October 19, 1998
Mr. Robert C. Galvin
44 Holmes Road
Ridgefield, CT 06877
Dear Bob:
This will confirm the terms and conditions of employment between you and
Nine West Group Inc. (the "Company"). It is agreed as follows:
1. TERM.
The Company shall employ you for a period from October 20, 1998, and
will end as of October 20, 2003. Thereafter, your employment with the Company
will continue, and this agreement will be automatically renewed, for
successive two (2)-year terms unless either party to this agreement advises
the other in writing, at least six (6) months prior to the expiration of the
initial period or any renewal term, that such party does not wish to renew.
Your employment may be terminated by the Company prior to the expiration of
the term of this agreement for Cause, as defined below, in which event no
further payments shall be made to you following such termination except for
amounts due and owing as of such date. As used in this agreement, the term
"Cause" shall mean: (a) your engaging in conduct that constitutes willful
misconduct or gross negligence in regard to this agreement; or (b) your
engaging in any conduct materially detrimental to the business, goodwill or
reputation of the Company; or (c) your conviction of a crime involving moral
turpitude; or (d) your violating any material provision of this agreement.
2. DUTIES.
(a) You shall render services to the Company as Executive Vice
President, Chief Financial Officer and Treasurer. Your services shall be
rendered in accordance with such rules and instructions as the Company shall
establish from time to time. You shall also perform such other executive and
administrative duties as may be assigned to you from time to time by the
Chairman of the Board of Directors, Chief Executive Officer, President, and/or
the Board of Directors of the Company.
(b) In the event that your duties, position or title undergo
changes in the course of your employment with the Company in ways not
expressly provided for in this agreement, such changes shall not constitute a
rescission of this agreement, or of any other terms hereof, and the agreement
shall remain in full force and effect as to all terms not affected by such
changes; provided, however, that any such new duties, position or title shall
be consistent with your current role, responsibilities and executive status.
In the event that such new duties, position, or title are inconsistent with
your current role, responsibilities and executive status or you are terminated
by the Company or the Board of Directors without cause, then you shall be
paid your salary and target bonuses for the remaining term of this agreement
in a lump sum upon such event.
3. COMPENSATION.
(a) SALARY. Your salary will be $450,000 per annum, with such
salary increased annually, by an amount at least equal to the Cost-of-Living
Factor multiplied by your then current salary; provided, however, you shall be
entitled to a salary increase by an amount not less than 5% per year. The
Cost-of-Living Factor shall be a fraction (i) the numerator of which will be
the Cost-of-Living Index at September 1 of the 12-month period immediately
preceding such 12-month period. The Cost-of-Living Index for purposes of this
calculation will be the Consumer Price Index for all Urban Consumers, New York
- - Northern New Jersey - Long Island, NY-NJ-CT (1982-84 = 100), published by
the Bureau of Labor Statistics, or if such Index shall cease to be published,
then the Cost-of-Living Index shall be such fair equivalent index as the
Company and you select.
(b) BONUS. You shall be entitled to an annual bonus in accordance
with the Company's applicable executive bonus program, and shall participate
at a target level of at least 75% of base salary.
(c) CAR ALLOWANCE. You shall receive a car allowance of $15,000 per
annum payable in accordance with the Company's usual practice for such an
allowance.
(d) VACATION. You shall receive four (4) weeks of paid vacation
each year during the term hereof. At your election, unused vacation time for
any year may be either paid in such year or carried over to the next
successive year.
4. BENEFITS AND EXPENSES.
You shall be eligible to participate in such deferred compensation
plans, retirement plans, stock option plan, medical and dental programs and
other fringe benefits as the Company provides to other executive employees.
We will pay or reimburse all reasonable business expenses incurred
by you with respect to work performed by you outside or inside the United
States on our behalf.
5. NONRENEWAL PAYMENT.
(a) NONRENEWAL BY EMPLOYEE. If this agreement expires pursuant to
Section 1 hereof because you elect not to renew this agreement as of October
20, 2003, then, except as provided otherwise in this Section 5, in
consideration of your covenant not to compete set forth in Section 6 of this
agreement, the Company will pay you a noncompetition payment equal to
your then current annual salary and last year's bonus plus full benefits equal
to that at the time of notice. The noncompetition payment shall be payable in
12 equal monthly installments on the last day of each month beginning with the
month immediately following nonrenewal of this agreement, and you shall not be
required to seek or accept other employment while receiving such payment,
provided, however, that the Company may, at any time, elect to release you
from your covenant not to compete at your request, and the Company will
thereupon be relieved of any further obligation to make the noncompetition
payment provided in this Section 5(a).
(b) NONRENEWAL BY THE COMPANY. If this agreement expires pursuant
to Section 1 hereof because the Company elects not to renew this agreement as
of October 20, 2003, then, except as provided otherwise in this Section 5, in
consideration of your covenant not to compete set forth in Section 6 of this
agreement, the Company will pay you a noncompetition payment equal to your
then current annual salary. The noncompetition payment shall be payable in 12
equal monthly installments on the last day of each month beginning with the
month immediately following nonrenewal of this agreement, and you shall not be
required to seek or accept other employment while receiving such payment.
Upon your request, the Company also will continue to provide health and dental
insurance coverage after such termination of employment, similar to that
provided to its executive employees, in accordance with the requirements of
the Consolidated Omnibus Budget Reconciliation Act of 1985. Notwithstanding
the foregoing, you may elect to be released from your covenant not to compete,
and if you accept employment with a competitor of the Company at any time when
noncompetition payments are being made under this Section 5(b), the Company's
obligation with respect to any further noncompetition, health and dental
insurance payments shall cease.
(c) FURTHER EXCEPTIONS. No noncompetition payments shall be made
under this Section 5 when any disability or death payments are payable by the
Company pursuant to any other agreement or arrangement, or if this agreement
is terminated by the Company at any time for Cause.
6. NONCOMPETITION.
(a) You acknowledge and recognize (i) the highly competitive nature
of the business of the Company and its affiliates, (ii) the importance to the
Company of the Confidential Material (as defined in Section 7 hereof) to which
you will have access, (iii) the importance to the Company of the knowledge and
experience possessed by it relating to sources of supply of footwear and
accessories in Brazil, and its relationships with such sources of supply,
developed by it or its predecessors over many years, and (iv) the position of
responsibility which you will hold with the Company. Accordingly, you agree
that for a period of one (1) year following nonrenewal of this agreement under
the circumstances described in Section 5(a) or 5(b) of this agreement or
following the cessation of your employment with the Company under any other
circumstances, you will not, directly or indirectly, (i) engage in the
business activities engaged in by the Company on the date hereof and during
your employment, such business activities being manufacturing, selling,
producing, marketing, distributing, designing, line building and otherwise
dealing in footwear and accessories, of the types in which the Company does
business as of the date of such cessation of employment, and produced in
Brazil, whether such other engagement is as an officer, director, employee,
proprietor, consultant, independent contractor, partner, advisor, agent or
investor (other than as a passive investor in less than 5% of the outstanding
capital stock of a publicly traded corporation); (ii) assist other persons or
businesses in engaging in any business activities prohibited under clause (i);
or (iii) induce any employees of the Company or its affiliates to engage in
any such activities or to terminate their employment.
(b) It is expressly understood and agreed that, although you and the
Company consider the restrictions contained in this Section 6 to be
reasonable, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction contained in
this Section 6 is an unreasonable or otherwise unenforceable restriction
against you, it is the intention of the parties that the provisions of this
Section 6 shall not be rendered void, but such court shall reduce the
duration, area or matter of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
(c) As used in Section 6(a), the term "Company" shall be deemed to
include the Company and any individual, person or entity controlling,
controlled by or under common control with the Company, and any respective
successors of any such individual, person or entity.
(d) The non-competition provisions of this Section 6 shall not apply
if the Company terminates your employment for any reason, except if the
Company terminates your employment pursuant to Section 1(b) and/or 1(d) of
this agreement. If termination of employment is pursuant to Section 1(b)
and/or 1(d) of this agreement, the Company agrees to provide written notice to
you stating which of such subparagraphs has been violated and the actions you
have taken resulting in such violation.
7. DEATH AND DISABILITY.
If your employment terminates before the expiration date because of
death or disability, the Company shall pay you or your duly appointed personal
representatives, as the case may be, (i) an amount equal to your monthly
salary during each of the twelve (12) months following your death or
disability, but in no event beyond the expiration date, and (ii) an amount
equal to your prior year's bonus. Disability is any physical injury, or any
illness, or a physical or psychological condition, which shall render you
incapable of performing the services required of you under this agreement for
a period of six (6) consecutive months.
8. CONFIDENTIALITY.
You acknowledge that, during the course of your employment by the
Company, you will have access to valuable confidential information, know-how,
lists of customers and prospects, cost lists, merchandising data, inventions,
designs, manufacturing methods and techniques and other information relevant
to the activities and business of the Company and its affiliates
("Confidential Material"). You agree that such Confidential Material shall be
and remain the Company's property, free of any rights on your part with
respect thereto, and that you shall keep it confidential at all times during,
and following the cessation of, your employment with the Company. You agree
to deliver to the Company all computer files and tapes, books, records and
documents (whether maintained in paper, electronic or any other medium)
relating to or bearing upon any such Confidential Material, upon the cessation
of your employment, and you agree not to retain any copies or extracts
thereof.
9. INJUNCTIVE RELIEF.
The parties recognize and agree that the covenants set forth in
Sections 6 and 7 are independent covenants and may be enforced regardless of
any claim regarding the balance of the agreement or any other claim relating
to the agreement. These covenants shall be enforceable by a court of equity
through the granting of a temporary restraining order, preliminary injunction
and/or permanent injunction. In the event of a breach of Section 6 or 7 of
this agreement, you consent to the entry of an injunction, and you shall pay
any reasonable fees and expenses incurred by the Company in enforcing such
Sections. Such equitable enforcement shall be in addition to and shall not
prejudice the right of the Company to an appropriate monetary award.
10. REPRESENTATION AND WARRANTY.
You hereby represent and warrant to the Company that your entering
into this agreement will not result in the breach of, or constitute a
violation of, any agreement, order or decree by which you are bound and that
you are not subject to any agreement, restriction or covenant, whether written
or oral, which restricts your ability to enter into this agreement or to
perform your duties as set forth herein.
11. MISCELLANEOUS.
(a) This agreement shall be governed by the laws of the State of
New York (excluding its choice of law rules).
(b) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, or if transmitted via telecopier with transmission
confirmed, with a copy mailed by certified mail, return receipt requested,
addressed to the addresses first set forth above or to such other addresses as
shall be furnished in writing by either party in like manner. Any such notice
or communication shall be deemed to have been given as of the date delivered
in person or transmission by telecopier is confirmed.
(c) This agreement may not be assigned by you. This agreement
shall be binding upon, and inure to the benefit of, the parties hereto, their
heirs, legal representatives, successors and permitted assigns.
(d) This agreement supersedes all prior agreements and
understandings between us and may not be modified or terminated orally. No
modifications, termination, or attempted waiver shall be valid unless set
forth in a writing signed by the party against whom the same is sought to be
enforced.
(e) The invalidity or unenforceability of any provision hereof
shall not in any way affect the validity or enforceability of any other
provision.
Please sign where indicated below, whereupon this letter will
constitute a binding agreement between us as of the date first above written.
Very truly yours, Accepted and agreed to as of
this 19 day of October, 1998.
Nine West Group Inc.
By: /s/ Vincent Camuto /s/ Robert C. Galvin
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Vincent Camuto Robert C. Galvin
Chief Executive Officer