Exhibit 10.33
LITTLE SWITZERLAND, INC.
000-X Xxxxx Xxx Xxxxxx Xxxx Xxxx
Xx. Xxxxxx, U.S.V.I. 00804
February 23, 1999
C. Xxxxxxx Xxxxx
c/o Little Switzerland, Inc.
000-X Xxxxx Xxx Xxxxxx Xxxx Xxxx
Xx. Xxxxxx, U.S.V.I. 00804
Reference is hereby made to your Employment Agreement (the "Employment
Agreement"), effective as of September 1, 1998, with Little Switzerland, Inc.
(the "Company") and L.S. Wholesale, Inc. ("L.S. Wholesale"). You and the
Company have agreed that you shall resign as the Acting Chief Executive Officer
and President of the Company effective as of April 7, 1999 (the effective date
of your resignation being hereinafter referred to as the "Resignation Date") on
the following terms and conditions:
1. Resignation. You shall continue your service to the Company as
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Acting Chief Executive Officer and President pursuant to the terms and
conditions set forth in your Employment Agreement through the end of business on
the Resignation Date, at which time, your resignation shall become effective.
Your resignation is a termination of employment by you without cause pursuant to
Section 5(e) of the Employment Agreement. On the Resignation Date, you shall
also resign as an officer and/or director of any and all of the subsidiaries of
the Company. The resignations referred to in this Section 1 are hereby accepted
by the Company and on behalf of its subsidiaries effective as of the Resignation
Date.
2. Base Salary. The Company will pay you your Base Salary (as defined
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in the Employment Agreement) from the date hereof through the Resignation Date,
which amount shall be equal to an aggregate of $42,192. In addition, the
Company hereby agrees to pay you, on the Resignation Date, one month of Base
Salary, or $29,167.
3. Quarterly Bonus. The Company hereby agrees to pay you, on the
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Resignation Date, $50,000 as a bonus for the Company's third quarter ending on
February 27, 1999.
4. Merchandise Purchase. The Company hereby grants you the right to
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purchase any and all of the Company's merchandise, at Company's cost, for a
period of three (3) years ending on the third anniversary of the Resignation
Date; provided, however that such purchases by you shall only be for your
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personal use or personal gifts and not for resale.
5. Medical Insurance. You acknowledge that after your resignation you
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will not be entitled to be maintained by the Company on the Company's medical
insurance plan and you have informed the Company that you intend to apply for
continuation of medical coverage under COBRA. Upon your election to seek
coverage under COBRA, the Company hereby agrees to reimburse you for premiums
associated with such COBRA coverage for a period of one (1) year ending on the
first anniversary of the Resignation Date; provided, however, if you become
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employed during such one-year period and can obtain similar medical insurance
coverage at comparable costs through such employment, all obligations of the
Company under this Section 5 will terminate as of the date of your new
employment.
6. Return of Personal Property. Except as expressly provided herein,
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you will return any and all of the Company's property or proprietary
information, if any, on the Resignation Date. The Company hereby agrees that you
may keep, as your sole and personal property, the personal computer that you are
currently using; provided, however, that you shall turn over to the Company, or
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at the Company's request delete or destroy, all proprietary information of the
Company contained on such personal computer before the Resignation Date.
7. Non-Qualified Stock Option. The Company hereby acknowledges and
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agrees that all 150,000 outstanding stock options granted pursuant to the Non-
Qualified Stock Option Agreement (the "Stock Option Agreement"), dated as of
September 1, 1998, between the Company and you will become fully vested and
immediately exercisable on the Resignation Date pursuant to Section 1(c) of the
Stock Option Agreement and will be exercisable for a period of two years from
the Resignation Date pursuant to Section 3(b) of the Stock Option Agreement.
8. Entire Payments; Withholding. Other than the payments or other
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benefits described herein, you shall not be entitled to any additional payments
or benefits from the Company relating to your employment with the Company, or
termination thereof. All payments made by the Company under this letter
agreement shall be net of any tax or other amounts required to be withheld by
the Company under applicable law.
9. Transition. You agree to assist the Company during the period
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commencing on the date hereof and ending on the Resignation Date to ensure the
smooth transition of your duties as Acting Chief Executive Officer and President
of the Company. You further agree to fully and accurately disclose to the
Company any significant matters or issues, whether completed or pending, about
which you have knowledge or information and (i) which require action or
attention by the Company to avoid or address any potential violation of any
statute, regulation or other legal requirement of which you are aware or (ii)
which, to the best of your knowledge, could have a material effect on the
Company's business or operations.
10. Release of Claims
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a. You voluntarily and irrevocably release and discharge the Company
and any of its subsidiaries, and each of their current and former officers,
directors, shareholders, employees, and agents (any and all of which are
referred to as "Releasees") generally from all
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charges, complaints, claims, promises, agreements, causes of action, damages,
and debts, known or unknown, that relate in any manner to your employment with
or services for the Company or any of its subsidiaries through the Resignation
Date. This general release includes all claims relating to your resignations as
described in Section 1 and your activities on behalf of the Company, and also
includes claims of breach of contract or breach of an implied covenant of good
faith and fair dealing, intentional or negligent misrepresentation, and unlawful
discrimination under the common law or any statute (including, without
limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S) 2000e, et
seq., the Age Discrimination in Employment Act of 1967, 29 U.S.C. (S)621, et
seq., the Employee Retirement Income Security Act, 29 U.S.C. (S)1001, et seq.,
and the Americans with Disabilities Act of 1990, 42 U.S.C. (S) 12101, et seq.).
You agree that you will not hereafter pursue any such claims against any
Releasee, by filing a lawsuit in any local, state, federal or international
court or filing an administrative or other proceeding for or on account of
anything which has occurred up to the present time as a result of your
employment, and you will not seek reinstatement with, or damages of any nature,
severance pay, attorney's fees, or costs from, the Company, any of its
subsidiaries or any of the other Releasees. Your release does not limit your
rights to indemnification under the terms of the Amended and Restated By-Laws of
the Company, as in effect on the date hereof, to enforce your rights to receive
certain payments pursuant to Sections 3(c), 3(d), 3(e) and 3(f) (only with
respect to reimbursement of business expenses) of the Employment Agreement or to
enforce your rights under this letter agreement
b. The Company voluntarily and irrevocably releases and discharges
you and your successors, assigns, heirs and survivors from any and all charges,
complaints, claims, promises, agreements, causes of action, damages and debts,
(including attorney's fees and costs actually incurred) which relate to acts or
omissions by you during the course of your employment, unless such acts or
omissions by you during the course of your employment constituted gross
negligence or fraud. This release does not limit the Company's right to enforce
its rights under this letter agreement.
11. Litigation Cooperation. You agree to cooperate fully with the
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Company in (i) the defense, prosecution or investigation of any claims or
actions which already have been brought or threatened and of which you have
knowledge, or which may be brought or threatened in the future against or on
behalf of the Company or actions which already have been brought or which may be
brought in the future against or on behalf of the Company relating to a period
in which you were either a director or an employee of the Company and
(ii) responding to, cooperating with, or contesting any governmental audit,
inspection, inquiry or investigation, in either case that relate to events or
occurrences that transpired during your membership on the Board of Directors of
the Company or your employment with the Company. Your full cooperation in
connection with such claims or actions shall include, without implication of
limitation: being available to meet with counsel to prepare for discovery or
trial; to attend trial and testify truthfully as a witness when reasonably
requested and at reasonable times designated by the Company; and to meet with
counsel or other designated representative of the Company to prepare responses
to and to cooperate with the Company's
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processing of governmental audits, inspections, inquiries or investigations. The
Company shall pay you such per diem fee for such cooperation as is mutually
agreed to by the Company and you. In addition, you will be reimbursed by the
Company only for any reasonable out-of-pocket expenses that you reasonably incur
in connection with such cooperation, subject to reasonable and satisfactory
documentation. The Company will not exercise their rights under this paragraph
so as to unreasonably interfere with your ability to engage in gainful
employment and shall endeavor to schedule your responsibilities hereunder so as
not to interfere with your schedule so long as you promptly provide timely
alternative dates on which you can fulfill your obligations hereunder.
12. Public Announcement. The Company and you shall consult with each
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other before issuing any press release or otherwise making any public statements
with respect to this letter agreement and shall not issue any such press release
or make any such public statement without your prior consent or the consent of
the Company, which consent shall not be unreasonably withheld; provided,
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however, that the Company may, without your prior consent, issue such press
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release or make such public statement or filing as may be required by law or the
applicable rules of Nasdaq if it has used its best efforts to consult with you
and to obtain your consent but has been unable to do so in a timely manner.
The Company and each of its officers, directors and nominees for directors
hereby agrees not to issue any press release or otherwise make any public
statement relating to your service as a director, employee or consultant of the
Company prior to the Resignation Date which portrays you in an unfavorable
light, except as may otherwise be required by law. You hereby agree not to
issue any press release or otherwise make any public statement relating to the
Company, its business or any of its officers, directors or nominees for
directors which portrays any of the foregoing in an unfavorable light.
13. Arbitration of Disputes. Any controversy or claim arising out of
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or relating to this letter agreement or the breach thereof shall, to the fullest
extent permitted by law, be settled by arbitration in any forum and form agreed
upon by the parties or, in the absence of such an agreement, under the auspices
of the American Arbitration Association ("AAA") in Boston, Massachusetts in
accordance with the rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. This Section 13 shall be specifically enforceable. Notwithstanding the
foregoing, this Section 13 shall not preclude either party from pursuing a court
action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate;
provided, however, that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 13.
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14. Legal Fees. If legal action is commenced by either party hereto to
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enforce his or its respective rights under this letter agreement and a court of
competent jurisdiction enters a judgment for such party, then the prevailing
party shall be entitled to recover any and all costs incurred in connection with
the enforcement of his or its, as the case may be, rights hereunder, including,
without limitation, reasonable attorney's fees, in addition to any other relief
granted.
15. Notices. Any notices, requests, demands, and other communications
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provided for by this letter agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
you at the last address you have filed in writing with the Company or to the
Company at its main office, attention of the President.
16. Entire Agreement. This letter agreement is the entire agreement
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between you and the Company, and all previous agreements, or promises between
you and the Company relating to the subject matter of this letter agreement are
superseded, null, and void. Notwithstanding the foregoing, the parties hereto
acknowledge that they are simultaneously herewith entering into or are parties
to a Consulting Agreement, an Amended and Restated Success Fee Agreement and a
Settlement Agreement.
17. Effectiveness. Except with respect to Section 7 hereof, the
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effectiveness of this letter agreement is contingent on the election of Xxxxxxx
X. Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxx and Xxxxxxx X. Xxxxxx, the Board of
Directors' nominees for directors of the Company, at the Company's 1998 Annual
Meeting of Stockholders, as set forth in a settlement agreement, dated as of the
date hereof, entered into by the Company, you and the other parties identified
therein. In the event such election does not occur, this Agreement shall
forthwith become null and void and have no effect, without any liability on the
part of any party hereto; provided, however, that this provision shall not apply
with respect to Section 7 hereof.
18. Acknowledgment. You acknowledge that you have been given a
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reasonable period of time in which to consider this letter agreement before
executing it. You further acknowledge that you have consulted with your
personal attorney before executing this letter agreement. By signing this
letter agreement, you acknowledge that you are doing so knowingly, voluntarily
and fully intending to be bound hereby. You also acknowledge that you are not
relying on any representations by the Company or any of its representatives
concerning the meaning of any aspect of this letter agreement.
19. Binding Effect. This letter agreement shall inure to the benefit of
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and be binding upon the Company and you, their respective successors, executors,
administrators, heirs and permitted assigns.
20. Amendment. This letter agreement may be amended or modified only by
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a written instrument signed by you and a duly authorized representative of the
Company.
21. Counterparts. This letter agreement may be executed in one or more
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counterparts, all of which documents shall be considered one and the same
document.
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22. Governing Law; Consent to Jurisdiction. It is the parties'
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intention that this letter agreement shall be construed under and be governed in
all respects by the laws of the State of Delaware. Each of the Company and you
hereby irrevocably and unconditionally consent to the sole and exclusive
jurisdiction of the courts of the State of Delaware and the United States
District Court for the District of Delaware for any action, suit or proceeding
arising out of or relating to this letter agreement, and agrees not to commence
any action, suit or proceeding related thereto except in such courts. Each of
the Company and you further hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, claim or other proceeding
arising out of or relating to this letter agreement in the courts of the State
of Delaware or the United States District Court for the District of Delaware,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such lawsuit, claim or other proceeding
brought in any such court has been brought in an inconvenient forum. The Company
agrees that service of any process, summons, notice or document by U.S.
registered mail to its address set forth above (with a copy to the persons at
the address listed below) shall be effective service of process for any action,
suit or proceeding brought against it in any such court. You agree that service
of any process, summons, notice or document by U.S. registered mail to the last
address you filed in writing with the Company (with a copy to the person at the
address listed below) shall be effective service of process for any action, suit
or proceeding brought against you in any such court.
The Company: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq. and
Xxxxxx X. Xxxxxxx III, P.C.
C. Xxxxxxx Xxxxx: Xxxxx, Xxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx Xxxxx, Esq.
23. Severability. In case provisions of this Agreement shall be
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invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
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If you agree to these terms, please sign and date below and return this
letter agreement to the Company.
Very truly yours,
LITTLE SWITZERLAND, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Director
Accepted and agreed as of the 23rd
day of February, 1999.
/s/ C. Xxxxxxx Xxxxx
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C. Xxxxxxx Xxxxx
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