EMPLOYMENT AGREEMENT
EXHIBIT 10.4
THIS EMPLOYMENT AGREEMENT (“Agreement”), dated as of January 1, 2020, by and between WEYCO GROUP INC., a Wisconsin corporation (the “Company”), and XXXXXX X. XXXXXXXXX, XX. of Milwaukee, Wisconsin (“Florsheim”).
1. Employment. The Company hereby employs Florsheim, during the term of this Agreement, in an executive and managerial capacity, to supervise and direct the operations of the Company as they are now or may hereafter be constituted. Florsheim shall have such title and responsibilities as the Company’s Corporate Governance and Compensation Committee of the Board of Directors shall from time to time assign to him, but the duties which he shall be called upon to render hereunder shall not be of a nature substantially inconsistent with those he has rendered and is currently rendering to the Company as its Chairman and Chief Executive Officer. During the term of this Agreement, Florsheim shall serve also, without additional compensation, in such offices of the Company to which he may be elected or appointed by the Company’s Board of Directors. The Company shall not require Florsheim, without his consent, to serve principally at a place other than Milwaukee, Wisconsin or its immediate suburban area, and shall exert its best efforts so as not to require him in the performance of his duties hereunder to be absent, without his consent, from said city or its immediate suburban area during any weekend or legal holiday nor for more than ten (10) days in any calendar month. Florsheim hereby accepts such employment and agrees to devote his full time, attention, knowledge and skill to the business and interest of the Company throughout the period of his employment hereunder. Florsheim shall be entitled to take vacations in the same manner and for the same periods of time as has been his custom during the previous three years.
(a) As compensation for his services to the Company during the term of this Agreement in whatever capacity or capacities rendered, the Company shall, subject to the provisions of Section 3 hereof, pay Florsheim a salary of $696,000.00 (Six Hundred Ninety-Six Thousand Dollars) per annum, or such greater amount per annum as the Corporate Governance and Compensation Committee of the Board of Directors of the Company may, in its discretion, fix; said salary is to be payable in equal, or approximately equal, bi-weekly installments.
(b) Nothing herein shall preclude Florsheim from receiving any additional compensation, whether in the form of bonus or otherwise, or from participating in any present or future profit-sharing, pension or retirement plan, insurance, sickness or disability plan, stock option plan or other plan for the benefits of Florsheim or the employees of the Company, in each case to the extent and in the manner approved or determined by the Company’s Board of Directors. The Company shall continue to provide Florsheim the use of an automobile, and other benefits at least equal to those provided to him under his previous contract of employment. These benefits are set forth in Schedule A hereto.
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(a) If, during the period of his employment hereunder, Florsheim is dismissed by the Company for cause, thereupon his employment shall terminate. “Cause”, for purposes of this subparagraph, shall mean conduct or activities that cause a substantial demonstrable detriment to the Company.
(b) If Florsheim’s employment terminates pursuant to Section 3(a) above, the Company shall be obligated to pay him his salary and other payments due to be paid hereunder, on or prior to the date of termination; provided, that nothing herein shall be deemed to entitle Florsheim to amounts accrued but not due to be paid, or to accelerate the date on which any payment of salary or bonus is due.
(c) (i) If, during the term of this Agreement, the Company for any reason other than that contained in Section 3(a) terminates the employment of Florsheim, or in the event that he terminates his employment following an event described in Section 6 hereof, the Company shall pay to Florsheim as severance pay, on the first day of the seventh month which begins after the date of such termination, a lump sum amount that, when added to any other payments or benefits which constitute “parachute payments”, will be equal to 299% of Florsheim’s “base amount”, as those terms are defined in Section 280G of the Internal Revenue Code of 1986 (the “Code”) and regulations promulgated by the Internal Revenue Service thereunder. The determination of Florsheim’s base amount shall be made by the Company’s independent auditors.
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(ii) All or a portion of the payment otherwise required to be made pursuant to the provisions of subparagraph (i) above shall be delayed to the extent the Company reasonably anticipates that the Company’s deduction with respect to such payment would be limited or eliminated by application of Code Section 162(m); provided, however that such payment shall be made on the earliest date on which the Company anticipates that the deduction for payment of the amount will not be limited or eliminated by application of Code Section 162(m). In any event, such payment shall be made no later than the last day of the calendar year in which occurs the six (6) month anniversary of Florsheim’s termination of employment. Any deferred amounts shall earn interest at the rate of 7% per annum until paid.
(d) In the event Florsheim is prevented from performing his duties by reason of disability, the salary provided by Section 2(a) of this Agreement shall cease as of the date he becomes permanently disabled, except that the Company shall pay to Florsheim from the date such salary ceases to December 31, 2022, inclusive, a salary at the rate equal to 75% of his then current salary, less any amount received by Florsheim pursuant to a salary continuation insurance plan, the premiums for which are paid in whole or in part by the Company. Florsheim shall be considered to be suffering from a “disability” if he is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, either (i) receiving income replacement benefits for a period of not less than three months under a welfare plan covering employees of the Company or (ii) unable to engage in any substantial gainful activity.
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(e) In the event Florsheim dies prior to the termination of his employment hereunder (for purposes of this Section 3(e), such employment shall not be deemed terminated if, at the time of his death, the Company was making payments pursuant to Section 3(d) above), the salary provided by Section 2(a) (or Section 3(d), as the case may be) shall cease as of the date of his death (prorated for part of any month), and the Company shall pay to the beneficiary or beneficiaries of Florsheim, as designated by him pursuant to written direction given by him to the Company (or in the absence of such writing or in the event the last such writing filed by him shall designate one or more persons who are not living at the time of his death or shall for any other reason be wholly or partially ineffective, to the personal representatives of his estate) a death benefit equal to his salary hereunder (at the annual rate which was being paid to him at the date of his death) for a three-year period. Such death benefits shall be payable in thirty-six equal monthly installments, the first of which shall be paid within sixty days next following the date of his death and the remaining of which shall be made on the date during each of the thirty-five next succeeding calendar months corresponding to the date of such first payment. If any payments are required to be made under this Section 3(e) to a beneficiary of Florsheim who shall have died after having commenced receiving payments hereunder, such payment shall be made to the personal representative of said beneficiary’s estate.
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(a) The replacement of two or more of the existing members of the Company’s Board of Directors by persons not nominated by the Board of Directors; or
(b) Any amendment to Section 2 of Article III of the Company’s By-Laws to enlarge the number of directors of the Company if the change was not supported by the existing Board of Directors; or
(c) Any change in Florsheim’s duties or powers such that his duties or powers, as changed, would be of a nature substantially inconsistent with those he has rendered in the past and is currently rendering to the Company as its chief executive officer; or
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(d) A successful tender offer for 15% or more of the shares or merger or consolidation or transfer of assets of the Company; or
(e) A change in control of more than 15% of the shares in the Company, such that Florsheim decides in good faith that he can no longer effectively discharge his duties.
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12. Prior Employment Agreements. This Agreement supersedes all oral or written employment agreements heretofore made by and between the parties with respect to the subject matter hereof, and any and all such agreements are hereby canceled and terminated in their entirety.
13. Applicable Law. This Agreement, executed in the State of Wisconsin, shall be construed in accordance with and governed in all respects by the laws of the State of Wisconsin to the extent not governed by federal law.
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(a) In order to facilitate compliance with Section 409A of the Internal Revenue Code, the Company and Florsheim agree that they shall neither accelerate nor defer or otherwise change the time at which any payment due hereunder is to be made, except as may otherwise be permitted under Code Section 409A of the Internal Revenue Code and regulations thereunder.
(b) Whether a termination of employment has occurred will be construed in a manner consistent with the requirements described in IRS regulations under Code Section 409A. Termination of employment by the Company on the one hand or by Florsheim on the other hand (other than by death of Florsheim) shall be communicated by a written notice of termination to the other. That notice shall indicate the specific termination provision in this Agreement relied upon and, to the extent applicable, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provisions so indicated and the termination date. The termination date shall be no later than thirty (30) days after the date such written notice is provided but may be earlier if so specified in the notice.
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WEYCO GROUP, INC. a Wisconsin corporation, | ||||
By | /s/ Xxxx X. Xxxxxxxxx | |||
Its | President | |||
Attest: | /s/ Xxxx Xxxxxxxxxx | |||
Its Secretary | ||||
/s/ Xxxxxx X. Xxxxxxxxx,Xx. | ||||
Xxxxxx X. Xxxxxxxxx,Xx. |
(SEAL)
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SCHEDULE A
Life and Accidental Death and Dismemberment Insurance
Health Insurance
Weyco Group, Inc. Pension
Plan
Deferred Compensation Agreement
Weyco Group, Inc. Deferred Compensation Plan
Weyco Group, Inc. Excess Benefits Plan
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February 21, 2020
TO: | WEYCO GROUP, INC. |
Pursuant to Section 3(e) of the Employment Agreement dated as of January 1, 2020, by and between Weyco Group, Inc., a Wisconsin corporation, and Xxxxxx X. Xxxxxxxxx, Xx. of Milwaukee, Wisconsin, I hereby designate Xxxxxxxx Xxxxxxxxx as beneficiary of the death benefits equal to my salary hereunder for a three-year period.
/s/ Xxxxxx X. Xxxxxxxxx, Xx. | |
Xxxxxx X. Xxxxxxxxx, Xx. |
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