Group Disability. The Company shall continue to provide Executive
coverage under the Company's group disability plan at all times during the term
of the Consulting Agreement contemplated by Section 5(i) hereof.
(f) Office. Executive shall be entitled to retain the cellular
telephone and the home office computer equipment provided to him by the Company;
provided, however, that Executive shall be responsible for the payment of all of
his cellular telephone bills, except for those expenses incurred for business
purposes. In addition, at Executive's request, the Company shall provide
Executive with an office at the Company's principal executive offices.
(g) Automobile. During the forty-five (45) day period following the
expiration or termination of this Agreement, Executive shall be entitled to
purchase from the Company, at the Company's book value therefor, the automobile
provided to him by the Company. In the event Executive does not elect to
purchase the automobile within such forty-five (45) period, then Executive
agrees to promptly return the automobile to the Company.
(h) Relocation. In the event that Executive desires to relocate his
home and family to an area outside of Dallas County, Texas, within the twelve
(12) month period following the expiration or termination of this Agreement,
then Company shall reimburse Executive for all reasonable and appropriate moving
and other expenses actually incurred by him in connection with such move, and
approved by the Compensation Committee of the Board of Directors.
(i) Consulting Agreement. In the event (i) either the Company or
Executive elects not to renew this Agreement pursuant to Section 3 or (ii)
Executive terminates this Agreement pursuant to Section 4(d)(iii), Executive and
Company shall enter into, as of the effective date the expiration or termination
of this Agreement, a Consulting Agreement in the form attached hereto as Exhibit
A.
(j) Offset. Any fringe benefits received by Executive in connection
with any other employment that are reasonably comparable, but not necessarily as
beneficial, to Executive as the fringe benefits then being provided by the
Company pursuant to this Section 5, shall be deemed to be the equivalent of, and
shall terminate the Company's responsibility to continue providing, the fringe
benefits then being provided by the Company pursuant to this Section 5. The
Company acknowledges that if Executive's employment with the Company is
terminated, Executive shall have no duty to mitigate damages.
(k) General Release. Acceptance by Executive of any amounts pursuant
to this Section 5 shall constitute a full and complete release by Executive of
any and all claims Executive may have against the Company, its officers,
directors and affiliates, including, but not limited to, claims he might have
relating to Executive's cessation of employment with the Company; provided,
however, that there may properly be excluded from the scope of such general
release the following:
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(i) claims that Executive may have against the Company for
reimbursement of ordinary and necessary business expenses incurred by
him during the course of his employment;
(ii) claims that may be made by the Executive for payment of Base
Salary, fringe benefits or stock options properly due to him; or
(iii) claims respecting matters for which the Executive is
entitled to be indemnified under the Company's Certificate of
Incorporation or Bylaws, respecting third party claims asserted or
third party litigation pending or threatened against the Executive.
A condition to Executive's receipt of any amounts pursuant to this Section 5
shall be Executive's execution and delivery of a general release as described
above. In exchange for such release, the Company shall, if Executive's
employment is terminated without Cause, provide a release to Executive, but only
with respect to claims against Executive which are actually known to the Company
as of the time of such termination.
6. Effect of Change in Control.
(a) If within two years following a "Change of Control" (as
hereinafter defined), Executive terminates his employment with the Company for
Good Reason (as hereinafter defined) or the Company terminates Executive's
employment for any reason other than Cause or disability, the Company shall pay
to the Executive: (1) an amount equal to three (3) times the Executive's Base
Salary as of the date of termination; (2) an amount equal to three (3) times the
average annual cash bonus paid to Executive for the two fiscal years immediately
preceding the date of termination; (3) all benefits under the Company's various
benefit plans, including group healthcare, dental and life, for the period equal
to thirty-six (36) months from the date of termination; and (4) a lump sum
payment equal to the actuarial equivalent (determined by the Company in good
faith with assistance of its accountants or actuaries), of the benefit which
would have accrued under the SERP if (i) Executive remained a participant in the
SERP for the three (3) year period commencing on the first day of the SERP's
plan year ("Plan Year") in which the Executive's employment with the Company
terminated ("Measurement Period"), (ii) during each Plan Year in the Measurement
Period the Executive earned benefit points equal to the highest number of the
benefit points earned by such Executive in a Plan Year during the three (3) year
period ending on the last day of the Plan Year immediately preceding the Plan
Year in which his employment with the Company terminated, and (iii) the
Executive's final average pay during the Measurement Period is the greater of
his monthly Base Salary on the date of (A) a Potential Change of Control, (B)
the Change of Control or (C) the date of his termination of employment.
(b) "Change of Control" shall mean the date as of which: (i) there
shall be consummated (1) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's common stock would be converted into cash, securities or
other property, other than a merger of the Company in
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which the holders of the Company's common stock immediately prior to the merger
have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (2) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company; or (ii) the stockholders of
the Company approve any plan or proposal for the liquidation or dissolution of
the Company; or (iii) any person ( as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 30% of the Company's outstanding common stock; or
(iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire board of directors of the Company
shall cease for any reason to constitute a majority thereof unless the election,
or the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period.
(c) "Good Reason" shall mean any of the following actions taken by
the Company without the Executive's written consent after a Change of Control:
(i) the assignment to the Executive by the Company of duties
inconsistent with, or the reduction of the powers and functions
associated with, the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change of Control
or Potential Change of Control (as defined below), or an adverse
change in Executive's titles or offices as in effect immediately prior
to a Change of Control or Potential Change of Control, or any removal
of the Executive from or any failure to re-elect Executive to any of
such positions, except in connection with the termination of his
employment for Disability or Cause or as a result of Executive's death
or by the Executive other than for Good Reason;
(ii) A reduction by the Company in the Executive's base salary as
in effect on the date of a Change of Control or Potential Change of
Control, or as the same may be increased from time to time during the
term of his Agreement, or the Company's failure to increase (within 12
months of Executive's last increase in base salary) the Executive's
base salary after a Change of Control or Potential Change of Control,
unless such failure is the result of (A) a hiring or salary freeze
uniformly applied to all employees or (B) Executive's failure to meet
preestablished and objective performance criteria;
(iii) Company's principal executive offices shall be moved to a
location outside Irving, Dallas County, Texas;
(iv) Company shall require the Executive to be based anywhere
other than at the Company's principal executive offices or the
location where the Executive is based on the date of a Change of
Control or Potential Change of Control, or if Executive agrees to such
relocation, the Company fails to reimburse the Executive for moving
and all other expenses incurred with such move;
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(v) The Company shall fail to continue in effect any
Company-sponsored plan or benefit that is in effect on the date of a
Change of Control or Potential Change of Control, and provides (A)
incentive or bonus compensation, (B) fringe benefits such as vacation,
medical benefits, life insurance and accident insurance, (C)
reimbursement for reasonable expenses incurred by the Executive in
connection with the performance of duties with the Company, and (D)
pension benefits such as a Code Section 401(k) plan;
(vi) Any material breach by the Company of any provision of this
Agreement; and
(vii) Any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company effected in
accordance with the provisions of Section 6.
(d) "Potential Change of Control" shall mean the date as of which (1)
the Company enters into an agreement the consummation of which, or the approval
by shareholders of which, would constitute a Change of Control; (ii) proxies for
the election of Directors of the Company are solicited by anyone other than the
Company; (iii) any person (including, but not limited to, any individual,
partnership, joint venture, corporation, association or trust) publicly
announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change of Control; or (iv) any other event
occurs which is deemed to be a Potential Change of Control by the Board and the
Board adopts a resolution to the effect that a Potential Change of Control has
occurred.
(e) In the event that (i) Executive would otherwise be entitled to
the compensation and benefits described in Section 6(a) hereof ("Compensation
Payments"), and (ii) the Company determines, based upon the advice of tax
counsel selected by the Company's independent auditors and acceptable to
Executive, that, as a result of such Compensation Payments and any other
benefits or payments required to be taken into account under Code Section
280G(b)(2) ("Parachute Payments"), any of such Parachute Payments would be
reportable by the Company as "excess parachute payments", such Compensation
Payments shall be reduced to the extent necessary to cause Executive's Parachute
Payments to equal 2.99 times the "base amount" as defined in Code Section
280G(b)(3) with respect to such Executive. However, such reduction in the
Compensation Payments shall be made only if, in the opinion of such tax counsel,
it would result in a larger Parachute Payment to the Executive than payment of
the unreduced Parachute Payments after deduction of tax imposed on and payable
by the Executive under Section 4999 of the Code ("Excise Tax"). The value of any
non-cash benefits or any deferred payment or benefit for purposes of this
paragraph shall be determined by the Company's independent auditors.
(f) The parties hereto agree that the payments provided under Section
6(a) above, as the case may be, are reasonable compensation in light of
Executive's services rendered
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to the Company and that neither party shall contest the payment of such benefits
as constituting an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code.
(g) Unless the Company determines that any Parachute Payments made
hereunder must be reported as "excess parachute payments" in accordance with
Section 6(e) above, neither party shall file any return taking the position that
the payment of such benefits constitutes an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code.
7. Non-Competition. Executive agrees that during the term of this
Agreement and for a period of eighteen (18) months from the date of the
termination of Executive's employment with the Company pursuant to Sections
4(c), 4(d) and 6 herein or for any other reason that results in the Executive
being entitled to the benefits described in Section 5, he will not, directly or
indirectly, compete with the Company by providing to any company that is in a
"Competing Business" services substantially similar to the services currently
being provided by Executive. Competing Business shall be defined as any business
that engages, in whole or in part, in the wholesale or retail sale of jewelry in
the United States, and Executive's employment function or affiliation is
directly or indirectly in such business of jewelry. Executive shall not be
obligated to abide by the foregoing covenant if the Company defaults in the
payment of any severance compensation or benefits.
8. Nonsolicitation of Employees. For a period of two years after the
termination or cessation of his employment with the Company for any reason
whatsoever, Executive shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation, or other entity, solicit or in
any manner attempt to influence or induce any employee of the Company or its
subsidiaries or affiliates (known by the Executive to be such) to leave the
employment of the Company or its subsidiaries or affiliates, nor shall he use or
disclose to any person, partnership, association, corporation or other entity
any information obtained while an employee of the Company concerning the names
and addresses of the Company's employees.
9. Nondisclosure of Trade Secrets. During the term of this Agreement,
Executive will have access to and become familiar with various trade secrets and
proprietary and confidential information of the Company, its subsidiaries and
affiliates, including, but not limited to, processes, computer programs,
compilations of information, records, sales procedures, customer requirements,
pricing techniques, customer lists, methods of doing business and other
confidential information (collectively, referred to as "Trade Secrets") which
are owned by the Company, its subsidiaries and/or affiliates and regularly used
in the operation of its business, and as to which the Company, its subsidiaries
and/or affiliates take precautions to prevent dissemination to persons other
than certain directors, officers and employees. Executive acknowledges and
agrees that the Trade Secrets (1) are secret and not known in the industry; (2)
give the Company or its subsidiaries or affiliates an advantage over competitors
who do not know or use the Trade Secrets; (3) are of such value and nature as to
make it reasonable and necessary to protect and preserve the confidentiality and
secrecy of the Trade Secrets; and (4) are valuable, special and unique assets of
the Company or its subsidiaries or affiliates, the disclosure of which could
cause substantial injury and loss of profits and goodwill to the Company or its
subsidiaries or affiliates.
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Executive may not use in any way or disclose any of the Trade Secrets, directly
or indirectly, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment under this
Agreement, if required in connection with a judicial or administrative
proceeding, or if the information becomes public knowledge other than as a
result of an unauthorized disclosure by the Executive. All files, records,
documents, information, data and similar items relating to the business of the
Company, whether prepared by Executive or otherwise coming into his possession,
will remain the exclusive property of the Company and may not be removed from
the premises of the Company under any circumstances without the prior written
consent of the Board (except in the ordinary course of business during
Executive's period of active employment under this Agreement), and in any event
must be promptly delivered to the Company upon termination of Executive's
employment with the Company. Executive agrees that upon his receipt of any
subpoena, process or other request to produce or divulge, directly or
indirectly, any Trade Secrets to any entity, agency, tribunal or person,
Executive shall timely notify and promptly hand deliver a copy of the subpoena,
process or other request to the Board. For this purpose, Executive irrevocably
nominates and appoints the Company (including any attorney retained by the
Company), as his true and lawful attorney-in-fact, to act in Executive's name,
place and stead to perform any act that Executive might perform to defend and
protect against any disclosure of any Trade Secrets.
10. Severability. The parties hereto intend all provisions of Sections 7,
8 and 9 hereof to be enforced to the fullest extent permitted by law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any provision of Sections 7, 8 or 9 hereof is too broad to be enforced as
written, the parties intend that the court reform the provision to such narrower
scope as it determines to be reasonable and enforceable. In addition, however,
Executive agrees that the nonsolicitation and nondisclosure agreements set forth
above each constitute separate agreements independently supported by good and
adequate consideration shall be severable from the other provisions of, and
shall survive, this Agreement. The existence of any claim or cause of action of
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants of Executive contained in the nonsolicitation and nondisclosure
agreements. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision never
constituted a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or enforceable provision as may be possible and be legal,
valid and enforceable.
11. Arbitration - Exclusive Remedy.
(a) The parties agree that the exclusive remedy or method of
resolving all disputes or questions arising out of or relating to this Agreement
shall be arbitration. Arbitration shall be held in Dallas, Texas by three
arbitrators, one to be appointed by the Company, a second to be appointed by
Executive, and a third to be appointed by those two arbitrators. The third
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arbitrator shall act as chairman. Any arbitration may be initiated by either
party by written notice ("Arbitration Notice") to the other party specifying the
subject of the requested arbitration and appointing that party's arbitrator.
(b) If (i) the non-initiating party fails to appoint an arbitrator by
written notice to the initiating party within ten days after the Arbitration
Notice, or (ii) the two arbitrators appointed by the parties fail to appoint a
third arbitrator within ten days after the date of the appointment of the second
arbitrator, then the American Arbitration Association, upon application of the
initiating party, shall appoint an arbitrator to fill that position.
(c) The arbitration proceeding shall be conducted in accordance with
the rules of the American Arbitration Association. A determination or award made
or approved by at least two of the arbitrators shall be the valid and binding
action of the arbitrators. The costs of arbitration (exclusive of the expense of
a party in obtaining and presenting evidence and attending the arbitration and
of the fees and expenses of legal counsel to a party, all of which shall be
borne by that party) shall be borne by the Company only if Executive receives
substantially the relief sought by him in the arbitration, whether by
settlement, award or judgment; otherwise, the costs shall be borne equally
between the parties. The arbitration determination or award shall be final and
conclusive on the parties, and judgment upon such award may be entered and
enforced in any court of competent jurisdiction.
12. Miscellaneous.
(a) Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other must be in writing and must be either (i) personally delivered, (ii)
mailed by registered or certified mail, postage prepaid with return receipt
requested, (iii) delivered by overnight express delivery service or same-day
local courier service, or (iv) delivered by telex or facsimile transmission, to
the address set forth below, or to such other address as may be designated by
the parties from time to time in accordance with this Section 11(a):
If to the Company: Zale Corporation
901 West Walnut Hill Lane
Irving, Texas 75038
Attention: Alan P. Shor, Executive
Vice President
If to Executive: Robert J. DiNicola
3800 Beverly Drive
Dallas, Texas 75205
Notices delivered personally or by overnight express delivery service
or by local courier service are deemed given as of actual receipt. Mailed
notices are deemed given three business days after mailing. Notices
delivered by telex or facsimile transmission are deemed given upon receipt
by the sender of the answer back (in the case of a telex) or transmission
confirmation (in the case of a facsimile transmission).
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(b) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or written, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect to the subject matter of this
Agreement.
(c) Modification. No change or modification of this Agreement is
valid or binding upon the parties, nor will any waiver of any term or condition
in the future be so binding, unless the change or modification or waiver is in
writing and signed by the parties to this Agreement.
(d) Governing Law and Venue. The parties acknowledge and agree that
this Agreement and the obligations and undertakings of the parties under this
Agreement will be performable in Irving, Dallas County, Texas. This Agreement is
governed by, and construed in accordance with, the laws of the State of
Delaware. If any action is brought to enforce or interpret this Agreement, venue
for the action will be in Irving, Dallas County, Texas.
(e) Counterparts. This Agreement may be executed in counterparts,
each of which constitutes an original, but all of which constitutes one
document.
(f) Costs. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, each party shall bear its own costs
and expenses.
(g) Estate. If Executive dies prior to the expiration of the term of
employment or during a period when monies are owing to him, any monies that may
be due him from the Company under this Agreement as of the date of his death
shall be paid to his estate and as when otherwise payable.
(h) Assignment. The Company shall have the right to assign this
Agreement to its successors or assigns. The terms "successors" and "assigns"
shall include any person, corporation, partnership or other entity that buys all
or substantially all of the Company's assets or all of its stock, or with which
the Company merges or consolidates. The rights, duties and benefits to Executive
hereunder are personal to him, and no such right or benefit may be assigned by
him.
(i) Binding Effect. This Agreement is binding upon the parties
hereto, together with their respective executors, administrators, successors,
personal representatives, heirs and permitted assigns.
(j) Waiver of Breach. The waiver by the Company or Executive of a
breach of any provision of this Agreement by Executive or the Company may not
operate or be construed as a waiver of any subsequent breach.
12
<PAGE> 13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Company"
ZALE CORPORATION
By: /s/ ALAN P. SHOR
----------------------------------------
Name: Alan P. Shor
--------------------------------------
Title: Executive Vice President
-------------------------------------
By: /s/ RICHARD C. MARCUS
----------------------------------------
Name: Richard C. Marcus
--------------------------------------
Title: Chairman, Compensation Committee
-------------------------------------
"Executive"
/s/ ROBERT J. DINICOLA
---------------------------------------------
Robert J. DiNicola