Exhibit 10.3


 


AMENDMENT
NO. 3


TO
THE


EMPLOYMENT
AGREEMENT


 


This Amendment No. 3
(this “Amendment”) to the
Employment Agreement is made as of December 15, 2009 by and among FGX
International Inc., a Delaware corporation (the “Company”), and Anthony Di Paola, a resident of the State of
Rhode Island (the “Executive”).


 


WHEREAS, the Company and
the Executive are parties to a certain amended and restated Employment
Agreement dated as of July 23, 2007, as amended as of December 5, 2008 and
November 6, 2009 (the “Agreement”);


 


WHEREAS, Essilor
International, a French Société anonyme (“Parent”),
1234 Acquisition Sub Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of Parent (“Merger Sub”),
and FGX International Holdings Limited, a British Virgin Islands corporation
(“FGX Holdings”) propose to enter into a merger agreement
(that certain Agreement and Plan of Merger among Parent, Merger Sub and FGX
Holdings, dated as of December 15, 2009, the “Merger Agreement”)
that will (subject to the satisfaction of the terms and conditions of the
Merger Agreement) result in FGX Holdings becoming wholly-owned by Parent upon
the Closing (as defined in the Merger Agreement, the “Closing”)
(the “Merger”);


 


WHEREAS, following the
Closing, the Company desires to continue the employment of the Executive on the
terms and conditions stated herein;


 


WHEREAS, pursuant to and
in accordance with Section 13 of the Agreement, the Company and the
Executive desire to amend the Agreement.


 


NOW, THEREFORE, in
consideration of the foregoing promises and agreements contained herein, and
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Company and the Executive agree as follows:


 


1.             This Amendment will become effective upon
its execution by each of the parties; provided, however, that this Amendment
will be null and void ab initio
and of no further force or effect if the Merger Agreement is terminated prior
to the Closing or if, for any reason, the Closing does not occur.  Capitalized terms not defined herein will
have the meanings ascribed to such terms in the Agreement.


 


2.             Section 2 of the Agreement is
amended in its entirety to read as follows:


 


“2.           Employment;
Duties. Subject to the terms and conditions set forth herein, from and after
the Closing and during the Employment Period, the Executive shall serve as the
Executive Vice President, Chief Financial Officer and Treasurer of the Company,
of FGX Holdings, and each of its subsidiaries. The duties assigned and
authority granted to Executive shall be as set forth in the By-laws of the
Company and those that are typically assigned and/or afforded to a 


 

















 


chief financial officer and treasurer of a wholly-owned subsidiary, and
such other duties and responsibilities as may otherwise reasonably be assigned
to him by the Chief Executive Officer from time to time. Executive agrees to
perform his duties for the Company diligently, competently and in a good faith
manner. Notwithstanding anything to the contrary set forth herein, the Executive
shall be permitted during the Employment Period to (a) engage in civic and
charitable activities to the extent they are not inconsistent with Executive’s
duties hereunder and (b) serve as a member of the board of directors of
not more than two additional for profit corporations.”


 


3.             Section 3.b. of the Agreement is
amended in its entirety to read as follows:


 


“b.           Bonus. In addition to the Base Salary, the Executive shall
be eligible to receive an annual cash bonus on account of services rendered by
him during each calendar year during the Employment Period.  In accordance with the Merger Agreement, the
Board of Directors, in consultation with the Chief Executive Officer, shall
establish performance metrics (as such performance metrics may be amended or modified
in the sole discretion of the Board of Directors during any calendar year to
take into account any acquisitions, divestitures or non-recurring items or any
other fundamental corporate transactions or changes, the “Performance Metrics”) to quantify the
Company’s performance for any calendar year during the Employment Period.  In the event that the Company meets or
exceeds the annual Performance Metrics established by the Board of Directors,
the Executive shall be entitled to receive, in addition to the Base Salary, a
bonus of up to fifty percent (50%) of the Base Salary paid to the Executive on
account of such calendar year (the “Bonus”).  Subject to (i) the Executive remaining
employed by the Company on the date the Bonus is determined, or (ii) the Executive
being employed by the Company on the day immediately following the end of the
applicable performance period in the event that the Company terminates the
Executive’s employment without Cause, any Bonus payable to the Executive on
account of any calendar year shall be paid to the Executive on or before the
later of (x) March 15 of the year following the year for which the
Bonus was earned and (y) the date on which the Board of Directors has been
able to determine within a reasonable degree of certainty that the Performance
Metrics have been met or exceeded and the amount of the Bonus due Executive.


 


In
addition to the Base Salary and Bonus, the Executive shall (i) participate
in the Company’s long-term incentive program on terms and conditions to be established
by the Board of Directors as soon as reasonably practicable following the
Closing, and (ii) be granted options, subject to approval by the board of
directors of Parent (the “Parent Board”),
to purchase shares of Parent on terms and conditions to be established by the
Parent Board as soon as reasonably practicable following the Closing.”


 


4.             Section 3.c. of the Agreement is
deleted in its entirety.


 


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5.             Section 4.d. of the Agreement is
deleted in its entirety.


 


6.             Section 6.a.i. of the Agreement is
amended in its entirety to read as follows:


 


“i.            Termination by
Executive.  Executive
may terminate his employment at any time by providing ninety (90) days’ written
notice to the Company.”


 


7.             Section 6.a.ii. of the Agreement is
amended in its entirety to read as follows:


 


“ii.           Termination by the Company Without Cause. The Company may terminate Executive’s
employment at any time, without Cause by providing ninety (90) days’ written
notice to Executive. As used in this Agreement, the term “without Cause” shall
mean termination for any reason not specified in Section 5 or Section 7
hereof.”


 


8.             Clause (i) of the second sentence of
Section 6(b) of the Agreement is amended in its entirety to read as
follows:


 


“(i)          the material
reduction or material adverse change in Executive’s authority, duties, job
responsibilities or reporting structure from those in effect on the date
hereof; provided, however, that no Good Reason shall exist solely as a result
of the Company ceasing to be an independent publicly held company and as a
result of the change in the Executive’s reporting structure as a result of the
Merger;”


 


9.             Section 6.c. of the Agreement is
amended by deleting clauses i. and ii. in their entirety and redesignating
clauses iii. and iv. thereof as clauses i. and ii., respectively.


 


10.           Section 8.a. of the Agreement is amended in its
entirety to read as follows:


 


“a.           Subject to Section 8.d., if the Executive’s
employment is terminated either by the Company without Cause, by the Executive
for Good Reason or because of the Executive’s death or Disability, in any case,
within twenty-four (24) months after a Change in Control (as defined in Section 8.c.),
the Executive shall be entitled to receive a supplemental bonus payment (the “Change in Control Payment”) from the
Company equal to (i) one and one-half (1.5) times the sum of (x) the
Executive’s then current Base Salary plus (y) the amount of the Bonus (as
defined in Section 3.b. above) for the year in which the Executive’s
employment is terminated (determined without regard to whether any Performance
Metrics established by the Board of Directors pursuant to Section 3.b.
above are or were satisfied) minus (ii) the aggregate retention payments
received by the Executive pursuant to Section 8.b.i. below prior to the
effective date of such termination of employment.  The Change in Control Payment shall be paid
to the Executive on the sixtieth (60th)
day following the earlier of the Executive’s separation from service (as
defined in Section 409A) or the date of 


 


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the Executive’s
death.  The Executive shall also be
entitled to continuation of medical, dental and vision benefits under Section 4.a.
hereof at the same cost to the Executive as is applicable to active employees
of the Company until the earlier of (x) the 18-month anniversary of the
Termination Date and (y) the date on which the Executive is provided
comparable benefits from any other source (the “Continuation Coverage”); provided, however, that the Company
shall use commercially reasonable efforts to provide such health insurance
benefits through a third party insurer. 
For purposes of this Agreement, the amounts paid or contributed by the
Company for Continuation Coverage for the benefit of the Executive and, as
applicable, the Executive’s eligible dependents are referred to as the “Premium Payments”.  In the event that the Company’s group health
plan is or becomes subject to the nondiscrimination rules of Section 105(h) of
the Code, the Company’s obligation to pay the premiums for Continuation
Coverage will end, and the Executive will become responsible for the timely
payment of the full cost of maintaining his elected coverage and the coverage
for his eligible dependents until the end of the applicable Continuation
Period.  In such event, the Company will
reimburse the Executive in an amount equal to the Premium Payments that the
Company would otherwise have paid in accordance with Section 4.a. (“Premium Reimbursements”).  The Executive acknowledges that any Premium
Reimbursements will be treated for reporting purposes as taxable income to the
Executive.  The Executive will provide
the Company substantiation in reasonable detail of the premiums the Executive
paid within two calendar months after the premiums are paid.  Premium Reimbursements under this Section 8.a.
will be paid to the Executive in the calendar month following the calendar
month in which substantiation determined by the Company to be adequate has been
provided to the Company.  In no event
will adequately substantiated reimbursements be paid to the Executive later
than the last day of the calendar year following the calendar year in which the
premium expense was incurred.  The
Executive will promptly notify the Company in writing if the Executive becomes
eligible for coverage under another group health plan prior to the 18-month
anniversary of the Termination Date.”


 


11.           Section 8.b. of the Agreement is
amended in its entirety to read as follows:


 


“b.           i.              Subject to the
Executive remaining employed by the Company on the first year anniversary of
the Closing (the “First Retention Payment
Date”), the Executive shall be entitled to receive, no later than
five (5) business days following the First Retention Payment Date, an
amount in cash equal to 30% of the Change in Control Payment (calculated in
accordance with Section 8.a. above). 
Subject to Section 8.d. and subject to the Executive remaining
employed by the Company on the second year anniversary of the Closing (the “Second Retention Payment Date”), the
Executive shall be entitled to receive, no later than five (5) business
days following the Second Retention Payment Date, an amount in cash equal to
70% of the Change in Control Payment (calculated in accordance with Section 8.a.
above) (the “Second Retention Payment”).


 


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ii.             Notwithstanding
anything to the contrary in this Agreement, this Agreement will terminate upon
payment of the Second Retention Payment; provided, however, that the provisions
of Section 8.a. (but only to the extent Section 8.a. relates to the
Continuation Coverage), Section 8.b.iv., Sections 9 through and including
12, and Sections 14, 18, 20 and 21 shall survive the termination or expiration
of this Agreement.


 


iii.            Notwithstanding
anything to the contrary in this Agreement, (x) in no event shall the
Executive be entitled to receive benefits under both Section 8.a. and Section 8.b.
above and (y) in no event shall the aggregate cash payment(s) to the
Executive under this Section 8 be less than $666,900.


 


iv.            Executive
shall be provided the Continuation Coverage with respect to any termination of
his employment with the Company that is effective as of or following the second
year anniversary of a Change in Control.”


 


12.           Section 8.c. of the Agreement is
amended in its entirety to read as follows:


 


“The
parties hereby agree that the Closing will constitute a “Change in Control” for purposes of this
Agreement.”


 


13.           A new Section 8.d. is added to the
Agreement as follows:


 


“d.           i.              As a condition precedent to receiving the
Second Retention Payment or any payment pursuant to Section 8.a.,
Executive shall execute a general release reasonably satisfactory to the
Company of any and all claims which Executive or his heirs, executors, agents
or assigns might have against the Company, its subsidiaries, affiliates,
successors, assigns and its past, present and future employees, officers,
directors, agents and attorneys, except for claims arising under this Agreement
or any employee benefit plan (other than any employee benefit plan providing a
benefit in the nature of a severance benefit) in which Executive participates
or for any right to indemnification to which Executive may be entitled as an
officer and director of the Company (the “Release”).


 


ii.             In the case of the Release in respect of the Second
Retention Payment, a valid Release shall be delivered to the Company prior to
the Second Retention Payment Date; provided that the Company has provided Executive
a form of Release at least forty-five (45) days prior to the Second Retention
Payment Date.  Subject to the Company’s
compliance with the previous sentence, the Company shall have no obligations
under Section 8.b. if Executive fails to deliver a valid Release to the
Company on or prior to the Second Retention Payment Date.


 


iii.            In the case of the Release in respect of any payment
under Section 8.a., a valid Release shall be delivered to the Company
within sixty (60) days following Executive’s termination of employment;
provided that the Company has provided Executive a form of Release within seven
(7) days following the 


 


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Executive’s
termination of employment.  Subject to
the Company’s compliance with the previous sentence, the Company shall have no
obligations under Section 8.a. if Executive fails to deliver a valid
Release to the Company within sixty (60) days following Executive’s termination
of employment.”


 


14.           Section 14 of the Agreement is amended
in its entirety to read as follows:


 


“14.  Notices.  Any notice, request or other document
required or permitted to be given under this Agreement shall be in writing and
shall be deemed given (a) upon delivery, if delivered by hand, (b) three
days after the date of deposit in the mail, postage prepaid, if mailed by U.S.
certified or registered, mail, or (c) on the next business day, if sent by
prepaid overnight courier service, in each case, addressed as follows:


 


(a)           If to
Executive, to:


 


At the last home address for the Executive appearing on the Company’s
records


 


(b)           If to the
Company, to:


 


FGX
International Inc.


500
George Washington Highway


Smithfield,
Rhode Island 02917


Attention:
Chief Executive Officer


 


With
copies (which shall not constitute notice) to:


 


Skadden,
Arps, Slate, Meagher & Flom LLP 


Four
Times Square


New
York, New York 10036


Attn:  Neil M. Leff, Esq.


 


Essilor
International


147
rue de Paris


94227
Charenton-le-Pont


France


Attn:  Carol Xueref


 


Jones
Day


222
East 41st Street


New
York, New York 10017


Attn:  Manan D. Shah, Esq.


 


Any party may change the
address to which notice shall be sent by giving notice of such change of
address to the other parties in the manner provided above.”


 


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15.           Except as expressly provided herein, no
other modifications or amendments to the Agreement are being made and, with the
exception of the amendment set forth herein, the terms and conditions of the
Agreement are hereby ratified and confirmed.


 


[Signatures Appear on Next Page]


 


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IN WITNESS WHEREOF, the parties have executed this
Amendment as of the date first written above.


 


 


	
   

  	
  FGX INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John H. Flynn, Jr.

  
	
   

  	
  By: John H.
  Flynn, Jr.

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Anthony Di
  Paola

  
	
   

  	
  Anthony Di Paola