Exhibit 10.5(f)
AMENDMENT NO. 5 TO EMPLOYMENT AGREEMENT
AMENDMENT NO. 5, dated as of November 29, 2000, to the Employment
Agreement, dated as of January 3, 1995 (as previously amended by the Amendment
to Employment Agreement dated as of May 17, 1995, Amendment No. 2 to Employment
Agreement dated as of March 5, 1997, Amendment No. 3 to Employment Agreement
dated as of July 1, 1997 and Amendment No. 4 to Employment Agreement dated as of
February 16, 2000, the "Employment Agreement") by and among Finlay Enterprises,
Inc., a Delaware corporation, Finlay Fine Jewelry Corporation, a Delaware
corporation, and Xxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H :
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WHEREAS, the parties hereto mutually desire to amend certain provisions of
the Employment Agreement;
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree as follows:
1. The provisions of Section 1 of the Employment Agreement shall be amended
so that the ending date is extended by four years to January 31, 2005.
2. The provisions of Section 3 of the Employment Agreement shall be amended
so that the Base Salary shall be increased to the annual rate of $900,000
effective as of February 1, 2001 (the "Effective Date"). The Base Salary shall
be increased in increments of not less than $35,000 per year at the commencement
of each succeeding year during the Employment Term, with the first such increase
to be effective on February 1, 2002.
3. The provisions of Section 4(b) of the Employment Agreement shall be
amended to read in its entirety as follows:
"Commencing with the 2001 Fiscal Year (i.e., the year beginning
February 4, 2001), the target amount of Incentive Compensation payable in
respect of any Fiscal Year during the Employment Term shall be 100% of the
Base Salary in effect at the beginning of such Fiscal Year (the "Target
Incentive Amount"). If EBITA in any Fiscal Year is 80.00% of the Target
Level for such Fiscal Year, the Incentive Compensation payable in respect
of such Fiscal Year shall be 20.00% of the Target Incentive Amount. If
EBITA in any Fiscal Year exceeds 80.00% of the Target Level, the percentage
of the Target Incentive Amount payable in respect of such Fiscal Year shall
be equal to the sum of (i) 20% plus (ii) 2% for each percentage point
(calculated to the nearest 1/100th of a percentage point) by which EBITA in
such Fiscal Year exceeds 80.00% of the Target Level. No Incentive
Compensation shall be payable in respect of any Fiscal Year in which EBITA
for such Fiscal Year is less than 80% of the Target Level for such Fiscal
Year.
4. (a) Effective as of February 4, 2001, the Parent shall issue to
Executive an aggregate of 100,000 shares of Common Stock, subject to
restrictions ("Restricted Stock"), pursuant to a restricted stock agreement to
be entered by Executive and the Parent, with the Restricted Stock to become
fully vested and nonforfeitable if Executive still is, and since the date of
this Amendment No. 5 has continuously been, employed by the Company on January
31, 2005.
(b) Notwithstanding anything to the contrary contained in the Employment
Agreement (including without limitation Section 9(f) thereof), (i) a pro rata
portion of the Restricted Stock representing the shares earned hereunder during
employment (based on time employed during this four year extension period) shall
be deemed vested and nonforfeitable if Executive is terminated without Cause by
the Company or Executive terminates employment for Good Reason or if Executive's
employment is terminated by reason of his death or disability; the balance of
the Restricted Stock not so vested shall be deemed forfeited; and (ii) upon the
termination of Executive's employment for any reason coincident with or
following a Change of Control, all of the Restricted Stock shall be deemed
vested and nonforfeitable and no portion thereof shall be deemed forfeited.
5. A new Section 8B shall be added to the Employment Agreement immediately
after the text of Section 8A thereof, which shall read in its entirety as
follows:
"If either (a) at the scheduled expiration of the term hereunder or
any renewal thereof, Executive and the Company cannot agree upon terms to
continue employment arrangements between them or Executive does not desire
to continue working for the Company, or (b) Executive's employment is
terminated without Cause by the Company or by Executive for Good Reason,
Executive shall be entitled to receive, in addition to any and all other
payments and benefits otherwise provided in the Employment Agreement, a
severance payment ("Severance Amount") equal to one year of the Base
Salary, at the most recent rate of Base Salary in effect. In the event
Executive does not desire to continue working for the Company after the
scheduled expiration of the term hereof (as renewed, if applicable),
Executive shall provide the Company with at least 180 days' prior written
notice thereof. The Severance Amount due pursuant to this Section 8B shall
be paid in twelve equal monthly installments, in accordance with the
Company's normal payroll policies, commencing on February 1, 2005 in the
case of clause (a) above, or the date of termination in the case of clause
(b) above. For as long as payments are required to be made pursuant to this
Section 8B, Executive shall continue to be entitled, as if still employed
hereunder, to all of the health and medical benefits provided for herein,
including payment for the catastrophic health insurance referred to in
Section 5 hereof (it being agreed that if Executive cannot then be covered
for such insurance, the Company shall pay to Executive a sum, for the
balance of such period, equal to the amount of premiums for coverage that
would have been payable by the Company in respect of such period if
Executive had remained an employee, based on the then most-recent premiums
paid by the Company for Executive's coverage)."
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6. Except as amended hereby, the Employment Agreement shall remain in full
force and effect, without change or modification. The Employment Agreement,
together with this Amendment No. 5, is intended by the parties as a final
expression of their agreement and understanding in respect of the subject matter
contained herein and therein. The Employment Agreement and this Amendment No. 5
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
7. This instrument may be executed 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.
8. Terms defined in the Employment Agreement and not otherwise defined
herein shall have the meanings set forth in the Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment No. 5 as
of the day and year first above written.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
FINLAY ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
and Chief Financial Officer
FINLAY FINE JEWELRY CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
and Chief Financial Officer
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