Exhibit 10(i)
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment dated June 5, 1998 (the "Amendment") modifies the
Employment Agreement dated November 4, 1997 (the "Employment Agreement")
between The Stride Rite Corporation (the "Company") and Xxxxxx X. Xxxxxx
("Executive").
WHEREAS, Executive has advised the Company that Executive will voluntarily
retire as an officer of the Company effective December 31, 1998; and
WHEREAS, in order to insure a smooth transition, the Board of Directors of the
Company will seek to name Executive's successor prior to the effective date of
Executive's retirement;
NOW THEREFORE, in consideration of the promises contained herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, Executive and the Company agree as follows:
1. Amendment Controls.
Notwithstanding anything to the contrary contained in the Employment
Agreement, the terms and conditions of this Amendment shall control.
2. Retirement.
Executive will retire and Executive's employment with the Company will
terminate effective December 31, 1998 (the "Retirement Date"). Executive resigns
as of the Retirement Date (or such earlier date as the Board of Directors of the
Company may request as provided below) as Chairman of the Board, President and
Chief Executive Officer of the Company and from any and all offices or other
positions Executive may hold with the Company or any of its related or
affiliated entities. Executive agrees to execute, from time to time, such
documents requested by the Company evidencing such resignation(s).
3. Interim Period
For purposes of this Amendment, the period of June 5, 1998 through
December 31, 1998 is referred to herein as the "Interim Period".
a. Search Committee. The Board of Directors has designated the
members of the Compensation Committee as the Committee responsible to search for
Executive's successor. Executive shall serve as an "ad hoc" member of such
Committee.
b. Employment Period. The "Employment Period" as defined in
Section 2 of the Employment Agreement is extended to the close of business on
December 31, 1998.
c. Early Resignation. In the event the Company names
Executive's successor prior to the expiration of the Interim Period, Executive
agrees to resign at such earlier date as the Board of Directors may request.
Executive's compensation shall continue through the Interim Period as if
Executive had not resigned.
d. Residence Requirement. Section 8 of the Employment
Agreement is deleted. During the Interim Period, Executive shall work a minimum
of three (3) weeks per month at the Company's headquarters in Lexington, MA or
traveling on Company business. In the event of Early Resignation as provided in
3c, above, after a reasonable transition period, Executive shall only be
required to spend such time in Lexington, MA as the Company deems reasonably
necessary.
e. Travel Reimbursement. During the Interim Period, the
Company shall reimburse Executive for one coach class round trip airfare per
month between Boston, MA and Charleston, SC.
4. Post Interim Period.
After the Interim Period or, if applicable, Executive's earlier
resignation, the following terms shall apply:
a. Stock Options. Any stock options which Executive has been
granted and which are vested on December 31, 1998, may be exercised by Executive
within one (1) year of the Retirement Date. Any shares that are not vested by
December 31, 1998 shall be forfeited. As of June 5, 1998, Executive has been
granted options to purchase a total of 645,000 shares of the Company's common
stock. Of such 645,000 shares: (i) Executive has exercised options to purchase
90,000 shares, (ii) 331,667 shares are currently vested and exercisable; (iii)
on December 13, 1998 an additional 131,666 shares will vest and become
exercisable; and (iv) 91,667 shares shall not be vested and will be forfeited on
the Retirement Date.
b. Bonus. The Compensation Committee of the Board of Directors
shall determine the amount of Fiscal Year 1998 Bonus which may be payable to
Executive pursuant to the provisions of the Company's Annual Incentive
Compensation Plan.
c. Life Insurance. Executive's group term life insurance
policy will end January 30, 1999. Executive may, if eligible, convert to an
individual policy issued by Xxxx Xxxxxxx at Executive's expense.
d. Perquisites. All perquisites set forth in Section 6 of the
Employment Agreement shall terminate as of the close of business on December 31,
1998 and Executive shall return to the Company the Vehicle leased on behalf of
the Executive.
e. Medical and Dental Benefits. Executive's medical and dental
coverage with CIGNA HealthCare will end on January 30, 1999. Executive may elect
to extend Executive's coverage through COBRA for an additional 18 months as
provided by COBRA law.
f. Disability. Executive's short and long-term disability
coverage will end on December 31, 1998.
g. 401(k) Employee Savings and Investment Plan. Company
records indicate that Executive is participating in the Employee Savings and
Investment Plan. Executive will receive a package of information from Xxxxxx
Investments within the first two weeks of the month following the effective date
of Executive's retirement. This package will outline Executive's distribution
options for funds currently in Executive's Xxxxxx account. Please be aware that
Executive has 60 days from the date the package is mailed from Xxxxxx to choose
a distribution option. If Executive wishes to receive the information from
Xxxxxx earlier, Executive may call Xxxxxx at 0-000-000-0000 to request a
package.
h. Retirement Income Plan. Company records indicate Executive
has completed at least five years of service with Stride Rite and is therefore
is vested in a pension benefit in accordance with the provisions of The Stride
Rite Retirement Income Plan. Please remember to contact The Stride Rite
Corporation at least three months prior to Executive's retirement date to
initiate benefit payments.
i. Other Benefits. Pursuant to applicable benefit plan terms
and benefit practices, Executive's eligibility to participate in any of the
Company's other employee benefit plans and programs ceases effective on the
Retirement Date. Executive's rights to benefits, if any, are governed by the
terms of those benefit plans and programs.
5. Director/Advisor. Following Executive's resignation as Chairman,
President and CEO of the Company, Executive may continue to serve as a director
of the Company for the balance of the term under which Executive was elected a
director at the Company's annual stockholders meeting held in 1997. Executive
agrees that he will resign as a director of the Company at the request of the
majority of the Board of Directors. In the event Executive resigns at the
request of the Board of Directors prior to December 31, 1999, the Company shall
retain Executive as an advisor for the calendar year 1999. Executive's annual
compensation for acting as an advisor for the Company shall be at an annual rate
of $50,000, payable in equal monthly installments, pro-rated if such advisory
services are provided for less than a full year. The Company shall reimburse
Executive for travel and expenses incurred by Executive in performing his duties
under this Section 5.
6. General Release of Claims
Except for Executive's rights and benefits under the Employment
Agreement, as amended, Executive voluntarily releases and discharges the Company
and its affiliates, subsidiaries, and the predecessors, successors, and assigns
of each of them, and the current and former officers, directors, shareholders,
employees, and agents of each of the foregoing (any and all of which are
referred to as the "Releasees") generally from all charges, complaints, claims,
promises, agreements, causes of action, damages, and debts of any nature
whatsoever, known or unknown ("Claims"), which Executive has, claims to have,
ever had, or ever claimed to have had against the Company. This general release
of Claims includes, without implication of limitation,
all Claims related to Executive's employment with the Company, the compensation
provided to Executive by the Company, or Executive's activities on behalf of the
Company, including, without implication of limitation, any Claims of breach of
contract, breach of an implied covenant of good faith and fair dealing, tortious
interference with advantageous relations, deceit or any intentional or negligent
misrepresentation, and unlawful discrimination under the common law or any
statute (including, without implication of limitation, Mass. Gen. Laws ch. 151B,
Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss. 2000e, et seq., the Age
Discrimination in Employment Act of 1967, 29 U.S.C. ss.621, et seq., and the
Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101, et seq.).
Executive also waives any Claim for reinstatement, severance pay, attorney's
fees, or costs.
Except for the Company's rights and benefits under the Employment
Agreement, as amended, the Company voluntarily releases and discharges Executive
generally from all charges, complaints, claims, promises, agreements, causes of
action, damages, and debts of any nature whatsoever, known or unknown
("Claims"), which the Company has, claims to have, ever had, or ever claimed to
have had against Executive. This general release of Claims includes, without
implication of limitation, all Claims related to Executive's employment with the
Company, Executive's activities on behalf of the Company, except any activity
involving deceit or any intentional misrepresentation by Executive. The Company
also waives any Claim for attorney's fees and costs.
Executive and the Company agree that they will not hereafter pursue any
claim against the other by filing a lawsuit in any local, state or federal court
for or on account of anything which has occurred up to the present time, and
Executive shall not seek reinstatement with, or damages of any nature, severance
pay, attorney's fees, or costs from any Releasee as a result of Executive's
employment; provided, however, that nothing in this general release shall be
construed to bar or limit either party's rights to enforce the Employment
Agreement, as amended, or to release Executive's right to indemnification under
and in accordance with applicable by-laws.
Executive and the Company represent to the other that they have not
heretofore assigned or transferred, or purported to assign or transfer, to any
person or entity, any respective Claim against the other or the Releasees or any
portion thereof or interest therein.
7. Confidentiality of Agreement.
Except as may be required by law, Executive agrees to keep the terms of
this Amendment in the strictest confidence and not reveal the terms of this
Amendment to any persons except Executive's immediate family, Executive's
attorney, and Executive's financial advisors, and to them only provided that
they also agree to keep the information completely confidential.
8. Return of Property
All documents, records, materials, software, equipment, and other
physical property, and all copies of any of the foregoing, whether or not
pertaining to Confidential Information, that have come into Executive's
possession or been produced by Executive in connection with Executive's
employment ("Property") have been and remain the sole property of the Company.
Executive confirms that Executive will return to the Company all Property on or
before the Retirement Date.
9. Nondisparagement
Executive agrees not to take any action or make any statement, written
or oral, to any current or former employee of the Company or to any other person
which disparages or could reasonably be interpreted to be in any way harmful to
the interest of the Company, its officers, directors, management, business
practices, or which disrupts or impairs its normal operations, including actions
or statements that would (a) harm the reputation of the Company with its
customers, suppliers, or the public; or (b) interfere with existing contractual
or employment relationships with customers, suppliers or Company employees.
The Company agrees not to take any action or make any statement,
written or oral, to any third party which disparages or could reasonably be
interpreted to be in any way harmful to the interest of Executive.
10. Notices and Acknowledgments
Executive is advised to consult with an attorney before signing this
Amendment. By signing this Amendment, Executive acknowledges that Executive is
doing so voluntarily. Executive understands that Executive is giving up
Executive's right to bring all possible legal claims against the Company, among
others, including claims relating to Executive's employment and separation from
employment. Executive also acknowledges that Executive is not relying on any
representations by any representative of the Company concerning the meaning of
any aspect of this Amendment.
11. Other Terms
All terms of the Employment Agreement not modified herein shall remain
in full force and effect, including, without limitation, Section 10 and 11 of
the Employment Agreement. The Employment Agreement, as amended by this
Amendment, is the entire agreement between Executive and the Company, and all
previous agreements or promises between Executive and the Company relating to
the subject matter of the Employment Agreement, as amended, are superseded,
null, and void.
The Employment Agreement, as amended, shall be binding upon and shall
inure to the benefit of each of the parties and upon their respective heirs,
administrators, representatives, executors, successors and assigns.
In the event of any dispute, the Employment Agreement, as amended, will
be construed as a whole, will be interpreted in accordance with its fair
meaning, and will not be construed strictly for or against either Executive or
the Company. The law of Massachusetts will govern any dispute about this
Agreement, including any interpretation or enforcement of this Amendment,
without giving effect to the conflict of laws provisions of Massachusetts law.
In the event that any provision or portion of a provision of the Employment
Agreement, as amended, shall be determined to be unenforceable, the remainder
of this Amendment shall be enforced to the fullest extent possible as if such
provision or portion of a provision were not included. The Employment Agreement,
as amended, may be modified only by a written agreement signed by Executive and
an authorized representative of the Company.
Agreed and accepted this 5th day of June, 1998.
EXECUTIVE THE STRIDE RITE CORPORATION
___/s/ Xxxxxx X. Siegel______ By: __/s/ Xxxxx Mori_______________
Xxxxxx X. Xxxxxx, an individual Xxxxx Xxxx, Chairman of the
Compensation Committee of the
Board of Directors
