EXHIBIT 10.3
August 12, 2004
Xxxxx X. Xxxxxx
00 xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
This will confirm the agreement ("Agreement") between you and Movado Group, Inc
and/or one of its subsidiaries (together, the "Company") concerning certain
terms relating to your continued employment by the Company and the payment of
severance by the Company to you under certain circumstances. You acknowledge
that the option grant and the other obligations undertaken by the Company as set
forth in this Agreement are in addition to any payments or other benefits to
which you are otherwise entitled. Capitalized terms used but not otherwise
defined below or elsewhere in this Agreement, shall have the meaning given such
terms in the Movado Group, Inc. 1996 Stock Incentive Plan, as amended and
restated as of April 8, 2004 ("Plan").
1. OPTION GRANT. You are hereby granted an option to purchase that number of
shares of Movado Group, Inc. common stock ("Stock") as set forth on
Schedule A (attached to and made a part of this Agreement) at a purchase
price per share equal to the Fair Market Value of the Stock on the date
that both you and the Company have signed this Agreement ("Effective
Date").
2. EMPLOYMENT AT WILL; SEVERANCE. Your employment with the Company is on an
at-will basis, meaning that you may resign at any time and, likewise, the
Company has the right to terminate your employment at any time, with or
without Cause. "Cause" means conviction of a felony committed by you prior
to termination of your employment with the Company; your knowing violation
of a material Company policy; your failure to perform any of your material
obligations hereunder or the material duties of your position with the
Company; or your gross negligence in the performance of your duties or
breach of your fiduciary duty to the Company as reasonably determined by
the Company's Chief Executive Officer. If the Company terminates your
employment without Cause, it will pay you as severance an amount equal to
your bi-weekly base salary for a period of 12 months after the date of
such termination ("Severance Period"); except that no such severance shall
be due or payable to you if you violate any of the terms of this
Agreement. All such payments that are due, will be made, net of all
withholding taxes, on a bi-weekly basis and will be paid to your estate in
the event of your death during the Severance Period. "Base salary" does
not include any commission or bonus payments or auto allowance. Any bonus
or commission payments which are earned and vested prior to your
resignation, or termination without Cause by the Company, will be paid to
you in accordance with the terms of any such bonus or commission plan. To
the extent medical insurance coverage is available following such
termination through COBRA, but not otherwise provided under the Company's
disability policies or plans, the Company will pay the costs of such
insurance for you under COBRA for the Severance Period, or, if
shorter, for the maximum period allowed or until you either become
eligible for Medicare or are employed by another employer which provides
medical benefits.
3. TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate your
employment for Cause and upon such termination, the Company shall be
released from any and all further obligations under this Agreement, except
for the obligation to pay accrued base salary, and accrued benefits owing
to you through the termination date.
4. NON-COMPETITION. While you are employed by the Company and for a period of
six (6) months after such employment terminates, whether voluntarily or
involuntarily, you shall not directly or indirectly in any capacity,
without the prior written consent of the Chief Executive Officer of the
Company, which may be granted or withheld in the Company's sole and
absolute discretion, carry on or engage or participate in the watch or
jewelry business, in any individual or representative capacity, as a
principal, for your own account, jointly with others as a partner, joint
venturer, or shareholder of any other firm, corporation, partnership,
association, or other entity, or as a consultant, contractor,
subcontractor or agent or employee of any person, firm, corporation,
partnership, association or other entity. You acknowledge and agree that
the contents of this section are fair and reasonable and you waive any
defenses that you may in the future claim against enforcement hereof on
the basis of public policy principles, excessive scope, duration or
geographic coverage or on any other basis. If notwithstanding the
foregoing, any of the provisions of this section should ever be deemed to
exceed the scope, time or geographic limitations of applicable law
regarding covenants not to compete, then such provisions shall be reformed
to the maximum scope, time or geographic limitations, as the case may be,
permitted by applicable laws.
5. NO SOLICITATION. While you are employed by the Company and for a period of
twelve (12) months after the termination of such employment, whether
voluntarily or involuntarily, you shall not, directly or indirectly, alone
or with others, in any capacity, without the prior written consent of the
Company, which may be granted or withheld in the Company's sole and
absolute discretion, (a) employ, engage or retain any individual who is
then an employee of the Company (or who had been an employee of the
Company within six (6) months prior to the termination of your employment
with the Company), or solicit, induce or persuade any such individual to
terminate his or her employment relationship with the Company; or (b)
request, induce, or advise any client of the Company (which you had reason
to know was such a client or prospective client of the Company) to
withdraw, curtail, or cancel any of its business with the Company.
6. PROPRIETARY INFORMATION.
6.1 You shall keep secret and retain in strictest confidence, and shall
not use for the benefit of yourself or others, except in the course of
performing your duties for the Company, all proprietary and/or
confidential information, knowledge and data of the Company relating to
its operations, sales, business or affairs, provided, however, that you
shall not be restricted with respect to use of information that (i) is or
becomes public knowledge through no action or default on your part; (ii)
is disclosed to you by a third party, provided that the third party has
the lawful right to make such disclosure; (iii) is approved by the Company
in writing for disclosure to specified third parties; or (iv) is required
to be disclosed by you pursuant to a court order or applicable rules and
regulations.
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6.2 You agree that all documents, records, reports, compilations, studies,
computer files, e-mails and other tangible material containing
confidential or proprietary information of the Company, whether created by
you or others, which shall come into your custody or possession, shall be
and are the exclusive property of the Company to be used by you only in
the performance of your duties for the Company. All such materials or
copies thereof and all tangible property of the Company in your custody or
possession shall be delivered to the Company, upon the earlier of (i) a
request by the Company or (ii) termination of your employment. After such
delivery, you shall not retain any such materials or copies thereof or any
such tangible property.
6.3 You agree that your obligations not to disclose or to use information
and materials of the types set forth in this Agreement, and your
obligation to return materials and tangible property, also extends to such
types of information, materials and tangible property of customers of the
Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to you, provided,
however, you shall not be restricted with respect to use of information
that (i) is or becomes public knowledge through no action or default on
your part; (ii) is disclosed to you by a third party, provided that the
third party has the lawful right to make such disclosure; (iii) is
approved by the Company in writing for disclosure to specified third
parties; or (iv) is required to be disclosed by you pursuant to a court
order or applicable rules and regulations.
7. REMEDIES
You acknowledge and agree that the Company's remedy at law for a breach or
threatened breach of the provisions of this Agreement would be inadequate
and, in recognition of this fact, in the event of a breach or threatened
breach by you of any provision of this Agreement, it is agreed that, in
addition to any available remedy at law, the Company shall be entitled to,
without posting any bond, specific performance, temporary restraining
order, temporary or permanent injunction, or any other equitable relief or
remedy which may then be available; provided, however, nothing herein
shall be deemed to relieve the Company of its burden to prove grounds
warranting such relief nor preclude you from contesting such grounds or
facts in support thereof. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available to it
for such breach or threatened breach hereof.
8. SEVERABILITY OF AGREEMENT
The provisions of this Agreement are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding
and enforceable. The parties agree that the covenants set forth herein are
reasonable. Without limiting the foregoing, it is the intent of the
parties that the covenants set forth herein be enforced to the maximum
degree permitted by applicable law. As such, the parties ask that if any
court of competent jurisdiction were to consider any provision of this
Agreement to be overly broad based on the circumstances at the time
enforcement is requested, that such court "blue pencil" the provision and
enforce the provision to the full extent that such court deems it to be
reasonable in scope.
9. APPLICABLE LAW AND CONSENT TO JURISDICTION
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The validity, construction, interpretation, and enforceability of this
Agreement shall be determined and governed by the laws of the State of New
Jersey without giving effect to the principles of conflicts of law. For
the purpose of litigating any dispute that arises under this Agreement,
the parties hereby consent to exclusive jurisdiction of, and agree that
such litigation shall be conducted in, any federal or state courts of the
State of New Jersey. The parties waive their right to trial by jury in any
action brought by either against the other in connection with any matter
arising out of this Agreement.
10. NOTICES
All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been duly delivered if delivered by
hand or received by US Mail:
If to Company - Movado Group, Inc.
000 Xxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Legal Department
or such other address which shall then be its primary U.S.
corporate executive offices.
If to you - at your home address as reflected in the Company's
payroll records
14. MISCELLANEOUS
This Agreement sets forth the entire agreement between the Company and you
and supersedes any and all prior agreements or understandings, if any,
between the parties regarding the subject matter of this Agreement. No
amendment or modification of this agreement shall be valid or effective,
unless in writing and signed by the parties to this Agreement. The failure
of either party to enforce any provision of this Agreement shall not be
construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict adherence with every provision of this
Agreement. This Agreement shall become effective on the date first set
forth above. Headings in this Agreement are used solely for convenience
and are not to be used in construing or interpreting this Agreement.
Very truly yours,
MOVADO GROUP, INC.
By /s/ Xxxxxx X'Xxxx
-----------------------
Name: Xxxxxx X'Xxxx
Xxxxx: Sr. V.P. HR
Date: 8/27/04
Xxxxxx and accepted this
27 day of August, 2004,
/s/ Xxxxx X. Xxxxxx
-----------------------
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SCHEDULE A
TERMS OF OPTION XXXXX UNDER
1996 INCENTIVE STOCK PLAN
( NONQUALIFIED STOCK OPTION)
SECTION 1. GRANT OF OPTION.
1.1 The Company hereby grants you an option (the "Option") to Purchase
20,000 shares of Stock at a purchase price per share equal to the Fair Market
Value per share of the Stock on the Effective Date.
1.2 The Option granted hereby is intended to be a nonqualified stock
option subject to the provisions of Section 83 of the Internal Revenue Code of
1986, as amended (the "Code"), and is not intended to qualify for special tax
provisions of Code Section 422.
SECTION 2. EXERCISABILITY.
2.1 The Option shall become cumulatively exercisable with respect to (a)
one third of the shares of Stock subject thereto (rounded down to the next lower
full share) commencing on the third anniversary of the date hereof, and (b) an
additional third of the shares of Stock subject thereto on each of the next two
following anniversary dates of the date hereof.
2.2 The Option may at any time and from time to time be exercised in whole
or in part for the shares of Stock subject thereto, within the limitations on
exercisability set forth above.
2.3 Unless terminated earlier, the unexercised portion of the Option shall
automatically and without notice terminate and become null and void on the tenth
anniversary of the Effective Date.
2.4 Upon the occurrence of a Change of Control (as defined in the Plan)
prior to the date on which the Option expires, notwithstanding any other
provision of the Plan, each installment of the Option that has not theretofore
vested and become exercisable shall immediately vest and become exercisable;
provided, however, that no installment of the Option may be exercised until six
months after the date of grant.
SECTION 3. METHOD OF EXERCISE.
3.1 The Option or any part thereof may be exercised in accordance with the
terms hereof only by giving written notice of exercise to the Company, on a form
to be provided by the
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Company for that purpose, and by specifying the number of whole shares of Stock
with respect to which the Option is being exercised. Such notice must be
accompanied by payment of the full purchase price for the number of shares
purchased.
3.2 Payment of the purchase price shall be made by you to the Company at
the time of exercise as provided in Section 7(b) of the Plan and may be made in
any manner permitted under the Plan. As soon as practicable after the Company
receives payment of the purchase price, subject to the provisions of the Plan,
the Company shall deliver to you a certificate or certificates for the shares of
Stock so purchased.
SECTION 4. TERMINATION OF EMPLOYMENT
4.1 Notwithstanding anything to the contrary contained herein, the Option
shall terminate and expire on the day your employment is terminated for Cause.
4.2 If your employment with the Company terminates by reason of your
voluntary resignation, or the termination of your employment by the Company
without Cause, then the vested portion of the Option may be exercised until the
earlier of (i) 60 days after the date on which the final payment of any salary
or severance (exclusive of any other payments such as commissions , bonuses or
reimbursements for expenses) due to you from the Company is made or (ii) the
date on which the Option terminates or expires in accordance with the provisions
of the Plan and this Agreement (other than this Section 4). The "vested portion"
of the Option shall mean the portion thereof that is exercisable immediately
prior to termination of your employment for any reason.
4.3 If your employment terminates by reason of your retirement (i) at or
after age 65, or (ii) before the age of 65 but after age 55 provided you have
been employed by the Company for at least 10 years and further subject to the
specific approval of the Committee (including any limitations or conditions the
Committee may, in its discretion, impose which are not inconsistent with the
express terms of the Plan), then the unvested portion of the Option shall
immediately become vested and the Option may be exercised until the earlier of
(a) three years after termination of employment or (b) the date on which the
Option terminates or expires in accordance with the provisions of the Plan and
this Agreement (other than this Section 4). The Committee may in its discretion
determine whether any leave of absence (including short-term or
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long-term disability or medical leave) shall constitute a termination of
employment for purposes of this Agreement.
4.4 If your employment terminates by reason of your (i) permanent
disability (as determined by the Committee) and you have been employed by the
Company for at least ten years, or (ii) death, then, in either case, the
unvested portion shall immediately become vested and the Option shall be
exercisable until the earlier of (a) three years after termination of your
employment by reason of permanent disability or death or (b) the date on which
the Option terminates or expires in accordance with the provisions of the Plan
and this Agreement (other than this Section 4). In the case of your death, the
Option shall be exercisable by the person to whom the Option passes under your
will (or, if applicable, pursuant to the laws of descent and distribution).
SECTION 5. NON-TRANSFERABILITY.
No right granted to you under the Plan or this Agreement shall be
assignable or transferable (whether by operation of law or otherwise and whether
voluntarily or involuntarily), other than by will or by laws of descent and
distribution. During your lifetime, all rights granted to you under the Plan or
this Agreement shall be exercisable only by you .
SECTION 6. NO SHAREHOLDER RIGHTS.
You shall have no rights as a shareholder of the Company with respect to
any shares subject to the Option until the date of the issuance of a stock
certificate or certificates to you for such shares. Except for the adjustments
made pursuant to Section 13 of the Plan, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued.
SECTION 7. PLAN PROVISIONS TO PREVAIL.
This Agreement shall be subject to all of the terms and provisions of the
Plan, which are incorporated hereby and made a part hereof. If there is any
inconsistency between any of the provisions of this Agreement and the Plan, the
provisions of the Plan shall govern.
SECTION 8. OPTIONEE'S ACKNOWLEDGMENTS.
By entering into this Agreement you agree and acknowledge that (a) you
have received and read a copy of the Plan and (b) none of the Company, the
Board, the Committee, the
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Affiliates (including their respective parents and subsidiaries) and their
respective shareholders, officers, directors, employees, agents and counsel
shall be liable for any action or determination with respect to the Plan or any
award thereunder or this Agreement.
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