Exhibit 10(f)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
is made as of April 27, 1993, by and between WOLVERINE WORLD WIDE, INC., a
Delaware corporation (the "Employer"), and GEOFFREY B. BLOOM, an individual
(the "Executive"), and amends and restates in its entirety the Employment
Agreement between the parties dated May 8, 1992.
R E C I T A L S :
Executive has been employed by Employer in an executive,
managerial and supervisory capacity. Executive has held the offices of
President and Chief Operating Officer of Employer and currently holds the
offices of President and Chief Executive Officer of Employer.
Executive has an existing employment agreement with Employer
dated May 8, 1992. In recognition of the appointment of Executive to the
office of Chief Executive Officer and the additional responsibilities that
accompany such appointment, the parties desire to amend the existing
employment agreement and restate in a single document the agreement of the
parties which supersedes all prior employment agreements.
Employer is desirous of being assured of the continued services
of Executive for a minimum term ending on April 30, 1997. Executive is
willing to continue in the employ of Employer for such term, and desires to
have the terms and conditions of such continued employment reduced to
writing.
THEREFORE, in consideration of the foregoing and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. Employment. Employer hereby agrees to continue to employ
Executive and Executive agrees to continue to serve Employer in an
executive, managerial and supervisory capacity on the terms and conditions
set forth in this Agreement.
2. Position and Duties. Executive shall serve as President and
Chief Executive Officer of Employer reporting only to Employer's Board of
Directors. Executive shall have supervision and control over, and
responsibility for, the general management and operation of Employer, and
shall have such other powers and duties as may from time to time be
prescribed by Employer's Board of Directors. Subject to the foregoing,
Executive agrees to devote his best efforts and substantially all his
working time and attention to the business of Employer and its
subsidiaries, and to the performance of such executive, managerial and
supervisory duties as may be assigned to him by Employer's Board of
Directors; provided, that Executive shall be permitted to serve on a
reasonable number of boards of directors of other companies, subject to the
prior consent of Employer's Board of Directors, and render occasional
services in connection with such service, and Executive shall be permitted
to participate in charitable and civic endeavors to the extent such service
does not interfere with Executive's obligations under this Agreement.
3. Term. Except in the case of early termination as specifically
provided in this Agreement, the term of Executive's employment shall be for
the period beginning effective as of April 27, 1993, and ending April 30,
1997.
4. Compensation. For the services to be rendered by Executive as
provided in this Agreement, Employer agrees to pay Executive during the
term hereof in thirteen (13) equal installments during each year of such
term, a base salary of not less than Three Hundred Thirty Thousand
($330,000) Dollars per annum, payable effective as of April 27, 1993.
Executive's base salary may be increased at the discretion of Employer's
Board of Directors and/or its Compensation Committee at any time and from
time to time during the term of this Agreement. Upon any such increase in
Executive's base salary, the new rate shall without further action by the
parties be deemed to be substituted for the rate set forth in this
Agreement and this Agreement shall be deemed to be amended accordingly.
5. Fringe Benefits.
(a) In addition to the compensation provided in Section 4
of this Agreement, Executive shall also be entitled to the
following fringe benefits:
(i) Executive shall participate in both the Executive
Long-Term Incentive (Three Year) Plan and the Executive
Short-Term Incentive Plan, or any successor or substitute
plans, and in such other bonus plans as may be made
available to upper echelon executives of Employer.
(ii) Executive shall be entitled to a leased automobile
of a type to be mutually agreed upon by Executive and
Employer. In addition, Employer shall pay maintenance and
all other operating expenses, including gasoline, repairs
and insurance, with respect to such automobile in accordance
with applicable regulations issued or administered by the
Internal Revenue Service.
(iii) Employer shall pay for reasonable dues,
assessments, and other non-discretionary expenses and all
business related expenses, associated with a membership in
two country clubs or similar luncheon or social
organizations in the Grand Rapids, Michigan area to be
selected by Executive.
(iv) Employer shall provide Executive with the benefits
of a term life insurance policy in the amount of Five
Hundred Thousand Dollars ($500,000) payable to his
designated beneficiaries, in addition to the benefits of all
-2-
other life insurance plans as provided in this Agreement.
Upon termination of this Agreement (except for voluntary
resignation by Executive or termination of Executive for
Cause), such Five Hundred Thousand Dollar ($500,000) life
insurance policy shall be assigned to Executive and Employer
shall pay all premiums due after any such assignment until
the expiration of the original term of this Agreement. In
the event of voluntary resignation by Executive or
termination of Executive for Cause, at Executive's option,
such life insurance policy shall be assigned to Executive
and Executive shall pay all premiums due after such
assignment.
(v) Employer shall provide Executive with tax
preparation services and financial planning advice and
services consistent with Employer's past practice or as may
be made available to upper echelon executives of Employer.
(vi) Employer shall pay Executive's reasonable legal
expenses related to the negotiation and execution of this
Agreement.
(vii) Executive shall be entitled to four (4) weeks of
vacation per year, plus such additional vacation as may be
permitted with the concurrence of Employer's Board of
Directors. Executive shall further be entitled to all
benefits in the way of "fringes" presently available or
which may subsequently be made available to upper echelon
executives of Employer as a class or benefits substantially
equivalent thereto, so long as such benefits or plans are in
effect, including but not limited to, participation in the
Wolverine World Wide, Inc. Employees' Pension Plan; the
Wolverine World Wide, Inc. Employees' Profit-Sharing and
Savings Plan; the Wolverine World Wide, Inc. Non-Qualified
Stock Option Plan of 1979 and any amendments thereto; the
Wolverine World Wide, Inc. 1984 Executive Incentive Stock
Purchase Plan; the Wolverine World Wide, Inc. Executive
Incentive Bonus Plan; the Wolverine World Wide, Inc.
Employee Loan Program; the Wolverine World Wide, Inc. 1993
Stock Incentive Plan; and all group life, disability,
hospitalization, medical, dental and surgical benefit plans
presently or hereafter in effect and available to upper
echelon executives of Employer, or their equivalent.
(viii) Employer shall provide Executive with a Deferred
Compensation Agreement mutually agreed upon by both parties
which, assuming Executive does not voluntarily resign or is
not terminated for Cause, provides for payments to Executive
or his assigns in the amount of One Hundred Twenty Thousand
Dollars ($120,000) per year for eighteen (18) consecutive
years commencing at age fifty-eight (58) or, at Executive's
-3-
sole discretion, at such later age or date as Executive may
elect.
(ix) In the event that Executive does not voluntarily
terminate his employment (for purposes of this Section,
Termination for Disability, Good Reason or death shall not
be considered voluntary termination) or is not terminated
for Cause prior to January 1, 1994, then Employer shall
forgive one-half of the total indebtedness, One Hundred Five
Thousand Four Hundred Sixty-four Dollars and Eighty-five
Cents ($105,464.85), plus accrued interest, of Executive to
Employer incurred in connection with the purchase of 22,500
shares of Employer's common stock. In the event that
Executive does not voluntarily terminate his employment or
is not terminated for Cause prior to May 8, 1994, then
Employer shall forgive the remainder of the total
indebtedness, plus accrued interest, of Executive to
Employer incurred in connection with the purchase of such
shares. In addition, upon forgiveness of any part of such
indebtedness, Employer shall loan to Executive an amount
equal to the federal and state income taxes resulting from
such forgiveness of indebtedness. Such loan shall bear no
interest and shall be repaid in three (3) equal annual
installments commencing on the first anniversary date of
such loan.
(b) Notwithstanding any provision or term of this Agreement
to the contrary, Employer shall not be required or obligated to
maintain, amend or adopt any particular fringe benefit plan or
policy, including those plans or policies referenced in this
Section, or to pay, credit or otherwise vest in Executive as a
participant any amount or level of award or grant under any such
plan; provided, however, that the foregoing shall not apply to
any deferred bonus, payment or other credit awarded to Executive
under any such plan.
6. Additional Benefits. The provisions of this Agreement with
respect to compensation and other benefits payable to Executive shall not
preclude or in any way affect the grant by Employer or the receipt by
Executive of increases in base salary or total compensation, or bonuses, or
additional compensation, contingent or otherwise, to be determined solely
in the discretion of Employer's Board of Directors and/or its Compensation
Committee, or by other persons or groups to whom such authority is legally
delegated.
7. Expenses. In addition to the compensation and benefits provided
in Sections 4 and 5 of this Agreement, Employer will reimburse or pay
Executive's reasonable and appropriate expenses for his business related
travel and entertainment in accordance with Employer's then current policy.
As a condition to such reimbursement or payment, Executive shall be
required to account to Employer for expenses incurred in the performance of
-4-
his employment duties. Executive shall be entitled, if Executive deems it
appropriate, to bring his spouse with him on up to two out of town trips
involving business of Employer per year, and Employer shall reimburse
Executive or pay the reasonable and appropriate expenses incurred for her
travel and entertainment. Employer may pay the travel and entertainment
expenses of Executive's spouse incurred on more than two business trips per
year with the prior approval of Employer's Board of Directors, and/or its
Compensation Committee.
8. Renewal of Term of Employment.
(a) Unless Employer delivers written notice to Executive on
or prior to May 1, 1996, of its intention not to renew
Executive's term of employment for an additional three (3) year
term, then Executive's term of employment shall be automatically
renewed for an additional three-year term commencing May 1, 1997,
and ending on April 30, 2000, on the same terms and conditions
set forth in this Agreement.
(b) Except as otherwise provided in Sections 10 and 14
hereof, if Employer terminates Executive's employment during the
original or renewal term of this Agreement, or elects not to
renew Executive's term of employment following expiration of the
original term of this Agreement, then Employer shall pay to
Executive on the earlier of the date of termination or May 1,
1997, a lump sum payment equal to two hundred percent (200%) of
Executive's then current annual base salary. In addition, except
as otherwise provided in Sections 10 and 14 hereof, if Employer
terminates Executive's employment during the original or renewal
term of this Agreement, or elects not to renew Executive's term
of employment following expiration of the original term of this
Agreement, Executive shall be credited with an additional three
(3) years of continuous service at Executive's salary rate in
effect on the Date of Termination for purposes of computing
Executive's benefits under the Wolverine World Wide, Inc.
Employees' Pension Plan such that, following the termination of
Executive's employment, Executive shall receive benefits from
such plan (or such supplemental plan as may be necessary to
provide such benefits) effective at age fifty-eight (58) as if
Executive had thirteen (13) years of service with Employer.
Executive may elect to commence payments upon attaining age
fifty-eight (58) or at a later date as permitted under the
general provisions of such plan, and such payments shall be based
upon the additional three (3) years of service credited to
Executive as provided in this Section.
9. Disability and Retirement.
(a) If, as a result of Executive's incapacity due to
physical or mental illness, he shall have been absent from his
-5-
duties with Employer on a full time basis for six (6) consecutive
months, and if he shall have not returned to the full time
performance of his duties within thirty (30) days after written
notice after such six (6) month period, Employer may terminate
this Agreement for "Disability."
(b) Termination of Executive's employment by Employer or
Executive based on "Retirement" shall mean termination in
accordance with Employer's retirement policy generally applicable
to salaried employees or in accordance with any retirement
arrangement applicable to him established with Executive's
consent.
10. Termination for Cause. Employer may terminate Executive's
employment for Cause. For purposes of this Agreement, "Cause" shall mean:
(a) the willful and continued failure by Executive to substantially perform
his duties with Employer (other than any such failure resulting from
Executive's incapacity due to physical or mental illness, or any such
actual or anticipated failure resulting from Executive's termination for
Good Reason) after a demand for substantial performance is delivered to
Executive by Employer's Board of Directors and/or its Chairman (which
demand shall specifically identify the manner in which the Board and/or its
Chairman believes that Executive has not substantially performed his
duties); or (b) the commission of a felony injurious to Employer or its
reputation, as determined by Employer's Board of Directors. For purposes
of this Section, no act or failure to act on the part of Executive shall be
considered "willful" unless done or omitted to be done by Executive not in
good faith and without reasonable belief that his action(s) or omission(s)
was in the best interests of Employer. If Executive's employment is
terminated for Cause, or if Executive voluntarily terminates his employment
other than for Good Reason, Disability or Retirement, then Employer shall
pay Executive his full base salary through the Date of Termination (as
provided in this Agreement) at the rate in effect at the time Notice of
Termination is given, and Employer shall have no further obligations to
Executive under this Agreement or under the Deferred Compensation
Agreement.
11. Termination for Good Reason. Executive may terminate his
employment at any time for Good Reason and, in such event, Employer shall
continue to be obligated to pay Executive the amounts and benefits set
forth in Section 14 of this Agreement. For purposes of this Agreement,
"Good Reason" shall, without Executive's express written consent, mean:
(a) The assignment to Executive of any duties inconsistent
with his present positions, duties, responsibilities and status
with Employer as President and Chief Executive Officer, or a
change in Executive's reporting responsibilities in such
capacities, titles or offices from those in effect as of the date
hereof, or any removal of Executive from, or failure to re-elect
him as President and Chief Executive Officer, except in
connection with the termination of his employment for Cause,
-6-
Disability or Retirement or as a result of his death or by
Executive other than for Good Reason;
(b) A reduction by Employer in Executive's annual base
salary as provided in this Agreement or as the same may be
increased from time to time, except for across-the-board salary
reductions, freezes or reduced increases similarly affecting all
executives of Employer;
(c) A failure by Employer to continue the Employer's
Executive Incentive Bonus Plan as such plan may be modified from
time to time but substantially in the form presently in effect
(the "Plan"), or a failure by Employer to continue Executive as a
participant in the Plan or to pay Executive any annual
installment of a previous award under the Plan or any Deferred
Distribution (as defined in the Plan) awarded under the Plan;
(d) The relocation of Employer's principal executive
offices to a location outside Rockford, Michigan, or any
requirement that Executive be based anywhere other than
Employer's principal executive offices, except for required
travel on Employer's business to an extent substantially
consistent with Executive's present business travel obligations,
or, in the event Executive consents to any such relocation of
Employer's principal executive offices, the failure by Employer
to pay (or reimburse Executive for) all reasonable moving
expenses incurred by Executive relating to a change of
Executive's principal residence in connection with such
relocation and to indemnify Executive against any loss (defined
as the difference between the actual sale price of such residence
and the higher of (i) Executive's aggregate investment in such
residence or (ii) the fair market value of such residence as
determined by a real estate appraiser designated by Executive and
reasonably satisfactory to Employer) realized in the sale of
Executive's principal residence in connection with any such
relocation;
(e) The failure by Employer to continue to provide
Executive with benefits substantially similar to those enjoyed by
Executive under any benefit or compensation plan (including but
not limited to Employer's 1979 Non-Qualified Stock Option Plan,
1988 Stock Option Plan and Deferred Compensation Plan), pension,
life insurance, medical, health and accident or disability plan
in which Executive is currently participating, the taking of any
action by Employer which would adversely affect Executive's
participation in or materially reduce Executive's benefits under
any of such plans or deprive Executive of any material fringe
benefit currently enjoyed by Executive, or the failure by
Employer to provide Executive with the number of paid vacation
days to which Executive is then entitled on the basis of years of
service with Employer in accordance with this Agreement and
-7-
Employer's normal vacation policy in effect on the date of this
Agreement;
(f) The failure of Employer to obtain the assumption of
Employer's obligations under this Agreement by any successor as
contemplated in Section 16 of this Agreement;
(g) Any purported termination of Executive's employment
which is not effected pursuant to a Notice of Termination which
satisfies the requirements of Section 12 below (and, if
applicable, Section 10 above); or
(h) Any other material breach by Employer of its
obligations under this Agreement.
12. Notice of Termination. Any purported termination of this
Agreement by Employer or by Executive shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon (except in the
event of termination of Executive without Cause) and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of Executive's employment under the provision so indicated
(including, if applicable, the requirements of Section 10 hereof).
13. Date of Termination. "Date of Termination" shall mean (a) if
this Agreement is terminated for Disability, the time specified in
Section 9 of this Agreement, and (b) if Executive's employment is
terminated for any reason other than Disability, the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Section 11 above shall not be more than sixty (60) days from the date such
Notice of Termination is given); provided, that, if within thirty (30) days
after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties or
by a binding arbitration award; and provided further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution
of such dispute with reasonable diligence. Notwithstanding the pendency of
any such dispute, Employer will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue Executive as a
participant in all compensation, benefit and insurance plans, subject to
the terms of this Agreement, in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement; provided, however, in the event that the Date of Termination
shall be extended by a notice of dispute and such dispute is resolved in
-8-
favor of the Employer, than the Employer may credit and offset any
compensation paid to Executive after the date specified in the Notice of
Termination against any payments due to Executive hereunder or, at
Employer's option, such payments shall be reimbursed by the Executive to
Employer.
14. Compensation Upon Termination.
(a) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, then, in lieu of
the payments provided under Sections 4, 5 and 8 of this
Agreement, Employer shall pay to Executive as severance pay (the
"Severance Payments") in a lump sum on the fifth day following
the Date of Termination, the following amounts:
(i) Executive's base salary through the Date of
Termination at the rate in effect at the time Notice of
Termination is given and an amount equal to the amount, if
any, of the deferred portion of any awards which pursuant to
the Plan have been awarded to Executive but which have not
yet been paid to Executive as well as a bonus for the year
prior to termination if not yet awarded and for the year of
termination prorated through the date of termination, both
based on 100% of any bonus awarded Executive for the
immediately preceding year, or the average of Executive's
bonus awards pursuant to the Plan for the two immediately
preceding years, whichever is greater, and including in
either case the amount of Deferred Compensation, if any,
under the Plan which has accrued to Executive's account;
(ii) In lieu of any further salary payments to
Executive for periods subsequent to the Date of Termination,
Employer shall pay Executive the present value (as computed
in Section 14(h) below), of the product of (A) the sum of
Executive's annual base salary at the rate in effect on the
Date of Termination plus the amount awarded Executive under
the Plan during the year most recently ended (whether or not
fully paid), and (B) the number of years (rounded to the
nearest hundredth) between the Date of Termination and April
30, 1997;
(iii) Employer shall also pay all relocation and
indemnity payments as set forth in Section 11(d) of this
Agreement;
(iv) All reasonable legal fees and expenses incurred by
Executive as a result of such termination if Executive
substantially prevails in enforcing his rights under this
Agreement (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or
-9-
in seeking to obtain or enforce any right or benefit
provided by this Agreement);
(v) In lieu of the $1.00 par value per share common
stock of Employer ("Company Shares") issuable upon the
exercise of options, (other than options granted after
May 8, 1992 as incentive stock options in accordance with
the provisions of Section 422A of the Internal Revenue Code
of 1986, as amended (the "Code")), under Employer's 1988
Stock Option Plan, or any other stock option plan now or
subsequently adopted by the Employer (which options shall be
canceled upon payment of the amount set forth below),
Executive shall receive an amount in cash equal to one
hundred fifty percent (150%) of the aggregate positive
spread between the exercise prices of all such options held
by Executive, whether or not then fully exercisable, and the
higher of (A) the closing price of Company Shares as
reported on the New York Stock Exchange on or nearest the
Date of Termination, or (B) the highest price per Company
share actually paid in connection with any change in control
of Employer;
(vi) In lieu of the Company Shares issuable upon the
exercise of options granted after May 8, 1992 which are then
exercisable, which options have been granted as incentive
stock options in accordance with the provisions of
Section 422A of the Code, under Employer's 1988 Stock Option
Plan, or any other stock option plan now or subsequently
adopted by Employer (which options shall be canceled upon
payment of the amount set forth below), Executive shall
receive an amount in cash equal to the aggregate positive
spread between the exercise prices of all such options held
by Executive which are then exercisable and the closing
price of Company Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination. Executive
shall receive such amount for any unexpired incentive stock
options, whether or not the exercise date of such stock
options has passed, provided such options would have been
exercisable prior to April 30, 1997;
(vii) The amount set forth in Section 8(b) of this
Agreement (which shall not be subject to mitigation as
provided in Section 15 hereof); and
(viii) In the event that any restrictions against
sale, transfer or other disposition of Company Shares
provided in the 1984 Plan have not lapsed on the Date of
Termination, Employer shall declare the restrictions to have
lapsed with respect to those shares, provided such
restrictions would have lapsed prior to April 30, 1997.
-10-
(b) Unless Executive is terminated for Cause, Employer
shall maintain in full force and effect, for continued benefit
after the Date of Termination, all employee benefit plans and
programs or arrangements in which Executive was entitled to
participate immediately prior to the Date of Termination (except
for bonus and stock option plans) provided that Executive's
continued participation is possible under the general terms and
provisions of such plans and programs until the last to expire of
six months after the Date of Termination, or the date upon which
Executive is engaged in an equivalent position and entitled to
participate in such other employer's employee benefits, in no
event to exceed one (1) year following the Date of Termination.
In the event that Executive's participation in any such plan or
program is barred, Employer shall arrange to provide Executive
with benefits substantially similar to those which Executive is
entitled to receive under such plans and programs. At the end of
the period of coverage, Executive shall have the option to have
assigned to him at no cost and with no apportionment of prepaid
premiums, any assignable insurance policy owned by Employer and
relating specifically to Executive.
(c) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, then in addition
to the benefits to which Executive is entitled under the
retirement plans or programs in which Executive participates or
any successor plans or programs in effect on the Date of
Termination, Employer shall pay Executive in one lump sum in cash
at Executive's normal retirement age (or earlier retirement age
should Executive so elect) as defined in the retirement plans or
programs in effect on the Date of Termination, an amount equal to
the actuarial equivalent of the retirement pension to which
Executive would have been entitled under the terms of such
retirement plans or programs without regard to any vesting
requirements of such plans or programs, had Executive accumulated
three (3) additional years of continuous service (after any
termination pursuant to Section 3) at Executive's salary rate in
effect on the Date of Termination plus the amount awarded
Executive under the plan during the year most recently ended
(whether or not fully paid) (including subsequent annual salary
adjustments) under such retirement plans or programs reduced by
the single sum actuarial equivalent of any amount to which
Executive is entitled pursuant to the provisions of such
retirement plans and programs. For purposes of this Subsection,
"actuarial equivalent" shall be determined using the same methods
and assumptions utilized under Employer's retirement plans and
programs immediately prior to any change in control.
(d) If Employer shall terminate Executive's employment
other than for Cause, Retirement or Disability, or if Executive
shall terminate his employment for Good Reason, Employer shall
-11-
provide Executive with executive out-placement services by
entering into a contract with a company specializing in such
services.
(e) Notwithstanding any provision in this Agreement to the
contrary, if part or all of any amount to be paid to Executive by
the Employer under this Agreement constitutes a "parachute
payment" (or payments) under Section 280G or any other similar
provision of the Code, the following limitation shall apply:
If the aggregate present value of such parachute
payments (the "Parachute Amount") exceeds 2.99 times Executive's
"base amount" as defined in Section 280G of the Code, then the
amount otherwise payable to or for the benefit of Executive
subsequent to the termination of his employment and taken into
account in calculating the Parachute Amount (the "Termination
Payments"), shall be reduced and/or delayed, as further described
below, to the extent necessary so that the Parachute Amount is
equal to 2.99 times Executive's "base amount."
Any determination or calculation described in this
Section shall be made by the Employer's independent accountants.
Such determination, and any proposed reduction and/or delay in
Termination Payments shall be furnished in writing promptly by
the accountants to Executive. Executive may then elect, in his
sole discretion, which and how much of any particular Termination
Payment shall be reduced and/or delayed and shall advise Employer
in writing of his election, within thirty (30) days of the
accountant's determination of the reduction and/or delay in
Termination Payments. If no such election is made by Executive
within such thirty (30) day period, Employer may elect which and
how much of any termination payment shall be reduced or delayed
and shall notify Executive promptly of such election. As
promptly as practicable following such determination and the
elections hereunder, Employer shall pay to or distribute to or
for the benefit of Executive such amounts as are then due to
Executive.
(f) Any disagreement regarding a reduction and/or delay in
Termination Payments will be subject to arbitration under
Section 21 of this Agreement. Neither Executive's designation of
specific payments to be reduced and/or delayed, nor Executive's
acceptance of reduced and/or delayed payments, shall waive
Executive's right to contest such reduction and/or delay.
(g) It is the belief of the parties that none of the
payments provided for in this Agreement is or will be a
"parachute payment."
(h) In computing the "present value" of payments under
Section 14(b) above, each payment shall be discounted from the
-12-
date it would have boon received had the employment continued to
the date of actual payment. The discount rate shall equal one
hundred twenty (120) percent of the applicable federal rate
(determined under Section 1274(d) of the Code, and the
regulations promulgated thereunder) compounded semiannually. The
applicable federal rate will be the federal rate in effect on the
date as of which the present value is determined.
15. Mitigation.
(a) Executive shall be required to mitigate the payments
upon termination described in Section 14 of this Agreement, in
accordance with applicable law governing mitigation of damages.
During the period Employer is obligated to make payments or
provide benefits to Executive under Section 14, Executive will
notify Employer in writing of any other employment or self-
employment in which Executive engages.
(b) The parties both believe and agree that it would not be
reasonable to expect Executive to mitigate damages during the
period covered under Section 14 by seeking or accepting
employment which is not substantially equivalent in all material
respects (including without limitation level of responsibility,
compensation, benefits and working conditions) to Executive's
position with Employer. The parties also believe and agree that
it would not be reasonable to require Executive to mitigate
damages during the period covered under Section 14 by seeking or
accepting employment outside the West Michigan Area. In addition,
nothing in this Section 15 shall be construed to require
Executive to actively seek employment to mitigate the amount of
payments due to him hereunder.
If Executive does earn income from other employment, or
net income from self-employment, during the period payments are
due under Section 14, the parties believe that the amount of any
such earnings (including the cash value of any fringe benefits)
should be deducted from the amount payable under Section 14,
subject to the following conditions. The parties believe and
agree that it would be reasonable and proper, before deducting
any other earnings from payments due under Section 14, to reduce
those other earnings by any expenses incurred by Executive in
obtaining such other earnings, including but not limited to
moving expenses, employment agency fees and, if the Executive
sells his residence in Kent County, Michigan, in order to
relocate, the amount of any loss on that residence (computed as
the difference between the sales price (net of real estate
commissions and other selling costs) and the greater of (i)
Executive's aggregate capital investment in such residence, or
(ii) the fair market value of such residence as determined by
agreement between the parties or, if the parties are unable to
-13-
agree, by an independent appraisal by a qualified real estate
appraiser reasonably acceptable to both parties).
The recitations in this Subsection are intended to set
forth the expectations, intentions and beliefs of the parties as
to what would constitute reasonable mitigation, which the parties
have each relied upon in entering into this Agreement. Nothing
in this Agreement is intended to change the allocation under
applicable law of burden of proof concerning mitigation of
damages, in the event of any dispute.
(c) If Executive receives a payment under Section 14, which
subsequently becomes subject to mitigation under this Section due
to earnings of Executive from subsequent employment or self-
employment, Executive shall repay to Employer that portion of
such payment which has been mitigated. Such repayment shall be
adjusted, however, to reflect the reduced "present value" amount
actually received by Executive under Section 14.
16. Successors; Binding Agreement.
(a) Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of Employer,
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Employer would be
required to perform this Agreement if no such succession had
occurred. Failure of Employer to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same
terms as Executive would be entitled hereunder if Executive
terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Employer" shall mean
Employer as defined in this Agreement and any successor to its
business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts
would still be payable to him hereunder if Executive had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to his devisee, legatee, or other designee or, if there
be no such designee, to his estate.
-14-
17. Noncompetition. Recognizing that his skill, experience and
knowledge are unique and are a material inducement to Employer to enter
into this Agreement, Executive agrees that during the original and any
renewal term of this Agreement, and prior to his attaining age fifty-eight
(58), Executive will not enter employment with, or, directly or indirectly,
own an interest in, or manage, operate, control or participate in the
business of, any company whose business is similar to or in competition
with that of Employer without the express authorization of Employer's Board
of Directors. This provision shall not, however, restrict the right of
Executive to own stock in any company listed on a national or regional
stock exchange, regardless of the nature of its business. The parties
hereto agree that in view of all the facts and circumstances, this
provision is neither an unreasonable restraint nor unconscionable.
18. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and such officer as may be
specifically designated by Employer's Board of Directors. No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of the same or similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter of this Agreement have been made by
either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Michigan.
19. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
21. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration in Rockford, Michigan, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of
his right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.
22. War or National Emergency. Employer agrees that, in the event of
a war or national emergency, Executive will, at his request, be granted a
leave of absence for military or governmental service and during said
period of leave of absence shall be paid such compensation as may be fixed
by, or with the authority of Employer's Board of Directors. During any
-15-
such leave of absence, Executive shall, except with respect to his rights
to the compensation provided in this Agreement and his obligation to
perform such active duties of Employer, be deemed, for the purposes of this
Agreement, to be continuing in the employment of Employer pursuant to the
Agreement.
23. Notice. Any and all notices referred to in this Agreement shall
be sufficient if furnished in writing, sent by certified or registered
mail, to the respective parties at the following addresses:
If to Employer: Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, MI 49351
Attn: General Counsel
If to Executive: Geoffrey B. Bloom
440 Cambridge, S.E.
East Grand Rapids, MI 49506
24. Termination of Prior Agreements. This Agreement terminates and
replaces in its entirety all prior employment agreements between the
parties, including the Employment Agreement dated July 12, 1991, as
amended.
WOLVERINE WORLD WIDE, INC.
By /s/ Daniel T. Carroll
Daniel T. Carroll
Director and Chairman of the
Compensation Committee of the
Board of Directors
WITNESS
/s/ Geoffrey B. Bloom
Geoffrey B. Bloom
-16-