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EXHIBIT 10.35
December 15 , 1999
Mr. Xxxxxxx Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Dear Xxxx:
This will confirm the agreement between you and Movado Group, Inc. (the
"Corporation") concerning the payment of severance by the Corporation to you
under certain circumstances as hereinafter set forth.
1. For purposes of this Agreement, a "Change of Control" of the
Corporation shall mean the occurrence of any of the following events:
(a) the acquisition by any single individual or entity or group (within
the meaning of Section 13(d)(3) or 14(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) ("Person") of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty
percent (50%) of the combined aggregate voting power of the Corporation's then
outstanding voting securities other than (i) any acquisition directly from the
Corporation, excluding an acquisition by virtue of the exercise of a conversion
privilege, unless the security being so converted was itself acquired directly
from the Corporation , (ii) any acquisition by the Corporation or by any Person
controlled by, under common control with or controlling the Corporation
("Affiliate"), (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or by an Affiliate, (iv) any
acquisition by any Person, or any entity controlled by any such Person, who, as
of May 12, 1999 was the beneficial owner of at least fifteen percent (15%) of
the combined aggregate voting power of the Corporation's then outstanding voting
securities, or (v) any acquisition that complies with subsection b(i) of this
section 1; or
(b) the approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, or the sale or other disposition of all
or substantially all the assets of the Corporation ("Corporate Transaction");
excluding, however, any Corporate Transaction (i) as a result of which the
Persons, each of whom was, as of May 12, 1999, the beneficial owner of more than
fifteen percent (15%) of the combined aggregate voting power of the then
outstanding voting securities of the Corporation, or any entity controlled by
such Persons, will beneficially own, directly or indirectly, more than thirty
percent (30%) of the combined aggregate voting power of the then outstanding
voting securities of the corporation resulting from such Corporate Transaction;
or
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(c) the complete liquidation or dissolution of the Corporation.
2. In the event of your Qualified Termination of Employment, you shall be
entitled, as compensation for services rendered (subject to any applicable
payroll or other taxes required to be withheld) to continue to receive regular
bi-weekly payments of base salary for twenty four months following the date of
such Qualified Termination of Employment.
3. (a) "Qualified Termination of Employment" shall mean your termination
of employment with the Corporation, other than as a consequence of your death or
Disability, within two years after a Change of Control of the Corporation,
(i) by the Company for any reason other than for Cause, or
(ii) by you by reason of an Adverse Change in Conditions of
Employment.
(b) For the purpose of this Section 3, "Cause" shall mean gross negligence
or willful misconduct in respect of your obligations to the Corporation
(including but not limited to final conviction for a felony or perpetration of a
common law fraud) that has or is likely to result in material economic damage to
the Corporation.
(c) An "Adverse Change in Conditions of Employment" shall mean the
occurrence of any of the following events:
(i) change by the Corporation of your functions, duties or
responsibilities, which change would cause your position with the
Corporation to become one of substantially less dignity,
responsibility, importance or scope;
(ii) a reduction by the Corporation of your monthly base salary as
in effect immediately preceding the Change of Control or as the same
may thereafter be increased from time to time;
(iii) failure by the Corporation to continue you in any compensation
or benefit plan in which, and on at least as favorable a basis, as, you
were participating immediately preceding the Change of Control or, if
more favorable to you, failure by the Corporation to provide for you
participation in any compensation or benefit plan on a comparable basis
and as in effect at any time thereafter with respect to other key
employees;
(iv) the Corporation's requiring you to be based anywhere other
than fifty (50) miles of your principal office location prior to the
Change of Control, except for required travel on the Corporation's
business to an extent substantially consistent with your business
travel obligations prior to the Change of Control.
4. Termination by the Corporation of your employment based on Disability
shall mean termination because of your absence from duties with the Corporation
on a full time basis for six (6) consecutive months, as a result of your
incapacity due to physical or mental illness which is determined to be total and
permanent by a physician selected by the Corporation or its insurers and
acceptable to you or your legal representative (such Agreement as to
acceptability not to be withheld unreasonably).
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5. You shall hold, in a fiduciary capacity for the benefit of the
Corporation, all secret or confidential information, knowledge or data relating
to the Corporation and its businesses which shall have been obtained by you
during your employment by the Corporation and which shall not be public
knowledge (other than by your acts in violation of this provision). After
termination of your employment with the Corporation, you shall not, without the
prior written consent of the Corporation use, communicate or divulge any such
information, knowledge or data to any one other than the Corporation and those
persons designated by it.
6. If one or more of the covenants or agreements provided for in this
Agreement is contrary to any express provision of law or contrary to the policy
of expressed law, though not expressly prohibited, then such covenant or
covenants, agreement or agreements shall be null and void and shall be deemed
separable from the remaining covenants and agreements and shall in no way affect
the validity of this Agreement or the effect of any remaining covenant or
agreement.
7 All notices required or permitted hereunder shall be in writing and
sent by fax and first class mail or overnight courier to the parties at their
respective addresses first set forth above.
8. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof, and no representations, inducements,
promises or agreements, oral or otherwise, between the parties not embodied
herein shall be of any force and effect.
9. No amendment or modification of this Agreement or any of its terms
shall be binding on either of the parties to this Agreement unless such
amendment or modification is in writing and is executed by both parties to this
Agreement.
10. It is the intention of the Corporation and you that no portion of the
payments made hereunder be deemed to be an excess parachute payment as defined
in Section 280G of the Internal Revenue Code of 1986, as amended, or any
successor thereto ( the "Code"). It is agreed that the total amount of such
payments and any other payment to or for the benefit of you in the nature of
compensation, receipt of which is contingent on a Change in Control, and to
which Section 280G of the Code applies, shall not exceed an amount equal to one
dollar less than the maximum amount which you may receive without becoming
subject to the tax imposed by Section 4999 of the Code or any successor
provision or which the Corporation may pay without the loss of deduction under
Section 280G of the Code or any successor provisions.
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11. This Agreement shall be governed by the law of New York without
reference to any conflict of laws rules and the parties consent to the personal
jurisdiction of the federal and state courts sitting in New York county and
agree that any dispute arising hereunder shall be resolved in such courts.
Very truly yours,
MOVADO GROUP, INC.
By :/s/ Xxxxxx X'Xxxx
Name: Xxxxxx X'Xxxx
Title: Sr. VP HR
Agreed and accepted
this 16 day of December,
/s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx
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