Exhibit 10-W

SHOE CARNIVAL, INC.

EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

This EMPLOYMENT AND NONCOMPETITION AGREEMENT (the “Agreement”) is made and
entered into as of ______September 10_________, 2018 (“Effective Date”), by and
between SHOE CARNIVAL, INC., an Indiana corporation with its principal offices
located at 7500 East Columbia Street, Evansville, Indiana (the “Company”), and
MARK WORDEN (“You” or the “Employee”).

 

RECITALS

 

WHEREAS, the Company is one of the largest retailers of family footwear in the
United States; and

 

WHEREAS, the Company desires to retain Your services upon the terms and
conditions set forth herein; and

 

WHEREAS, You desire to be so employed by the Company, to be eligible for
opportunities of advancement, potential compensation increases and the potential
payments provided for herein; and

 

WHEREAS, the Company and You desire to enter into this Agreement to set forth
the terms and conditions of the employment relationship between the Company and
You; and

 

WHEREAS, in connection with its business, the Company has expended a substantial
amount of time, money, and effort to develop and maintain its confidential,
proprietary and trade secret information, and that this information, if misused
or disclosed, could be very harmful to the Company’s business and its
competitive position in the marketplace;

 

NOW THEREFORE, in consideration of the mutual covenants, promises and
obligations set forth herein, the parties agree as follows:

 

AGREEMENT

 

1.Term.  The Company hereby agrees to employ You, and You hereby agree to be
employed by the Company, in accordance with the terms and conditions of this
Agreement, for a period of two (2) years commencing on the Effective Date and
ending on _September 10_____, 2020 (the “Initial Term”), subject to earlier
termination as expressly provided in this Agreement.  This Agreement shall
automatically renew for successive one-year periods (“Renewal Periods”), unless
either party provides written notice of its intention to not renew at least
thirty (30) days prior to the end of the then current term.  For purposes of
this Agreement, the Initial Term together with any Renewal Period(s) shall be
referred to as the “Term”.  

 

 

 

2.Position and Duties.

 

 

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2.1  Position.  You shall serve as the Executive Vice President, Chief Strategy
and Marketing Officer of the Company.  In such position, You shall have such
duties, authority and responsibility as shall be determined from time to time by
the Company’s Board of Directors, or in such other or additional positions as
the Chief Executive Officer or Board of Directors may determine from time to
time.

  

2.2  Duties.  You agree to perform such duties incident to Your position, as
well as any other duties for the Company as may be directed by any senior
officer of the Company, and to assume such other or additional title, duties,
and/or responsibilities as the Board of Directors may determine.  During the
Term, You shall devote substantially all of Your business time and attention to
the performance of Your duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would
conflict or interfere with the performance of such services either directly or
indirectly without the prior written consent of the Board of
Directors.  Notwithstanding the foregoing, You will be permitted to act or serve
as a volunteer, director, trustee, committee member or principal of any civic or
charitable organization, provided such service does not interfere with your work
for the Company.  You shall not engage in any activity that is competitive with
the Company’s business or make any preparations to engage in any competitive
activity. You shall be supportive of the Company’s business and its best
interests and shall not, directly or indirectly, take any action which could
reasonably be expected to have an adverse effect upon the business or best
interests of the Company.  You agree that You will at all times honestly and
fairly conduct Your duties, and will at all times maintain the highest of
professional standards in representing the interests of the Company.  You will
comply with Company policies, decisions, and instructions, which may be changed
by the Company from time to time.   

 

3.Compensation.  

 

3.1Base Salary.  The Company shall pay You an annual base salary of Five Hundred
Fifteen Thousand Dollars ($515,000.00), payable in accordance with the Company’s
usual payroll practices, and subject to all taxes, withholdings and deductions
as required by law and as You may authorize.  The Company will review Your Base
Salary on a periodic basis, approximately annually, during the Term to
determine, in the Company’s sole discretion, whether to adjust Your Base Salary
upward or downward, and if so, the amount of such adjustment and the time at
which such adjustment should take effect.  The term “Base Salary” as used in
this Agreement shall refer to Your annual base salary as in effect from time to
time, including any adjustments.  

 

3.2Incentive Bonus.  You are entitled to participate in the Company’s 2016
Executive Incentive Compensation Plan, in accordance with the terms contained
therein, and in any successor plan adopted by the Company from time to
time.  However, You agree that the failure of the Company to award any such
bonus and/or other incentive compensation shall not give rise to any claim
against the Company.  The Company, in its

 

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sole discretion, may adjust, modify or discontinue any bonus plan or program
applicable to You from time to time during the Term.

 

3.3Employee Benefits.  You shall be eligible to participate in any employee
benefit plans, practices and programs maintained by the Company (“Employee
Benefit Plans”), commensurate with Your position with the Company and subject to
the eligibility requirements and other terms and conditions of such plans and
programs.  The Company, in its sole discretion, may change, amend or discontinue
any of its Employee Benefit Plans at any time during Your employment with the
Company, and nothing contained herein shall obligate the Company to institute,
maintain or refrain from changing, amending or discontinuing any Employee
Benefit Plan.

 

4.Termination of Employment and Compensation Upon Termination.

  

4.1Expiration of the Agreement.  Your employment with the Company may terminate
by way of the expiration of the Term as a result of either party exercising the
right not to renew.  In the event of termination of Your employment by
expiration of the Term, the Company’s obligation to pay and provide You
compensation and benefits under this Agreement shall immediately terminate,
except:  (a) You shall be entitled to receive that portion of Your Base Salary
which shall have been earned through the termination date; and (b) the Company
shall pay or provide You such other payments and benefits, if any, which had
vested hereunder before the termination date.

 

4.2For Cause.  The Company may terminate Your employment at any time effective
immediately for “Cause.”  As used in this Agreement, the term “Cause” means the
occurrence of any one or more of the following events:  (a) Your failure to
perform Your duties (other than any such failure resulting from incapacity due
to physical or mental illness); (b)  Your embezzlement, misappropriation or
fraud, whether or not related to Your employment with Company; (c) Your
conviction of or plea of guilty or nolo contendere to a crime that constitutes a
felony or other crime involving moral turpitude; (d) Your engaging in
dishonesty, illegal conduct or gross misconduct which is in each case injurious
to the Company or its affiliates;  (e) Your failure or refusal to comply with
any lawful and reasonable instructions of the Company’s Chief Executive Officer,
President, or other executive officer to whom You report; (f) Your material
breach of any of Your obligations under this Agreement; (g) Your material breach
of the Company’s policies; (h) Your use of alcohol or drugs which interferes
with the performance of Your duties for the Company or which compromises the
integrity or reputation of the Company; or (i) Your engaging in any conduct
tending to bring the Company into public disgrace or disrepute.

 

In the event of termination of Your employment by the Company for Cause, the
Company’s obligation to pay and provide You compensation and benefits under this
Agreement shall immediately terminate, except:  (x) You shall be entitled to
receive that portion of Your Base Salary which shall have been earned through
the termination date;

 

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and (y) the Company shall pay or provide You such other payments and benefits,
if any, which had vested hereunder before the termination date.  

 

4.3Unilateral – The Company without Cause.  The Company may terminate Your
employment at any time without Cause.

 

In the event the Company terminates Your employment without Cause, the Company’s
obligation to pay and provide You compensation and benefits under this Agreement
shall immediately terminate, except:  (a) You shall be entitled to receive that
portion of Your Base Salary which shall have been earned through the termination
date; (b) the Company shall pay or provide You such other payments and benefits,
if any, which had vested hereunder before the termination date; (c) the Company
shall pay to You, within thirty (30) calendar days following the date of
termination, a lump sum amount equal to fifty-five percent (55%) of the product
of (i) multiplied by (ii), where   “(i)” is Your Base Salary for the fiscal year
in which the termination occurs, and where “(ii)” is a fraction, the numerator
of which is the number of days elapsed in such fiscal year through the date of
termination and the denominator of which is 365; (d) the Company shall pay to
You, within thirty (30) calendar days following the termination date, a lump sum
payment in an amount equal to one hundred fifty percent (150%) of Your Base
Salary for the fiscal year in which the termination occurs; and (e) the Company
shall pay You, within thirty (30) calendar days following the termination date,
a lump sum payment in an amount equal to eighteen (18) times the monthly “COBRA
Premium Rate” (which is the monthly amount charged, as of the termination date,
for continuation coverage under the Company's group medical and dental plans
pursuant to the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) for
the coverage options and coverage levels applicable to You and Your covered
dependents immediately prior to the termination date).  Payment of the severance
compensation set forth in subparts (c), (d) and (e) of this Section 4.3 is
subject to the terms and conditions of Section 4.10 and Section 9.2 of this
Agreement.  

 

4.4Unilateral – The Employee.  You may terminate Your employment at any time
with the Company by providing the Company with thirty (30) days’ advance written
notice of such termination.  At the sole option of the Company, such termination
may be considered effective on the date such notice is given or at any other
date the Company may designate during the 30-day notice period.

 

In the event that You unilaterally terminate Your employment, the Company’s
obligation to pay and provide You compensation and benefits under this Agreement
shall immediately terminate, except:  (a) You shall be entitled to receive that
portion of Your Base Salary which shall have been earned through the termination
date; and (b) the Company shall pay or provide You such other payments and
benefits, if any, which had vested hereunder before the termination date.  

 

4.5For Good Reason – The Employee.  At any time during the Term, You may
terminate Your employment for Good Reason if all of the following conditions are

 

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satisfied:  (a) You give the Company a written notice of termination, which
describes in reasonable detail the condition claimed to constitute Good Reason,
within thirty (30) calendar days of the initial existence of the condition
claimed to constitute Good Reason; (b) the Company does not remedy the condition
within thirty (30) calendar days of the Company’s receipt of Your written notice
of termination (the “Good Reason Cure Period”); and (c) You give the Company a
second written notice of termination within thirty (30) calendar days following
the expiration of the Good Reason Cure Period.  If You do not provide the notice
of termination for Good Reason as described in subpart (a) of the preceding
sentence within 30 days of the first occurrence of the applicable grounds, then
You will be deemed to have waived Your right to terminate for Good Reason with
respect to such grounds.  For purposes of this Agreement, “Good Reason” means
the occurrence, without Your written consent, of a material reduction by the
Company in Your Base Salary.

 

      In the event You terminate Your employment for Good Reason, the Company’s
obligation to pay and provide You compensation and benefits under this Agreement
shall immediately terminate, except:  (a) You shall be entitled to receive that
portion of Your Base Salary which shall have been earned through the termination
date; (b) the Company shall pay or provide You such other payments and benefits,
if any, which had vested hereunder before the termination date; (c) the Company
shall pay to You, within thirty (30) calendar days following the date of
termination, a lump sum amount equal to fifty- five percent (55%) of the product
of (i) multiplied by (ii), where “(i)” is Your Base Salary for the fiscal year
in which the termination occurs, and “(ii)” is a fraction, the numerator of
which is the number of days elapsed in such fiscal year through the date of
termination and the denominator of which is 365; (d) the Company shall pay to
You, within thirty (30) calendar days following the termination date, a lump sum
payment in an amount equal to one hundred fifty percent (150%) of Your Base
Salary for the fiscal year in which the termination occurs; and (e) the Company
shall pay You, within thirty (30) calendar days following the termination date,
a lump sum payment in an amount equal to eighteen (18) times the monthly COBRA
Premium Rate.  Payment of the severance compensation set forth in subparts (c),
(d) and (e) of this Section 4.5 is subject to the terms and conditions of
Section 4.10 and Section 9.2 of this Agreement.

 

4.6Disability or Death.  If You suffer a “Disability,” the Company shall have
the right to terminate Your employment by delivering to You a written notice of
the Company’s intent to terminate for Disability, specifying in such notice a
termination date not less than ten (10) calendar days after the giving of the
notice (the “Disability Notice Period”).  Your employment shall terminate at the
close of business on the last day of the Disability Notice Period.  For purpose
of this Agreement, the term “Disability” shall mean either (a) when You are
deemed disabled in accordance with the long-term disability insurance policy or
plan of the Company in effect at the time of the illness or injury causing the
Disability, or (b) the inability of You, because of injury, illness, disease or
bodily or mental infirmity, to perform the essential functions of Your job (with
reasonable accommodation) for more than one hundred twenty (120) consecutive
days.  

 

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The existence of a Disability shall be determined by the Company.  If You should
die during the Term, this Agreement shall terminate as of the date of Your
death.  

 

In the event Your employment is terminated as a result of Your death or
Disability, the Company’s obligation to pay and provide You compensation and
benefits under this Agreement shall immediately terminate except:  (a) You shall
be entitled to receive that portion of Your Base Salary which shall have been
earned through the termination date; and (b) the Company shall pay or provide
You such other payments and benefits, if any, which had vested hereunder before
the termination date.

 

4.7Timely Qualifying Termination Following a Change In Control.  

 

4.7.1For purposes of this Agreement, a “Timely Qualifying Termination” shall
mean either (a) a termination by the Company without Cause that occurs within
two (2) years immediately following a Change in Control or (b) a termination by
You for Good Reason that occurs within two (2) years immediately following a
Change in Control.

 

4.7.2For purposes of this Agreement, “Change In Control” of the Company shall
mean and shall be deemed to have occurred as of the first day on which any one
of the following conditions has been satisfied:

 

(A)The acquisition, within a 12-month period ending on the date of the most
recent acquisition, by any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act as in effect from time to time)
of  thirty percent (30%) or more of either (i) the then outstanding shares of
common stock of the Company or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors; provided, however, that the following acquisitions shall
not constitute an acquisition of control:  (a) any acquisition directly from the
Company (excluding an acquisition by virtue of the exercise of a conversion
privilege), (b) any acquisition by the Company, (c) any acquisition by any
employee benefit plan or related trust sponsored or maintained by the Company or
any corporation controlled by the Company, (d) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (C) of this Section are
satisfied,  (e) any acquisition by any Person who, immediately before the
commencement of the 12-month period, already held beneficial ownership of thirty
percent (30%) or more of the outstanding voting securities of the Company
(“Affiliated Person”) or (f) upon the death of any shareholder who, on the date
of this Agreement, is the beneficial owner of 10% or more of the outstanding
voting securities of the Company, any acquisition triggered by the death of such
shareholder by operation

 

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of law, by any testamentary bequest or by the terms of any trust or other
contractual arrangement established by such shareholder; or

 

(B)Individuals who, as of the Effective Date, constitute the Board of Directors
of the Company (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors of the Company (the “Board”);
provided, however, that any individual becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a‑11 of Regulation 14A 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; or

 

(C)Approval by the shareholders of the Company of a reorganization, merger or
consolidation, in each case, unless, following such reorganization, merger or
consolidation, (i) more than fifty percent (50%) of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the outstanding Company common stock and
outstanding Company voting securities immediately prior to such reorganization,
merger or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or consolidation, of
the outstanding Company stock and outstanding Company voting securities, as the
case may be, (ii) no Person (excluding the Company, any employee benefit plan or
related trust of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, thirty percent (30%) or more of the outstanding Company common stock
or outstanding voting securities, as the case may be) beneficially owns,
directly or indirectly, thirty percent (30%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger or
consolidation; or

 

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(D)Approval by the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation with
respect to which following such sale or other disposition (a) more than fifty
percent (50%) of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company common stock and outstanding
Company voting securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the outstanding Company common stock and
outstanding Company voting securities, as the case may be, (b) no Person
(excluding the Company and any employee benefit plan or related trust of the
Company or such corporation, any Affiliated Person and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, thirty percent (30%) or more of the outstanding Company common stock
or outstanding Company voting securities, as the case may be) beneficially owns,
directly or indirectly, thirty percent (30%) or more of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (c) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Company.

 

Notwithstanding any other provision of this Section to the contrary, an
occurrence shall not constitute a Change In Control if it does not constitute a
change in the ownership or effective control of, or in the ownership of a
substantial portion of the assets of, the Company, within the meaning of Section
409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”)
and its interpretive regulations.

 

4.7.3 In the event of a Timely Qualifying Termination, then, in lieu of all
other benefits under this Agreement, the Company’s obligation to pay and provide
You compensation and benefits under this Agreement shall immediately terminate,
except:  (a) You shall be entitled to receive that portion of Your Base Salary
which shall have been earned through the termination date; (b) the Company shall
pay or provide You such other payments and benefits, if any, which had vested
hereunder before the termination date: (c) the Company shall pay to You, in a
lump sum not later than thirty (30) calendar days after the termination date, an
amount equal to two times one hundred fifty-five percent (155%) of Your Base
Salary for the fiscal year in which the termination occurs; (d) the Company
shall

 

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pay You, in a lump sum not later than thirty (30) calendar days after the
termination date, an amount equal to eighteen (18)  times the COBRA Premium
Rate; and (e) the Company shall provide You with reasonable and appropriate
out-placement services, as determined and coordinated by the Company, by paying
a fee, not to exceed Two Thousand Five Hundred Dollars ($2,500.00), to an
outplacement services provider selected by the Company, provided that such
services shall not extend past the end of the second taxable year following the
taxable year in which the Timely Qualifying Termination occurs.  Payment and
provision of the severance compensation and benefits set forth in subparts (c),
(d), and (e) of this Section 4.7.3 are subject to the terms and conditions of
Section 4.10 and Section 9.2 of this Agreement.  

 

4.8Compensation Upon Termination in General.  In the event of termination of
Your employment as set forth herein, and subject to any lawful right of offset
the Company may have against any such benefits, compensation, or severance
amounts owed to You, whether the result of promissory notes, loans, or other
financial arrangements the Company may have entered into with You or on Your
behalf, and which are or would become due and payable on or after the
termination date, to include the principal and interest pursuant to such
arrangements (which right of offset cannot be inconsistent with the standards
for nonqualified deferred compensation plans under Code Section 409A, to the
extent applicable), the parties agree that the terms herein shall be the
exclusive termination pay arrangements.

 

4.9Payroll Withholdings.  The Company may withhold from any compensation or
benefits payable under this Agreement all federal, state, city, or other taxes
or deductions as may be required pursuant to any law or governmental regulation
or ruling.  

 

4.10Release Agreement.  Any payment or provision of the severance compensation
or benefits described herein is subject to Your execution of (and, if a right of
revocation applies to such release, not revoking) a release of claims in favor
of the Company, its affiliates and their respective officers and directors in a
form provided by the Company.

 

4.11Delay of Separation Payments to You.  Notwithstanding any other provisions
of this Agreement, if any amount payable to You under this Agreement on account
of Your separation from service with the Company constitutes deferred
compensation within the meaning of Code Section 409A, and You are a specified
employee, within the meaning of Code Section 409A(a)(2)(B)(i), on the date of
Your separation from service, payment of the amount shall be delayed until the
first business day that is at least six (6) months after the date on which Your
separation from service occurred.

5.Confidential Information. You understand and acknowledge that during the Term,
You will have access to and learn about Confidential Information, as defined
below.

5.1Definition. For purposes of this Agreement, "Confidential Information"
includes, but is not limited to, all of the Company’s trade secrets,
confidential and

 

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proprietary information and all other information belonging to, maintained by or
concerning the Company that is not generally known to the public, in spoken,
printed, electronic or any other form or medium, relating directly or indirectly
to:  the Company’s business processes, practices, policies, plans, publications,
documents, research, operations, services, strategies, techniques, agreements,
contracts, know-how, trade secrets, computer programs, computer software,
work-in-process, databases, manuals, records, systems, supplier information,
vendor information, financial information, accounting information, employee
information, legal information, marketing information, advertising information,
pricing information, credit information, design information, payroll
information, employee lists, supplier lists, vendor lists, developments,
reports, internal controls, security procedures, graphics, drawings, sketches,
market studies, sales information, revenue, costs, formulae, notes,
communications, algorithms, product plans, designs, styles, models, ideas,
audiovisual programs, customer information, customer lists, manufacturing
information, and factory information, of the Company or any existing customer,
supplier, investor or other associated third party, or of any other person or
entity that has entrusted information to the Company in confidence.

You understand that the above list is not exhaustive, and that Confidential
Information also includes other information that is marked or otherwise
identified as confidential or proprietary, or that would otherwise appear to a
reasonable person to be confidential or proprietary in the context and
circumstances in which the information is known or used.

You understand and agree that Confidential Information includes information
developed by You in the course of Your employment by the Company as if the
Company furnished the same Confidential Information to You in the first
instance. Confidential Information shall not include information that is
generally available to and known by the public at the time of disclosure to You;
provided that, such information was not made available by, or is not known by
the public as a result of, any direct or indirect fault of You or person(s)
acting on Your behalf.

5.2Company Creation and Use of Confidential Information.  You understand and
acknowledge that the Company has invested, and continues to invest, substantial
time, money and specialized knowledge into developing its resources, creating a
customer base, generating customer and potential customer lists, training its
employees, and improving its offerings in the field of the retail sale of
footwear and footwear related items. You understand and acknowledge that as a
result of these efforts, the Company has created, and continues to use and
create Confidential Information. This Confidential Information provides the
Company with a competitive advantage over others in the marketplace.

5.3Disclosure and Use Restrictions.  You agree and covenant: (a) to treat all
Confidential Information as strictly confidential; (b) not to directly or
indirectly disclose, publish, communicate or make available Confidential
Information, or allow it to be

 

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disclosed, published, communicated or made available, in whole or part, to any
entity or person whatsoever (including other employees of the Company) not
having a need to know and authority to know and use the Confidential Information
in connection with the business of the Company and, in any event, not to anyone
outside of the direct employ of the Company except as required in the
performance of Your authorized employment duties to the Company or with the
prior consent of the Chief Executive Officer acting on behalf of the Company in
each instance (and then, such disclosure shall be made only within the limits
and to the extent of such duties or consent); and (c) not to access or use any
Confidential Information, and not to copy any documents, records, files, media
or other resources containing any Confidential Information, or remove any such
documents, records, files, media or other resources from the premises or control
of the Company, except (x) as required in the performance of Your authorized
employment duties to the Company (and then, such disclosure shall be made only
within the limits and in the ordinary course of such duties), (y) with the prior
consent of the Chief Executive Officer acting on behalf of the Company in each
instance (and then, such disclosure shall be made only within the limits and to
the extent of such consent), or (z) in connection with Your reporting possible
violations of law or regulations to any governmental agency or making other
disclosures protected under any applicable whistleblower laws. Nothing herein
shall be construed to prevent disclosure of Confidential Information as may be
required by applicable law or regulation, or pursuant to the valid subpoena or
order of a court of competent jurisdiction or an authorized government agency,
provided that the disclosure does not exceed the extent of disclosure required
by such law, regulation or order. You shall, unless prohibited by applicable
law, promptly provide written notice of any such subpoena or order to the Chief
Executive Officer.

5.4 Survival of Non-Disclosure Obligations. You understand and acknowledge that
Your obligations under this Agreement with regard to any particular Confidential
Information shall commence immediately upon You first having access to such
Confidential Information (whether before or after You begin employment by the
Company) and shall continue during and after Your employment by the Company
until such time as such Confidential Information has become public knowledge
other than as a result of Your breach of this Agreement or breach by those
acting in concert with You or on Your behalf.

5.5Defend Trade Secrets Act Notice.  Notwithstanding anything to the contrary in
this Section 5, any other provision of this Agreement or any policy of the
Company, You may not be held criminally or civilly liable under any federal or
state trade secret law for the disclosure of a trade secret that is made (a) in
confidence to a federal, state or local government official, either directly or
indirectly, or to an attorney if such disclosure is made solely for the purpose
of reporting or investigating a suspected violation of law or for pursing an
anti-retaliation lawsuit; or (b) in a complaint or other document filed in a
lawsuit or other proceeding, if such filing is made under seal and You do not
disclose the

 

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trade secret except pursuant to a court order.  In the event a disclosure is
made, and You file a lawsuit against the Company alleging that the Company
retaliated against You because of Your disclosure, You may disclose the relevant
trade secret or Confidential Information to Your attorney and may use the same
in the court proceeding only if        (x) You ensure that any court filing that
includes the trade secret or Confidential Information at issue is made under
seal; and (y) You do not otherwise disclose the trade secret or Confidential
Information except as required by court order.

 

6.Restrictive Covenants.

 

6.1Acknowledgement.  You acknowledge that Your position with the Company is
special, unique and intellectual in character and Your position in the Company
places You in a position of confidence and trust with employees, vendors and
customers of the Company.  You further acknowledge and agree that you have
received adequate consideration for these restraints in the form of the Base
Salary and other valuable consideration contained herein. The restrictions and
obligations contained in this Section 6 shall survive the Term of this
Agreement.  Notwithstanding the above, if the Company elects not to renew this
Agreement and subsequently terminates Your employment without offering to pay
you severance payments equivalent to 100% of Your Base Salary in effect at the
time of termination—which offer of such severance compensation shall be subject
to the terms and conditions of Section 4.10 and Section 9.2 of this Agreement,
You will not be subject to the restrictions and obligations of this Section.

 

6.2Non-compete.  You agree that during Your employment with the Company and for
a period of one (1) year immediately after the termination of Your employment
with the Company, You shall not:

 

6.2.1within the Restricted Geographic Area engage in (including, without
limitation, being employed by, working for, or rendering services to) any
Competing Business in any Prohibited Capacity; provided, however, if the
Competing Business has multiple divisions, lines or segments, some of which are
not competitive with the business of the Company, nothing herein shall prohibit
You from being employed by, working for or assisting only that division, line or
segment of such Competing Business that is not competitive with the business of
the Company provided that Your work for such non-competitive division, line or
segment of the Competing Business does not involve any products that are
competitive with the products offered by the Company;

 

6.2.2(a) solicit, recruit, hire, employ, engage or attempt to hire, employ or
engage any person who is an employee of the Company; (b) assist any person or
entity in the recruitment, hiring or engagement of any person who is an employee
of the Company; (c) urge, induce or seek to induce any person to terminate
his/her employment with the Company; or (d) advise, suggest to or recommend to
any Competing Business that it employ, engage or seek to employ or engage any

 

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person who is an employee of the Company; for purposes of this Section, employee
of the Company includes any person who is employed with the Company at the time
of the activity in question or was an employee within the six month period
preceding such activity;

 

6.2.3solicit, urge, induce or seek to induce any of the Company’s independent
contractors, subcontractors, vendors, suppliers, customers or consultants to
terminate their relationship with, or representation of, the Company or to
cancel, withdraw, reduce, limit or in any manner modify any such person’s or
entity’s business with or representation of, the Company for whatever purpose or
reason;

 

6.2.4make or publish any statement or comment that disparages or in any way
injures the reputation and/or goodwill of the Company or any of its directors,
officers or employees; provided, however, that nothing in this Section is
intended to prohibit You from (a) making any disclosures as may be required or
compelled by law or legal process or (b) making any disclosures or providing any
information to a governmental agency or entity, including without limitation in
connection with a complaint by You against the Company or the investigation of
any complaint against the Company; and/or

 

6.2.5take any action intended to harm the Company or its reputation, which the
Company reasonably concludes could lead to unwanted or unfavorable publicity to
the Company.

 

6.2.6The restrictive time periods set forth in this Section shall not expire
during any period in which You are in violation of any of the restrictive
covenants set forth in this Section, and all restrictions shall automatically be
extended by the period You were in violation of any such restrictions.  

 

6.2.7The restrictive covenants contained in this Section prohibit You from
engaging in certain activities directly or indirectly, whether on Your own
behalf or on behalf of any other person or entity.  

 

6.2.8The covenants and restrictions in this Section are separate and divisible,
and to the extent any covenant, provision or portion of this Section is
determined to be unenforceable or invalid for any reason, such unenforceability
or invalidity shall not affect the enforceability or validity of the remainder
of the Agreement.  Should any particular covenant, restriction, provision or
portion of this Section be held unreasonable or unenforceable for any reason,
including, without limitation, the time period, geographical area, and/or scope
of activity covered by any restrictive covenant, provision or clause, such
covenant, provision or clause shall automatically be deemed reformed such that
the contested covenant, provision or portion will have the closest effect
permitted by applicable law to the original form and shall be given effect and
enforced as so reformed to the extent reasonable and enforceable under
applicable law.  

 

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6.3Definitions:  

 

6.3.1“Competing Business” means any of the following entities (which You
acknowledge are direct competitors of the Company) and each of their respective
subsidiaries and successors:  (a) Payless; (b) Caleres, Inc.; (c) Designer Shoe
Warehouse; (d) Rack Room; (e) Kohls Corporation; (f) Shoe Department;         
(g) Shoe City; (h) Shoe Pavilion, Inc.; (i) JD Sports Fashion plc; (j) Finish
Line, Inc.; (k) Dick’s Sporting Goods, Inc.; (l) Academy Sports + Outdoors; (m)
Belk; and (n) Off Broadway Shoe Warehouse.

 

6.3.2“Prohibited Capacity” means:  (a) the same or similar capacity or function
to that in which You worked for the Company at any time during the thirty-six
(36) months immediately preceding the termination of Your employment with the
Company; (b) any executive or officer capacity or function; (c) any managerial
capacity or function; (d) any business consulting capacity or function; (e) any
merchandizer or buyer capacity or function; (f) any ownership capacity, except
You may own an investment of less than 5% of any class of equity or debt
security of a publicly-held company; (g) any capacity or function in which You
likely would inevitably use or disclose the Company’s trade secrets or
Confidential Information; or (h) any other capacity or function in which Your
knowledge of the Confidential Information would facilitate or assist Your work
for the Competing Business.

 

6.3.3“Restricted Geographic Area” means: (a) the United States of America,
including, but not limited to, each State in which the Company operates a retail
store; (b) Puerto Rico; and (c) any other state, country, province or territory
in which the Company operates a retail store as of the date of termination of
Your employment.

 

6.4Acknowledgment of Restrictions.  You acknowledge and agree that You
understand the restrictions in this Section, and that they are reasonable and
enforceable, in view of, among other things, Your position within the Company,
the highly competitive nature of the Company’s business, and the confidential
nature of the information You have been provided.  You further agree that the
Company would not have adequate protection if You were permitted to work for its
competitors in violation of the terms of this Agreement since the Company would
be unable to verify whether its Confidential Information was being disclosed
and/or misused, and whether You were involved in diverting the Company’s
customers and/or its customer goodwill.

 

6.5Required Disclosures Concerning New Employment.  You agree that, during the
one (1) year period immediately following the termination of Your employment
with the Company for any reason, You (a) will within ten (10) days of acceptance
of new employment, notify the Company in writing of Your employment, engagement
or other affiliation with any other business or entity; and (b) will provide a
copy of Sections 5 and

 

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6 of this Agreement to any prospective employer before accepting employment or
other work engagement with any such employer.

 

7.Proprietary Rights.  All work performed by You and all inventions,
discoveries, developments, work product, processes, improvements, creations,
deliverables and all written, graphic or recorded material and works of
authorship fixed in any tangible medium of expression made, created or prepared
by You, alone or jointly with others, during Your employment with the Company
and relating to the Company’s business (collectively, the “Works”) shall be the
Company’s exclusive property, shall be deemed a work made for hire, and all
rights, title and interest in the Works shall vest in the Company.  To the
extent that the title or rights to any such Works may not, by operation of law,
vest in the Company, You hereby irrevocably assign and transfer to the Company
all rights, title and interest to such Works.  All Works shall belong
exclusively to the Company, and the Company shall have the right to obtain and
hold in its own name, any patents, copyrights, registrations or such other
intellectual property protections as may be appropriate to the subject
matter.  You will sign documents of assignment, declarations and other documents
and take all other actions reasonably required by the Company, at the Company’s
expense, to perfect and enforce any of its proprietary rights and to vest all
right, title and interest to the Works in the Company.  This Section does not
apply to an invention for which no equipment, supplies, facility, or
Confidential Information of the Company was used and which was developed
entirely on Your own time, unless (a) the invention relates (1) directly to the
business of the Company, or (2) to the Company’s actual or anticipated research
or development, or (b) the invention results from any work performed by You for
the Company.

 

8.Remedies.  In the event of a breach or threatened breach by You of any of the
above provisions, the Company shall be entitled to an injunction restraining You
from such breach, in addition to all other remedies which the Company shall be
entitled to in law or equity.  The Company also shall be entitled to recover
from You all litigation costs and attorneys’ fees incurred by the Company in any
action or proceeding relating to this Agreement in which the Company prevails,
including, but not limited to, any action or proceeding in which the Company
seeks enforcement of this Agreement or seeks relief from Your violation of this
Agreement.  Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available for such breach, threatened breach, or any
breach of this Agreement.

 

9.Post-Termination Obligations.  

 

9.1Survival.  You acknowledge and agree that Your post-termination obligations
under this Agreement, including without limitation Your confidentiality and
non-competition obligations set forth in Sections 5, 6 and 12.2 of this
Agreement, shall survive the termination of Your employment with the Company,
regardless of whether such termination is voluntary or involuntary, or is with
or without Cause. You further acknowledge and agree that:  (a) Your
confidentiality, non-competition and return-of-property obligations set forth in
Sections 5, 6 and 12.2 of this Agreement shall be construed as independent
covenants and that no breach of any contractual or legal duty by the Company
shall be held sufficient to excuse or terminate Your obligations under
Sections 5, 6 and 12.2 of this Agreement or preclude the Company from obtaining

 

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injunctive relief for Your violation or threatened violation of such covenants;
and (b) the existence of any claim or cause of action by You against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the Company’s enforcement of Your confidentiality, non-competition
and return-of-property obligations set forth in Sections 5, 6 and 12.2 of this
Agreement.

 

9.2Compliance With Post-Employment Restrictions.  In the event that You breach
any of the covenants or provisions set forth in Sections 5, 6 and 12.2 of this
Agreement (a) You will have forfeited Your right to receive, and the Company
shall have the right immediately and permanently to discontinue payment and
provision of, any of the severance compensation and benefits payable under this
Agreement and (b) You shall be obligated to pay to the Company an amount equal
to the amount of the severance compensation received by You pursuant to this
Agreement, minus Five Hundred Dollars ($500.00), with such amount being due and
payable immediately upon the Company making written demand on You for such
payment   You and the Company acknowledge and agree that such forfeiture and
clawback is in addition to, and not in lieu of, any and all other legal and/or
equitable remedies that may be available to the Company in connection with Your
breach of any of the covenants or provisions of this Agreement.

 

10.Notices.  All notices related to this Agreement shall be in writing and shall
be deemed to have been delivered on the date personally delivered or the date
mailed, postage prepaid, by certified mail, return receipt requested, or
telegraphed and confirmed, or faxed and confirmed, to the following respective
addresses:

 

To You:Mark J. Worden

6688 Mill Creek Court

Newburgh, IN 47630

 

To Company:Chief Executive Officer

Shoe Carnival, Inc.

7500 East Columbia Street

Evansville, IN 47715

 

Either party may designate a different address by providing written notice to
the other party.

 

11.Assignment.  The Company shall have the right to assign this Agreement.  This
Agreement shall inure to the benefit of, may be enforced by, and shall be
binding on, any and all successors and assigns of the Company, including,
without limitation, by asset assignment, stock sale, merger, consolidation or
other corporate reorganization, and shall be binding on You, Your executors,
administrators, personal representatives and other successors in interest.  This
Agreement is personal to You, and therefore You shall not have the right to
assign this Agreement nor any of Your rights, powers, duties or obligations
hereunder.

 

12.Security.  

 

 

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12.1Security and Access.  You agree and covenant (a) to comply with all Company
security policies and procedures in force from time to time including but not
limited to those related information technology resources and facility access
resources such as the employee identification card; (b) not to access or use any
information technology resources and facility access resources except as
authorized by the Company; and (c) not to access or use information technology
resources and facility access resources in any manner after the termination of
Your employment, whether termination is voluntary or involuntary.  You agree to
notify the Company promptly in the event that You learn of any violation of the
foregoing by others, or of any other misappropriation or unauthorized access,
use, reproduction or reverse engineering of, or tampering with information
technology resources and facility access resources or other Company property or
materials.

 

12.2Exit Obligations.  Upon (a) voluntary or involuntary termination of Your
employment or (b) at the Company’s request at any time during Your Employment,
You shall (i) provide or return to the Company any and all Company property and
all Company documents and materials belonging to the Company and stored in any
fashion, including but not limited to those that constitute or contain any
Confidential Information or Works, that are in Your possession or control,
whether they were provided to You by the Company or any of its business
associates or created by You in connection with Your employment by the Company;
and (ii) delete or destroy all copies of any such documents and materials not
returned to the Company that remain in Your possession or control, including
those stored on any non-Company devices, networks, storage locations and media
in Your possession or control.

 

13.Code Section 409A Standards.  It is the intent of the parties that payments
and benefits under this Agreement subject to Code Section 409A (“409A”) comply
with 409A, and therefore, to the maximum extent permitted, this Agreement shall
be interpreted and administered to be in compliance with 409A.  Notwithstanding
anything in this Agreement to the contrary, to the extent required in order to
avoid accelerated taxation and/or tax penalties under 409A, You shall not be
considered to have terminated employment with the Company for purposes of this
Agreement until You would be considered to have incurred a “separation from
service” from the Company within the meaning of 409A.  Any payments described in
this Agreement that are due within the “short-term deferral period” (as defined
in 409A) shall not be treated as deferred compensation unless applicable law
requires otherwise.  Each amount to be paid or benefit to be provided to You
pursuant to this Agreement that constitutes deferred compensation subject to
409A shall be construed as a separate identified payment for purposes of 409A.  

 

14.Parachute Payment Restrictions.  If any payment or benefit to be paid or
provided to You under this Agreement, taken together with any payments or
benefits otherwise paid or provided to You by the Company or any corporation
that is a member of an “affiliated group” (as defined in Section 1504 of the
Code without regard to Section 1504(b) of the Code) of which the Company is a
member (the “other arrangements”), would collectively constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), and if the net
after-tax amount of such parachute payment to You is less than what the net
after-tax amount to You

 

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would be if the aggregate payments and benefits otherwise constituting the
parachute payment were limited to three times Your “base amount” (as defined in
Section 280G(b)(3) of the Code) less $1.00, then the aggregate payments and
benefits otherwise constituting the parachute payment shall be reduced to an
amount that shall equal three times Your base amount, less $1.00.  Should such a
reduction in payments and benefits be required, You shall be entitled, subject
to the following sentence, to designate those payments and benefits under this
Agreement or the other arrangements that will be reduced or eliminated so as to
achieve the specified reduction in aggregate payments and benefits to You and
avoid characterization of such aggregate payments and benefits as a parachute
payment.  The Company will provide You with all information You reasonably
request to permit You to make such designation.  To the extent that Your ability
to make such a designation would cause any of the payments and benefits to
become subject to any additional tax under 409A, or if You fail to make such a
designation within ten (10) business days of receiving the requested information
from the Company, then the Company shall achieve the necessary reduction in such
payments and benefits by first reducing or eliminating the portion of the
payments and benefits that are payable in cash and then by reducing or
eliminating the non-cash portion of the payments and benefits, in each case in
reverse order beginning with payments and benefits which are to be paid or
provided the furthest in time from the date of the Company’s determination.  For
purposes of this Section, a net after-tax amount shall be determined by taking
into account all applicable income, excise and employment taxes, whether imposed
at the federal, state or local level, including the excise tax imposed under
Section 4999 of the Code.

 

15.Entire Agreement.  This Agreement contains all of the understandings and
representations between the parties pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous negotiations, discussions, commitments
and understandings between the parties relating hereto, whether oral or
written.  

 

16.Modification and Waiver.  This Agreement may be amended or modified only in a
writing signed by the parties. No waiver by either party of any breach by the
other party shall be deemed a waiver of any other provision or condition, nor
shall the failure of or delay by either party in exercising any right, power or
privilege hereunder operate as a waiver or preclude any exercise thereof.  

 

17.Governing Law and Forum Selection.  This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Indiana, without giving
effect to any choice-of-law or conflict-of-law principle that would cause the
application of the substantive law of any jurisdiction other than Indiana.  Any
legal action (whether based on contract, tort or other legal theory) arising out
of or relating to this Agreement, Your employment with the Company or the
termination of Your employment shall be commenced and maintained exclusively
before any state or federal court having appropriate subject matter jurisdiction
located in Evansville, Indiana, and You and the Company each consents and
submits to the personal jurisdiction and venue of such courts located in
Evansville, Indiana, and waives any right to challenge or otherwise object to
personal jurisdiction or venue (including, without limitation, any objection
based on inconvenient forum grounds) in any action commenced or maintained in
such courts located in Evansville, Indiana.  

 

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18.Severability.  If any term or provision of this Agreement is found to be
invalid or unenforceable, the remaining provisions will remain effective and
such term or provision shall be replaced with another term consistent with the
purpose and intent of this Agreement.

 

19.Counterparts.  This Agreement may be executed in separate counterparts, all
of which taken together shall constitute one and the same agreement.  Signatures
transmitted by facsimile or other electronic means are acceptable the same as
originals.

 

20.Representations of the Employee.  You represent and warrant that Your
acceptance of employment with the Company and the performance of Your duties
hereunder will not violate any non-solicitation, non-competition, or other
covenant or agreement of a prior employer and it will not conflict with or
result in a violation of, a breach of, or a default under any contract,
agreement or understanding to which You are a party or are otherwise bound.

 

21.Acknowledgment and Full Understanding.  YOU ACKNOWLEDGE AND AGREE THAT YOU
HAVE FULLY READ, UNDERSTAND AND VOLUNTARILY ENTER INTO THIS AGREEMENT.  YOU
ACKNOWLEDGE AND AGREE THAT YOU HAVE HAD AN OPPORTUNITY TO ASK QUESTIONS AND
CONSULT WITH AN ATTORNEY OF YOUR CHOICE BEFORE SIGNING THIS AGREEMENT.

 

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IN WITNESS WHEREOF, the parties have executed this Employment and Noncompetition
Agreement as of the above written Effective Date.

 

 

 

SHOE CARNIVAL, INC.EMPLOYEE

 

 

 

By:       /s/  Sean M. Georges                               /s/   Mark J.
Worden___________MARK J. WORDEN

Its:  Senior Vice President, Human Resources

 

Date: September 10, 2018Date:   September 10, 2018