Exhibit 10.18
December 2, 1999
Mr. Steven L. Bock
10 Graystone Lane
Weston, Massachusetts 02493
Re: Amendment to Employment Agreement
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Dear Steven:
Reference is made to that certain Amended and Restated Employment Agreement
between SPECIALTY CATALOG CORP., a Delaware corporation ("Specialty"), SC
CORPORATION, a Delaware corporation ("SC"; together with Specialty, sometimes
referred to as the "Corporation"), and you ("Executive"), dated as of October
15, 1996, as amended by that certain First Amendment thereto dated June 24, 1999
(as heretofore amended, and as amended hereby, the "Employment Agreement"). We
acknowledge that Executive has previously resigned, effective as of December 31,
1999, from employment with the Corporation pursuant to the terms of the
Employment Agreement (the "Resignation").
As you know, the Corporation is contemplating entering into a transaction
in which Golub Associates Incorporated ("Golub") or a related entity would
acquire all of the outstanding common stock of Specialty. Such a transaction is
subject to numerous conditions, and is expected to close during the first
quarter of 2000. The Corporation wishes to encourage Executive to withdraw the
Resignation and to commit to remain in the employ of the Corporation until the
earlier (the "End Date") of a. the Closing of the Golub transaction, if any, or
b. June 30, 2000. In consideration for the making of such commitment (whether or
not the Golub transaction should ever close), the Corporation is willing to
provide certain benefits and a bonus to Executive to encourage him to remain in
the employ of the Corporation, and has formally adopted a resolution approving
the arrangements contemplated by this letter agreement and authorizing the
execution and delivery of this letter agreement with Executive, a copy of which
resolution has been provided to Executive prior to the execution and delivery of
this letter agreement.
The purpose of this letter agreement is to confirm the agreement of the
Corporation and Executive, each of whom intends to be legally bound hereby, as
follows:
1. The purpose of this Agreement is to amend the Employment Agreement. To the
extent that the Employment Agreement is inconsistent herewith, the provisions of
this letter agreement shall govern; to the extent the Employment Agreement is
not inconsistent herewith, it shall survive. The Corporation and Executive
acknowledge and agree that there are no existing defaults under the Employment
Agreement.
2. The Resignation, effective as of December 31, 1999, is hereby rescinded and
withdrawn, effective immediately, and the Executive's employment shall continue
through and terminate automatically at the close of business on June 30, 2000
without the necessity of any party's providing notice of termination to the
other.
3. Executive's base salary shall be $325,000 per annum, effective as of October
24, 1999. Executive shall be compensated at his base salary rate through June
30, 2000, but such base salary shall be earlier terminated in the event (but
only in the event) that Executive terminates his employment with the Corporation
prior to the End Date for any reason not described in the Section 7(a)(i) or
7(a)(ii) or 7(b) of the Employment Agreement, or the Corporation properly
terminates Executive's employment prior to the End Date for any reason set forth
in Section 7(a)(iii), 7(a)(iv), 7(a)(v), or 7(a)(vi) of the Employment
Agreement.
4. Section 7(a)(vii) of the Agreement is hereby deleted in its entirety for all
purposes.
5. Anything contained in the Employment Agreement to the contrary
notwithstanding, the Corporation shall pay to Executive on January 1, 2000 the
amount of $325,000. The obligation to make such payment shall be unconditional,
and the making of such payment by the Corporation shall satisfy in full any and
all severance obligations the Corporation may now or at any time hereafter have
to Executive under the Employment Agreement.
6. The Corporation shall pay to Executive a bonus (the "Stay Bonus") in the
aggregate amount of $175,000 in exchange for Executive's remaining in the
Corporation's employ until the End Date, subject to earlier termination as may
be provided by the Employment Agreement. The Stay Bonus shall be payable in
three (3) installments, as follows:
i. one installment of $75,000 on January 1, 2000;
ii. a second installment of $50,000 on the earlier of (1) the date five
days after the Termination Date (as defined in the first sentence of
Section 8 of that certain Stockholders Agreement dated as of even date
herewith among Golub, Executive and certain others (the "Stockholders
Agreement")), and (2) the End Date; and
iii. a third installment of $50,000 on the earlier of (1) the date thirty
days after the Termination Date (defined as set forth above), and (2)
the End Date.
The Stay Bonus shall be payable whether or not the Golub transaction, or
any other transaction, shall be entered into, approved or consummated. The Stay
Bonus shall be payable in full to Executive as aforesaid, but the Stay Bonus
shall be forfeited by Executive (and, to the extent previously received by
Executive, shall be returned to the Corporation immediately upon demand) in the
event (but only in the event) that Executive terminates his employment with the
Corporation prior to the End date for any reason not described in Section
7(a)(i) or 7(a)(ii) or 7(b) of the Employment Agreement, or the Corporation
properly terminates Executive's employment prior to the End date for any reason
set forth in Section 7(a)(iii), 7(a)(iv), 7(a)(v) or 7(a)(vi) of the Employment
Agreement.
7. All options granted to Executive (including, but not limited to, all options
referred to in the Employment Agreement), if and to the extent the same shall
not have previously vested, shall automatically vest on December 31, 1999, all
restrictions against exercising such options (except such as may be required by
law) set forth in the Employment Agreement shall lapse simultaneously with the
execution and delivery of this letter agreement, and all such options shall be
and remain fully exercisable in accordance with their respective terms, without
regard to any provision in the Employment Agreement which would otherwise
shorten any such term or terms.
10. The reasonable fees and expenses of Executive's legal counsel in connection
with the drafting, negotiation and execution of this letter agreement and in
connection with all aspects of the Golub transaction shall be borne and paid
directly by the Corporation.
11. Any and all amounts which may become due to Executive under the Employment
Agreement and which remain unpaid after the due date upon which they become due
shall bear interest at the rate of 18% per annum, compounded monthly, or, if
lower, the highest rate permitted by applicable law. It is hereby understood
that this provision does not constitute a consent or agreement on the part of
Executive to extend or postpone the time of any payment beyond the scheduled
date for payment.
12. Executive and his family shall receive health and related benefits as
currently provided through the End Date and for a period of one year thereafter.
Your signature set forth below indicates your acceptance of all terms and
conditions set forth in this letter agreement.
Very truly yours,
SPECIALTY CATALOG CORP.
by: /s/ Thomas McCain
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Thomas McCain
SVP & CFO
SC CORPORATION
by: /s/ Thomas McCain
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Thomas McCain
SVP & CFO
ACCEPTED AND AGREED this 2nd day of December 1999.
/s/ Steven L. Bock
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Steven L. Bock