Document:

trump-ex101_092910.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 27th day of September, 2010, by and between Trump Entertainment Resorts, Inc. and Trump Entertainment Resorts Holdings, L.P. (together, the “Company”) and Robert F. Griffin (the “Executive”).

 

WHEREAS, the Company desires to employ the Executive and the Executive desires to serve as an employee of the Company, on the terms and conditions set forth below;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

 

1.           Employment.  The Company hereby agrees to employ the Executive and the Executive hereby accepts such employment, in accordance with the terms, conditions and provisions of this Agreement.  The Executive’s employment hereunder shall commence on the Monday following his last day of employment with his current employer (but not later than the 65th calendar day after the date of this Agreement); provided, however, that commencement of the Executive’s employment hereunder shall be conditioned on the receipt by the Executive of the required regulatory approvals from the State of New Jersey.  The date upon which the Executive’s employment commences in accordance with the preceding sentence is referred to herein as the “Commencement Date.”  The Executive shall advise the Company in writing as soon as the Commencement Date has been determined. The Executive’s employment may be terminated by either the Executive or the Company at any time and for any reason, in accordance with the provisions of this Agreement.

 

2.           Position, Duties and Responsibilities.  While employed by the Company under this Agreement, the Executive shall serve as Chief Executive Officer (“CEO”) of the Company and its subsidiaries and shall report to and be subject to the direction of the Board of Directors of the Company (the “Board”).  The Executive shall have the appropriate authority, duties and responsibilities attendant to his position and as may be further reasonably assigned by the Board.  For so long as the Executive holds the position of CEO, the Executive shall also be a member of the Board.  The Executive shall fulfill his duties and responsibilities with that degree of skill and diligence appropriate for a senior executive of a public company and in a manner consistent with applicable laws, rules and regulations.  The Executive agrees to use his best efforts to carry out his duties and responsibilities and, consistent with the other provisions of this Agreement, to devote substantially all of his business time, attention and energy thereto.  The foregoing shall not be construed as preventing the Executive from, to the extent such activities do not involve a conflict of interest with the interests of the Company and provided that in each case, and in the aggregate, such other service does not materially interfere with the Executive’s duties hereunder, (i) serving on committees or boards of professional, charitable, educational, religious or similar types of organizations; (ii) engaging in personal investment activities for himself and his family, provided that such investment is not in an entity which competes with the Company; (iii) purchasing or otherwise acquiring up to three percent (3%) of any class of securities of any publicly traded corporation; provided, however, that the Executive may not otherwise participate in the activities of such corporation; and (iv) engaging in charitable and civic activities.

 

3.           Place of Performance.  The Executive’s principal place of employment shall be at the Company’s headquarters in Atlantic City, New Jersey.  The Executive shall undertake such domestic and international travel as may from time to time be necessary to fulfill the Executive’s duties hereunder.

 

4.           Compensation.  As full compensation for the Executive’s performance of his duties and responsibilities hereunder, while employed pursuant to this Agreement, the Company shall pay the compensation and provide the benefits set forth below:

 

4.1.           Base Salary.  The Company shall pay the Executive a base salary (“Base Salary”) at the annual rate of $807,500 payable in accordance with the Company’s customary payroll practice.  The compensation committee of the Board (the “Compensation Committee”) shall review the Executive’s performance and Base Salary from time to time, but no less than annually, in accordance with the Company’s regular administrative practices and may, in its sole discretion, adjust the Executive’s salary rate.  To the extent the Compensation Committee determines to so adjust the Executive’s salary rate, and provided the Executive’s performance is satisfactory, it is expected that any such salary adjustment shall equal or exceed the percentage of change in the consumer price index for such period.  Any such adjusted salary shall be and become the “Base Salary” for purposes of this Agreement.  Base Salary shall not be reduced at any time (including after any increase) below the initial Base Salary (i.e., not below $807,500 per annum).

 

4.2.           Annual Performance Bonus.  Subject to the following provisions of this Section 4.2, the Executive shall be eligible for an annual cash performance bonus (“Annual Bonus”) in respect of each complete calendar year of the Company, beginning with the 2011 calendar year, with a minimum target bonus equal to fifty percent (50%) of Base Salary and a maximum bonus equal to one hundred percent (100%) of Base Salary, provided that the Executive remains actively employed on the date of payment (except as otherwise provided in this Agreement) and satisfies the performance criteria and objectives discussed below.  The Annual Bonus shall have two (2) components, as follows:  (i) fifty percent (50%) of the Annual Bonus shall be subject to the successful achievement of the Performance Objectives (as defined below) for the calendar year to which the Annual Bonus relates and (ii) fifty percent (50%) of the Annual Bonus shall be awarded by the Compensation Committee based upon the Compensation Committee’s evaluation of the overall performance of the Company and/or the Executive, in its sole discretion.  No later than ninety (90) days after the beginning of the calendar year to which such Annual Bonus relates, the Compensation Committee shall, in consultation with the Executive, establish objective performance criteria for the Company and/or the Executive (the “Performance Objectives”).  Each Annual Bonus, if earned, shall be payable promptly following a determination by the Compensation Committee that the applicable Performance Objectives have been satisfied and at the time the Company generally pays performance bonuses to other senior executives, but in no event later than the March 15th following the end of the calendar year to which such Annual Bonus relates unless the delay in payment past March 15th would not cause the Annual Bonus to be deferred compensation under Section 409A of the Internal Revenue Code, as amended (the “Code”) and the regulations thereunder (“Section 409A”).  Any determination as to whether the Performance Objectives have been achieved with respect to any year shall be made by the Compensation Committee in its sole discretion.  Notwithstanding the foregoing, the Executive shall be entitled to an Annual Bonus for the 2011 calendar year equal to an amount not less than thirty-five percent (35%) of the Executive’s annual Base Salary in effect for the 2011 calendar year, which Annual Bonus shall be payable in 2012 at the time the Company generally pays performance bonuses to other senior executives.

 

4.3.           Incentive Awards.

 

(a)           Initial Incentive Award.  On the Commencement Date, the Executive shall be granted an initial equity and equity-based award consisting of 125,000 shares of restricted stock of the Company (the “Performance Restricted Stock Award”) and 62,500 restricted stock units (the “Service RSU Award” and, together with the Performance Restricted Stock Award, the “Initial Equity-Based Award”).  The Initial Equity-Based Award shall be conditioned on the Executive and the Company executing an award agreement(s), to be prepared by the Company, in form and substance reasonably satisfactory to both parties, consistent with the terms herein, and which will provide for, among other things, accelerated vesting in the event of a change in control of the Company or otherwise at the election of the Board.

 

(i)           Service RSU Award.  Each restricted stock unit included in the Service RSU Award shall represent an unfunded and unsecured promise of the Company to deliver, subject to the terms of this Agreement and the applicable award agreement, a share of common stock of the Company or cash equal to the fair market value of a share of common stock of the Company on the Delivery Date (as defined below).  The Service RSU Award shall vest as follows:  fifty percent (50%) (i.e., 31,250 restricted stock units) shall vest on the Commencement Date and fifty percent (50%) shall vest on the first anniversary of the Commencement Date; provided that, except as otherwise provided in Section 5.4, as a condition of such vesting on the first anniversary, the Executive must remain continuously employed by the Company from the Commencement Date through the vesting date.  For purposes of this Section, “Delivery Date” shall mean the second anniversary of the Commencement Date.

 

(ii)            Performance Restricted Stock Award.  The Performance Restricted Stock Award shall vest in four (4) installments of 31,250 shares each, on the March 15th following each of the calendar years 2011, 2012, 2013 and 2014 (each such calendar year, a “Performance Period”), provided that, except as otherwise provided in Section 5.4, as a condition of vesting of any particular installment of the Performance Restricted Stock Award, the Executive must remain continuously employed by the Company from the Commencement Date through the end of the relevant Performance Period and the Performance Objectives for the Performance Period at the minimum fifty percent (50%) target level under Section 4.2, above, must have been achieved.

 

(b)           Subsequent Incentive Awards.  The Executive will be considered for additional equity or equity-based awards in the future by the Board or the Compensation Committee, in their sole discretion.

 

4.4.           Reimbursement of Expenses.  The Executive shall be entitled to reimbursement for reasonable out-of-pocket business expenses incurred in the performance of his duties hereunder, in accordance with the Company’s expense reimbursement policies then applicable to senior executives of the Company, against appropriate vouchers or other receipts.  Reimbursements pursuant to this Section 4.4 shall be made as soon as practicable and in no event later than the December 31st of the year following the year in which the expense was incurred.

 

4.5.           Vacation, Sick Leave and Holidays.  The Executive shall be entitled in each calendar year to four (4) weeks of paid vacation time and any portion of the Executive’s allowable vacation time not used during the calendar year shall be subject to the Company’s policies regarding carryover vacation.  The Executive shall be entitled to holiday and sick leave in accordance with the Company’s holiday and other pay for time not worked policies.

 

4.6.           Life Insurance and Other Benefits.  Subject to the Executive submitting to a physical exam, during the term of the Executive’s employment, the Company shall pay the reasonable premiums for a term life insurance policy on the Executive, with the Executive having the right to name the beneficiary(ies) thereof.  Such term life insurance policy shall be for an amount that is at least two (2) times the Executive’s initial Base Salary.  The Executive shall be eligible to participate in all employee benefit plans and programs of the Company, including health and retirement plans, that may be in effect from time to time for senior executives generally.  Consistent with the foregoing, the Company shall have the right to modify, amend, add or eliminate any of these benefits and programs (other than the term life insurance described above) in its sole discretion, subject to applicable law and the documents governing such programs.

 

4.7.           Relocation Benefits.

 

(a)           The Executive shall relocate his principal residence to within a reasonable commuting distance of Atlantic City, New Jersey as soon as practical after the Commencement Date.  The Company shall reimburse the Executive for the actual and reasonable out-of-pocket expense (i) of moving the Executive’s family and household goods and cars to the Atlantic City, New Jersey vicinity, including hiring a professional moving company of the Executive’s choosing to pack and ship such belongings, and (ii) of storage of the Executive’s household goods and cars in the event the Executive’s residence in the Cranberry Township, Pennsylvania vicinity is sold prior to his purchase of a residence in the Atlantic City, New Jersey vicinity.  The Executive shall not treat any amount paid by him and reimbursed by the Company pursuant to this Section 4.7(a) as deductible moving expenses on any tax return filed by the Executive and to the extent permitted by applicable law, the Company shall report the amounts so reimbursed to the Executive as a moving expense reimbursement excludable from the Executive’s taxable income in Box 12 (using Code “P”) on the Executive’s Form W-2 (or any equivalent box or code of any successor form).  Furthermore, in the event the Executive relocates to Atlantic City, New Jersey prior to purchasing or being able to move into a permanent residence in the Atlantic City, New Jersey vicinity, the Company shall make available to the Executive (for use by him and his immediate family) suitable temporary housing at or in the vicinity of one of the Company’s resort/casino properties for up to three (3) months at no cost to the Executive.  To the extent the benefits provided for in this Section 4.7(a) would be subject to income taxes to the Executive, the Company shall pay the Executive an amount equal to the federal income, state income and employment taxes imposed on such benefits (and on any such gross-up payment), so that the net amount received by the Executive pursuant to this Section 4.7(a) shall equal the amount the Executive would have received had such benefits not been subject to such federal income, state income or employment taxes.  Any reimbursements under this Section 4.7(a) shall be made as soon as practicable but no later than the December 31st of the year following the year they are incurred and the gross-up payment (if any) shall be made to the Executive no later than the end of the calendar year following the year in which the taxes were remitted to the relevant taxing authorities.

 

(b)           The Company shall reimburse the Executive (i) for the actual and reasonable brokerage fees and/or appraisal fees incurred by him in connection with the sale of his Cranberry Township, Pennsylvania residence, and (ii) in the event the Executive sells his Cranberry Township, Pennsylvania residence, either directly or to an appraisal company, for less than the original purchase price of $715,000 (the “Original Purchase Price”), for the difference between the sale price and the Original Purchase Price.  In addition, the Company shall pay the Executive an amount (the “Brokerage/Appraisal Fees Gross Up Amount”) equal to the federal income, state income and employment taxes imposed on the reimbursement described in clause (i) of the preceding sentence (and on any such gross-up payment), so that the net amount received by the Executive pursuant to clause (i) of the preceding sentence and this sentence shall equal the amount the Executive would have received had the reimbursement described in clause (i) of the preceding sentence not been subject to such federal income, state income or employment taxes.  Notwithstanding the foregoing, in no event shall the reimbursements under clauses (i) and (ii) of the first sentence of this Section 4.7(b) exceed $90,000 in the aggregate; provided, further, that if the Executive resigns from his employment with the Company without Good Reason (as defined below) prior to the first anniversary of the Commencement Date, the Executive shall immediately repay any such reimbursed amounts and the Brokerage/Appraisal Fees Gross Up Amount to the Company.  Any reimbursement under this Section 4.7(b) shall be made as soon as practicable but no later than the December 31st of the year following the year incurred and the gross up payment (if any) shall be made to the Executive no later than the end of the calendar year following the year in which the taxes were remitted to the relevant taxing authorities.

 

(c)           In the event that the Executive is unable to sell his Cranberry Township, Pennsylvania residence within three (3) months after the Commencement Date, the Compensation Committee will consider, in its sole discretion, whether to cause the Company to reimburse the Executive for all or a portion of the reasonable carrying costs of such residence.

 

5.           Termination.  The Executive’s employment may be terminated at any time in accordance with, and subject to, the terms and conditions set forth below.

 

5.1.           Termination by the Company.

 

(a)           Without Cause.  The Company may terminate the Executive’s employment at any time without Cause (as such term is defined in subsection (b) below), effective thirty (30) days after delivery of written notice to the Executive, in accordance with Section 5.6.  Any such termination shall not be deemed a breach of the Agreement.  The Company, in its sole discretion, may elect to pay the Executive his pro rata Base Salary for thirty (30) days in lieu of any such notice of termination hereunder.

 

(b)           With Cause.  The Company may terminate the Executive’s employment at any time for Cause, effective immediately upon delivery of written notice to the Executive, in accordance with Section 5.6.  Any such termination shall not be deemed a breach of the Agreement.  As used herein, the term “Cause” shall mean:

 

	
  

	
(i)

	
the Executive’s material failure to substantially perform the Executive’s responsibilities under this Agreement;

 

	
  

	
(ii)

	
the Executive’s engagement in fraud, embezzlement, breach of fiduciary duty, misappropriation of funds or dishonesty;

 

	
  

	
(iii)

	
the Executive having engaged in conduct that is materially and demonstrably injurious or causes financial or reputational harm to the Company;

 

	
  

	
(iv)

	
the Executive’s habitual use of controlled substances (not legally prescribed by a physician) or the use of alcohol that, in the reasonable discretion of the Board, interferes with the performance of the Executive’s duties;

 

	
  

	
(v)

	
the Executive having committed, or having been charged with or plead guilty or nolo contendere to, an act that constitutes a misdemeanor involving moral turpitude or a felony under the laws of the United States or any state or subdivision thereof;

 

	
  

	
(vi)

	
the Executive’s engaging in activity that the Board determines in its reasonable discretion (x) would result in the suspension or revocation of any gaming license or permit held by the Executive or by the Company or any of its subsidiaries or (y) violates any applicable statues and/or regulations regarding prohibited relationship with gaming companies;.

 

	
  

	
(vii)

	
the Executive failing to obtain any required license, registration or qualification with any federal, state and/or local governmental or gaming authority having jurisdiction over the business of the Company in any jurisdiction in which the Company conducts business (“Gaming Authority”), or any such license, registration or qualification expiring and not being renewed or being revoked; or

 

	
  

	
(viii)

	
the Executive having breached in any material respect the provisions of this Agreement;

 

provided, however, that if such termination is based on any event set forth in clauses (i) or (viii), above, the Executive shall have thirty (30) days after receipt of the notice of termination in which to cure the failure, breach or infraction described in the notice of termination, as determined by the Board.  If the failure, breach or infraction is timely cured by the Executive as determined by the Board, the notice of termination shall become null and void.

5.2.           Termination by the Executive.

 

(a)           Voluntarily.  The Executive may terminate his employment at any time, effective upon thirty (30) days advance written notice to the Company, in accordance with Section 5.6.  Any such termination shall not be deemed a breach of the Agreement.

 

(b)           For Good Reason.  The Executive may terminate his employment for Good Reason, effective upon thirty (30) days advance written notice to the Company, in accordance with Section 5.6; provided, however, that Good Reason shall cease to exist for an event on the sixtieth (60th) day following the later of its occurrence or the Executive’s knowledge thereof, unless the Executive has given the Company written notice, in accordance with Section 5.6.  During such thirty (30) day notice period, the Company shall have a cure right (if curable), and the Executive’s termination for Good Reason will be effective upon expiration of such cure period only if not cured within such period.  Any such termination shall not be deemed a breach of the Agreement.  As used herein, the term “Good Reason” shall mean, in the absence of a written consent of the Executive (which may be withheld for any reason or for no reason):

 

(i)           a material diminution in the Executive’s authority, duties or responsibilities;

 

(ii)           the relocation of the Executive’s principal office to a location outside a fifty (50) mile radius from Atlantic City, New Jersey; provided that the Company may require the Executive to travel on business as long as such travel is reasonable or necessary; or

 

(iii)           a breach by the Company of any material provision of this Agreement;

 

provided, however, that the Company shall have thirty (30) days after receipt of the Executive’s notice of termination in which to cure the failure, breach or infraction described in the notice of termination.  If the failure, breach or infraction is timely cured by the Company, the notice of termination shall become null and void.

5.3.           Termination for Death or Disability.  The Executive’s employment shall terminate automatically upon the Executive’s death.  The Company may terminate the Executive’s employment hereunder for Disability.  “Disability” shall mean that the Executive has been unable to perform the duties and responsibilities required of him hereunder due to a physical and/or mental disability for a period of ninety (90) consecutive days or one hundred eighty (180) days, whether or not consecutive, during any twelve (12) month period.

 

5.4.           Payments Due Upon Termination.

 

(a)           Generally.  Upon any termination of employment, the Executive shall be entitled to receive any amounts due for (i) Base Salary earned or accrued through the Executive’s date of termination of employment, prorated on a daily basis, (ii) reimbursement for reasonable and necessary business expenses incurred by the Executive through the Executive’s date of termination of employment, subject to the Company’s then current policy regarding expense reimbursements, (iii) payment for any accrued, unused vacation or other paid time off through the Executive’s date of termination, subject to the Company’s then current policy regarding payment for accrued vacation and (iv) all other payments and benefits to which the Executive may be entitled under the terms of any applicable compensation arrangement or benefit plan or program of the Company (collectively, the “Accrued Benefits”).

 

(b)           By the Company For Cause; By the Executive Without Good Reason; Death; Disability.  If the Company terminates the Executive’s employment for Cause, the Executive resigns without Good Reason or the Executive’s employment is terminated on account of the Executive’s death or Disability, the Executive (or his heirs or estate, as applicable) shall only be entitled to receive the Accrued Benefits and the Company shall have no further obligation to the Executive.

 

(c)           By the Company Other Than for Cause; By the Executive With Good Reason.  If the Company terminates the Executive’s employment without Cause (and not on account of the Executive’s death or Disability) or the Executive resigns from employment with the Company with Good Reason, except under the circumstances described in Section 5.4(d), in addition to the Accrued Benefits, the Executive shall be entitled to (i) any Annual Bonus determined or earned (and not determined) but not yet paid for any calendar year completed prior to the date of the Executive’s termination of employment, payable at the time the Company generally pays performance bonuses to senior executives of the Company, (ii) continuation of Base Salary for a twelve (12) month period (and without mitigation for subsequent employment with another employer, provided such employment is not in violation of Section 6 of this Agreement), in accordance with the Company’s payroll practices, beginning sixty (60) days following the Executive’s date of termination (the “Payment Date”), (iii) for a twelve (12) month period following the Executive’s date of termination, at the election of the Company, either (x) reimbursement for premiums paid by the Executive for COBRA medical benefit continuation coverage for the Executive (and, if applicable, his spouse and eligible dependents) under the Company’s health insurance plan, net of the portion of such premiums that the Company’s senior executives are paying, or (y) health insurance benefits for the Executive (and, if applicable, his spouse and eligible dependents) under an individual health insurance policy to be purchased by the Executive with benefits comparable to the health benefits provided to the Company’s senior executives generally and with Company reimbursement of premiums so that the Executive’s net cost for premiums, if any, is not more than the cost of premiums that the Company’s senior executives are paying, provided the Executive continues to pay that portion of the insurance premiums that are his responsibility, (iv) accelerated vesting of any outstanding and unvested portion of the Service RSU Award, (v) any other equity or equity-based awards that are not vested as of the Executive’s date of termination but would become vested within six (6) months from the date of the Executive’s date of termination shall continue to vest during such six (6) month period and all other equity awards that are not vested on the Executive’s date of termination shall automatically terminate and be forfeited, and (vi) if notice of such termination without Cause or resignation with Good Reason is given after June 30 of any calendar year, provided that the Performance Objectives for the year of termination are achieved, a pro rata portion of the 50% component of the Annual Bonus for the year of termination that is based on achievement of such Performance Objectives (as described in clause (i) of the second sentence of Section 4.2), payable at the time the Company generally pays performance bonuses to senior executives of the Company for such calendar year.  The benefits provided and the amounts payable to the Executive pursuant to Section 5.4(c)(i) through (vi) are referred to herein as “Severance”.

 

(d)           By the Company Other than for Cause Following a Change in Control; By the Executive With Good Reason Following a Change in Control.  Notwithstanding the foregoing, if the Company terminates the Executive’s employment without Cause (and not on account of the Executive’s death or Disability) or the Executive resigns from employment with the Company with Good Reason, all within twelve (12) months following a “Change in Control” (as defined below), in addition to the Accrued Benefits and in lieu of Severance, the Executive shall be entitled to (i) any Annual Bonus determined or earned (and not determined) but not yet paid for any calendar year completed prior to the date of the Executive’s termination of employment, payable at the time the Company generally pays performance bonuses to senior executives of the Company, (ii) a lump sum payment on the Payment Date equal to two (2) times his annual Base Salary, (iii) for a twelve (12) month period following the Executive’s date of termination, at the election of the Company, either (x) reimbursement for premiums paid by the Executive for COBRA medical benefit continuation coverage for the Executive (and, if applicable, his spouse and eligible dependents) under the Company’s health insurance plan, net of the portion of such premiums that the Company’s senior executives are paying, or (y) health insurance benefits for the Executive (and, if applicable, his spouse and eligible dependents) under an individual health insurance policy to be purchased by the Executive with benefits comparable to the health benefits provided to the Company’s senior executives generally and with Company reimbursement of premiums so that the Executive’s net cost for premiums, if any, is not more than the cost of premiums that the Company’s senior executives are paying, provided the Executive continues to pay that portion of the insurance premiums that are his responsibility, (iv) accelerated vesting of any outstanding and unvested equity or equity-based awards, and (v) if notice of such termination without Cause or resignation with Good Reason is given after June 30 of any calendar year, provided that the Performance Objectives for the year of termination are achieved, a pro rata portion of the 50% component of the Annual Bonus for the year of termination that is based on achievement of such Performance Objectives (as described in clause (i) of the second sentence of Section 4.2), payable at the time the Company generally pays performance bonuses to senior executives of the Company for such calendar year.    The benefits provided and the amounts payable to the Executive pursuant to Section 5.4(d)(i) through (v) are referred to herein as “Change in Control Severance”.

 

For purposes of this Agreement, “Change in Control” shall mean (i) the acquisition, by any person, entity or group, within the meaning of Regulation Section 1.409A-3(i)(5)(v)(B), (excluding, for this purpose, the Excluded Entities (defined below)) of ownership, of fifty percent (50%) or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors; or (ii) during any period of twelve (12) consecutive months (not including any period prior to the Commencement Date), individuals who at the beginning of such period constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the Commencement Date whose election, or nomination for election, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board. Notwithstanding the above, an event shall not constitute a Change in Control unless it would be a change in control within the meaning of Section 409A and provided the occurrence of the event is objectively determinable and does not require the exercise of judgment or discretion.

 

For purposes of this Agreement, “Excluded Entities” means (i) the Company or its affiliates or any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company or (ii) each of the individuals and entities holding (alone or together with their affiliates) over twenty percent (20%) of the common stock of the Company on the Commencement Date.

 

(e)           Release.  Notwithstanding the foregoing, the Company shall not be required to make the payments or provide the benefits under Section 5.4(c) or (d) (other than the Accrued Benefits), unless (i) the Executive has, prior to the Payment Date, executed and delivered to the Company an effective and irrevocable release (prepared by the Company and in the form then used by the Company for executive employees generally) (the “Release”) that waives and releases the Company, its affiliates and their stockholders, officers, directors, agents, benefit plan trustees and employees from any and all claims relating to the Executive’s employment by the Company (and services for its subsidiaries), whether known or unknown, and regardless of type, cause or nature, which such Release shall be provided by the Company to the Executive no later than ten (10) days following the Executive’s date of termination of employment and (ii) the Executive agrees to provide consulting services at no additional cost to the Company for a reasonable period of time up to twelve (12) months following the Executive’s date of termination of employment.  If the Executive breaches any obligations under Section 6 of this Agreement, without limiting any other rights the Company may have, the Company’s obligation to pay, and the Executive’s right to receive, Severance or Change in Control Severance, as applicable, shall immediately terminate.

 

5.5.           Resignation from Company Offices.  In the event of the Executive’s termination of employment for any reason, the Executive shall promptly resign and shall be deemed to have resigned immediately from any and all directorships, offices, committee memberships and other positions with, on behalf of, or relating to the Company or any of its affiliates or benefit plans, effective as of the date of the Executive’s termination of employment with the Company.

 

5.6.           Notice of Termination.  Any termination of the Executive’s employment shall be communicated by a written notice of termination delivered within the time period specified in the applicable subsection of this Section.  The notice of termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the termination date in accordance with the requirements of this Agreement.

 

5.7.           No Other Rights. For any termination, the Executive's sole rights and remedies are set forth in this Section 5 and the Executive shall have no other rights or remedies or claims of any kind other than for benefits, including retirement benefits, under any Company sponsored employee benefit plans or other compensation arrangement in which the Executive participates in accordance with the terms of those plans.

 

6.           Covenants.

 

6.1.           Confidentiality.  The Executive recognizes and acknowledges that he will have access to certain confidential information of the Company and its affiliates, stockholders, lenders, advisors and other representatives or their respective clients and customers, and that such information constitutes valuable, special and unique property of such parties (including but not limited to Company proprietary information, technical data, trade secrets, customer lists and customers, marketing materials, financials or other business information disclosed to him by the Company and its affiliates either directly or indirectly in writing, orally or by drawings or observation, together with all notes, analysis compilations, studies, summaries, data, interpretations, documents and other materials which contain, reflect or are generated or otherwise derived from such information) (collectively, the “Confidential Information”).  The Executive agrees that he will not, for any reason or purpose whatsoever, during or after his employment hereunder, use or disclose any of such Confidential Information to any party, and that the Executive will keep inviolate and secret all Confidential Information or knowledge which he has access to by virtue of his employment with the Company, except as otherwise may be necessary in the ordinary course of performing the Executive’s duties under the Agreement. “Confidential Information” shall not include any information that is (i) generally known to the industry or the public other than as a result of the Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties or (ii) made legitimately available to the Executive, other than in the Executive’s capacity as an employee of the Company, by a third party without breach of any confidentiality obligations.  Notwithstanding the foregoing, the Executive shall be authorized to disclose confidential information (i) as may be required by law or legal process after providing the Company with prior written notice and an opportunity to respond to such demand for disclosure (unless such notice is prohibited by law), (ii) in any criminal proceeding against him after providing the Company with prior written notice and (iii) with the prior written consent of the Company.

 

6.2.           Work Product and Inventions. The Company and/or its nominees or assigns shall own all right, title and interest in and to any and all inventions, ideas, trade secrets, technology, devices, discoveries, improvements, processes, developments, designs, know how, data, computer programs, algorithms, formulae, works of authorship, works modifications, trademarks, trade names, documentation, techniques, designs, methods, trade secrets, technical specifications, technical data, concepts, expressions, patents, patent rights, copyrights, and all other intellectual property rights or other developments whatsoever (collectively, “Developments”), whether or not patentable, reduced to practice or registrable under patent, copyright, trademark or other intellectual property law anywhere in the world, made, authored, discovered, reduced to practice, conceived, created, developed or otherwise obtained by the Executive (alone or jointly with others) during the Executive's employment with the Company, and arising from or relating to such employment or the business of the Company or its affiliates (whether during business hours or otherwise, and whether on the premises of using the facilities or materials of the Company or otherwise).  The Executive shall promptly and fully disclose to the Company and to no one else all Developments, and hereby assigns to the Company without further compensation all right, title and interest the Executive has or may have in any Developments, and all patents, copyrights, or other intellectual property rights relating thereto, and agrees that the Executive has not acquired and shall not acquire any rights during the course of his employment with the Company or thereafter with respect to any Developments.

 

6.3.           Non-Compete.  During the Executive’s employment by the Company and for twelve (12) months from the Executive’s date of termination, the Executive shall not, except with the prior written consent of the Company, directly or indirectly, compete with the business of the Company by becoming an officer, agent, employee, consultant, partner or director of any other corporation, partnership or other entity, or otherwise rendering services to or assisting or holding an interest (except a passive investment interest as a less than three percent (3%) shareholder of a publicly-traded corporation or as a less than five percent (5%) shareholder of a corporation that is not publicly traded) in any Competitive Business (as defined below).  “Competitive Business” shall mean any person or entity (including any joint venture, partnership, firm, corporation, or limited liability company) that engages in any principal or significant business of the Company or any of its subsidiaries as of the date the Executive’s employment terminates (or any material or significant business which the Board has approved the Company to pursue as of the date of termination and that the Company or any of its subsidiaries enter into during the following twelve (12) months) within one hundred (100) miles of any principal business location of the Company or its subsidiaries.

 

6.4.           Non-Solicit.  During the Executive’s employment by the Company and for twelve (12) months from the Executive’s date of termination, the Executive will not, except with the prior written consent of the Company, directly or indirectly, (i) solicit or hire, or encourage the solicitation or hiring of, any person who is, or was within the twelve (12) month period prior to such solicitation or hiring, an employee of the Company or any of its affiliates for any position as an employee, independent contractor, consultant or otherwise; (ii) solicit any person or entity which is then or has been within the twelve (12) month period prior to such solicitation, a client or customer of the Company, to transact with a Competitive Business or to reduce or refrain from doing business with the Company and any of its affiliates; (iii) solicit, encourage or persuade any vendor or supplier of the Company or any of its affiliates to end its business relationship or reduce the level of business with the Company and its affiliates or (iv) interfere with or damage any relationship between the Company or any of its affiliates and their clients, customers, vendors and suppliers.

 

6.5.           Compliance with Applicable Law.

 

(a)           In the performance of his duties hereunder, the Executive shall comply with all applicable laws, rules, regulations, and licensing requirements of any Gaming Authority.  In addition, the Executive understands and agrees that this Agreement is subject to the junket licensing requirements imposed on the Executive by the Gaming Authorities in the various jurisdictions in which the Company conducts business.  The Executive agrees to timely file for and obtain any license, registration or qualification from any Gaming Authority necessary to perform his duties hereunder and the Company shall assist the Executive in securing such licenses, registrations or qualifications.  It is fully understood by and between the parties hereto that licensure, registration and/or qualification of the Executive with any applicable Gaming Authorities, if required, shall be and is a condition that must be met before the Company can proceed with this Agreement.

 

(b)           Should the Executive’s license, registration, or qualification with any Gaming Authority expire or be revoked during the term of this Agreement, all money which would be due and payable to the Executive for the services he performed in the jurisdiction in which his license, registration, or qualification was revoked or expired will be withheld by the Company until such time as said license, registration, or qualification is reinstated.  The Executive further understands and agrees that, in the event his license, registration, or qualification is not reinstated, the Company shall not be obligated to pay any money due pursuant to this Agreement for the Executive’s services performed in the jurisdiction in which his license, registration, or qualification was revoked or expired and the Company may terminate the Executive’s employment for Cause.

 

7.           Acknowledgements; Independent Agreements.

 

7.1.           The Executive acknowledges that (i) he is sophisticated in business and that the covenants contained in Section 6 of this Agreement do not create an undue hardship on him and will not prevent him from earning a livelihood; (ii) the restrictions contained in Section 6 of this Agreement are reasonable and necessary to protect the legitimate interests of the Company and its affiliates given the nature of this Agreement and the position that the Executive will hold within the Company and his interests in the Company; and (iii)  he has had a sufficient period of time within which to review this Agreement, including Section 6 hereof, with an attorney of his choice and he has done so to the extent he desired.

 

7.2.           It is understood by the parties hereto that the Executive’s obligations and restrictions and remedies set forth in Section 6 are essential elements of this Agreement and that but for his agreement to comply with and/or agree to such obligations, restrictions and remedies, the Company would not have entered into this Agreement or employed (or continued to employ) him.  The Executive’s obligations and the restrictions and remedies set forth in Section 6 of this hereof are independent agreements and the existence of any claim or claims by him against the Company under this Agreement or otherwise will not excuse his breach of any of his obligations or affect the restrictions and remedies set forth under this Agreement.  The Executive’s obligations under Section 6 of this Agreement shall remain in full force and effect notwithstanding the termination of his employment or this Agreement.

 

8.           Assistance.  The Executive agrees that during and after his employment by the Company, upon the request by the Company, the Executive will assist the Company and its affiliates in the defense of any claims, or potential claims that may be made or threatened to be made against them in any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (a “Proceeding”), and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company in any Proceeding, to the extent that such claims may relate to the Executive’s employment or to events or acts occurring during the period of the Executive’s employment by the Company.  The Executive agrees, unless precluded by law, to promptly inform the Company if the Executive is asked to participate (or otherwise become involved) in any Proceeding involving such claims or potential claims.  The Executive also agrees, unless precluded by law, to promptly inform the Company if the Executive is asked to assist in any investigation (whether governmental or otherwise) of the Company or any of its affiliates (or their actions), regardless of whether a lawsuit has then been filed against the Company or its affiliates with respect to such investigation.  The Company agrees to reimburse the Executive for all of the Executive’s reasonable, documented and out-of-pocket expenses associated with such assistance, including travel expenses and attorneys’ fees.  In addition, the Executive agrees to provide such services as are reasonably requested by the Company to assist any successor to the Executive in the transition of duties and responsibilities to such successor.  Any services or assistance contemplated in this Section 8 shall be at mutually agreed upon and convenient times.

 

9.           Document and Property Surrender.  Upon the termination of the Executive’s employment for any reason, the Executive shall immediately surrender and deliver to the Company all documents, correspondence and any other information, of any type whatsoever, from the Company or any of its agents, servants, employees, suppliers, and existing, past or potential customers, that came into the Executive’s possession by any means whatsoever, during the course of employment and shall not retain any copies thereof and shall return all property of the Company, including but not limited to, any computers, cell phones, handheld devices, credit cards, office keys, security passes or identification cards in the Executive’s possession.

 

10.           Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws (but not the law of conflicts) of the State of New York applicable to contracts made and to be performed entirely within that state.  The Agreement shall be liberally construed to maximize protection of the Company’s rights in confidential information.

 

11.           Jurisdiction; Waiver of Jury Trial.  The parties hereby irrevocably consent to the jurisdiction of the federal and state courts located in the State of New York, County of New York, and by the execution and delivery of this Agreement, each of the parties hereto accepts for itself and himself the exclusive jurisdiction of the aforesaid courts for the resolution of any dispute arising under this Agreement and irrevocably consents to the jurisdiction of such courts (and the appropriate appellate courts) in any such proceedings, and waives any objection to venue laid therein.  TO THE EXTENT PERMITTED BY LAW, THE EXECUTIVE AND THE COMPANY WAIVE ANY AND ALL RIGHTS EITHER OF THEM MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL WITH RESPECT TO ANY MATTERS RELATED TO THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR THE BENEFITS UNDER THIS AGREEMENT.

 

12.           Severability.  If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction.  If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.  In addition, if any court determines that any part of Sections 5 or 6 hereof is unenforceable, such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable.

 

13.           Remedies.

 

13.1.           No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity.

 

13.2.           Except as provided in Section 5.2(b) of this Agreement, no delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

 

13.3.           The Executive acknowledges that a breach or threatened breach of any of the terms set forth in Section 6 of this Agreement shall result in an irreparable and continuing harm to the Company and its affiliates for which there shall be no adequate remedy at law.  The Company shall, without posting a bond, be entitled to specific performance, injunctive relief and such other equitable relief in order to prevent a breach of Section 6 or to enforce its provisions, in addition to all other remedies available at law or equity to the Company.

 

14.           Section 409A.

 

14.1.           It is the intention of the Company that all payments and benefits under this Agreement shall be made and provided in a manner that is either exempt from or intended to avoid taxation under Section 409A, to the extent applicable.  Any ambiguity in this Agreement shall be interpreted to comply with the above.  The Executive acknowledges that the Company has made no representations as to the treatment of the compensation and benefits provided hereunder and the Executive has been advised to obtain his own tax advice.

 

14.2.           Each amount or benefit payable pursuant to this Agreement shall be deemed a separate payment for purposes of Section 409A.

 

14.3.           For all purposes under this Agreement, any iteration of the word “termination” (e.g., “terminated”) with respect to the Executive’s employment, shall mean a separation from service within the meaning of Section 409A.

 

14.4.           Notwithstanding anything in this Agreement to the contrary, in the event the stock of the Company is publicly traded on an established securities market or otherwise and the Executive is a “specified employee” (as determined under the Company’s administrative procedure for such determinations, in accordance with Section 409A) at the time of the Executive’s termination of employment, any payments under this Agreement that are deemed to be deferred compensation subject to Section 409A shall not be paid or begin payment until the earlier of (i) the Executive’s death or (ii) the first payroll date following the six (6) month anniversary of the Executive’s date of termination of employment.  If the payment of any amounts under this Agreement are delayed as a result of the previous sentence, on the first payroll date following the end of the six (6) month period, the Company shall pay the Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to the Executive under this Agreement during such six (6) month period, plus accrued interest on such cumulative amounts at a per annum rate of interest equal to the prime rate for large banks, as published in the Wall Street Journal on the Executive’s date of termination, for the period beginning on (and including) the date of termination through (and excluding) the date of payment.

 

15.           Section 280G.  Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payments or benefits provided for in this Agreement or otherwise is or would be, if not for this Section 15, subject to excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the payments or benefits provided to the Executive shall be reduced (but not below zero) if and to the extent necessary so that no payments made or benefit to be provided to the Executive under this Agreement or otherwise, shall be subject to the Excise Tax.  If there is a reduction of the payments or benefits, such reduction shall occur in the following order:  (i) any cash Severance or Change in Control Severance payable by reference to the Executive’s Base Salary, (ii) any other cash amount payable to the Executive, (iii) any employee benefit valued as a “parachute payment”  under Section 280G of the Code and (iv) acceleration of vesting of any outstanding equity or equity-based award.  Any determination required under this Section 15 shall be made in writing by the independent public accountant of the Company (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and the Executive.  For purposes of making any calculation required by this Section 15, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code.

 

16.           Agreement; Amendment.  This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and, from and after the Commencement Date, this Agreement shall supersede any and all prior negotiations, understandings, discussions and agreements or arrangement, whether written or oral, between the parties (and the Executive shall not be eligible for severance benefits under any other plan, program or policy of the Company).  This Agreement cannot be altered, modified, extended, waived or terminated except upon a written instrument signed by the parties hereto.

 

17.           Miscellaneous.

 

17.1.           Headings.  The Section headings and other captions contained herein are for convenience only and shall not affect the meaning or interpretation of the contents hereof.

 

17.2.           Notices.  All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when delivered by hand, delivered by guaranteed next-day delivery or sent by facsimile or electronic mail (with confirmation of transmission) and receipt or shall be deemed given on the third business day following mail by registered or certified mail, as follows (provided that any notice of change of address, facsimile number or e-mail address shall be deemed given only when received):

 

If to the Company, to:

 

Mr. Stephen McCall

Chairman of the Compensation Committee

Trump Entertainment Resorts, Inc.

c/o Blackpoint Equity Partners

25 Bergen Street, #1C

Brooklyn, NY  11201

917-868-0040 (phone)

718-797-1332 (fax)

smccall@blackpointequity.com

with a copy (which shall not constitute notice) to:

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, N.Y. 10038

Attn:  Kristopher Hansen, Esq.

212-806-5400 (phone)

212-806-9056 (fax)

If to the Executive, to:

Robert F. Griffin

[at his primary residence as shown in the records of the Company]

with a copy (which shall not constitute notice) to:

Law Offices of Charles C. Shulman, Esq., LLC

632 Norfolk Street

Teaneck, NJ 07666

201-357-0577 (phone)

201-836-4847 (fax)

or to such other names or addresses as the Company or the Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section.

17.3.           Withholding.  All payments and benefits under this Agreement shall be made subject to applicable withholding, and the Company shall withhold from any payments or benefits under this Agreement all federal, state and local income, payroll and excise taxes, as the Company believes it is required to withhold pursuant to any law or governmental rule or regulation.  Except as specifically provided otherwise in this Agreement, the Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment and benefits received under this Agreement.

 

17.4.           Counterparts.  This Agreement may be executed in any number of counterparts, including counterparts transmitted by facsimile or electronic mail, any one of which shall constitute an original of this Agreement.  When counterparts or facsimile or electronic mail copies have been executed by all parties hereto, they shall have the same effect as if the signatures to each counterpart or copy were upon the same documents and copies of such documents shall be deemed valid as originals.  The parties agree that all such signatures may be transferred to a single document upon the request of any party. This Agreement shall not be binding unless and until it shall be fully executed and delivered by all parties hereto.  In the event that this Agreement is executed and delivered by way of facsimile transmission or electronic mail, each party delivering a facsimile or electronic mail counterpart shall promptly deliver an ink-signed original counterpart of the Agreement to the other party by overnight courier service; provided, that the failure of a party to deliver an ink-signed original counterpart shall not in any way effect the validity, enforceability or binding effect of a counterpart executed and delivered by facsimile transmission or electronic mail.

 

17.5.           Interpretation.  In the event of a dispute over the meaning of this Agreement or any provision thereof, neither party shall be entitled to any presumption of correctness in favor of the interpretation advanced by such party or against the interpretation advanced by the other party.

 

17.6.           Assignment.  This Agreement and the rights, interests and benefits hereunder are personal to the Executive and may not be assigned, transferred or pledged in any manner by the Executive.  Any purported assignment or delegation by the Executive in violation of the foregoing shall be null and void ab initio and of no force and effect.  The Company may assign its rights and obligations under this Agreement to any affiliate of the Company or any successor (whether direct or indirect) in interest to substantially all of the business operations of the Company.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such successor.

 

17.7.           Survival of Terms.  The provisions of this Agreement shall survive the termination of this Agreement to the extent consistent with, or necessary to carry out, the purposes thereof.

 

17.8.           Regulatory Compliance.  The terms and provisions hereof shall be conditioned on and subject to compliance with all laws, rules, and regulations of all jurisdictions, or agencies, boards or commissions thereof, having regulatory jurisdiction over the employment or activities of Executive hereunder.

 

17.9.           No Limitations.  The Executive represents his employment by the Company hereunder does not conflict with, or breach, any confidentiality, non-competition or other agreement, express or implied, to which he is a party or to which he may be subject.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

 

	 	  
	 	
TRUMP ENTERTAINMENT RESORTS, INC., ON ITS OWN BEHALF AND AS GENERAL PARTNER OF TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

	 	  
	 	
By:

	  /s/ Stephen McCall
	 	
Name:

	 Stephen McCall 
	 	
Title:

	 Chairman of the Compensation Committee
	 	  
	 	  
	 	  
	 	
EXECUTIVE:

	 	  
	 	 /s/ Robert F. Griffin
	 	
Robert F. Griffinmm09-3010_8ke101.htm

EXHIBIT 10.1

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (as hereinafter amended from time to time, this “Agreement”) is made and entered into this 29th day of September, 2010 (the “Effective Date”), by and among Sterling Jewelers Inc., a Delaware corporation (the “Company”) and Michael W. Barnes (the “Executive”).

 

W I T N E S S E T H

 

WHEREAS, the Company is engaged in the business of operating a chain of retail jewelry stores in the United States;

 

WHEREAS, the Company desires to employ the Executive as Chief Executive Officer designate (“Chief Executive Designate”) of Signet from the Commencement Date (as hereinafter defined) until January 29, 2011, and as Chief Executive Officer of Signet effective as of January 30, 2011 (the “Group Chief Executive”) and to enter into an employment agreement embodying the terms of such employment; and

 

WHEREAS, the Company is a wholly-owned subsidiary of Signet Jewelers Limited, a Bermuda corporation (“Signet,” and, together with its subsidiaries, the “Signet Group”), which for purposes of this Agreement is an affiliate of the Company; and

 

WHEREAS, in connection with accepting such employment, the Executive has agreed to relocate himself and his family from Dallas, Texas to Akron, Ohio; and

 

WHEREAS, the Executive desires to enter into this Agreement and to accept such employment, subject to the terms and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the “Parties”), intending to be legally bound, agree as follows:

 

Agreement

 

1. Employment Term.  The Company hereby employs the Executive, and the Executive hereby accepts such employment, for the period commencing on December 1, 2010 (the “Commencement Date”) and ending on January 31, 2014, subject to earlier termination in accordance with the terms of this Agreement (the “Term of Employment”).

 

 

  

  

  

 

 

2. Position.

 

(a) During the Term of Employment, the Executive shall serve as Chief Executive Designate until January 29, 2011, and as the Group Chief Executive as of January 30, 2011.  The Executive shall report through the Chairman of the Board of Directors of Signet (the “Board”) to the Board and shall have such duties and authority, consistent with such positions, as may be assigned from time to time by the Board.  For so long as the Executive serves as the Group Chief Executive during the Term of Employment, the Executive shall, subject to the provisions of the Bylaws of Signet, also serve as a member of the Board and shall, if requested by the Company, also serve as a member of the board of directors of any of Signet’s or the Company’s subsidiaries without additional compensation.

 

(b) The Executive will devote his full business time and best efforts to the performance of the Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude the Executive from accepting appointment to or to continue to serve on any board of directors or trustees of any charitable or educational  organization or from engaging in other charitable, civic and professional activities; or, subject to the prior approval of the Board, in its sole discretion, from accepting appointment to any board of directors of any business entity; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of the Executive’s duties hereunder or conflict with Sections 11 or 12.

 

3. Base Salary.  During the Term of Employment, the Company shall pay the Executive a base salary at the annual rate of $1,050,000, payable in installments in accordance with the Company’s payroll practices as in effect from time to time, subject to applicable deductions and withholding.  The Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”  The Compensation Committee of the Board (the “Compensation Committee”) shall review the Executive’s Base Salary (together with other elements of remuneration) on an annual basis to ensure continued compliance with the Board’s compensation policy, with changes to Base Salary, if any, to become effective on April 1 of the applicable year following such annual review; provided, that the Compensation Committee shall not reduce the Base Salary unless there is a comparable reduction in the base salaries of other named executive officers of Signet.

 

4. Annual Bonus.  Beginning February 1, 2011, with respect to each full fiscal year during the Term of Employment, the Executive shall be eligible to earn an annual cash bonus award (the “Annual Bonus”) in accordance with the annual bonus plan then in effect for executive officers of Signet, as approved by the Compensation Committee or its designee.  The amount of the Executive’s Annual Bonus for achievement of “target” level performance objectives shall be equal to one hundred percent (100%) of the Executive’s Base Salary (the “Target Bonus”).  The Executive’s 

 

 

 

  

2

  

 

 

Annual Bonus may be less than the Target Bonus upon achievement of lesser performance objectives than target level and greater than the Target Bonus upon achievement of greater performance objectives than target performance, up to two hundred percent (200%) of the Executive’s Base Salary.  The Annual Bonus, if any, shall be paid to the Executive in a lump sum during the period commencing on the 15th of April and ending on the 31st of May following the end of the applicable fiscal year of Signet.

 

5. Long Term Incentive Plan.  During the Term of Employment, the Executive shall be eligible to participate in the long-term incentive plan then in effect as approved by the Compensation Committee or its designee (the “Long Term Incentive Plan”) with a payment for a three-year performance period (each, a “Performance Cycle”) at “target” level performance equal to $3,250,000 (and a maximum of $4,875,000) to be comprised of equity-based awards (or as otherwise determined in the sole discretion of the Compensation Committee) to be paid upon the conclusion of a Performance Cycle in accordance with the Long Term Incentive Plan.  The amount of any such Long Term Incentive payment shall be paid in accordance with the terms of the Long Term Incentive Plan.  If the Compensation Committee so approves, a Performance Cycle under the Long Term Incentive Plan shall commence annually.

 

6. Employee Benefits.

 

(a) During the Term of Employment, the Executive shall be entitled to participate in all of the Company’s health, life and disability insurance and other welfare, and retirement, savings, deferred compensation and fringe employee benefit plans, as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to senior executives of the Company.  The Executive shall be entitled to not less than five weeks of paid vacation each year and otherwise shall be subject to the Company’s vacation policies applicable to senior executives.

 

(b) During the Term of Employment, the Executive shall be entitled to participate in the Company’s deferred compensation plan as in effect from time to time (the “Deferred Compensation Plan”).  To the extent the Executive elects to participate in the Deferred Compensation Plan, he shall be entitled to receive a Company matching contribution equal to fifty percent of the first ten percent of eligible compensation deferred by the Executive.

 

7. Relocation Expenses.  In consideration of the Executive’s agreement to relocate himself and his family to Akron, Ohio, for a period of six months following the Commencement Date, the Company shall reimburse or pay on behalf of the Executive the expenses listed below that are actually incurred by the Executive promptly upon presentation by the Executive to the Company of written invoices, expense statements or such other written supporting information as the Company may require, all in accordance with the Company’s Relocation Policy (the “Relocation Policy”):

 

 

 

  

3

  

 

 

 

(a) the cost of a temporary residence for the Executive in Ohio;

 

(b) the cost of up to 48 round trips between Dallas, Texas and Akron, Ohio for the Executive, his spouse and/or his children;

 

(c) the closing costs on the acquisition of the Executive’s new home in Ohio; and

 

(d) all relocation and moving expenses of the Executive and the Executive’s family.

 

The Executive shall be entitled to an additional amount (the “Gross-up Payment”) such that, after reduction for all federal, state and local income taxes, if any, payable by the Executive in respect of the reimbursement by the Company of an expense described in this Section 7 (each, a “Covered Expense”) and the Gross-up Payment, the Executive shall retain an after-tax amount equal to such Covered Expense.  For purposes of this Section 7, the federal, state and local income taxes payable by the Executive in respect of a reimbursement by the Company to the Executive of a Covered Expense or Gross-up Payment shall be determined utilizing the actual tax rates applicable to the Executive in the state and locality of the Executive’s residence.  Any Gross-up Payment shall be made no later than the end of the calendar year next following the calendar year in which the Executive remits the related tax.

 

8. Make-Whole Payment.

 

(a) On the Commencement Date, the Company shall make a lump sum cash payment to the Executive equal to $641,666, which amount represents the portion of the 2010 Fossil, Inc. annual bonus that the Executive forfeited in connection with his termination of employment with Fossil, Inc.

 

(b) On the Commencement Date or as soon as practicable thereafter subject to Signet’s blackout periods as determined in accordance with Signet’s Code for Securities Transactions, the Company shall take the following actions:

 

(i) The Company shall grant the Executive non-qualified stock options to purchase common shares of Signet (“Shares”), as determined by the Board in its sole discretion, with a Black-Scholes value equal to the aggregate spread (i.e., the excess, if any, of the fair market value per share over the grant price) of the outstanding unvested Fossil, Inc. stock appreciation rights held by the Executive as of the date the Executive terminated employment with Fossil, Inc.  The stock options will have a term and vesting conditions that are substantially similar to the term and vesting conditions of such Fossil, Inc. stock appreciation rights, and such other terms and conditions as are consistent with the Signet Omnibus Incentive Plan (the “Omnibus Plan”).

 

 

  

4

  

 

 

(ii) The Company shall grant the Executive restricted Shares with an aggregate Fair Market Value (as defined in accordance with the Omnibus Plan) equal to the aggregate fair market value of all outstanding restricted shares of common stock of Fossil, Inc., held by the Executive as of the date the Executive terminated employment with Fossil, Inc.  The restricted Shares will have vesting conditions that are substantially similar to the vesting conditions of such Fossil, Inc. restricted shares, and such other terms and conditions as are consistent with the Omnibus Plan.

 

(c)           For purposes of this Section 8, “fair market value” shall mean the average of the high and low closing prices of a share of Fossil, Inc. common stock, as reported on the NASDAQ Stock Market for the date of such termination (or, if no such prices are reported, the immediately preceding date upon which such prices are reported).  The Executive shall provide the Company with the applicable documents governing his Fossil, Inc. equity awards described in this Section 8 to the extent reasonably necessary to determine the terms and conditions of the Share awards described in this Section 8.

 

(d)           The equity grants set forth in Section 8(b) shall not be subject to the Share Ownership Requirement set forth in Section 16(a) of this Agreement; provided, that if the Executive chooses to hold all or any portion of the Shares granted to the Executive (or received upon the exercise of stock options) under this Section 8, such Shares shall count towards the Share Ownership Requirement.

 

9. Business Expenses. During the Term of Employment, the Executive shall be reimbursed by the Company for reasonable business expenses incurred by the Executive in the performance of the Executive’s duties hereunder, in accordance with Company policies and subject to timely submission of reimbursement requests.

 

10. Termination.  The Executive’s employment hereunder may be terminated by either Party at any time and for any reason on at least 90 days’ advance written notice (other than upon the Executive’s death or upon a termination for Cause, which may be effective immediately).  Notwithstanding any other provision of this Agreement, the provisions of this Section 10 exclusively shall govern the Executive’s rights upon termination of employment with the Company and its affiliates.

 

(a) Termination By the Company For Cause or Resignation By the Executive Without Good Reason.

 

(i) If the Executive’s employment hereunder is terminated by the Company for Cause (as defined below) or by the Executive’s resignation without Good Reason (as defined below), the Executive shall be entitled to receive solely the following:

 

(A)           Base Salary and accrued and unused vacation through the date of termination in accordance with the Company’s normal payroll practices; and

 

 

 

  

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(B)           any Annual Bonus or Long Term Incentive Plan payment that has been earned by the Executive for a completed fiscal year (or with respect to a Long Term Incentive Plan payment, a completed Performance Cycle) ending prior to the effective date of the Executive’s date of termination but which remains unpaid as of such date (the amounts described in clauses (A) and (B) being referred to as the “Accrued Rights”); and

 

(C)           a lump sum amount equal to the Target Bonus for the fiscal year of termination, which amount shall be pro-rated based on the number of calendar days that shall have elapsed since the beginning of the applicable fiscal year and ending on the date of termination.

 

(ii) For purposes of this Agreement, “Cause” shall mean (A) fraud, embezzlement, gross insubordination or any act of moral turpitude or misconduct, in each case, on the part of the Executive; (B) conviction of or the entry of a plea of nolo contendere by the Executive for any felony; or (C) (x) a material breach by the Executive of his duties, responsibilities or obligations under this Agreement, or (y) the willful failure or refusal by the Executive to perform and discharge a specific lawful directive issued to Executive by the Board within a reasonable period of time, not to be less than five (5) business days, following written notice thereof to the Executive by the Company or the Board.

 

(iii) For purposes of this Agreement, “Good Reason” shall mean without the Executive’s prior written consent: (A) any material reduction in his target or maximum potential annual compensation opportunities; (B) any diminishment in the Executive’s title, principal responsibilities or basic reporting relationships; (C) any requirement that the Executive relocate his principal place of employment by more than fifty miles from Akron, Ohio; or (D) a material breach by the Company of its obligations to the Executive under this Agreement, which breach remains uncured for thirty days following written notice thereof provided by the Executive to the Company.

 

(b) Termination By the Company Without Cause, Resignation by the Executive for Good Reason or Automatic Termination Upon the Executive’s Death.

 

(i) If the Executive’s employment hereunder is terminated by the Company without Cause, if the Executive resigns for Good Reason, or if the Executive’s employment terminates automatically upon the Executive’s death, the Executive (or his beneficiary or estate) shall be entitled to receive solely the following in addition to the Accrued Rights, subject to the Executive’s continued compliance with the provisions of Sections 11 and 12:

 

(A)           continued payment of Base Salary for twelve months following the date of the Executive’s termination (paid in accordance with 

 

 

 

  

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the Company’s normal payroll practices as in effect on the date of such termination); and

 

(B)           a lump sum amount equal to the Target Bonus for the fiscal year in which the Executive’s termination occurred, payable in accordance with Section 4 hereof; and

 

(C)           a lump sum amount equal to the sum (if applicable) of the Long Term Incentive Plan payment (or payments, if applicable) in respect of each then-ongoing Performance Cycle under the Long Term Incentive Plan as of the date of termination, with the amount to be paid in respect of each Performance Cycle calculated based on actual performance for any completed fiscal year during the Performance Cycle and assuming that target performance was attained for the fiscal year of termination, pro-rated based on the number of calendar days that have elapsed since the beginning of the applicable fiscal year through the date of termination, payable in accordance with Section 5 hereof; and

 

(D)           for twelve months following the date of termination, continued group medical coverage for the Executive and the Executive’s eligible dependents upon the same terms as provided to senior executive officers of the Company and at the same cost to the Executive and the same coverage levels as in effect immediately prior to such termination of employment (except to the extent such cost and coverage would have changed if the Executive had remained employed); provided, that such continued group medical coverage shall cease upon the Executive becoming employed by another employer and eligible for substantially similar coverage, as applicable, with such other employer; and

 

(E)           any stock options or restricted Shares granted to the Executive under Section 8(b) of this Agreement that are unvested as of immediately prior to the date of termination shall immediately become fully vested on such date.

 

For the avoidance of doubt, all payments under this Section 10(b) shall cease upon the Executive’s breach of the provisions of Sections 11 and 12 of this Agreement.

 

(c) Termination Following a Change of Control.

 

(i) If a Change of Control occurs and the Executive resigns for Good Reason following the effective date of such Change of Control, the Executive shall be entitled to receive solely the following in addition to the Accrued Rights, subject to the Executive’s continued compliance with the provisions of Sections 11 and 12:

 

 

 

  

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(A)           continued payment of Base Salary for twelve months following the effective date of the Executive’s resignation (paid in accordance with the Company’s normal payroll practices as in effect on the date of such resignation); and

 

(B)           a lump sum amount equal to the Target Bonus for the fiscal year in which the Executive’s termination occurred, payable in accordance with Section 4 hereof; and

 

(C)           a lump sum amount equal to the sum (if applicable) of the Long Term Incentive Plan payment (or payments, if applicable) in respect of each then-ongoing Performance Cycle under the Long Term Incentive Plan as of the date of termination, with the amount to be paid in respect of each Performance Cycle calculated based on actual performance for any completed fiscal year during the Performance Cycle and assuming that target performance was attained for the fiscal year of termination, pro-rated based on the number of calendar days that have elapsed since the beginning of the applicable fiscal year through the date of termination, payable in accordance with Section 5 hereof; and

 

(D)           for twelve months following the date of resignation, continued group medical coverage for the Executive and the Executive’s eligible dependents upon the same terms as provided to senior executive officers of the Company and at the same cost to the Executive and the same coverage levels as in effect immediately prior to such resignation of employment (except to the extent such cost and coverage would have changed if the Executive had remained employed); provided, that such continued group medical coverage shall cease upon the Executive becoming employed by another employer and eligible for substantially similar coverage, as applicable, with such other employer; and

 

(E)           any stock options or restricted Shares granted to the Executive under Section 8(b) of this Agreement that are unvested as of immediately prior to the date of resignation shall immediately become fully vested on such date.

 

(ii) For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events: (A) the sale or disposition, in one transaction or a series of related transactions of all or substantially all of the assets of the Company to any person or group (such terms within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended); (B) the sale or disposition of more than 50% of the value or voting power of the capital stock of Signet or the Company to any unrelated third party; or (C) the consummation of any merger or consolidation of the Company or Signet with an unrelated third party (it being understood that a capital reconstruction or reorganization of Signet approved by the Board of Directors of Signet would not constitute such a transaction) that results in a 

 

 

  

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change in the Board of Directors of Signet such that the individuals who constitute the Board of Directors of Signet at any time within the twelve-month period ending immediately prior to such transaction (together with any new directors whose election by such Board or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors of the Company, then still in office, who were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the resulting board of directors immediately following the transaction.

 

For the avoidance of doubt, all payments under this Section 10(c) shall cease upon the Executive’s breach of the provisions of Sections 11 and 12 of this Agreement.

 

(d) Notice of Termination.  Any purported termination of employment by the Company or by the Executive (other than due to the Executive’s death) shall be communicated by written Notice of Termination to the other Party hereto in accordance with Section 18(f) hereof.

 

(e) Board/Committee Resignation.  Upon termination of the Executive’s employment for any reason, the Executive agrees to resign at the direction of the Board, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s subsidiaries or affiliates.

 

(f) Waiver and Release; Timing of Payments.  Notwithstanding anything herein to the contrary, as a condition precedent to receiving any payments under this Section 10 (other than those amounts already accrued prior to the date of termination, including the Accrued Rights), Executive shall have executed, within twenty-one days, or if required for an effective release, forty-five days, following the Executive’s termination of employment, a waiver and release in substantially the form attached hereto as Exhibit A (the “Release”), which Release may be updated by the Company from time to time to reflect changes in law, and the seven-day revocation period of such Release shall have expired.  Subject to Section 14(b) and the execution of the Release pursuant to this Section 10(f), all payments under this Section 10 shall be payable as described above; provided, that the first payment shall be made on the sixtieth day after the Executive’s termination of employment, and such first payment shall include payment of any amounts that would otherwise be due prior thereto.

 

11. Confidentiality; Ownership of Developments.

 

(a) During the Term of Employment and for any time thereafter, the Executive shall keep secret and retain in strictest confidence and not divulge, disclose, discuss, copy or otherwise use or suffer to be used in any manner, except in connection with the Business (as defined below) of the Company and of any of the subsidiaries or affiliates of the Company, any trade secrets, confidential or proprietary information and documents or materials owned, developed or possessed by the Company or any of the subsidiaries or affiliates of the Company pertaining to the Business of the Company or 

 

 

 

  

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any of the subsidiaries or affiliates of the Company; provided that such information referred to in this Section 11(a) shall not include information that is or has become generally known to the public or the jewelry trade without violation of this Section 11.

 

(b) The Executive acknowledges that all developments, including, without limitation, inventions (patentable or otherwise), discoveries, improvements, patents, trade secrets, designs, reports, computer software, flow charts and diagrams, data, documentation, writings and applications thereof (collectively, “Works”) relating to the Business or planned business of the Company or any of the subsidiaries or affiliates of the Company that, alone or jointly with others, the Executive may create, make, develop or acquire during the Term of Employment (collectively, the “Developments”) are works made for hire and shall remain the sole and exclusive property of the Company and its subsidiaries and affiliates and the Executive hereby assigns to the Company all of his right, title and interest in and to all such Developments.  Notwithstanding any provision of this Agreement to the contrary, “Developments” shall not include any Works that do not relate to the Business or planned business of the Company or any of the subsidiaries or affiliates of the Company.

 

(c) For purposes of this Agreement, “Business” shall mean the operation of a retail jewelry business that sells to the public jewelry, watches and associated services.

 

(d) The provisions of this Section 11 shall, without any limitation as to time, survive the expiration or termination of the Executive’s employment hereunder, irrespective of the reason for any termination.

 

12. Covenants Not to Solicit and Not to Compete.  The Executive agrees that during his employment with the Company and for a period of one year commencing upon termination of the Executive’s employment, the Executive shall not, directly or indirectly, without the prior written consent of the Company:

 

(a) solicit, entice, persuade or induce any employee, consultant, agent or independent contractor of the Company or of any of the subsidiaries or affiliates of the Company to terminate his or her employment or engagement with the Company or such subsidiary or affiliate, to become employed by any person, firm or corporation other than the Company or such subsidiary or affiliate or approach any such employee, consultant, agent or independent contractor for any of the foregoing purposes; or

 

(b) directly or indirectly own, manage, control, invest or participate in any way in, consult with or render services to or for any person or entity (other than for the Company or any of the subsidiaries or affiliates of the Company) which is primarily engaged in the retail jewelry business (“primarily” meaning having a product mix consisting of 25% or more jewelry sales per year); provided, however, that the restrictions of this Section 12(b) shall not extend to the ownership, management or control of a retail jewelry business by the Executive following the termination of employment provided that such activity is no less than five miles distant from any retail 

 

 

 

  

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jewelry store of Signet at the time of such termination of employment; provided that notwithstanding the foregoing, the Executive shall be entitled to own up to 1% of any class of outstanding securities of any company whose common stock is listed on a national securities exchange or included for trading on the NASDAQ Stock Market.

 

13. Specific Performance.  The Executive acknowledges that the services to be rendered by the Executive are of a special, unique and extraordinary character and, in connection with such services, the Executive will have access to confidential information vital to the Business of the Company and the subsidiaries and affiliates of the Company.  By reason of this, the Executive consents and agrees that if the Executive violates any of the provisions of Sections 11 or 12 hereof, the Company and the subsidiaries and affiliates of the Company would sustain irreparable injury and that monetary damages will not provide adequate remedy to the Company and that the Company shall be entitled to have Sections 11 or 12 specifically enforced by any court having equity jurisdiction.  Nothing contained herein shall be construed as prohibiting the Company or any of the subsidiaries or affiliates of the Company from pursuing any other remedies available to it for such breach or threatened breach, including, without limitation, the recovery of damages from the Executive or cessation of payments hereunder without requirement for posting a bond.  The provisions of this Section 13 shall survive any termination of employment.

 

14.Section 409A.

 

(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A.  To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.

 

(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof 

 

 

 

  

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prior to a “separation from service” would violate Section 409A.  For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then, notwithstanding any other provision herein, with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided prior to the date which is the earlier of (A) the expiration of the six-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 14(b) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

 

(d) For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

(e) Nothing contained in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Section 409A.  Subject to the above provisions of this Section 14, (i) the Company has no obligation to take any action to prevent the assessment of any additional income tax, interest or penalties under Section 409A on any person and (ii) the Company, its subsidiaries and affiliates, and each of their employees and representatives shall not have any liability to the Executive with respect thereto.

 

15. Directors and Officers Insurance.  During the Term of Employment, the Company shall keep in force for the Executive coverage under a directors and officers liability insurance policy, such coverage to be at a level no less than that maintained for substantially all of the executive officers of the Company or Signet 

 

 

 

  

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(during the period the Executive is an executive officer of Signet) and substantially all of the members of the Board of Directors Signet (during any period the Executive is a member of the Board of Directors of Signet).

 

16. Compliance with Board Policies.

 

(a)  Over the course of the five-year period commencing on the Commencement Date, the Executive shall be required to build a holding of Shares equal to at least five times his Base Salary (the “Share Ownership Requirement”).  Until the Share Ownership Requirement has been achieved, subject to Section 8(d), the Executive shall be required to hold all Shares (i) received upon exercise of stock options or stock appreciation rights, as the case may be, under the Company’s equity plans (other than the minimum number of Shares required to pay the related tax) and (ii) pursuant to which the applicable restrictions have lapsed, in the case of restricted Shares granted under the Company’s equity plans (other than the minimum number of Shares required to pay the related tax).  For the avoidance of doubt, once the Share Ownership Requirement is achieved at any given Share price, such requirement shall be considered satisfied, notwithstanding any subsequent change in Share price.  The Share Ownership Requirement is to be required for so long as the Executive is the Chief Executive Designate or the Group Chief Executive, as applicable.

 

(b)  The Executive shall be subject to the written policies of the Board applicable to executives, including without limitation any Board policy relating to claw back of compensation, as they exist from time to time during the Executive’s employment by the Company.

 

17. Governing Law; Jurisdiction.

 

(a)  This Agreement shall be subject to, and governed by, the laws of the State of Ohio applicable to contracts made and to be performed therein, without regard to conflict of laws principles thereof.

 

(b)  Any action to enforce any of the provisions of this Agreement shall be brought in a court of the State of Ohio located in Summit County or in a Federal court located in Cleveland, Ohio.  The parties consent to the jurisdiction of such courts and to the service of process in any manner provided by Ohio law.  Each Party irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in such court and any claim that such suit, action, or proceeding brought in such court has been brought in an inconvenient forum and agrees that service of process in accordance with the foregoing sentences shall be deemed in every respect effective and valid personal service of process upon such Party.

 

18. Miscellaneous.

 

(a)  Entire Agreement/Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of the Executive by 

 

 

 

  

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the Company.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

(b) No Waiver.  The failure of a Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such Party’s rights or deprive such Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(c) Severability.  The provisions of this Agreement are severable and the invalidity, illegality or unenforceability of any one or more provisions shall not affect the validity, legality or enforceability of any other provision.  In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.

 

(d) Assignment.  This Agreement and all of the Executive’s rights and duties hereunder shall not be assignable or delegable by the Executive.  Any purported assignment or delegation by the Executive in violation of the foregoing shall be null and void ab initio and of no force and effect.  This Agreement may be assigned by the Company to a person or entity which is an affiliate of the Company or a successor in interest to substantially all of the business operations of the Company.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

 

(e) Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  In the event of the Executive’s death, all amounts payable to the Executive that are then unpaid, including pursuant to Section 10, shall be paid to the Executive’s beneficiary designated by him in writing to the Company or, in the absence of such designation, to his estate.

 

(f) Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either Party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

If to the Company:

 

 

 

  

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Sterling Jewelers Inc.

375 Ghent Road

Akron, Ohio 44333

Fax: (330) 668-5191

Attn:  Chief Financial Officer

 

with copies to:

 

Signet Jewelers Limited

15 Golden Square

London, W1F 9JG

Fax:  44(207) 734-9376

Attn:  Mark A. Jenkins

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY  10153-0119

Fax:  (212) 310-8007

Attn:  Amy M. Rubin

 

If to the Executive:

 

To his last address set forth on the payroll records of the Company

(g) Executive Representation.  The Executive hereby represents to the Company that the execution and delivery of this Agreement by the Executive and the Company and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which the Executive is a party or otherwise bound.

 

(h) Cooperation.  The Executive shall provide the Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during the Executive’s employment hereunder.  This provision shall survive any termination of this Agreement.

 

(i) Withholding Taxes.  The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(j) Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[signatures on following page]

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the day and year first above written.

 

 

	 	STERLING JEWELERS INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	 	 	 
	 	 	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 

 

 

 

 

	 	EXECUTIVE	 
	 	 	 	 
	
 

	 /s/ 	 
	 	Michael W. Barnes 	 

 

 

 

 

 

 

  

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EXHIBIT A

 

RELEASE

 

 

This RELEASE (“Release”) dated as of ___________, 20__ between Sterling Jewelers Inc., a Delaware corporation (the “Company”), and Michael W. Barnes (the “Executive”).

 

WHEREAS, the Company and the Executive previously entered into an employment agreement dated _____, 2010 (the “Employment Agreement”); and

 

WHEREAS, the Executive's employment with the Company has terminated effective ______ __, 20__ (“Termination Date”);

 

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Employment Agreement, the Company and the Executive agree as follows:

 

1. Capitalized terms not defined herein shall have the meaning as defined under the Employment Agreement.

 

2. In consideration of the Executive’s release under Paragraph 3 hereof, the Company shall pay to the Executive or provide benefits to the Executive as set forth in Section 10, as applicable, of the Employment Agreement, which is attached hereto and made a part hereof.

 

3. The Executive, on his own behalf and on behalf of his heirs, estate and beneficiaries, does hereby release the Company, and in such capacities, any of its subsidiaries or affiliates, and each past or present officer, director, agent, employee, shareholder, and insurer of any such entities, from any and all claims made, to be made, or which might have been made of whatever nature, whether known or unknown, from the beginning of time, including those that arose as a consequence of his employment with the Company, or arising out of the severance of such employment relationship, or arising out of any act committed or omitted during or after the existence of such employment relationship, all up through and including the date on which this Release is executed, including, without limitation, any tort and/or contract claims, common law or statutory claims, claims under any local, state or federal wage and hour law, wage collection law or labor relations law, claims under any common law or other statute, claims of age, race, sex, sexual orientation, religious, disability, national origin, ancestry, citizenship, retaliation or any other claim of employment discrimination, including under Title VII of the Civil Rights Acts of 1964 and 1991, as amended (42 U.S.C. §§ 2000e et seq.), Age Discrimination in Employment Act, as amended (29 U.S.C. §§ 621, et seq.); the Americans with Disabilities Act (42 U.S.C. §§ 12101 et seq.), the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the Family and Medical Leave Act (29 U.S.C. §§ 2601 et seq.), the Fair Labor Standards Act (29 U.S.C. §§ 201 et seq.), the Employee Retirement Income Security Act of 1974 (29 U.S.C. §§ 1001 et seq.) and any other law (including any state or local law or ordinance) prohibiting employment discrimination or relating to employment, retaliation in employment, termination of employment, wages, benefits or otherwise. If any arbitrator or court rules that such waiver of rights to file, or have filed on his behalf, any administrative or judicial charges or complaints is ineffective, the Executive agrees 

 

 

 

 

  

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not to seek or accept any money damages or any other relief upon the filing of any such administrative or judicial charges or complaints.  The Executive relinquishes any right to future employment with the Company and the Company shall have the right to refuse to re-employ the Executive, in each case without liability of the Executive or the Company.  The Executive acknowledges and agrees that even though claims and facts in addition to those now known or believed by him to exist may subsequently be discovered, it is his intention to fully settle and release all claims he may have against the Company and the persons and entities described above, whether known, unknown or suspected.

 

4. The Company and the Executive acknowledge and agree that the release contained in Paragraph 3 does not, and shall not be construed to, release or limit the scope of any existing obligation of the Company and/or any of its subsidiaries or affiliates (i) to indemnify the Executive for his acts as an officer or director of Company in accordance with the Certificate of Incorporation and all agreements thereunder, (ii) to pay any amounts or benefits pursuant to Section 2 of this Release or any Standard Entitlements (as defined in the Employment Agreement) to which the Executive is entitled under the Employment Agreement, or (iii) with respect to the Executive’s rights as a shareholder of the Company, Signet or any of their subsidiaries.

 

5. Executive acknowledges that pursuant to the Release set forth in Paragraph 3 above, Executive is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that Executive’s waiver and release of such rights is knowing and voluntary.  Executive acknowledges that the consideration given for the ADEA waiver and release under this Agreement is in addition to anything of value to which Employee was already entitled.

 

(a) Executive further acknowledges that he has been advised by this writing that:

 

(i) Executive should consult with an attorney prior to executing this Release and has had an opportunity to do so;

 

(ii) Executive has up to twenty-one (21) days within which to consider this ADEA waiver and release;

 

(iii) Executive has seven (7) days following Executive’s execution of this Agreement to revoke this ADEA waiver and release, but only by providing written notice of such revocation to the Company in accordance with the “Notices” provision in Section 9 of the Employment Agreement;

 

(iv) the ADEA waiver and release shall not be effective until the seven (7) day revocation period has expired; and

 

(v) the twenty-one (21) day period set forth above shall run from the date Executive receives this Release.  The Parties agree that any modifications made to this Agreement prior to its execution shall not restart, or otherwise affect, this twenty-one day (21) period.

 

 

 

  

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(b)           It is the intention of the parties in executing this Release that this Release shall be effective as a full and final accord and satisfaction and release of and from all liabilities, disputes, claims and matters covered under this Release, known or unknown, suspected or unsuspected.

 

6.   This Release shall become effective on the first (1st) day following the day that this Release becomes irrevocable under Paragraph 5.  All payments due to the Executive shall be payable in accordance with the terms of the Employment Agreement.

 

 

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IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.

 

 

	 	STERLING JEWELERS INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ 	 
	 	 	 	 
	 	 	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 

 

 

 

 

	 	MICHAEL W. BARNES	 
	 	 	 	 
	
 

	 /s/ 	 

 

 

 

 

 

 

 

  

20

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