Exhibit 10.19
Amendment to Employment Agreement
AMENDMENT effective as of the date hereof, to Employment Agreement, dated
October 13, 1998, by and between Candie's, Inc., a Delaware corporation (the
"Company" or "Employer") and Deborah Sorell Stehr (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive is currently the Company's Senior Vice President and
General Counsel; and
WHEREAS, the Company and Employee entered into an Employment Agreement
dated October 13, 1998 (the "Agreement"); and
WHEREAS, the Executive has assumed additional responsibilities on behalf of
the Company and the Company wishes, among other things, to extend the term of
the Executive's employment with the Company pursuant to the Agreement beyond the
term currently provided by the Agreement; and
WHEREAS, the Company and Executive desire to amend the terms of the
Agreement as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Employer and
Executive hereby agree as follows:
1. Section 1 of the Agreement is hereby amended to provide that the Company
agrees to employ the Executive as its Senior Vice President and General Counsel
for a term expiring on January 31, 2002.
2. Subsection 6(b) of the Agreement is hereby amended by deleting 6(b)(v)
and the last sentence of subsection 6(b) in its entirety:
3. Subsections 7(b) And 7(c) of the Agreement are hereby amended by
deleting the entire subsections and replacing them with the following:
(b) If the Company terminates your employment without Cause or you
terminate your employment for Good Reason within 12 months after a Change
in Control (as defined in Subsection 7(d)), then the Company shall pay to
you in complete satisfaction of its obligations under this Agreement, as
severance pay and as liquidated damages (because actual damages are
difficult to ascertain), in a lump sum, in cash, within 15 days after
the date of your termination, an amount equal to $100 less than three times
your "annualized includable compensation for the base period" (as defined
in Section 280G of the Internal Revenue Code of 1986); provided, however,
that if such lump sum severance payment, either alone or together with
other payments or benefits, either cash or non-cash, that you have the
right to receive from the Company, including, but not limited to,
accelerated vesting or payment of any deferred compensation, options, stock
appreciation rights or any benefits payable to you under any plan for the
benefit of employees, which would constitute an "excess parachute payment"
(as defined in Section 280G of the Internal Revenue Code of 1986), then
such lump sum severance payment or other benefit shall be reduced to the
largest amount that will not result in receipt by you of a parachute
payment. The determination of the amount of the payment described in this
subsection shall be made by [the Company's independent auditors] at the
sole expense of the Company. For purposes of clarification the value of any
options described above will be determined by the Company's independent
auditors using a Black-Scholes valuation methodology.
4. New subsections 7(c), 7(d) and 7(e) are hereby added to the Agreement as
follows:
(c) If within 12 months after the occurrence of a Change of Control,
the Company shall terminate your employment without Cause or you terminate
your employment for Good Reason, then notwithstanding the vesting and
exercisability schedule in any stock option agreement between the Company
and you, all unvested stock options granted by the Company to you pursuant
to such agreement shall immediately vest and become exercisable and shall
remain exercisable for not less than 180 days thereafter.
(d) A "Change in Control" shall mean any of the following:
(1) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of
the Company's common stock would be converted into cash, securities or
other property, other than a merger of the Company in which the holders of
the Company common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger;
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(2) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets
of the Company;
(3) any approval by the stockholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
(4) the cessation of control (by virtue of their not constituting a
majority of directors) of the Company's Board of Directors by the
individuals (the "Continuing Directors") who (x) at the date of this
Agreement were directors or (y) become directors after the date of this
Agreement and whose election or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the
directors then in office who were directors at the date of this Agreement
or whose election or nomination for election was previously so approved);
or
(5) (A) the acquisition of beneficial ownership ("Beneficial
Ownership"), within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of an aggregate of 15% or
more of the voting power of the Company's outstanding voting securities by
any person or group (as such term is used in Rule 13d-5 under the Exchange
Act) who beneficially owned less than 10% of the voting power of the
Company's outstanding voting securities on the effective date of this
Agreement, (B) the acquisition of Beneficial Ownership of an additional 5%
of the voting power of the Company's outstanding voting securities by any
person or group who beneficially owned at least 10% of the voting power of
the Company's outstanding voting securities on the effective date of this
agreement, or (C) the execution by the Company and a stockholder of a
contract that by its terms grants such stockholder (in its, hers or his
capacity as a stockholder) or such stockholder's Affiliate (as defined in
Rule 405 promulgated under the Securities Ac of 1933 (an "Affiliate"))
including, without limitation, such stockholder's nominee to the Company's
Board of Directors (in its, hers or his capacity as an Affiliate of such
stockholders), the right to veto or block decisions or actions of the
Company's Board of Directors' provided however, that notwithstanding the
foregoing, the events described in items (A), (B) or (C) above shall not
constitute a Change in Control hereunder if the acquiror is (aa) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or one of its affiliated entities and acting in such capacity, (bb)
a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of voting
securities of the Company (cc) a person or
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group meeting the requirements of clauses (ii) and (ii) of Rule 13d-1(b)(1)
under the Exchange Act or (dd) in the case of an acquisition described in
items (A) or (B) above (but not in the case of an acquisition described in
item (C) above), any other person whose acquisition of shares of voting
securities is approved in advance by a majority of the Continuing
Directors;
(6) subject to applicable law, in a Chapter 11 bankruptcy proceeding,
the appointment of a trustee or the conversion of a case involving the
Company to a case under Chapter 7.
(e) You shall not be required to mitigate the amount of any payment
provided for in this Section 7 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 7 be
reduced by any compensation earned by you as the result of your employment
by another employer or business or by profits earned by you from any other
source at any time before and after you date of termination.
5. All capitalized terms used in this Amendment and not otherwise defined
shall have the meanings ascribed to them in the Agreement. All of the other
provisions of the Agreement shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this amendment as of
the 27th day of January, 2000.
CANDIE'S, INC.
By: /s/ Neil Cole
-------------------------
/s/ Deborah Sorell Stehr
Deborah Sorell Stehr
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