EXHIBIT 10.2
EMPLOYMENT AGREEMENT AMENDMENT
Amendment Number 3
This Amendment Number 3 to the Employment Agreement, made as of September
1, 2002 and amended by Amendment Number 1 thereto made as of September 1, 2002
and Amendment Number 2 thereto made as of June 23, 2003 (as so amended, the
"Employment Agreement"), between Hanover Direct, Inc., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxxx ("Xxxxx"), shall be effective as of August
3, 2003.
W I T N E S S E T H :
WHEREAS, the Company and Xxxxx entered into the Employment Agreement; and
WHEREAS, the Company and Xxxxx now desire to amend the Employment
Agreement in certain respects.
NOW, THEREFORE, it is agreed by and between the parties hereto to the
following amendments to the Employment Agreement:
1. Section 3 of the Employment Agreement is hereby amended to read as
follows:
"Term. Subject to paragraph 6, the term of this Agreement (the
"Agreement Term") and the term for the services of Xxxxx shall
commence as of September 1, 2002 and shall terminate on March 31,
2006."
2. The first sentence of paragraph 4(a) of the Employment Agreement is
hereby amended to read as follows:
"In consideration for providing his services as President/CEO,
during the Agreement Term, Xxxxx shall receive, in addition to the
other consideration provided in this Agreement, compensation at the
rate of $71,250 per month or $855,000 per annum (the "Base
Compensation"), payable in accordance with the Company's normal
payroll policies; provided, however, that for purposes of the 2002
Management Incentive Plan referred to in Exhibit 1, and the 2003
Management Incentive Plan, if any, Xxxxx'x annual Base Compensation
shall be deemed to be $600,000 through March 31, 2003; and,
provided, further, however,
that solely for purposes of (1) Sections 2.9(ii) and 5.1(i) of the
Hanover Direct, Inc. Eighteen Month Key Executive Compensation
Continuation Plan effective as of April 25, 2001, as amended, (2)
clause (ii) of the definition of "For Good Reason" contained in
Section 5 of this Agreement, and (3) the Transaction Bonus Agreement
between the Company and Xxxxx dated May 14, 2001 as amended
September 1, 2002, Xxxxx'x Base Compensation (therein referred to as
annualized base salary or base pay) shall be equal to the higher of
Xxxxx'x Base Compensation (or annualized base salary or base pay) at
the time of the Change of Control and Xxxxx'x Base Compensation on
August 2, 2003 (which was $900,000)."
3. The last sentence of the first paragraph of Section 5 of the
Employment Agreement is hereby amended to read as follows:
"The 2000 Option is fully vested and exercisable until March 31,
2006."
4. The definition of "For Good Reason" contained in Section 5 of the
Employment Agreement is hereby amended to read as follows:
""For Good Reason" shall mean the voluntary termination by Xxxxx of
his employment with the Company on account of any of the following
actions: (i) a substantial and material diminution of Xxxxx'x duties
or responsibilities for the Company, (ii) a material and substantial
diminution of Xxxxx'x base salary or any long-term incentive
opportunity (each as in effect as of the first day of the Agreement
Term), (iii) the Company's requiring Xxxxx to regularly report to
work at a facility that is more than 30 miles from the facility at
which Xxxxx regularly reported as of the first day of the Agreement
Term, (iv) decisions or actions by the Board of Directors,
committees or individual members of the Board (including designees
of the holder of the Series B Participating Preferred Stock of the
Company if any) that materially impede Xxxxx'x ability to take
actions to increase value for all shareholders of the Company, (v)
the failure of the Company to provide Xxxxx with the number of paid
vacation days to which he would otherwise be entitled in accordance
with the vacation policy of the Company, or (vi) any action by the
Company that adversely affects in a material way Xxxxx'x
participation in or materially reduces Xxxxx'x benefits under any
such of the Company's employee benefit or compensation plans;
provided, however, that in all cases, in order to terminate his
employment with the Company For Good Reason, Xxxxx must notify the
Company in writing that Good Reason exists within 30 Business days
of his knowledge of the event or events constituting Good Reason.
The Company shall thereafter have 15 Business days within which to
cure Xxxxx'x otherwise Good Reason ("The Cure Period"). Unless
Xxxxx'x Good Reason is cured during the Cure Period, his termination
For Good Reason shall become effective on the first business day
following the conclusion of the Cure Period."
5. Except as hereunder provided, the Employment Agreement shall
remain in full force and effect without furhter modification.
IN WITNESS WHEREOF, the Company and Xxxxx have executed this
Amendment Number 3 as of August 6, 2003.
HANOVER DIRECT, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President,
Human Resources & Legal
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
