VINCENT CAMUTO
RETENTION AGREEMENT
THIS AGREEMENT made as of the 15th day of December, 1998, by and between
Nine West Group Inc. (the "Company") and Vincent Camuto (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change of Control (as defined herein) exists and
that the threat or the occurrence of a Change of Control can result in
significant distraction of the Company's key management personnel because of
the uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders, for the Company to retain the
services of the Executive in the event of a threat or occurrence of a Change
of Control and to ensure the Executive's continued dedication and efforts in
such event without undue concern for the Executive's personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company, particularly in the event of a threat or the occurrence of a Change
of Control, the Company desires to enter into this Agreement with the
Executive to provide the Executive with certain benefits in the event his
employment is terminated as a result of, or in connection with, a Change of
Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of December
15, 1998, and shall continue in effect until December 31, 2001 (the "Term");
PROVIDED, HOWEVER, that if the Company gives written notice to the Executive
on or before January 1, 2000, and on or before each January 1 thereafter, that
it wishes to extend the Term for one (1) year beyond the date on which it
would otherwise expire, the Term shall be so extended; PROVIDED, FURTHER,
HOWEVER, that following the occurrence of a Change of Control, the Term shall
not expire prior to the expiration of thirty-six (36) months after such
occurrence.
2. TERMINATION OF EMPLOYMENT. If, during the Term, the Executive's
employment with the Company shall be terminated on a date that falls within
the thirty-six (36) month period following a Change of Control, the Executive
shall be entitled to the following compensation and benefits:
(a) If the Executive's employment with the Company shall be
terminated (1) by the Company for Cause (as defined herein) or Disability (as
defined herein), (2) by reason of his death, or (3) by the Executive other
than for Good Reason (as defined herein) (other than during the 30-day period
following the first anniversary of a Change of Control), the Company shall pay
to the Executive his Accrued Compensation (as defined herein).
(b) If the Executive's employment with the Company shall be
terminated (1) for any reason other than as specified in Section 2(a), or (2)
by the Executive for any reason during the 30-day period following the first
anniversary of a Change of Control, the Executive shall be entitled to the
following:
(1) the Company shall pay the Executive all Accrued
Compensation and a Pro Rata Bonus (as defined herein);
(2) the Company shall pay the Executive as severance pay
and in lieu of any further compensation for periods subsequent to the
Termination Date (as defined herein), an amount equal to three (3) times his
Base Amount (as defined herein);
(3) For the remainder of his lifetime following the
Executive's Termination Date (the "Continuation Period"), the Company shall
continue on behalf of the Executive and his dependents and beneficiaries the
life insurance, disability, medical, dental, prescription drug and
hospitalization coverages and benefits provided to the Executive immediately
prior to the Change of Control or, if greater, the coverages and benefits
provided at any time thereafter. The coverages and benefits (including
deductibles and costs to the Executive) provided in this Section 2(b)(3)
during the Continuation Period shall be no less favorable to the Executive and
his dependents and beneficiaries than the most favorable of such coverages and
benefits referred to above. The Company's obligation hereunder with respect
to the foregoing coverages and benefits shall be reduced to the extent that
the Executive obtains any such coverages and benefits pursuant to a subsequent
employer's benefit plans, in which case the Company may reduce any of the
coverages or benefits it is required to provide the Executive hereunder so
long as the aggregate coverages and benefits (including deductibles and costs
to the Executive) of the combined benefit plans is no less favorable to the
Executive than the coverages and benefits required to be provided hereunder.
This Section 2(b)(3) shall not be interpreted so as to limit any benefits to
which the Executive, his dependents or beneficiaries may be entitled under any
of the Company's employee benefit plans, programs or practices following the
Executive's termination of employment, including but not limited to retiree
medical and life insurance benefits;
(4) the Company shall pay in a single payment an amount in
cash equal to the excess of (A) the Supplemental Retirement Benefit (as
defined herein) had (w) the Executive remained employed by the Company for an
additional three (3) complete years of credited service under each
supplemental and other retirement plan in which the Executive was a
participant on the Termination Date (or until his 65th birthday, if earlier),
(x) his annual compensation during such period been equal to his Base Amount,
(y) the Company made employer contributions to each defined contribution plan
in which the Executive was a participant on the Termination Date (in an amount
equal to the amount of such contribution for the plan year ending immediately
preceding the Termination Date) and (z) the Executive become fully (100%)
vested in his benefit under each supplemental and other retirement plan in
which the Executive was a participant on the Termination Date, over (B) the
lump sum actuarial equivalent of the aggregate retirement benefit the
Executive is actually entitled to receive under such supplemental and other
retirement plans. For purposes of this Section 2(b)(4), "Supplemental
Retirement Benefit" shall mean the lump sum actuarial equivalent of the
aggregate retirement benefit the Executive would have been entitled to receive
under the Company's supplemental and other retirement plans including but not
limited to The Pension Plan for Associates of Nine West Group Inc. (the
"Pension Plan"). For purposes of this Section 2(b)(4), the "actuarial
equivalent" shall be determined in accordance with the actuarial assumptions
used for the calculation of benefits under the Pension Plan as applied prior
to the Termination Date in accordance with the Pension Plan's past practices;
(5) the Company shall pay the Executive a lump sum in cash
equal to the present value (determined using a discount rate equal to one
hundred twenty percent (120%) of the applicable mid-term Federal rate
determined pursuant to Section 1274(d) of the Code (as defined herein),
compounded semiannually) of thirty-six (36) monthly payments, each of which
payments is equal to the monthly automobile allowance payable by the Company
in respect of the Executive immediately prior to the Termination Date; and
(6) for thirty-six (36) months following the Executive's
Termination Date, the Company shall continue to pay the Company portion of
premiums under the split-dollar life insurance policy maintained in respect of
the Executive.
(c) The amounts provided for in Sections 2(a) and 2(b)(1), (2),
(4) and (5) shall be paid in a single lump sum cash payment within ten (10)
days after the Executive's Termination Date (or earlier, if required by
applicable law).
(d) Upon the occurrence of a Change of Control, all options held
by the Executive on the date of the Change of Control shall vest and become
immediately exercisable and all restrictions on shares of restricted stock
shall lapse; provided, however, such accelerated vesting and/or lapse of
restrictions shall not be applicable if its implementation would preclude the
application of pooling-of-interests accounting treatment to a transaction for
which such treatment is to be adopted by the Company and which has been
approved by the Board of Directors, and the holders of options and restricted
stock shall not be entitled to any accelerated vesting in such event.
(e) The severance pay and benefits provided for in this Section
2 shall be in lieu of any other severance pay to which the Executive may be
entitled under any severance or employment agreement with the Company,
PROVIDED HOWEVER, that the Executive shall receive compensation or benefits
other than as provided herein to the extent that the Executive is entitled to
receive such compensation or other benefits at the time of his termination, as
determined in accordance with the employee benefit plans of the Company and
other applicable agreements, programs and practices as in effect from time to
time, including but not limited to the Consulting Agreement, dated as of even
date herewith, between the Executive and the Company (the "Consulting
Agreement"), a copy of which is attached as EXHIBIT A hereto.
(f) If the Executive's employment is terminated by the Company
without Cause prior to the date of a Change of Control but the Executive
reasonably demonstrates that such termination (1) was at the request of a
third party who has indicated an intention or taken steps reasonably
calculated to effect a Change of Control (a "Third Party") and who effectuates
a Change of Control or (2) otherwise arose in connection with, or in
anticipation of, a Change of Control which has been threatened or proposed and
which actually occurs, such termination shall be deemed to have occurred after
a Change of Control, it being agreed that any such action taken following
shareholder approval of a transaction which if consummated would constitute a
Change of Control, shall be deemed to be in anticipation of a Change of
Control provided such transaction is actually consummated.
3. EFFECT OF SECTION 280G OF THE INTERNAL REVENUE CODE.
(a) Notwithstanding any other provision of this Agreement to the
contrary, and except as provided in Section 3(b), to the extent that any
payment or distribution of any type to or for the benefit of the Executive by
the Company, any Person who acquires ownership or effective control of the
Company or ownership of a substantial portion of the Company's assets (within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder), or any Affiliate of such
Person, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total Payments"), is or will be
subject to the excise tax imposed under Section 4999 of the Code (the "Excise
Tax"), then the Total Payments shall be reduced (but not less than zero) if
and to the extent that a reduction in the Total Payments would result in the
Executive retaining a larger amount, on an after-tax basis (taking into
account federal, state and local income taxes and the Excise Tax), than if the
Executive received the entire amount of such Total Payments. Unless the
Executive shall have given prior written notice specifying a different order
to the Company to effectuate the foregoing, the Company shall reduce or
eliminate the Total Payments, by first reducing or eliminating the portion of
the Total Payments which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in time from the
Determination (as defined herein). Any notice given by the Executive pursuant
to the preceding sentence shall take precedence over the provisions of any
other plan, arrangement or agreement governing the Executive's rights and
entitlements to any benefits or compensation.
(b) If the reduction of the Payments as provided in Section 3(a)
would exceed $200,000, Section 3(a) shall not apply and the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including any Excise Tax,
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.
(c) The determination of whether the Payments shall be reduced
pursuant to this Section 3 and the amount of such reduction, and the
determination of whether a Gross-Up Payment is payable, shall be made at the
Company's expense, by an accounting firm selected by the Company which is one
of the five (5) largest accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation to the Company and the Executive within ten (10) days of the
Termination Date, if applicable, or such other time as requested by the
Company or by the Executive (provided the Executive reasonably believes that
any of the Payments may be subject to the Excise Tax), and if the Accounting
Firm determines that no Excise Tax is payable by the Executive with respect to
the Payments, it shall furnish the Executive with an opinion reasonably
acceptable to the Executive that no Excise Tax will be imposed with respect to
any such Payments. The Determination shall be binding, final and conclusive
upon the Company and the Executive.
(d) If a Gross-Up Payment is determined to be payable, it shall
be paid to the Executive within twenty (20) days after the Determination (and
all accompanying calculations and other material supporting the Determination)
is delivered to the Company by the Accounting Firm. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive, absent
manifest error. As a result of uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments not made by the Company
should have been made ("Underpayment"), or that Gross-Up Payments will have
been made by the Company which should not have been made ("Overpayments"). In
either such event, the Accounting Firm shall determine the amount of the
Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment (including any applicable
interest and penalties) shall be promptly paid by the Company to or for the
benefit of the Executive. In the case of an Overpayment, the Executive shall,
at the direction and expense of the Company, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company, and
otherwise reasonably cooperate with the Company to correct such Overpayment,
PROVIDED, HOWEVER, that (i) the Executive shall not in any event be obligated
to return to the Company an amount greater than the net after-tax portion of
the Overpayment that he has retained or has recovered as a refund from the
applicable taxing authorities and (ii) if a Gross-Up Payment is determined to
be payable, this provision shall be interpreted in a manner consistent with an
intent to make the Executive whole, on an after-tax basis, from the
application of the Excise Tax, it being understood that the correction of an
Overpayment may result in the Executive repaying to the Company an amount
which is less than the Overpayment. The cost of all such determinations made
pursuant to this Section 3 shall be paid by the Company.
4. NOTICE OF TERMINATION. Following a Change of Control, any
intended termination of the Executive's employment by the Company shall be
communicated by a Notice of Termination from the Company to the Executive, and
any intended termination of his employment by the Executive for Good Reason
shall be communicated by a Notice of Termination from the Executive to the
Company.
5. FEES AND EXPENSES. The Company shall pay, as incurred, all legal
fees and related expenses (including the costs of experts, evidence and
counsel) that the Executive may incur following a Change of Control as a
result of or in connection with (a) the Executive's contesting, defending or
disputing the basis for the termination of his employment, (b) the Executive's
hearing before the Board of Directors of the Company as contemplated in
Section 15.5 of this Agreement or (c) the Executive seeking to obtain or
enforce any right or benefit provided by this Agreement or by any other plan
or arrangement maintained by the Company under which the Executive is or may
be entitled to receive benefits; PROVIDED, HOWEVER, that the Company shall not
be required to pay the Executive's legal fees and related expenses if it is
finally determined by the final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been taken) that the Executive's claims are frivolous.
6. COVENANTS OF THE EXECUTIVE.
6.1. NON-COMPETITION AND NON-SOLICITATION.
The Executive acknowledges and recognizes (i) the highly
competitive nature of the business of the Company, (ii) the importance to the
Company of the Confidential Business Information and Trade Secrets (as defined
herein) to which the Executive 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, China, Europe, Hong Kong,
Taiwan, Korea, Mexico and the United States, and its relationships with such
sources of supply, developed by it or its predecessors over many years, and
(iv) the position of responsibility which the Executive will hold with the
Company. Accordingly, the Executive agrees that during the Non-Compete Period
(as defined herein), the Executive will not, directly or indirectly, (x)
engage in the business activities engaged in by the Company on the date hereof
and during the Executive's 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, China, Europe, Hong Kong, Taiwan, Korea,
Mexico or the United States, in any State of the United States in which the
Company is then doing business, the District of Columbia, and any other
country in which the Company is then doing business, 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); (y) assist other persons or businesses in
engaging in any business activities prohibited under clause (x); or (z) induce
any employees of the Company to engage in any such activities or to terminate
their employment or hire or attempt to hire any employees of the Company.
6.2. APPLICATION AND PERIOD.
(a) APPLICATION. Section 6.1 shall apply following a
Change of Control if (i) the Company terminates the Executive's employment for
Cause, (ii) the Executive voluntarily terminates his employment for any
reason, including for Good Reason (as defined herein), or (iii) the employment
of the Executive is terminated and such termination results in payments to the
Executive under Section 2(b) hereof.
(b) PERIOD. The "Non-Compete Period" shall mean a period
of two (2) years following the termination of the Executive's employment with
the Company after a Change of Control.
6.3. NON-PUBLICATION.
During the Non-Compete Period, the Executive shall not publish any
statement or make any statement (under circumstances reasonably likely to
become public) critical of the Company or in any way adversely affecting or
otherwise maligning the reputation of the Company, customers, suppliers,
agents or subcontractors. In particular and without limitation of the
foregoing, the Executive shall not, in any circumstance likely to become
public, discourage any person, firm, partnership, corporation, trust or any
other entity or third party from selling any business or assets to the
Company, entering into any joint venture or other business relationship with
the Company, or investing in the Company. Any statements made by the
Executive in connection with legal, administrative or arbitration proceedings,
or that are required to be made by the Executive pursuant to applicable law,
shall not be prohibited by this Section 6.3.
6.4. CONFIDENTIALITY.
(a) The Executive acknowledges that the Company is engaged in
the highly competitive business of designing, developing, manufacturing,
marketing and selling footwear and accessories. The Company's involvement in
this business has required and continues to require the expenditure of
substantial amounts of money and the use of skills developed over considerable
time. As a result of these investments of money, skill and time, the Company
has developed and will continue to develop certain valuable trade secrets and
confidential business information that are peculiar to the Company's business
and the disclosure of which would cause the Company great and irreparable
harm. The Executive acknowledges that, during the course of his employment by
the Company, he will receive and/or have access to "Trade Secrets" and/or
"Confidential Business Information" (as defined herein), and that, had the
Executive not had the opportunity to work at the Company, he would not have
become privy to such information.
(b) The term "Trade Secrets" means any technical or financial
information, design, process, procedure, formula or improvement that is
valuable and not generally known to the Company's competitors. To the fullest
extent consistent with the foregoing, Trade Secrets shall include, without
limitation, all information and documentation, whether or not subject to
copyright, pertaining to product developments, methods of operation, cost and
pricing structures, and other private, confidential business matters.
(c) The term "Confidential Business Information" means any data
or information and documentation, other than Trade Secrets, which is valuable
to the Company and not generally known to the public, including but not
limited to:
i. Financial information, including but not limited to
earnings, assets, debts, prices, cost information, sales and
profit projections or other financial data;
ii. Marketing information, including but not limited to
details about ongoing or proposed marketing programs or
agreements by or on behalf of the Company, marketing forecasts,
results of marketing efforts or information about impending
transactions;
iii. Product information, including but not limited to
development plans, designs, and product costs; and
iv. Product source and customer information, including but
not limited to any data regarding actual or potential supply
sources, agency agreements or arrangements and actual or
potential customers.
(d) The Executive agrees that, except as required to fulfill his
obligations during the course of his employment, he will not, during his
employment with the Company or after such employment has ceased, directly or
indirectly use, disclose or disseminate to any other person, organization or
entity or otherwise employ any Trade Secrets or Confidential Business
Information. Nothing in this paragraph shall preclude the Executive from
disclosing or using Trade Secrets or Confidential Business Information if (i)
the Trade Secrets or Confidential Business Information have become generally
known, at the time the Trade Secrets or Confidential Business Information are
used or disclosed, to the public or to competitors of the Company except
through or as a result of the Executive's act or omission; or (ii) the
disclosure of the Trade Secrets or Confidential Business Information is
required to be made by any law, regulation, governmental body or authority, or
court order, provided that the Executive will give the Company prompt written
notice of such requirement so that the Company may seek an appropriate
protective order or similar remedy. The Executive agrees 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 Trade Secrets or Confidential Business Information, upon the
cessation of his employment, and the Executive agrees not to retain any copies
or extracts thereof.
(e) It is expressly understood and agreed that, although the
Executive 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 this Section 6 is an unreasonable or an otherwise unenforceable
restriction, 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 activity covered by such provision and, in its reduced form,
such provision shall then be enforceable and shall be enforced.
Notwithstanding the foregoing, the Executive shall be entitled to retain such
records as may be reasonably necessary for personal tax or legal compliance or
planning.
6.5. INJUNCTIVE RELIEF.
The covenants set forth in this Section 6 are independent and
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 of this Agreement, the Executive consents to
the entry of an injunction, and the Executive 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.
7. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including any Notice of
Termination) shall be in writing, shall be signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive,
and shall be deemed to have been duly given when personally delivered or sent
by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other, provided that all
notices to the Company shall be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof (whichever is earlier), except that
notice of change of address shall be effective only upon receipt.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company and
for which the Executive may qualify, nor shall anything herein limit or reduce
such rights as the Executive may have under any other agreements with the
Company, except as explicitly provided herein. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
plan or program of the Company shall be payable in accordance with such plan
or program, except as explicitly modified by this Agreement.
9. (a) FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including
but not limited to any set-off, counterclaim, defense, recoupment, or other
claim, right or action which the Company may have against the Executive or
others.
(b) NO MITIGATION. The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and no such payment shall be offset or reduced
by the amount of any compensation or benefits provided to the Executive in any
subsequent employment except as provided in Section 2(b)(3).
10. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and the Company. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party which are not
expressly set forth in this Agreement.
11. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company and its Successors and Assigns. The Company shall
require its Successors and Assigns, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.
12. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York without
giving effect to the conflict of laws principles thereof. Any action brought
by any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in New York County in the State of New York.
13. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
14. ENTIRE AGREEMENT. This Agreement and the Consulting Agreement
constitute the entire agreement between the parties hereto, and supersede all
prior agreements, if any, understandings and arrangements, oral or written,
between the parties hereto, with respect to the subject matter hereof;
PROVIDED, HOWEVER, that the employment agreement between the Company and the
Executive, dated as of May 8, 1992, as amended on December 30, 1992 (the
"Employment Agreement") shall apply, except with respect to Sections 2(e) and
6 of this Agreement, which shall supersede the Employment Agreement.
15. DEFINITIONS.
15.1. ACCRUED COMPENSATION. For purposes of this Agreement,
"Accrued Compensation" shall mean all amounts of compensation for services
rendered to the Company that have been earned or accrued through the
Termination Date but that have not been paid as of the Termination Date
including, without limitation (a) base salary, (b) reimbursement for
reasonable and necessary business expenses incurred by the Executive on behalf
of the Company during the period ending on the Termination Date and (c)
vacation pay.
15.2. AFFILIATE. For purposes of this Agreement, "Affiliate"
means, with respect to any Person, any other Person directly or indirectly
controlled by, controlling or under common control with such Person.
15.3. BASE AMOUNT. For purposes of this Agreement, "Base
Amount" shall mean annual base salary at the rate in effect as of the date of
a Change of Control or, if greater, at any time thereafter, determined without
regard to any salary reduction or deferred compensation elections made by the
Executive.
15.4. CAUSE. For purposes of this Agreement, a termination of
employment is for "Cause" if the Executive
(a) has been convicted of a felony (including a plea of
nolo contendere), the time for appeal of which has elapsed;
(b) intentionally and continually failed substantially to
perform the Executive's reasonably assigned duties with the Company (other
than a failure resulting from his incapacity due to physical or mental illness
or from the assignment to the Executive of duties that would constitute Good
Reason) which failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance, signed by a duly
authorized officer of the Company, has been delivered to the Executive
specifying the manner in which the Executive has failed substantially to
perform; or
(c) intentionally engaged in illegal conduct or willful
misconduct which is demonstrably and materially injurious to the Company.
For purposes of this Agreement, no act, nor failure to act, on his part, shall
be considered "intentional" unless the Executive has acted, or failed to act,
with a lack of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest of the Company.
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of the Company's
Chairman of the Board, Chief Executive Officer or a senior officer of the
Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The termination of
employment of the Executive shall not be deemed to be for Cause pursuant to
subparagraph (b) or (c) above unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote
of not less than three-fourths of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described
in subparagraph (b) or (c) above, and specifying the particulars thereof in
detail. Notwithstanding anything contained in this Agreement to the contrary,
no failure to perform by the Executive after a Notice of Termination is given
to the Company by the Executive shall constitute Cause for purposes of this
Agreement.
15.5. CHANGE OF CONTROL. A "Change of Control" shall mean the
occurrence during the term of the Agreement of:
(a) An acquisition (other than directly from Nine West
Group Inc.) of any common stock of Nine West Group Inc. ("Common Stock") or
other voting securities of Nine West Group Inc. entitled to vote generally for
the election of directors (the "Voting Securities") by any "Person" (as the
term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), immediately after
which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty percent (30%) or more of the
then outstanding shares of Common Stock or the combined voting power of Nine
West Group Inc.'s then outstanding Voting Securities; PROVIDED, HOWEVER, in
determining whether a Change of Control has occurred, Voting Securities which
are acquired in a Non-Control Acquisition (as defined herein) shall not
constitute an acquisition which would cause a Change of Control. A
"Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) Nine West Group
Inc. or (B) any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is owned, directly or
indirectly, by Nine West Group Inc. (a "Subsidiary"), (ii) Nine West Group
Inc. or its Subsidiaries, or (iii) any Person in connection with a Non-Control
Transaction (as defined herein);
(b) The individuals who, as of December 15, 1998, are
members of the Board of Nine West Group Inc. (the "Incumbent Board") cease for
any reason to constitute at least a majority of the members of the Board;
PROVIDED, HOWEVER, that if the election, or nomination for election by Nine
West Group Inc.'s shareholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Agreement, be considered as a member of the Incumbent Board;
PROVIDED FURTHER, HOWEVER, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(1) A merger, consolidation, reorganization or other
business combination with or into Nine West Group Inc. or in
which securities of Nine West Group Inc. are issued, unless
such merger, consolidation, reorganization or other business
combination is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation,
reorganization or other business combination with or into Nine
West Group Inc. or in which securities of Nine West Group Inc.
are issued where:
(A) the shareholders of Nine West Group Inc.,
immediately before such merger, consolidation,
reorganization or other business combination own directly
or indirectly immediately following such merger,
consolidation, reorganization or other business
combination, at least sixty percent (60%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation,
reorganization or other business combination (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities
immediately before such merger, consolidation,
reorganization, or other business combination,
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation,
reorganization or other business combination constitute
at least two-thirds (2/3) of the members of the board of
directors of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority of
the combined voting power of the outstanding voting
securities of the Surviving Corporation, and
(C) no Person other than (i) Nine West Group
Inc., (ii) any Subsidiary, (iii) any employee benefit
plan (or any trust forming a part thereof) that,
immediately prior to such merger, consolidation,
reorganization or other business combination was
maintained by Nine West Group Inc., the Surviving
Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation,
reorganization or other business combination had
Beneficial Ownership of thirty percent (30%) or more
of the then outstanding Voting Securities or common stock
of Nine West Group Inc., has Beneficial Ownership of
thirty percent (30%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting
securities or its common stock.
(2) A complete liquidation or dissolution of Nine West
Group Inc.; or
(3) The sale or other disposition of all or
substantially all of the assets of Nine West Group Inc. to any
Person (other than (i) any such sale or disposition that
results in at least fifty percent (50%) of Nine West Group
Inc.'s assets being owned by a subsidiary or subsidiaries or
(ii) a distribution to Nine West Group Inc.'s stockholders of
the stock of a subsidiary or any other assets).
Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding common
stock or Voting Securities as a result of the acquisition of Common Stock or
Voting Securities by Nine West Group Inc. which, by reducing the number of
shares of Common Stock or Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change of Control would occur (but for the operation of
this sentence) as a result of the acquisition of shares of Common Stock or
Voting Securities by Nine West Group Inc., and after such share acquisition by
Nine West Group Inc., the Subject Person becomes the Beneficial Owner of any
additional shares of Common Stock or Voting Securities which increase the
percentage of the then outstanding shares of Common Stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change of Control shall
occur.
15.6. COMPANY. For purposes of this Agreement, all references
to the Company shall be deemed to include the Company and any Affiliate of the
Company, and any respective Successors and Assigns.
15.7. DISABILITY. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which impairs his ability to
substantially perform his duties with the Company for six (6) consecutive
months and, within the time period set forth in a Notice of Termination given
to the Executive (which time period shall not be less than thirty (30) days),
the Executive shall not have returned to full-time performance of his duties;
PROVIDED, HOWEVER, that if the Company's Long Term Disability Plan, or any
successor plan (the "Disability Plan"), is then in effect, the Executive shall
not be deemed disabled for purposes of this Agreement unless the Executive is
also eligible for long-term disability benefits under the Disability Plan (or
similar benefits in the event of a successor plan).
15.8. GOOD REASON. (a) For purposes of this Agreement, "Good
Reason" shall mean the occurrence after a Change of Control of any of the
following events or conditions:
(1) a change in the Executive's responsibilities or
job description (including reporting responsibilities) that represents a
material adverse change from the Executive's responsibilities or job
description as in effect immediately prior thereto;
(2) a reduction in the Executive's annual base salary
below the Base Amount;
(3) the relocation of the offices of the Company at
which the Executive is principally employed to a location more than fifty (50)
miles from Columbus Circle in New York City, except for required travel on the
business of the Company to an extent substantially consistent with his
business travel obligations at the time of the Change of Control;
(5) the failure by the Company to pay to the Executive
any portion of his current compensation or to pay to the Executive any portion
of an installment of deferred compensation under any deferred compensation
program of the Company in which the Executive participated, within seven (7)
days of the date such compensation is due;
(6) the failure by the Company to (A) continue in
effect (without reduction in benefit level and/or reward opportunities which
with respect to the Incentive Plan shall include a reduction in the potential
bonus entitlement for comparable corporate performance by the Company and its
subsidiaries) any material compensation or employee benefit plan in which the
Executive was participating immediately prior to the Change of Control unless
a substitute or replacement plan has been implemented which provides
substantially identical compensation or benefits to the Executive or (B)
provide the Executive with compensation and benefits, in the aggregate, at
least equal (in terms of benefit levels and/or reward opportunities) to those
provided for under each other compensation, employee benefit or fringe benefit
plan, program or practice in which the Executive was participating immediately
prior to the Change of Control;
(7) the failure of the Company to obtain from its
Successors or Assigns the express assumption and agreement required under
Section 11(a) hereof; or
(8) any purported termination of his employment by the
Company which is not effected pursuant to a Notice of Termination satisfying
the terms set forth in the definition of Notice of Termination (and, if
applicable, the terms set forth in the definition of Cause).
(b) Any event or condition described in Section 15.8(a)(1)
through (8) which occurs prior to a Change of Control but which the Executive
reasonably demonstrates (1) was at the request of a Third Party who
effectuates a Change of Control or (2) otherwise arose in connection with, or
in anticipation of a Change of Control which has been threatened or proposed
and which actually occurs, shall constitute Good Reason for purposes of this
Agreement notwithstanding that it occurred prior to a Change of Control, it
being agreed that any such action taken following shareholder approval of a
transaction which if consummated would constitute a Change of Control, shall
be deemed to be in anticipation of a Change of Control provided such
transaction is actually consummated.
15.9. INCENTIVE PLAN. For purposes of this Agreement,
"Incentive Plan" shall mean the Company's First Amended and Restated Bonus
Plan or any successor annual incentive plan, maintained by the Company.
15.10. NOTICE OF TERMINATION. For purposes of this Agreement,
following a Change of Control, "Notice of Termination" shall mean a written
notice of termination of the Executive's employment, signed by the Executive
if to the Company or by a duly authorized officer of the Company if to the
Executive, which indicates the specific termination provision in this
Agreement, if any, relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of his
employment under the provision so indicated. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason, Disability or Cause shall not
serve to waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
15.11. PRO RATA BONUS. For purposes of this Agreement, "Pro
Rata Bonus" shall mean an amount equal to fifty percent (50%) of the Base
Amount multiplied by a fraction the numerator of which is the number of days
in the fiscal year in which the Executive's Termination Date occurs that have
elapsed through the Termination Date and the denominator of which is 365.
15.12. SUCCESSORS AND ASSIGNS. For purposes of this Agreement,
"Successors and Assigns" shall mean, with respect to the Company, a
corporation or other entity acquiring all or substantially all the assets and
business of the Company, as the case may be whether by operation of law or
otherwise.
15.13. TERMINATION DATE. For purposes of this Agreement,
"Termination Date" shall mean (a) in the case of the Executive's death, his
date of death, (b) if his employment is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that the Executive shall
not have returned to the performance of his duties on a full-time basis during
such thirty (30) day period) and (c) if his employment is terminated for any
other reason, the date specified in the Notice of Termination (which, in the
case of a termination for Cause shall not be less than thirty (30) days, and
in the case of a termination for Good Reason shall not be more than sixty (60)
days, from the date such Notice of Termination is given); PROVIDED, HOWEVER,
that if within thirty (30) days after any Notice of Termination is given the
party receiving such Notice of Termination in good faith notifies the other
party that a dispute exists concerning the basis for the termination, the
Termination Date shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, or by the final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been taken). Notwithstanding
the pendency of any such dispute, the Company shall continue to pay the
Executive his Base Amount and continue the Executive as a participant (at or
above the level provided prior to the date of such dispute) in all
compensation, incentive, bonus, pension, profit sharing, medical,
hospitalization, prescription drug, dental, life insurance and disability
benefit plans in which he was participating when the notice giving rise to the
dispute was given, until the dispute is finally resolved (whether or not the
dispute is resolved in favor of the Company); PROVIDED FURTHER, that if the
dispute results in the payment by the Company to the Executive of the amounts
contemplated under Section 2(b) hereof, the amount of such payments shall be
reduced by any Base Amount paid to the Executive during the pendency of the
dispute. Except as provided in the last proviso of the preceding sentence,
notwithstanding the outcome of any dispute, the Executive shall not be
obligated to repay to the Company or an Employing Affiliate any amounts paid
or benefits provided pursuant to this sentence. The Executive's rights to
receive payments under Section 2 of this Agreement shall survive the
expiration of the Term during any dispute contemplated by this Section.
16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall for all purposes be deemed an original, and all of which
shall constitute the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers and the Executive has executed this
Agreement as of the day and year first above written.
NINE WEST GROUP INC.
/s/ Joel K. Bedol
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By: Joel K. Bedol
Its: Executive Vice President
VINCENT CAMUTO
/s/ Vincent Camuto
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ATTEST
/s/ Mary Rice
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By: Mary Rice