EXHIBIT 10.3
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this "Amendment"), dated as of
December 21, 2007, is by and between Xxxxxx Xxxxxx, Ltd., a Delaware corporation
(the "Company"), and Xxxxxxx Xxxxxxxxx ("Executive").
WHEREAS, the parties hereto are parties to that certain Employment
Agreement, dated as of May 16, 2007 (the "Employment Agreement").
WHEREAS, the parties hereto, acting pursuant to Section 8(g) of the
Employment Agreement, desire to amend the Employment Agreement to make certain
changes thereto as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Section 1 of the Employment Agreement is hereby deleted in its
entirety and replaced with the following:
"1. Term. The term of employment shall commence upon the
Closing, if one occurs (the "Effective Date") and shall continue until June 30,
2008 (the "Term"), unless terminated earlier as provided herein."
2. Section 2(b) of the Employment Agreement is hereby amended by
adding the following text as the last sentence of Section 2(b): "In addition to
faithfully and diligently performing his duties as specified herein through the
Term, Executive shall, in conformity with the directions of the Company, assist
the Company in the hiring and/or training of a person or entity to manage the
Company's e-commerce business (the "E-commerce Successor") and shall assist the
Company in the transition of such responsibilities from Executive to the
E-commerce Successor." In addition, the third sentence of Section 2(b) is hereby
deleted and Executive acknowledges and agrees that no violation of such
provision has occurred prior to the date hereof.
3. Section 3(b) of the Employment Agreement is hereby deleted in
its entirety. The Company and Executive hereby agree that no bonus shall be
payable by the Company to Executive pursuant to the Employment Agreement, and
all references to any bonus payment elsewhere in the Employment Agreement shall
be of no force or effect.
4. Section 3(c) of the Employment Agreement is hereby deleted in
its entirety and replaced with the following:
"(c) Stock Options. The Company and Executive agree that
all stock options granted by the Company to Executive under the Company's 2006
Stock Incentive Plan are hereby cancelled and forfeited, effective as of the
date hereof. The Company and Executive further agree that (i) the Non-Qualified
Stock Option Agreement Pursuant to the Xxxxxx Xxxxxx, Ltd. 2006 Stock Option
Plan, dated as of May 16, 2007, between the Company and Executive in respect of
the grant of options to purchase from the Company 150,000 shares of the
Company's common stock at a price per share of $45.00 and (ii) the Non-Qualified
Stock Option Agreement Pursuant to the Xxxxxx Xxxxxx, Ltd. 2006 Stock Option
Plan, dated as of May 16, 2007, between the Company and Executive in respect of
the grant of options to purchase from the Company 150,000 shares of the
Company's common stock at a price per share of $50.00, in each case, are hereby
terminated in all respects."
5. The parties agree that this Amendment does not constitute a
termination by the Company for Cause or a Change in Control as such terms are
defined in the Employment Agreement, and Executive shall not receive any
payments pursuant to Section 5 of the Employment Agreement in connection with
the execution of this Amendment, Executive's continued employment through the
Term or the conclusion of the Term on June 30, 2008.
6. The second sentence of Section 4(c) of the Employment
Agreement is hereby deleted in its entirety and replaced with the following:
"For purposes of this Agreement, the term "Cause" shall mean
any of the following: (i) the perpetration of an intentional and knowing fraud
against or affecting the Company or any of its affiliates or any customer,
client, agent, or employee thereof ("fraud," for purposes of this clause (i),
meaning a false representation of a material fact, whether by words, conduct,
false or misleading allegations or concealment of that which should have been
disclosed, which deceives and is intended to deceive another so that he shall
act upon it to his legal injury); (ii) the indictment of Executive for (A) a
felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or
fraud ("indictment," for these purposes, meaning a United States-based
indictment, probable cause hearing or any other procedure pursuant to which an
initial determination of probable or reasonable cause with respect to such
offense is made); or (iii) any material breach by Executive of this Agreement
and the failure of Executive to cure such material breach within thirty (30)
days after written notice.
7. Each of Section 4(e) and Section 5(d) of the Employment
Agreement is hereby deleted in its entirety. The Company and Executive hereby
agree that Executive shall not be entitled to receive any payment under the
Employment Agreement upon a change in control of the Company (other than the
payments Executive is entitled to receive pursuant to Section 5(c) of the
Employment Agreement upon the termination of his employment by the Company
without Cause ), and that all references to any payment upon a change in control
of the Company elsewhere in the Employment Agreement shall be of no force or
effect. Section 5(c) is hereby amended to provide that the payment of Base
Salary shall be payable in a lump sum within ten (10) days of such termination
without cause.
8. Section 6(b) of the Employment Agreement is hereby deleted in
its entirety and replaced with the following:
"(b) Non-competition; Non-solicitation.
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(i) Executive acknowledges and recognizes the
highly competitive nature of the Company's business and that access to the
Company's confidential records and proprietary information renders him special
and unique within the Company's industry. In consideration of the payment by the
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Company to Executive of amounts that may hereafter be paid to Executive pursuant
to this Agreement (including, without limitation, pursuant to Sections 3 and 5
hereof) and other obligations undertaken by the Company hereunder, Executive
agrees that (A) through June 30, 2008 or, if earlier, the date on which
Executive's employment is terminated, Executive shall not, directly or
indirectly, engage (as owner, investor, partner, stockholder, employer,
employee, consultant, advisor, director or otherwise) in any Competing Business,
and (B) following the date on which Executive's employment is terminated through
December 31, 2011, Executive shall not, directly or indirectly, engage (as
owner, investor, partner, stockholder, employer, employee, consultant, advisor,
director or otherwise) in any Post-Employment Competing Business; provided, in
each case, that the provisions of this Section 6(b)(i)(A) will not be deemed
breached merely because Executive, (X) owns less than 3% of the outstanding
common stock of a publicly-traded company, (Y) owns no more than 50% of The
Preschoolians Company and/or sits on the board of such business, provided that
Executive is not active in the management of such business or (Z) participates
in The Preschoolians Company business (including being active in the management
of such business), so long as (i) such participation does not occur prior to
July 1, 2008, and (ii) The Preschoolians Company business is substantially
similar in scope and business line and is conducted in a substantially similar
manner as it is presently conducted as of the date of this Agreement. For
purposes of this Agreement, "Competing Business" shall mean the design,
sourcing, marketing and sale of branded footwear to consumers through retail
stores and e-commerce business, and "Post-Employment Competing Business" shall
mean any of the following businesses: Aldo; Xxxx Xxxxxx or any entity owned or
controlled by Xxxx Xxxxxx; Xxxxxxx Xxxxxxxx; Dolce Vita; Xxxx Xxxxxx / Facade;
Camuto Group; and Nine West.
(ii) In further consideration of the payment by
the Company to Executive of amounts that may hereafter be paid to Executive
pursuant to this Agreement (including, without limitation, pursuant to Sections
3 and 5 hereof) and other obligations undertaken by the Company hereunder,
Executive agrees that: (A) during his employment and through December 31, 2011
(the "Covered Time"), he shall not, directly or indirectly, (i) solicit,
encourage or attempt to solicit or encourage any of the employees, agents,
consultants or representatives of the Company or any of its affiliates to
terminate his, her, or its relationship with the Company or such affiliate, (ii)
solicit, encourage or attempt to solicit or encourage any of the employees of
the Company or any of its affiliates (other than persons or entities that are
subcontractors of The Preschoolians Company as of December 18, 2007 or that were
subcontractors of The Preschoolians Company within the twelve months prior to
December 18, 2007) to become employees of any other person or entity, or (iii)
persuade or seek to persuade any customer of the Company or any affiliate to
cease to do business or to reduce the amount of business which any customer has
customarily done or contemplates doing with the Company or such affiliate,
whether or not the relationship between the Company or its affiliate and such
customer was originally established in whole or in part through Executive's
efforts; and (B) during his employment, he shall not, directly or indirectly,
solicit or attempt to solicit any customer, vendor or distributor of the Company
or any of its affiliates with respect to any product or service being furnished,
made, sold or leased by the Company or such affiliate; provided that the
provisions of Section 6(b)(ii)(A)(iii) will not be deemed breached merely
because Executive: (X) owns less than 3% of the outstanding common stock of a
publicly-traded company, (Y) owns no more than 50% of The Preschoolians Company
and/or sits on the board of such business, provided that Executive is not active
in the management of such business, or (Z) is involved in the advertising,
marketing and sales of footwear to customers generally without use of any
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confidential information of the Company so long as such involvement is in
compliance with Section 6(b)(i). For purposes of this Section 6(b) only, the
terms "customer," "vendor" and "distributor" shall mean a customer, vendor or
distributor who has done business with the Company or any of its affiliates
within twelve months preceding the termination of Executive's employment.
(iii) During Executive's employment with the
Company, Executive agrees that upon the earlier of Executive's (i) negotiating
with any Competitor (as defined below) concerning the possible employment of
Executive by the Competitor, (ii) receiving an offer of employment from a
Competitor, or (iii) becoming employed by a Competitor, Executive will (A)
immediately provide notice to the Company of such circumstances and (B) provide
copies of Section 6 of this Agreement to the Competitor. Executive further
agrees that the Company may provide notice to a Competitor of Executive's
obligations under this Agreement, including without limitation Executive's
obligations pursuant to Section 6 hereof. For purposes of this Agreement,
"Competitor" shall mean any entity (other than the Company or any of its
affiliates) that engages, directly or indirectly, in any Competing Business.
(iv) Executive understands that the provisions of
this Section 6(b) may limit his ability to earn a livelihood in a business
similar to the business of Compo, the Company or its affiliates but nevertheless
agrees and hereby acknowledges that the consideration provided under this
Agreement, including any amounts or benefits provided under Sections 3 and 5
hereof and other obligations undertaken by the Company hereunder, is sufficient
to justify the restrictions contained in such provisions. In consideration
thereof and in light of Executive's education, skills and abilities, Executive
agrees that he will not assert in any forum that such provisions prevent him
from earning a living or otherwise are void or unenforceable or should be held
void or unenforceable."
9. Except as specifically amended hereby, each provision of the
Employment Agreement shall continue in full force and effect in accordance with
its terms.
10. To the extent of any inconsistency between the terms of the
Employment Agreement and this Amendment, the terms of this Amendment will
control.
11. This Amendment shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of New York
applicable to contracts made and to be entirely performed therein, without
regard to principles of conflicts of laws.
12. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all, of
the parties hereto. Any signature delivered by facsimile or electronic mail
shall have the same effect as an original hereto.
13. Capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed thereto in the Employment Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
XXXXXX XXXXXX, LTD
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxxx
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