Exhibit 10.8
Execution Copy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered as of 29 May 2007,
by and between Bauble Holdings Corp., a Delaware corporation ("Holdings"), and
Xxxx Xxxxx (the "Executive").
WHEREAS, upon the closing (the "Closing") of the transactions contemplated
by that certain Agreement and Plan of Merger dated as of March 20, 2007 (the
"Merger Agreement"), by and among Holdings, Bauble Acquisition Sub, Inc., a
Florida corporation ("Merger Sub") and Claire's Stores, Inc., a Florida
corporation ("Claire's"), Merger Sub will merge with and into the Claire's, and
Claire's shall become a wholly-owned subsidiary of Holdings (the "Acquisition");
WHEREAS, Holdings desires to employ the Executive on the terms and subject
to the conditions set forth herein and the Executive has agreed to be so
employed.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment of Executive; Duties.
1.1 Title. During the Employment Period (as defined in Section 2
hereof), the Executive shall serve as Managing Director Europe.
1.2 Duties.
(a) During the Employment Period, the Executive shall do and
perform all services and acts necessary or advisable to fulfill the duties and
responsibilities of the Executive's position and shall render such services on
the terms set forth herein. In addition, the Executive shall have such other
executive and managerial powers and duties as may reasonably be assigned to the
Executive by the Chief Executive Officer or the Board of Directors of Holdings
(the "Board"), commensurate with the Executive serving as President, Head of
European Operations. Holdings may adjust the duties and responsibilities of
Executive as President, European Operations, notwithstanding the specific title
set forth in Section 1.1 hereof, based upon Holdings needs from time to time.
Except for sick leave, reasonable vacations and excused leaves of absence and
reasonable time outside of the Company's normal working hours to attend to the
exisiting business commitments notified to Holdings' lawyers in writing at the
date hereof and approved by Holdings, the Executive shall, throughout the
Employment Period, devote the whole of the Executive's working time, attention,
knowledge and skills faithfully, and to the best of the Executive's ability, to
the duties and responsibilities of the Executive's positions in furtherance of
the business affairs and activities of Holdings and its subsidiaries and
Affiliates (as defined in Section 5.4(a) hereof).
(b) During the Employment Period, the Executive's principal
place of employment shall be at Holdings UK head office in Birmingham. Holdings
may require the Executive to work at any other reasonable location including any
other site within the United Kingdom or Europe on a temporary basis of no more
than four weeks as part of this Agreement. The Executive acknowledges that as
part of the terms of his employment he will be required to travel globally
including but not limited to Europe, the United States and Asia.
(c) The Executive shall at all times be subject to, comply
with, observe and carry out (i) Holdings rules, regulations, policies and codes
of ethics and/or conduct applicable to its employees generally and in effect
from time to time and (ii) such rules, regulations, policies, codes of ethics
and/or conduct, directions and restrictions as the Board may from time to time
reasonably establish or approve for senior executive officers of Holdings.
(d) The Executive agrees that he shall work such hours as are
necessary for the proper performance of his duties, including any such hours
which exceed the maximum weekly working time limit of 48 hours imposed by the
Working Time Regulations 1998 or any re-enactment thereof. The Holdings normal
working hours in the UK are 9.00am to 5.00pm Monday to Friday, with a break of
one hour for lunch each day.
1.3 Duties prior to the Closing Date. From the date hereof until the
date of the Closing (the "Closing Date"), the Executive agrees to be listed as
Managing Director Europe of Holdings or any of its subsidiaries in all
documentation in connection with the Acquisition, shall participate in the "road
show" relating to the financing of the Acquisition, and shall perform such other
services as reasonably requested by the Board in order to facilitate completion
of the Acquisition.
2. Term of Employment. This Agreement shall govern the terms and
conditions of the Executive's employment by Holdings, and the termination
thereof, from the date hereof through the Expiration Date. The "Expiration Date"
shall mean the second succeeding 31 December that follows the date Holdings or
the Executive notifies the other in writing that this Agreement shall expire (a
"Notice of Expiration"), provided that if a Notice of Expiration is provided by
either party on or before 31 October 2007, the Expiration Date shall be 31
December 2007. The period after the Closing Date during which the Executive is
actually employed by Holdings under this Agreement is referred to as the
"Employment Period". Should the Merger Agreement be terminated prior to
completion of the Acquisition, this Agreement shall expire and neither party
shall have any further obligations or rights hereunder.
3. Compensation and General Benefits.
3.1 Base Salary.
(a) During the Employment Period, Holdings agrees to pay to
the Executive a base salary at an annual rate of (pound)350,000 (such base
salary, as may be adjusted from time to time pursuant to Section 3.1(b), is
referred to herein as the "Base Salary"). The Executive's Base Salary, less
amounts required to be withheld under applicable law, shall be payable in equal
installments in accordance with Holdings normal payroll practices and
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procedures in effect from time to time for the payment of salaries to officers
of Holdings, but in no event less frequently than monthly.
(b) The Board or the Compensation Committee established by the
Board (the "Compensation Committee") shall review the Executive's performance on
an annual basis and, based on such review, may increase (but not decrease) the
Base Salary, as it, acting in its sole discretion, shall determine to be
reasonable and appropriate.
(c) The parties may enter into an irrevocable arrangement to
allow the Executive to sacrifice future salary before its accrual ("the Salary
Sacrifice") subject to agreement between the parties respective tax advisers as
to the terms of the salary sacrifice and compliance with the relevant HMRC
guidance and any restrictions in the relevant pension scheme.
3.2 Bonus. With respect to each fiscal year of Holdings that ends
during the Employment Period, the Executive shall be eligible to receive from
Holdings an annual performance bonus (the "Annual Bonus") based upon Holdings'
attainment of annual goals established by the Board or the Compensation
Committee, which may include Holdings' comparable store sales, earnings before
interest, taxes, depreciation and amortization ("EBITDA") and/or cash generation
goals. The Executive's Annual Bonus shall equal one hundred percent (100%) of
the Executive's Base Salary (before any Salary Sacrifice) to which the Executive
is entitled during such year if the Company meets target level of performance
established by the Board or the Compensation Committee for the applicable year,
and the Executive shall have an opportunity to receive an Annual Bonus of up to
an additional twenty five percent (25%) of the Executive's Base Salary (before
any Salary Sacrifice) to which the Executive is entitled during such year if and
to the extent the Company achieves levels in excess of target as established by
the Board or the Compensation Committee for the applicable year; provided that
for the first fiscal year that ends following the Closing Date, the Annual Bonus
shall be no less than one hundred percent (100%) of the Executive's Base Salary
(before any Salary Sacrifice) to which the Executive is entitled from the
Closing Date to such fiscal year end. Any Annual Bonus earned shall be payable
in full as soon as reasonably practicable following the determination thereof,
but in no event later than May 15 of the following year, and in accordance with
Holdings' normal payroll practices and procedures.
3.3 Expenses. In addition to any amounts to which the Executive may
be entitled pursuant to the other provisions of this Section 3.3 or elsewhere
herein, the Executive shall be entitled to receive reimbursement from Holdings
for all reasonable and necessary expenses incurred by the Executive during the
Employment Period in performing the Executive's duties hereunder on behalf of
Holdings, subject to, and consistent with, Holdings' policies for expense
payment and reimbursement, in effect from time to time.
3.4 Benefits. During the Employment Period, in addition to any
amounts to which the Executive may be entitled pursuant to the other provisions
of this Section 3 or elsewhere herein, the Executive shall be entitled to
participate in, and to receive benefits under, any benefit plans, arrangements
or policies made available by Holdings to its employees generally, subject to
and on a basis consistent with the terms, conditions and overall administration
of each such plan, arrangement or policy including provision of:
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(a) private medical insurance for the benefit of the Executive
and his spouse and children (under the age of 18 years of age or in full time
education) and;
(b) either, at the Exective's choice:
(i) a suitable leasehire motor car in the Company's name
("the Car") such as a top of the range BMW 750, Range Rover or equivalent.
Holdings will bear the cost of insuring, taxing and maintaining the Car. The
Executive undertakes to comply with all regulations from time to time imposed by
Holdings in relation to the use of the car, including the requirements of any
policy of insurance. Holdings will reimburse the Executive the cost of all fuel
incurred by him in connection with his business, and reasonable private, to the
extent provided by Holdings policy (which may be changed by the Company in its
discretion), use of the Car subject to the production of the appropriate
vouchers and receipts and in accordance with HMRC rates from time to time. or
(ii) a gross car allowance of (pound)1300 per calendar
month. Holdings will reimburse the Executive the cost of all fuel incurred by
him in connection with his business and reasonable private use of the Car
subject to the production of the appropriate vouchers and receipts and in
accordance with HMRC rates from time to time.
3.5 Equity Awards.
(a) On or shortly after the Closing Date, Holdings shall have
adopted a stock incentive plan, in the form attached hereto as Exhibit A and
incorporated herein by reference (the "Plan"), for the grant of stock options
and other stock awards to employees or directors of Holdings or of any
subsidiary of Holdings to purchase shares of Common Stock, US$0.01 par value per
share, of Holdings (the "Common Stock").
(b) On or shortly after the Closing Date, pursuant to the
Plan, the Executive shall be granted options to purchase a total of 709,300
shares of Common Stock at a price per share equal to US$10.00on the terms set
forth in the Option Grant Letter attached hereto as Exhibit B and incorporated
herein by reference.
(c) On or shortly after the Closing Date, the Executive shall
be awarded 162,500 shares of Common Stock on the terms set forth in the Stock
Award Letter attached hereto as Exhibit C and incorporated herein by reference.
3.6 Holiday. The Executive's total annual entitlement is 8 English
public holidays and 30 days paid contractual holiday. The Executive may carry up
to a maximum of 5 days unused holiday entitlement over to the subsequent holiday
year. Upon notice of termination of the Executive's employment being served by
either party Holdings may either require the Executive to take any unused
holidays accrued at that time during any notice period or may, at its
discretion, make a payment in lieu of such outstanding holiday entitlement. The
Executive will be required to make a payment to the Holdings in lieu of any
holiday taken in excess of the Executive's holiday entitlement at the date of
termination of the Employment. Any sums so due may be deducted from any money
owing to the Executive.
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4. Termination.
4.1 General. The employment of the Executive hereunder (and the
Employment Period) shall terminate in accordance with the provisions of this
Section 4. Upon any such termination, except as otherwise provided herein
pursuant to Sections 4.2(b), 4.3(a), 4.4 or 4.5(b), the Executive shall be
entitled to earned but unpaid Base Salary up to the Expiration Date together
with Annual Bonus calculated on a pro rated basis up to the effective date of
termination of the Executive's employment provided that bonus targets are met
for the relevant fiscal year, such pro rated bonus amount to be paid as soon as
reasonably practicable following the determination thereof, but in no event
later than May 15 of the following year, and in accordance with Holdings' normal
payroll practices and procedures and any other benefits accrued and vested
through to the Expiration Date or if earlier, the date his employment terminates
pursuant to Sections 4.2(b), 4.3(a), 4.4 or 4.5(b) but he shall remain subject
to the provisions of Section 5 and Section 6 as applicable. For the avoidance of
doubt, provided always that the Company complies with the express termination
provisions set out in this Section 4, any entitlement to stock options or
restricted stock that the Executive would have been entitled to receive had the
Executive's employment not terminated, either upon the Expiration Date or
earlier pursuant to Sections 4.2(b), 4.3(a), 4.4 or 4.5(b)shall lapse upon the
relevant effective date of termination unless expressly stated otherwise in the
Plan, the Option Grant Letter and the Stock Award Letter, and the Executive
shall not be entitled to any compensation in respect of loss of all or any of
such stock options or restricted stock and/or any diminution in value in or any
losses arising out of such loss of stock options or restricted stock.
4.2 Notice of Expiration by Holdings.
(a) If Holdings delivers to the Executive a Notice of
Expiration, the employment of the Executive hereunder (and the Employment
Period) shall terminate upon the Expiration Date, or, if earlier, as provided in
Section 4.3 or Section 4.4.
(b) Notwithstanding the foregoing, Holdings may at its
absolute discretion elect, upon or at any time after delivery to the Executive
of a Notice of Expiration, to immediately terminate the Executive's employment
hereunder (and the Employment Period), and provide the Executive the Base Salary
to which the Executive would have been entitled pursuant to Section 3.1 hereof
(at the Base Salary rate during the year of termination) and health care
benefits detailed in Section 3.4 hereof to which the Executive would have been
entitled had he remained in the employ of Holdings until the Expiration Date,
with all such amounts payable in accordance with Holdings' normal payroll
practices and procedures in the same manner and at the same time as though the
Executive remained employed by Holdings together with Annual Bonus calculated on
a pro rated basis up to the effective date of termination of the Executive's
employment provided that bonus targets are met for the relevant fiscal year,
such pro rated bonus amount to be paid as soon as reasonably practicable
following the determination thereof, but in no event later than May 15 of the
following year, and in accordance with Holdings' normal payroll practices and
procedures but not including for the avoidance of any doubt any Annual Bonus, or
any share options (unless expressly stated otherwise in the Plan, the Option
Grant Letter and the Stock Award Letter, and provided always that the Company
complies with the express termination provisions set out in this Section 4.2)
that would have accrued between the effective date of termination and the
Expiration Date
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(c) provided that if such termination occurs upon or within
six (6) months following a Change of Control (as defined in Exhibit D attached
hereto), Holdings shall continue to pay the Executive such Base Salary and
provide the healthcare benefits detailed in Section 3.4 hereof for no less than
one year following such date of termination.
4.3 Death or Disability of the Executive.
(a) Whether or not a Notice of Expiration has been provided,
the employment of the Executive hereunder (and the Employment Period) shall
terminate upon (i) the death of the Executive and (ii) at the option of
Holdings, upon not less than fifteen (15) days' prior written notice to the
Executive or the Executive's personal representative or guardian, if the
Executive suffers a "Total Disability" (as defined in Section 4.3(b) hereof).
Upon termination for death or Total Disability, Holdings shall pay to the
Executive, guardian or personal representative, as the case may be, a prorated
share of the Annual Bonus pursuant to Section 3.2 hereof (based on the period of
actual employment) that the Executive would have been entitled to had the
Executive worked the full year during which the termination occurred, provided
that bonus targets are met for the year of such termination. Any bonus shall be
payable as soon as reasonably practicable following the determination thereof,
but in no event later than May 15 of the following year, and in accordance with
Holdings' normal payroll practices and procedures.
(b) For purposes of this Agreement, "Total Disability" shall
mean (i) if the Executive is subject to a legal decree of incompetency (the date
of such decree being deemed the date on which such disability occurred), (ii)
the written determination by a physician selected by Holdings (which expense
shall be paid by Holdings) that, because of a medically determinable disease,
injury or other physical or mental disability, the Executive is unable
substantially to perform, with or without reasonable accommodation, the material
duties of the Executive required hereby, and that such disability has lasted for
ninety (180) consecutive days or any one hundred twenty (240) days during the
immediately preceding twelve (24)-month period or is, as of the date of
determination, reasonably expected to last twelve (12) months or longer after
the date of determination, in each case based upon medically available reliable
information or (iii) Executive's qualifying for benefits under Holdings'
long-term disability coverage, if any. In conjunction with determining mental
and/or physical disability for purposes of this Agreement, the Executive hereby
consents to (x) any examinations that the Board or the Compensation Committee
determines are relevant to a determination of whether the Executive is mentally
and/or physically disabled or are required by Holdings physician, (y) furnish
such medical information as may be reasonably requested and (z) waive any
applicable physician patient privilege that may arise because of such
examination. All expenses incurred by the Executive under this subsection shall
be paid by Holdings.
4.4 Termination by Holdings for Cause.
(a) Whether or not a Notice of Expiration has been provided,
Holdings may terminate the employment of the Executive hereunder (and the
Employment Period) immediately for Cause.
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(b) For purposes of this Agreement, "Cause" means the
occurrence of any one or more of the following events, and Holdings shall have
the sole discretion to determine the existence of Cause:
(i) the Executive breaches or fails to observe his
obligations under this Agreement or refuses or neglects to comply with any
reasonable and lawful direction of Holdings; or
(ii) the Executive acts in a manner tending to bring
himself or the Holdings into disrepute; or
(iii) the Executive becomes bankrupt or makes any
arrangement with or for the benefit of his creditors or had a County Court
administration order against him under the County Court Xxx 0000; or
(iv) the Executive was negligent or failed to perform
his duties to a standard satisfactory to the Board acting reasonably, after
having received a written warning from Holdings relating to the same; or
(v) the Executive breaches or fails to observe any
code of conduct, rule or regulation of Holdings or failed or ceased to be
registered (where such registration is, in the opinion of the Board, required
for the performance of his duties) by any regulatory body in the United Kingdom
or elsewhere;
(vi) the Executive is convicted of a criminal offence
(other than an offence under any road traffic legislation for which a fine or
non-custodial penalty is imposed) under any statutory enactment or regulation
relating to insider dealing;
(vii) the Executive becomes of unsound mind or a
patient within the meaning of any statute relating to mental health;
(viii) the Executive engages in any activity giving rise
to a material conflict with Holdings;
(ix) the Executive misappropriates a material business
opportunity of Holdings or confidential information.
(c) Before Holdings may terminate the Executive for Cause
pursuant to Section 4.4(a), the Board shall deliver to the Executive a written
notice of Holdings' intent to terminate the Executive for Cause, and the
Executive shall have been given a reasonable opportunity to cure any such acts
or omissions (which are susceptible of cure as reasonably determined by the
Board) within thirty (30) days after the Executive's receipt of such notice.
4.5 Notice of Expiration by the Executive.
(a) If the Executive delivers to Holdings a Notice of
Expiration, the employment of the Executive hereunder (and the Employment
Period) shall terminate upon the Expiration Date, or, if earlier, as provided in
Section 4.3 or Section 4.4.
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Notwithstanding the foregoing, Holdings may at its absolute discretion elect,
upon or at any time after receipt of a Notice of Expiration from the Executive,
to immediately terminate the Executive's employment hereunder (and the
Employment Period), and provide the Executive the Base Salary to which the
Executive would have been entitled pursuant to Section 3.1 hereof (at the Base
Salary rate during the year of termination) and health care benefits detailed in
Section 3.4 hereof to which the Executive would have been entitled had he
remained in the employ of Holdings until the Expiration Date, with all such
amounts payable in accordance with Holdings' normal payroll practices and
procedures in the same manner and at the same time as though the Executive
remained employed by Holdings together with Annual Bonus calculated on a pro
rated basis up to the effective date of termination of the Executive's
employment provided that bonus targets are met for the relevant fiscal year,
such pro rated bonus amount to be paid as soon as reasonably practicable
following the determination thereof, but in no event later than May 15 of the
following year, and in accordance with Holdings' normal payroll practices and
procedures but not including for the avoidance of any doubt any Annual Bonus, or
any share options (unless expressly stated otherwise in the Plan, the Option
Grant Letter and the Stock Award Letter, and provided always that the Company
complies with the express termination provisions set out in this Section 4.5)
that would have accrued between the effective date of termination and the
Expiration Date..
4.6 Garden Leave.
(a) Notwithstanding any other provision of this Agreement to
the contrary, during any period of employment between the date that a Notice of
Expiration is provided by either party until the Expiration Date, Holdings may
in its absolute discretion direct the Executive:
(i) to perform no duties; and/or
(ii) to refrain from contacting any customers,
clients, advertisers, suppliers, agents, professional advisors, brokers or
employees of Holdings or any of its Affiliates; and/or
(iii) not to enter all or any premises of Holdings or
any of its Affiliates; and/or
(iv) to immediately resign without claim for
compensation from office as director of Holdings and any Affiliate and from any
other office held by him in Holdings or any Affiliate; and/or
(v) return all documents, computer disks or tapes and
all other tangible items in the Executive's possession or control belonging to
or containing any confidential information of Holdings or any of its Affiliates.
(b) During any period when the provisions of this Section 4.6
are invoked, the Executive's salary and other contractual benefits and
compensation (including the vesting and exercisability of any equity awards)
will continue to be paid or provided by Holdings and the Executive will continue
to comply without exception with all the Executive's obligations under this
Agreement.
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4.7 Mutual Agreement. The parties may enter a mutual agreement in
writing to waive any applicable notice requirements. Where such agreement is
reached, the Executive's employment (and the Employment Period) shall come to an
immediate termination on the date specified in such agreement. Mutual agreement
to waive applicable notice requirements shall, unless the agreement states
otherwise, be without prejudice to the Executive's obligations set out in
Section 5 which shall continue to have full effect.
4.8 Resignation from Officer Positions. Upon the termination of the
Executive's employment for any reason (unless otherwise agreed in writing by
Holdings and the Executive), the Executive will be deemed to have resigned,
without any further action by the Executive, from any and all officer, director
and/or director positions that the Executive, immediately prior to such
termination, (a) held with Holdings or any of its Affiliates and (b) held with
any other entities at the direction of, or as a result of the Executive's
affiliation with, Holdings or any of its Affiliates. If for any reason this
Section 4.8 is deemed to be insufficient to effectuate such resignations, then
Executive will, upon Holdings' request, execute any documents or instruments
that Holdings may deem necessary or desirable to effectuate such resignations.
5. Confidentiality, Work Product and Non-Competition and Non-Solicitation.
5.1 Confidentiality.
(a) In connection with the Executive's employment with
Holdings, Holdings promises to provide the Executive with access to
"Confidential Information" (as defined in Section 5.4(d) hereof) in support of
the Executive's employment duties. The Executive recognizes that Holdings'
business interests require a confidential relationship between Holdings and the
Executive and the fullest practical protection and confidential treatment of all
Confidential Information. At all times on and after the date hereof, the
Executive shall not directly or indirectly: (i) appropriate, download, print,
copy, remove, use, disclose, divulge, communicate or otherwise "Misappropriate"
(as defined in Section 5.4(e) hereof), any Confidential Information, including,
without limitation, originals or copies of any Confidential Information, in any
media or format, except for Holdings' benefit within the course and scope of the
Executive's employment or with the prior written consent of a majority of the
Disinterested Directors; or (ii) take or encourage any action that would
circumvent, interfere with or otherwise diminish the value or benefit of the
Confidential Information to any of the Company Parties (as defined in Section
5.4(b) hereof).
(b) All Confidential Information, and all other information
and property affecting or relating to the business of Holdings Parties within
the Executive's possession, custody or control, regardless of form or format,
shall remain, at all times, the property of the respective Company Parties, the
appropriation, use and/or disclosure of which is governed and restricted by this
Agreement.
(c) The Executive acknowledges and agrees that:
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(i) the Executive occupies a unique position within
Holdings, and the Executive is and will be intimately involved in the
development and/or implementation of Confidential Information;
(ii) in the event the Executive breaches this Section
5.1 with respect to any Confidential Information, such breach shall be deemed to
be a Misappropriation of such Confidential Information; and
(iii) any Misappropriation of Confidential Information
will result in immediate and irreparable harm to Holdings.
(d) Upon receipt of any formal or informal request, by legal
process or otherwise, seeking the Executive's direct or indirect disclosure or
production of any Confidential Information to any Person, the Executive shall
promptly and timely notify Holdings and provide a description and, if
applicable, hand deliver a copy of such request to Holdings. The Executive
irrevocably nominates and appoints Holdings as the Executive's true and lawful
attorney-in-fact to act in the Executive's name, place and stead to perform any
act that the Executive might perform to defend and protect against any
disclosure of Confidential Information.
(e) At any time on or after the date hereof, Holdings may
request the Executive shall deliver to Holdings all originals and copies of
Confidential Information and all other information and property affecting or
relating to the business of the Company Parties within the Executive's
possession, custody or control, regardless of form or format, including, without
limitation any Confidential Information produced by the Executive. At any time
on or after the date hereof, Holdings shall have the right of reasonable access
to review, inspect, copy and/or confiscate any Confidential Information within
the Executive's possession, custody or control.
(f) Upon termination or expiration of this Agreement, the
Executive shall immediately return to Holdings all Confidential Information, and
all other information and property affecting or relating to the business of the
Company Parties, within the Executive's possession, custody or control,
regardless of form or format, without the necessity of a prior Company request.
(g) From and after the date hereof, the Executive represents
and agrees that the Executive will not use or disclose any confidential or
proprietary information or trade secrets of others, including but not limited to
former employers, and that the Executive will not bring onto the premises of
Holdings or access such confidential or proprietary information or trade secrets
of such others, unless consented to in writing by said others, and then only
with the prior written authorization of Holdings.
5.2 Work Product/Intellectual Property.
(a) Assignment. The Executive hereby assigns to Holdings all
right, title and interest to all "Work Product" (as defined in Section 5.4(h)
hereof) that (i) relates to any of the Company Parties' actual or anticipated
business, research and development or existing or future products or services,
or (ii) is conceived, reduced to practice, developed or
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made using any equipment, supplies, facilities, assets, information or resources
of any of the Company Parties (including, without limitation, any intellectual
property rights).
(b) Disclosure. The Executive shall promptly disclose Work
Product to the Disinterested Directors and perform all actions reasonably
requested by Holdings at any time on or after the date hereof to establish and
confirm the ownership and proprietary interest of any of the Company Parties in
any Work Product (including, without limitation, the execution of assignments,
consents, powers of attorney, applications and other instruments). The Executive
shall not file any patent or copyright applications related to any Work Product
except with the written consent of a majority of the Disinterested Directors.
5.3 Non-Competition and Non-Solicitation.
(a) In consideration of the Confidential Information being
provided to the Executive as stated in Section 5.1 hereof, and other good and
valuable new consideration as stated in this Agreement, including, without
limitation, employment and/or continued employment with Holdings, and the
business relationships, Company goodwill, work experience, client, customer
and/or vendor relationships and other fruits of employment that the Executive
will have the opportunity to obtain, use and develop under this Agreement, the
Executive agrees to the restrictive covenants stated in this Section 5.3.
(b) From the date hereof until the end of the Restricted
Period (as defined in Section 5.4(g) hereof), the Executive agrees that the
Executive will not, directly or indirectly, on the Executive's own behalf or on
the behalf of any other Person, within England or in any other country or
territory in which the businesses of Holdings are conducted:
(i) engage in a Competing Business (as defined in
Section 5.4(c) hereof), including, without limitation, by owning, managing,
operating, controlling, being employed by, providing services as a consultant,
agent or independent contractor to or participating in the ownership,
management, operation or control of any Competing Business;
(ii) deal in a Competing Business (as defined in
Section 5.4(c) hereof), including, without limitation, by owning, managing,
operating, controlling, being employed by, providing services as a consultant,
agent or independent contractor to or participating in the ownership,
management, operation or control of any Competing Business;
(iii) induce or attempt to induce any customer,
vendor, supplier, licensor or other Person in a business relationship with any
Company Party, for or with which the Executive or employees working under the
Executive's supervision had any direct or indirect responsibility or contact
during his employment, (A) to do business with a Competing Business or (B) to
cease, restrict, terminate or otherwise reduce business with Holdings for the
benefit of a Competing Business, regardless of whether the Executive initiates
contact; or
(iv) (A) solicit, recruit, persuade, influence or
induce, or attempt to solicit, recruit, persuade, influence or induce anyone
employed or otherwise retained by any of the Company Parties (including any
independent contractor, agent or consultant), to cease or leave their employment
or contractual or consulting relationship with any Company
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Party, regardless of whether the Executive initiates contact for such purposes
or (B) hire, employ or otherwise attempt to establish, for any Person, any
employment, agency, consulting, independent contractor or other business
relationship with any Person who is or was employed or otherwise retained by any
of the Company Parties (including any independent contractor or consultant).
(c) The parties hereto acknowledge and agree that,
notwithstanding anything in Section 5.3(b)(i) hereof, (i) the Executive may own
or hold, solely as passive investments, securities of Persons engaged in any
business that would otherwise be included in Section 5.3(b)(i), as long as with
respect to each such investment the securities held by the Executive do not
exceed five percent (5%) of the outstanding securities of such Person and such
securities are publicly traded on a recognised investment market and (ii) the
Executive may serve on the board of directors (or other comparable position) or
as an officer of any entity at the request of the Board; provided, however, that
in the case of investments otherwise permitted under clause (i) above, the
Executive shall not be permitted to, directly or indirectly, participate in, or
attempt to influence, the management, direction or policies of (other than
through the exercise of any voting rights held by the Executive in connection
with such securities), or lend the Executive's name to, any such Person.
(d) The Executive acknowledges and agrees that, for purposes
of this Section 5.3, indirect acts by the Executive shall include, without
limitation, an act by the Executive's spouse, ancestor, lineal descendant,
lineal descendant's spouse, sibling or other member of the Executive's immediate
family.
(e) The Executive acknowledges that (i) the restrictive
covenants contained in this Section 5.3 hereof are ancillary to and part of an
otherwise enforceable agreement, such being the agreements concerning
Confidential Information and other consideration as stated in this Agreement,
(ii) at the time that these restrictive covenants are made, the limitations as
to time, geographic scope and activity to be restrained, as described herein,
are reasonable and do not impose a greater restraint than necessary to protect
the good will and other legitimate business interests of Holdings, including
without limitation, Confidential Information (including trade secrets), client,
customer and/or vendor relationships, client and/or customer goodwill and
business productivity, (iii) in the event of termination of the Executive's
employment, the Executive's experiences and capabilities are such that the
Executive can obtain gainful employment without violating this Agreement and
without the Executive incurring undue hardship, (iv) based on the relevant
benefits and other new consideration provided for in this Agreement, including,
without limitation, the disclosure and use of Confidential Information, the
restrictive covenants of this Section 5.3, as applicable according to their
terms, shall remain in full force and effect even in the event of the
Executive's termination from employment, howsoever arising (v) the Executive has
carefully read this Agreement and has given careful consideration to the
restraints imposed upon the Executive by this Agreement and taken legal advice
in relation to the same and consents to the terms of the restrictive covenants
in this Section 5.3, with the knowledge that this Agreement may be terminated at
any time in accordance with the provisions hereof.
5.4 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
12
(a) An "Affiliate" of any specified Person means any other
Person, whether now or hereafter existing, directly or indirectly controlling or
controlled by, or under direct or indirect common control with, such specified
Person. For purposes hereof, "control" or any other form thereof, when used with
respect to any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
(b) "Company Parties" means Holdings, and its direct and
indirect parents, subsidiaries and Affiliates, and their successors in interest.
(c) "Competing Business" means any business that competes with
any of the Company Parties, including, without limitation, any enterprise that
engages in, owns or operates any retail business that derives 10% or more of its
business from sales of costume jewelry and accessories targeted to girls and
women.
(d) Confidential Information.
(i) Definition. "Confidential Information" means any and
all material, information, ideas, inventions, formulae, patterns, compilations,
programs, devices, methods, techniques, processes, know how, plans (marketing,
business, strategic, technical or otherwise), arrangements, pricing and other
data of or relating to any of the Company Parties (as well as their customers
and/or vendors) that is confidential, proprietary or trade secret (A) by its
nature, (B) based on how it is treated or designated by a Company Party, (C)
because the disclosure of which would have a material adverse effect on the
business or planned business of any of the Company Parties and/or (D) as a
matter of law.
(ii) Exclusions. Confidential Information does not
include material, data, and/or information (A) that any Company Party has
voluntarily placed in the public domain, (B) that has been lawfully and
independently developed and publicly disclosed by third parties, (C) that
constitutes the general non-specialized knowledge and skills gained by the
Executive at any time on or after the date hereof, or (D) that otherwise enters
the public domain through lawful means; provided, however, that the unauthorized
appropriation, use or disclosure of Confidential Information by the Executive,
directly or indirectly, shall not affect the protection and relief afforded by
this Agreement regarding such information.
(iii) Inclusions. Confidential Information includes,
without limitation, the following information (including without limitation,
compilations or collections of information) relating or belonging to any Company
Party (as well as their clients, customers and/or vendors) and created,
prepared, accessed, used or reviewed by the Executive at any time on or after
the date hereof: (1) product and manufacturing information, such as ingredients,
combinations of ingredients and manufacturing processes; (2) scientific and
technical information, such as research and development, tests and test results,
formulae and formulations, studies and analysis; (3) financial and cost
information, such as operating and production costs, costs of goods sold, costs
of supplies and manufacturing materials, non-public financial statements and
reports, profit and loss information, margin information and financial
performance information; (4) customer related information, such as customer
related contracts,
13
engagement and scope of work letters, proposals and presentations,
customer-related contacts, lists, identities and prospects, practices, plans,
histories, requirements and needs, price information and formulae and
information concerning client or customer products, services, businesses or
equipment specifications; (5) vendor and supplier related information, such as
the identities, practices, history or services of any vendors or suppliers and
vendor or supplier contacts; (6) sales, marketing and price information, such as
marketing and sales programs and related data, sales and marketing strategies
and plans, sales and marketing procedures and processes, pricing methods,
practices and techniques and pricing schedules and lists; (7) database, software
and other computer related information, such as computer programs, data,
compilations of information and records, software and computer files,
presentation software and computer-stored or backed-up information including,
but not limited to, e-mails, databases, word processed documents, spreadsheets,
notes, schedules, task lists, images and video; (8) employee-related
information, such as lists or directories identifying employees, representatives
and contractors, and information regarding the competencies (knowledge, skill,
experience), compensation and needs of employees, representatives and
contractors and training methods; and (9) business- and operation-related
information, such as operating methods, procedures, techniques, practices and
processes, information about acquisitions, corporate or business opportunities,
information about partners and potential investors, strategies, projections and
related documents, contracts and licenses and business records, files,
equipment, notebooks, documents, memoranda, reports, notes, sample books,
correspondence, lists and other written and graphic business records.
(e) "Misappropriate", or any form thereof, means:
(i) the acquisition of any Confidential Information
by a Person who knows or has reason to know that the Confidential Information
was acquired by theft, bribery, misrepresentation, breach or inducement of a
breach of a duty to maintain secrecy or espionage through electronic or other
means (each, an "Improper Means"); or
(ii) the disclosure or use of any Confidential
Information without the express consent of Holdings by a Person who (A) used
Improper Means to acquire knowledge of the Confidential Information (B) at the
time of disclosure or use, knew or had reason to know that his or her knowledge
of the Confidential Information was (x) derived from or through a Person who had
utilized Improper Means to acquire it, (y) acquired under circumstances giving
rise to a duty to maintain its secrecy or limit its use or (z) derived from or
through a Person who owed a duty to Holdings to maintain its secrecy or limit
its use or (C) before a material change of his or her position, knew or had
reason to know that it was Confidential Information and that knowledge of it had
been acquired by accident or mistake.
(f) "Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, business trust,
joint-stock company, estate, trust, unincorporated organization, government or
other agency or political subdivision thereof or any other legal or commercial
entity.
(g) "Restricted Period" means twelve (12) months after the
date of termination of employment (the Executive's last day of work for
Holdings) such period to be
14
reduced by one day for every day in respect of which Holdings has invoked any
provision set out at Section 4.6..
(h) "Work Product" means all patents and patent applications,
all inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports, creative works, discoveries, software, computer
programs, modifications, enhancements, know-how, formulations, concepts and
ideas, and all similar or related information (in each case whether or not
patentable), all copyrights and copyrightable works, all trade secrets,
confidential information, and all other intellectual property and intellectual
property rights that are conceived, reduced to practice, developed or made by
the Executive either alone or with others in the course of employment with
Holdings (including employment prior to the date of this Agreement).
5.5 Remedies. Because the Executive's services are unique and
because the Executive has access to Confidential Information, the Executive
acknowledges and agrees that if the Executive breaches any of the provisions of
Section 5 hereof, Holdings may suffer immediate and irreparable harm for which
monetary damages alone will not be a sufficient remedy. The restrictive
covenants stated in Section 5 hereof are without prejudice to Holdings' rights
and causes of action at law.
5.6 Interpretation; Severability.
(a) The Executive has carefully considered the possible
effects on the Executive of the covenants not to compete, the confidentiality
provisions and the other obligations contained in this Agreement, and the
Executive recognizes that Holdings has made every effort to limit the
restrictions placed upon the Executive to those that are reasonable and
necessary to protect Holdings' legitimate business interests.
(b) The Executive acknowledges and agrees that the restrictive
covenants set forth in this Agreement are reasonable and necessary in order to
protect Holdings' valid business interests. It is the intention of the parties
hereto that the covenants, provisions and agreements contained herein shall be
enforceable to the fullest extent allowed by law. If any covenant, provision or
agreement contained herein is found by a court having jurisdiction to be
unreasonable in duration, scope or character of restrictions, or otherwise to be
unenforceable, such covenant, provision or agreement shall not be rendered
unenforceable thereby, but rather the duration, scope or character of
restrictions of such covenant, provision or agreement shall be deemed reduced or
modified with retroactive effect to render such covenant, provision or agreement
reasonable or otherwise enforceable (as the case may be), and such covenant,
provision or agreement shall be enforced as modified. If the court having
jurisdiction will not review the covenant, provision or agreement, the parties
hereto shall mutually agree to a revision having an effect as close as permitted
by applicable law to the provision declared unenforceable. The parties hereto
agree that if a court having jurisdiction determines, despite the express intent
of the parties hereto, that any portion of the covenants, provisions or
agreements contained herein are not enforceable, the remaining covenants,
provisions and agreements herein shall be valid and enforceable. Moreover, to
the extent that any provision is declared unenforceable, Holdings shall have any
and all rights under applicable statutes or common law to enforce its rights
with respect to any and all Confidential Information or unfair competition by
the Executive.
15
6. Miscellaneous.
6.1 Public Statements.
(a) Media Nondisclosure. The Executive agrees that from and
after the date hereof, except as may be authorized in writing by Holdings, the
Executive will not directly or indirectly disclose or release to the Media any
information concerning or relating to any aspect of the Executive's employment
or termination from employment with Holdings and/or any aspect of any dispute
that is the subject of this Agreement. For the purposes of this Agreement, the
term "Media" includes, without limitation, any news organization, station,
publication, show, website, web log (blog), bulletin board, chat room and/or
program (past, present and/or future), whether published through the means of
print, radio, television and/or the Internet or otherwise, and any member,
representative, agent and/or employee of the same.
(b) Non-Disparagement. The Executive agrees and Holdings
agrees that it will procure that from and after the date hereof, neither the
Executive nor any Executive Officer of the Company (as applicable) will make any
statements, comments or communications in any form, oral, written or electronic
to any Media or any customer, client or supplier of Holdings or any of its
Affiliates, which would constitute libel, slander or disparagement of Holdings
or any of its Affiliates or the Executive (as applicable), including, without
limitation, any such statements, comments or communications that criticize,
ridicule or are derogatory to Holdings or any of its Affiliates or the
Executive (as applicable); provided, however, that the terms of this Section
6.1(b) shall not apply to communications between the Parties and, as applicable,
his or its attorneys or other persons with whom communications would be subject
to a claim of privilege existing under common law, statute or rule of procedure.
The Executive further agrees that the Executive will not in any way solicit any
such statements, comments or communications from others regarding Holdings or
any of its Affiliates and Holdings agrees to procure that no Executive Officer
will do likewise regarding the Executive.
6.2 Settlement of Existing Rights. In exchange for the other terms
of this Agreement, the Executive acknowledges and agrees that: (a) the
Executive's entry into this Agreement is a condition of employment and/or
continued employment with Holdings, as applicable; (b) except as otherwise
provided herein, this Agreement will replace any existing employment agreement
between the parties and thereby act as a novation, if applicable; (c) the
Executive is being provided with access to Confidential Information, including,
without limitation, proprietary trade secrets of one or more Company Parties, to
which the Executive has not previously had access; (d) all Company inventions
and intellectual property developed by the Executive during any past employment
with Holdings and all goodwill developed with Holdings' clients, customers and
other business contacts by the Executive during any past employment with
Company, as applicable, is the exclusive property of Holdings; and (e) all
Confidential Information and/or specialized training accessed, created, received
or utilized by the Executive during any past employment with Company, as
applicable, will be subject to the restrictions on Confidential Information
described in this Agreement, whether previously so agreed or not.
6.3 Indemnification. The Executive shall be entitled from the date
hereof until the end of the Employment Period in the capacity as an officer or
director of Holdings or any of its subsidiaries to the benefit of the
indemnification provisions contained in
16
the By-Laws of Holdings, or as a matter of law, whichever is greater. In
addition, during the term of the Executive's employment, and, where applicable
under the terms of the relevant liability policy, thereafter, the Executive
shall be covered under any directors' and officers' insurance policy maintained
by Holdings.
6.4 Post-Termination Assistance. In addition to the other provisions
of this Agreement, during the Restricted Period, the Executive shall cooperate,
at the reasonable request of Holdings (i) in the transition of any matter for
which the Executive had authority or responsibility during the Employment
Period, or (ii) with respect to any other matter involving Holdings for which
the Executive may be of assistance provided always that the Executive shall be
entitled to receive a reasonable daily rate of pay (being no less than the Base
Salary prevailing at the effective date of termination divided by 270) for each
day or part thereof on which he provides such assistance at the reasonable
request of Holdings. The Executive also shall be entitled to reimbursement of
any reasonable out-of-pocket expenses he incurs in providing such assistance
upon submission of documentation supporting such expenses.
6.5 Entire Agreement; Waiver. This Agreement contains the entire
agreement between the Executive and Holdings with respect to the subject matter
hereof, and supersedes any and all prior understandings or agreements, whether
written or oral. No modification or addition hereto or waiver or cancellation of
any provision hereof shall be valid except by a writing signed by the party to
be charged therewith. No delay on the part of any party to this Agreement in
exercising any right or privilege provided hereunder or by law shall impair,
prejudice or constitute a waiver of such right or privilege.
6.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of England without regard to principles of conflict
of laws.
6.7 Successors and Assigns; Binding Agreement. The rights and
obligations of the parties under this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their heirs, personal representatives,
successors and permitted assigns. This Agreement is a personal contract, and,
except as specifically set forth herein, the rights and interests of the
Executive herein may not be sold, transferred, assigned, pledged or hypothecated
by any party without the prior written consent of the others. As used herein,
the term "successor" as it relates to Holdings, shall include, but not be
limited to, any successor by way of merger, consolidation or sale of all or
substantially all of such Person's assets or equity interests.
6.8 Representation by Counsel; Independent Judgment. Each of the
parties hereto acknowledges that (a) it or the Executive has read this Agreement
in its entirety and understands all of its terms and conditions, (b) it or the
Executive has had the opportunity to consult with any individuals of its or the
Executive's choice regarding its or the Executive's agreement to the provisions
contained herein, including legal counsel of its or the Executive's choice, and
any decision not to was the Executive's or its alone and (c) it or the Executive
is entering into this Agreement of its or the Executive's own free will, without
coercion from any source, based upon its or the Executive's own independent
judgment.
17
6.9 Interpretation. The parties and their respective legal counsel
actively participated in the negotiation and drafting of this Agreement, and in
the event of any ambiguity or mistake herein, or any dispute among the parties
with respect to the provisions hereto, no provision of this Agreement shall be
construed unfavorably against any of the parties on the ground that the
Executive, it, or the Executive's or its counsel was the drafter thereof.
6.10 Survival. The provisions of Sections 5 and 6 hereof shall
survive the termination of this Agreement, unless this Agreement is terminated
pursuant to the last sentence of Section 2.
6.11 Notices. All notices and communications hereunder shall be in
writing and shall be deemed properly given and effective when received, if sent
by facsimile or telecopy, or by postage prepaid by registered or certified mail,
return receipt requested, or by other delivery service which provides evidence
of delivery, as follows:
If to Holdings, to:
Bauble Holdings Corp.
0000 X. Xxxxxxx Xx.
Xxxxxxx Xxxxxxx, XX 00000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxx & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxxxxx.xxx
If to the Executive, to:
Xxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx
Xxxxxxxxxx
X00 0XX
or to such other address as one party may provide in writing to the other party
from time to time.
6.12 No Conflicts. The Executive represents and warrants to Holdings
that his acceptance of employment and the performance of his duties for Holdings
will not conflict with or result in a violation or breach of, or constitute a
default under any contract, agreement or understanding to which he is or was a
party or of which he is aware and that there are no restrictions, covenants,
agreements or limitations on his right or ability to enter into and perform the
terms of this Agreement.
18
6.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Facsimile transmission of
any signed original document or retransmission of any signed facsimile
transmission will be deemed the same as delivery of an original. At the request
of any party, the parties will confirm facsimile transmission by signing a
duplicate original document.
6.14 Captions. Paragraph headings are for convenience only and shall
not be considered a part of this Agreement.
6.15 No Third Party Beneficiary Rights. In accordance with the
provisions of the Contracts (Rights of Third Parties) Act, except as otherwise
provided in this Agreement, no entity shall have any right to enforce any
provision of this Agreement, even if indirectly benefited by it.
6.16 Withholdings. Any payments provided for hereunder shall be paid
net of any applicable withholdings required under applicable law and any
additional withholdings to which Executive has agreed. For the purposes of the
Employment Rights Xxx 0000, sections 13-27, the Executive hereby authorises
Holdings to deduct from his salary and/or any other sums due under this
Agreement any sums due from him to Holdings including, without limitation, any
debits to his corporate credit card not authorised by Holdings, the Executive's
pension contributions (if any), any overpayments, loans or advances made to him
by Holdings, the cost of repairing any damage or loss to Holdings' property
caused by him and any losses suffered by Holdings as a result of any negligence
or breach of duty by the Executive.
6.17 Grievance And Disciplinary Procedures. The Executive is subject
to Holdings' disciplinary procedure and grievance procedure. These procedures do
not form part of the Executive's contract of employment. If the Executive wishes
to appeal against a disciplinary decision he may apply in writing to do so, in
accordance with Holdings' disciplinary procedure.
6.18 Collective Agreement. The Executive acknowledges that there is
no collective agreement which directly affects his employment with Holdings.
6.19 Data Protection. The Executive acknowledges and agrees that
Holdings is permitted to hold personal information about the Executive as part
of its personnel and other business records and may use such information in the
course of Holdings' business. The Executive agrees that Holdings may disclose
such information to third parties in the event that such disclosure is in
Holdings' view required for the proper conduct of Holdings' business or that of
any Group Company. This clause applies to information held, used or disclosed in
any medium.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the parties have duly executed this Agreement,
intending it to be signed and delivered as a deed, to be effective for all
purposes as of the Closing Date.
BAUBLE HOLDINGS CORP.
By: /s/ Xxxxx Milken
-----------------------------------------
Name: Xxxxx Milken
---------------------------------------
Title: Secretary
--------------------------------------
EXECUTIVE
/s/ Xxxx Xxxxx
---------------------------------------------
Xxxx Xxxxx
Witness signature:
Witness name:
Witness address:
Exhibit A
CLAIRE'S INC.
STOCK INCENTIVE PLAN
Section 1. Purpose
The Plan authorizes the Committee to provide employees or directors of the
Company or its subsidiaries, who are in a position to contribute to the
long-term success of the Company or its subsidiaries, with Shares or Options to
acquire Shares in the Company. The Company believes that this incentive program
will cause those individuals to increase their interest in the welfare of the
Company and its subsidiaries, and aid in attracting, retaining and motivating
individuals of outstanding ability.
Section 2. Definitions
Capitalized terms used herein shall have the meanings set forth in this
Section.
(a) "Affiliate" of any specified Person means any other Person, whether
now or hereafter existing, directly or indirectly controlling or
controlled by, or under direct or indirect common control with, such
specified Person. For purposes hereof, "control" or any other form
thereof, when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
shall have meanings correlative to the foregoing.
(b) "Claire's Investor" shall mean any of Apollo Investment Fund VI,
L.P., Apollo Investors Claire's A LLC, and Apollo Investors Claire's
B LLC, and each of their successors or assigns.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" shall have the meaning ascribed thereto in any effective
employment agreement between the Company or subsidiaries and the
Grantee, or if no employment agreement is in effect that contains a
definition of cause, then Cause shall mean a finding by the
Committee that the Grantee has (i) committed a felony or a crime
involving moral turpitude, (ii) committed any act of gross
negligence or fraud, (iii) failed, refused or neglected to
substantially perform his duties (other than by reason of a physical
or mental impairment) or to implement the reasonable directives of
the Company (which, if curable, is not cured within 30 days after
notice thereof to the Grantee by the Committee), (iv) materially
violated any policy of the Company (which, if curable, is not cured
within 30 days after notice thereof to the Grantee by the
Committee), or (v) engaged in conduct that is materially injurious
to the Company, monetarily or otherwise.
21
(e) "Committee" shall mean the Compensation Committee of the Board,
unless a different committee is appointed by the Board to administer
the Plan.
(f) "Company" shall mean Claire's Inc., a corporation organized under
the laws of the State of Delaware.
(g) "Disability" shall have the meaning ascribed thereto in any
effective employment agreement between the Company and the Grantee,
or if no employment agreement is in effect that contains a
definition of disability, then Disability shall mean any physical or
mental incapacitation which results in a Grantee's inability to
perform his duties and responsibilities hereunder, as determined by
the Committee in its good faith judgment, for a period of 180
consecutive days.
(h) "Employee" shall mean any individual that is providing services to
the Company or any of its subsidiaries as an employee or director.
(i) "Grant Letter" shall mean a letter, certificate or other agreement
accepted by the Grantee, evidencing the grant of an Option hereunder
and containing such terms and conditions, not inconsistent with the
express provisions of the Plan, as the Committee shall approve.
(j) "Grantee" shall mean an Employee granted an Option under the Plan.
(k) "ISO" shall mean any Option or portion thereof that meets the
requirements of an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, and that is designated by the
Committee to be an ISO.
(l) "Nonqualified Option" shall mean any Option or portion thereof that
is not an ISO.
(m) "Options" shall refer to options issued under and subject to the
Plan.
(n) "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, business trust,
joint-stock company, estate, trust, unincorporated organization,
government or other agency or political subdivision thereof or any
other legal or commercial entity.
(o) "Plan" shall mean this Stock Incentive Plan as set forth herein and
as amended from time to time.
(p) "Qualified IPO" means a sale by the Company of Shares in an initial
underwritten (firm commitment) public offering registered under the
Securities Act of 1933, with gross proceeds to the Company of not
less than $300 million, resulting in the listing of the Shares on a
nationally recognized stock exchange, including without limitation
the Nasdaq Stock Market.
22
(q) "Share" shall mean a share of common stock of the Company, or of any
class of security, if any, into which such common stock may be
converted or for which such common stock may be exchanged.
(r) "Specified Conduct" means a Grantee's (i) unauthorized disclosure of
confidential information relating to the Company or its Affiliates,
(ii) engaging, directly or indirectly, as an employee, partner,
consultant, director, stockholder, owner, or agent in any business
that is competitive with the businesses conducted by the Company and
its Affiliates at the time of termination of Grantee's employment,
(iii) soliciting or inducing, directly or indirectly, any former,
present or prospective customer or client of the Company or its
Affiliates to purchase any services or products offered by the
Company or its Affiliates from any Person other than the Company or
its Affiliates, or (iv) hiring, directly or indirectly, any
individual who was an employee of the Company or its Affiliates
within the six month period prior to termination of Grantee's
employment, or soliciting or inducing, directly or indirectly, any
such individual to terminate his or her employment with the Company
or its Affiliates.
Section 3. Shares Available under the Plan
Subject to the provisions of Section 7, the total number of Shares that
may be issued under the Plan shall not exceed 6,160,300. If, prior to exercise,
any awards are forfeited, lapse or terminate for any reason without issuance of
Shares, the Shares covered thereby may again be available for Option grants
under the Plan.
Section 4. Administration of the Plan
(a) Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select the Employees to whom Options or Shares may be
granted;
(ii) to determine the number of Shares awarded or subject to an
Option;
(iii) to determine the terms and conditions of any Shares or Option
granted under the Plan, including the purchase or exercise price,
conditions relating to exercise, and termination of the right to exercise;
(iv) to determine whether any Option shall be an ISO or a
Nonqualified Option;
(v) to determine the restrictions or conditions related to the
delivery, holding and disposition of Shares;
(vi) to prescribe the form of each Grant Letter;
23
(vii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Option or award of Shares, or Grant Letter or other instrument hereunder;
and
(ix) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. Any action of the Committee
with respect to the Plan shall be final, conclusive and binding on all Persons,
including the Company, its Affiliates, Grantees, or any Person claiming any
rights under the Plan from or through any Grantee, except to the extent the
Committee may subsequently modify, or take further action not consistent with,
its prior action. If not specified in the Plan, the time at which the Committee
must or may make any determination shall be determined by the Committee, and any
such determination may thereafter be modified by the Committee. The express
grant of any specific power to the Committee, and the taking of any action by
the Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the Company or
any Affiliate of the Company the authority, subject to such terms as the
Committee shall determine, to perform such functions as the Committee may
determine, to the extent permitted under applicable law.
(c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any of its
Affiliates, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained
by the Company to assist in the administration of the Plan. To the fullest
extent permitted by applicable law, no member of the Committee, nor any officer
or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on its behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action, determination or interpretation.
Section 5. Option Termination.
Unless otherwise determined by the Committee and set forth in a Grant
Letter, Options shall terminate on the earliest of:
(a) the 91st day following the date the Grantee ceases to be an
Employee for any reason (except if such cessation is on account of death
or Disability, the 181st day following such cessation); provided, however,
that (i) in all cases the portion of any Option that did not vest prior to
or upon the date of termination of employment or
24
engagement for any reason shall terminate immediately upon such
termination, and (ii) if such termination is for Cause, the vested portion
shall terminate as well;
(b) the seventh anniversary of the date of grant as set forth in the
Grant Letter; and
(c) cancellation, termination or expiration of the Options pursuant
to action taken by the Committee in accordance with Section 7.
Section 6. Exercise of Options
(a) Only the vested portion of any Option may be exercised. A Grantee
shall exercise an Option by delivery of written notice to the Company setting
forth the number of Shares with respect to which the Option is to be exercised,
together with cash, a certified check or bank draft payable to the order of the
Company, in amount equal to the sum of the exercise price for such Shares and
any withholding tax obligation arising in connection with such exercise. The
Committee may, in its sole discretion, permit other forms of payment, including
notes or other contractual obligations of a Grantee to make payment on a
deferred basis.
(b) Before the Company issues any Shares to a Grantee pursuant to the
exercise of an Option, the Company shall have the right to require that the
Grantee make such provision, or furnish the Company such authorization,
necessary or desirable so that the Company may satisfy its obligation under
applicable tax laws to withhold for income or other taxes due upon or incident
to such exercise. The Committee, may, in its discretion, permit such withholding
obligation to be satisfied through the withholding of Shares that would
otherwise be delivered upon exercise of the Option.
(c) As a condition to the grant of an Option or delivery of any Shares
upon exercise of an Option, the Company shall have the right to require that the
Grantee become party to any stockholders agreement then in effect.
Section 7. Adjustment Upon Changes in Capitalization
In the event any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase,
exchange or issuance of Shares or other securities, any stock dividend or other
special and nonrecurring dividend or distribution (whether in the form of cash,
securities or other property), liquidation, dissolution, or other similar
transactions or events, affects the Shares, then the Committee shall make such
equitable adjustment as it determines in its discretion is appropriate in order
to prevent dilution or enlargement of the rights of Grantees under the Plan,
including adjustment in (i) the number and kind of Shares deemed to be available
thereafter for grants of Options or Shares under Section 3, (ii) the number and
kind of Shares that may be delivered or deliverable in respect of outstanding
Options, and (iii) the exercise price. In addition, the Committee is authorized
to make such adjustments as it shall in its sole discretion determine are
appropriate in the terms and conditions of, and the criteria included in,
Options and Shares (including, without limitation, cancellation of Options in
exchange for the in-the-money value, if any, of the vested portion thereof,
cancellation of unvested and/or out-of-the-money Options for no consideration,
substitution of
25
Options using securities of a successor or other entity, acceleration of the
time that Options expire, or adjustment of performance targets or the manner in
which they are calculated) in recognition of unusual or nonrecurring events
(including, without limitation, an event described in the preceding sentence)
affecting the Company, the Claire's Investors or any other Affiliate of the
Company or the financial statements of the Company, the Claire's Investors or
any Affiliate of the Company, or in response to changes in applicable laws,
regulations or accounting principles.
Section 8. Restrictions/Rights on Shares.
(a) Restrictions on Issuing Shares. No Shares shall be issued or
transferred to an Employee under the Plan unless and until all applicable legal
requirements have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition the acquisition of Shares on the
Grantee's undertaking in writing to comply with such restrictions on any
subsequent disposition of the Shares issued or transferred thereunder as the
Committee shall deem necessary or advisable as a result of any applicable law,
regulation, official interpretation thereof, or any underwriting agreement.
(b) ISO Notice. A Grantee shall notify the Company of any disposition of
Shares acquired upon exercise of an ISO if such disposition occurs within one
year of the date of such exercise or within two years of the date of grant of
such ISO. The Company may impose such procedures as it determines may be
necessary to ensure that such notification is made.
(c) Transfer Restrictions. Except for transfers made pursuant to Sections
8(d) or (e) below, Shares issued to a Grantee pursuant to the Plan may not be
sold, pledged, encumbered or otherwise transferred, other than by the laws of
decent and distribution (but such Shares shall in any event remain subject to
the terms of the Plan and Grant Certificate).
(d) Repurchase Right. Unless otherwise determined in a Grant Letter, the
Company shall have the right (but not the obligation) to repurchase any or all
of the Shares acquired upon exercise of the Options upon a Grantee's ceasing to
be an Employee for any reason. Such right shall be exercisable by the Company
during the one year period following the later of the date of such cessation or
the date the Option is exercised. The price per Share to be paid by the Company
should it choose to exercise its repurchase right shall equal the fair market
value per share, as determined by the Board in good faith; provided, however, if
the Shares are to be repurchased following a termination for Cause, or if, prior
to such repurchase the Grantee engages in Specified Conduct, then the price per
Share to be paid by the Company shall not exceed the price per Share paid by the
Grantee, less any distributions paid in respect of such Share. The price per
Share to be paid by the Company should it choose to exercise its repurchase
right shall be paid in cash or by plain check against delivery of certificates
representing the repurchased Shares; provided that, if such payment would result
in a default or breach on the part of the Company or any subsidiary under any
loan or other agreement, then payment shall be deferred until the first business
day that it may occur without any such default or breach existing or resulting
(and such deferral shall be credited with a market rate of interest as
determined by the Committee), provided, further that if such payment cannot be
made within two years of the date of such repurchase, the Grantee may elect to
cancel such repurchase and
26
receive a return of the repurchased Shares. The Company may offset against the
payment of the repurchase price any amounts owed by the Grantee to the Company
or any Affiliate of the Company. Should the Company choose not to exercise its
repurchase right, or is otherwise prohibited by law or contract from doing so,
any Claire's Investor or its controlling Affiliates may exercise such right as
if it were the Company.
(e) Drag-Along Right. If one or more Claire's Investors notifies a holder
of Shares issued under the Plan that it or they desires to sell Shares
representing at least a majority of the outstanding Shares of the Company and
specifies the terms and conditions of such proposed transfer, then such holder
shall take all necessary and desirable actions reasonably requested by such
Claire's Investors in connection with the consummation of such sale, and within
ten (10) business days of the receipt of such notice (or such longer period of
time as such Claire's Investors shall designate in such notice) such holder
shall cause a pro rata number of his Shares to be sold to the designated
purchaser on the same terms and conditions for the same per share consideration
and at the same time as the Shares being sold by such Claire's Investors. In
furtherance, and not in limitation, of the foregoing, in connection with such a
sale, such holder will, (i) consent to and raise no objections against the sale
or the process pursuant to which it was arranged, (ii) waive any dissenter's
rights and other similar rights and (iii) execute all documents containing such
terms and conditions as those executed by such Claire's Investors as directed by
such Claire's Investors.
(f) Tag-Along Right. If one or more Claire's Investors desires to sell
Shares representing at least a majority of the outstanding Shares of the Company
(disregarding any sale to Affiliates of such Claire's Investor), the Company
shall notify a holder of Shares in writing. After such notice, a holder of
Shares issued under the Plan may, but is not obligated to, by written notice,
request that such Claire's Investor cause such designated purchaser to purchase
on the same terms and conditions as are applicable to such Claire's Investor's
Shares, the number of such holder's Shares to be sold, which as a percentage of
such Holder's Shares shall not exceed the percentage of such Claire's Investor's
Shares to be sold. The Company shall cause such Claire's Investor to agree,
within ten (10) business days of the receipt of such notice (or such longer
period of time as such Claire's Investor shall designate in such notice) to
cause such holder's Shares to be purchased by the designated purchaser on the
same terms and conditions for the same per share consideration and at the same
time as the sale of the Claire's Investor's Shares. In furtherance, and not in
limitation, of the foregoing, in connection with such a sale, such holder will,
(i) consent to and raise no objections against the sale or the process pursuant
to which it was arranged, (ii) waive any dissenter's rights and other similar
rights and (iii) execute all documents containing such terms and conditions as
those executed by such Claire's Investor as directed by such Claire's Investor.
(g) Voting. Each holder of Shares issued under the Plan shall be deemed to
have irrevocably appointed Apollo Management VI, L.P. on behalf of certain
affiliated co-investment partnerships (with full power of substitution), as such
holder's proxy and attorney-in-fact (in such capacity, the "Proxy Holder") to
vote and give or withhold consent, with respect to all Shares held by such
stockholder at any time, for all matters subject to the vote of such holder from
time to time in such manner as the Proxy Holder shall determine in its sole and
absolute discretion, whether at any meeting (whether annual or special and
whether or not an adjourned meeting) of
27
the Company or by written consent or otherwise, giving and granting to the Proxy
Holder all powers such holder would possess if personally present and hereby
ratifying and confirming all that the Proxy Holder shall lawfully do or cause to
be done by virtue hereof. The Proxy Holder shall not have any liability to any
holder of Shares as a result of any action taken or failure to take action
pursuant to the foregoing proxy except for any action or failure to take action
not taken or omitted in good faith or which involves intentional misconduct or a
knowing violation of applicable law. The Company acknowledges the validity of
the foregoing irrevocable proxy, and agrees to recognize the Proxy Holder as the
sole attorney and proxy for each such holder of Shares at all times.
(g) Qualified IPO. The rights and restrictions contained in subsections
(d), (e) and (f) above shall lapse upon a Qualified IPO, and the restrictions in
paragraph (c) shall lapse on the first anniversary of a Qualified IPO; provided,
however, that unless otherwise determined by the Committee, each Grantee shall
enter into such standstill agreements and related agreements as the managing
underwriters of such Qualified IPO may request.
(h) Certificates for Shares. Shares issued under the Plan may be evidenced
in such manner as the Committee shall determine. If certificates representing
Shares are registered in the name of a Grantee, such certificates may bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Shares, and the Company may retain physical possession of the
certificates, in which case the Grantee shall be required to have delivered a
power of transfer to the Company, endorsed in blank, relating to the Shares.
(i) Third Party Beneficiaries Rights. The Claire's Investors and their
Affiliates shall be third party beneficiaries under subsections (d) and (e), and
Apollo Management VI, L.P. shall be a third party beneficiary under subsection
(g), and they each shall be entitled to enforce their rights thereunder as to
any Grantee.
Section 9. General Provisions
(a) Grant Letter. Each award under the Plan shall be evidenced by a Grant
Letter. The terms and provisions of such Grant Letters may vary among Grantees
and among different awards granted to the same Grantee.
(b) No Right to Employment. The grant of an award under the Plan in any
year shall not give the Grantee any right to similar grants in future years, any
right to continue such Grantee's employment relationship with the Company or its
Affiliates, or, with respect to an Option, until the Option is exercised and
Shares are issued, any rights as a stockholder of the Company. All Grantees
shall remain subject to discharge to the same extent as if the Plan were not in
effect. For purposes of the Plan, a Grantee shall cease to be an Employee upon a
sale of any subsidiary of the Company that employs or engages such Grantee,
unless the Grantee shall otherwise continue to provide services to the Company
or another subsidiary of the Company as an employee or director.
(c) No Funding. No Grantee, and no beneficiary or other Persons claiming
under or through the Grantee, shall have any right, title or interest by reason
of any award under the Plan to any particular assets of the Company or
Affiliates of the Company, or any Shares allocated or
28
reserved for the purposes of the Plan or subject to any Option except as set
forth herein. The Company shall not be required to establish any fund or make
any other segregation of assets to assure satisfaction of the Company's
obligations under the Plan.
(d) No Transfers. No Option may be sold, transferred, assigned, pledged or
otherwise encumbered, except by will or the laws of descent and distribution,
and an Option shall be exercisable during the Grantee's lifetime only by the
Grantee. Upon a Grantee's death, the estate or other beneficiary of such
deceased Grantee shall be subject to all the terms and conditions of the Plan
and Grant Letter, including the provisions relating to the termination of the
right to exercise an Option.
(e) Governing Law; Jurisdiction. The Plan shall be governed by and
construed in accordance with the laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Illinois or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Illinois, except to the
extent that the Delaware General Corporation Law applies as a result of the
Company being incorporated in the State of Delaware, in which case the Delaware
General Corporation Law shall apply. Each Grantee, and each beneficiary or other
Person claiming under or through the Grantee by accepting the grant of an Option
consents to the exclusive jurisdiction of any state or federal court located
within the State of Illinois, agrees that all actions or proceedings relating to
the Plan shall be litigated in such courts, waives any defense of forum non
conveniens, and agrees to be bound by any final and nonappealable judgment
rendered thereby in connection with the Plan. To the extent the Grantee is a
party to an employment agreement with the Company or any of its subsidiaries
that provides for binding arbitration of employment disputes, then any disputes
between the Company and such Grantee arising under the Plan shall be arbitrated
in accordance with the procedures set forth in such employment agreement.
Section 10. Amendment or Termination
In addition to its authority elsewhere in the Plan, the Committee may, at
any time, amend or terminate the Plan or any Grant Letter; provided, however,
that, no such action shall adversely affect the rights of Grantees with respect
to Options or other awards previously granted hereunder or under such Grant
Letter.
29
Exhibit B
BAUBLE HOLDINGS CORP.
c/o Apollo Management VI, L.P.
00000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
May 29, 2007
Xxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx X00 0XX
Re: Grant of Stock Options
Dear Xxxx:
We are pleased to inform you that you have been granted options to purchase
709,300 shares of common stock of Bauble Holdings Corp. (the "Company"). As
further described below, the options have varying features relating to vesting
and are denominated as an "Investment Option", a "Time Option" a "Target
Performance Option" and a "Stretch Performance Option". These options and are
collectively referred to as the "Options", and the Target Performance Option and
the Stretch Performance Option are collectively referred to as the "Performance
Options". The Time Option and the Performance Options have been granted pursuant
to the Company's Stock Incentive Plan (the "Plan"), a copy of which is attached,
and are subject in all respects to the provisions of the Plan, except as
specifically modified hereby. The Investment Option has not been granted under
the Plan and shall have no effect on the number of options that may be awarded
under the Plan. However, in all other respects, the Investment Option shall be
treated as if it were awarded under the Plan, and shall be subject to the terms
and conditions of the Plan, except as specifically modified hereby. Capitalized
terms not otherwise defined in the text are defined in the Plan.
1. Investment Option: The key terms of the Investment Option are as follows:
(a) Number of Shares. 112,500
(b) Exercise Price per Share. US$10.00
(c) Vesting. The Investment Option is fully vested and immediately
exercisable, except to the extent forfeitable as provided in the
Letter Agreement between you and the Company dated as of the date
hereof relating to your Investment Shares as defined therein.
2. Time Option: The key terms of the Time Option are as follows:
30
(a) Number of Shares. 223,800
(b) Exercise Price per Share. US$10.00
(c) Vesting. The Time Option will vest and become exercisable in four
equal annual installments on May 29, 2008, 2009, 2010 and 2011,
provided that the Time Option will become fully vested and
exercisable immediately prior to a "Change of Control" (as defined
in the Employment Agreement among you and the Company dated as of
May 29, 2007 (the "Employment Agreement").
3. Target Performance Option: The key terms of the Target Performance Option
are as follows:
(a) Number of Shares. 223,800
(b) Exercise Price per Share. US$10.00
(c) Vesting.
(i) If on any Measurement Date, the Value Per Share equals or
exceeds the Target Stock Price (the "Target Performance
Goal"), then (1) if such Measurement Date is other than the
date of a Bauble Investors Liquidity Event, the Target
Performance Option will vest and become exercisable in two
equal annual installments on each of the first two
anniversaries of such Measurement Date, provided that if a
Change of Control occurs after any such Measurement Date, any
unvested installment shall become fully vested immediately
prior to the Change of Control, and (2) if such Measurement
Date is the date of a Bauble Investors Liquidity Event, the
Target Performance Option will become fully vested and
immediately exercisable at such time.
(ii) If, on any Measurement Date prior to a Qualified IPO, the
Target Performance Goal would be satisfied by disregarding in
the calculation of Net Equity Value, some portion, but not
all, of your Target Performance Option as well as similar
target performance options granted to other employees, then a
portion of your Target Performance Option shall vest, as
determined by the Option Committee in a fair and equitable
manner.
(d) Definitions. For purposes of both the Target Performance Option and
the Stretch Performance Option:
(i) "Bauble Investors Liquidity Event" means any transaction
(including, without limitation, a stock sale, redemption or
buy back, merger, consolidation or otherwise) immediately
following which all of the Shares held by all Bauble Investors
have been exchanged for or converted into consideration, all
or substantially all of which consists of cash or readily
marketable securities that the Bauble Investors can
immediately resell for
31
cash at prevailing quoted prices without legal, contractual or
market restrictions.
(ii) "Fully Diluted Shares" means, on any Measurement Date, the
number of Shares outstanding, plus the number of Shares
subject to all outstanding options, warrants and rights to
acquire Shares, whether or not exercisable.
(iii) "Measurement Date" means (1) prior to a Qualified IPO, the
last day of any fiscal quarter, starting with the last day of
the eight full fiscal quarter after May 29, 2007, (2)
following a Qualified IPO, each trading day, starting with the
90th trading day following the Qualified IPO, or (3) the date
of a Bauble Investors Liquidity Event, whether before or after
a Qualified IPO.
(iv) "Net Equity Value" means (1) 8.5 multiplied by the Company's
consolidated earnings, before interest, income taxes,
depreciation and amortization ("EBITDA") for the four fiscal
quarters ending upon a Measurement Date, plus (2) the sum of
cash, cash equivalents, and the aggregate exercise price of
all outstanding options or warrants to purchase Shares,
whether or not exercisable, in each case as of the Measurement
Date, less (3) debt as of the Measurement Date. EBITDA, cash
and debt shall be determined by the Option Committee based on
the Company's financial statements for such period, subject to
such adjustments to reflect unusual, nonrecurring or
extraordinary events as the Option Committee shall deem
equitable and appropriate.
(v) "Stretch Target Stock Price" means US$10.00, accumulated at an
effective annual rate of 32% from May 29, 2007 to the
Measurement Date, provided that the Option Committee shall
make such adjustment to the Stretch Target Stock Price as it
reasonably determines is equitable and appropriate to reflect
changes to the outstanding Shares or capital structure of the
Company, including contributions and distributions of capital.
(vi) "Target Stock Price" means US$10.00, accumulated at an
effective annual rate of 22.5% from May 29, 2007 to the
Measurement Date, provided that the Option Committee shall
make such adjustment to the Target Stock Price as it
reasonably determines is equitable and appropriate to reflect
changes to the outstanding Shares or capital structure of the
Company, including contributions and distributions of capital.
(vii) "Value Per Share" means (1) prior to a Qualified IPO, the Net
Equity Value divided by the Fully Diluted Shares, (2)
following a Qualified IPO, the average closing price of a
Share for the period of 90 consecutive trading days ending on
the Measurement Date, or (3) upon a Bauble Investors Liquidity
Event, the price per Share realized by the Bauble Investors.
32
4. Stretch Performance Option: The key terms of the Stretch Performance
Option are as follows:
(a) Number of Shares. 149,200
(b) Exercise Price per Share. US$10.00
(c) Vesting.
(i) If on any Measurement Date, the Value Per Share equals or
exceeds the Stretch Stock Price (the "Stretch Performance
Goal"), then (1) if such Measurement Date is other than the
date of a Bauble Investors Liquidity Event, the Stretch
Performance Option will vest and become exercisable in two
equal annual installments on each of the first two
anniversaries of such Measurement Date, provided that if a
Change of Control occurs after any such Measurement Date, any
unvested installment shall become fully vested immediately
prior to the Change of Control, and (2) if such Measurement
Date is the date of a Bauble Investors Liquidity Event, the
Stretch Performance Option will become fully vested and
immediately exercisable at such time.
(ii) If, on any Measurement Date prior to a Qualified IPO, the
Stretch Performance Goal would be satisfied by disregarding in
the calculation of Net Equity Value, some portion, but not
all, of your Stretch Performance Option as well as similar
stretch performance options granted to other employees, then a
portion of your Stretch Performance Option shall vest, as
determined by the Option Committee in a fair and equitable
manner.
5. Termination of the Options: Whether or not exercisable or scheduled to
become exercisable, the Options will terminate as provided in Section 5 of
the Plan; provided that the Performance Options will terminate no later
than a Bauble Investors Liquidity Event to the extent the Target
Performance Goal or Stretch Performance Goal, as applicable, is not
achieved at such time, or was not previously achieved.
6. Vesting upon Certain Terminations. As to the Time Option and each
Performance Option where the applicable Performance Goal had previously
been achieved, a portion of each such Option will become vested and
exercisable upon termination of your employment by reason of your death or
"Total Disability", as defined in your Employment Agreement, such portion
to equal the portion of each such Option that would have vested on the
next scheduled vesting date had your employment not so terminated,
multiplied by a fraction, the numerator of which is the number of days
that elapsed from the most recent vesting date to the date of such
termination, and the denominator of which is 365.
7. National Insurance Contributions. By acceptance of these Options, you
agree to indemnify the Company and its subsidiaries for any employer's
Class 1 national insurance contributions due on the exercise or other
disposition of the Options.
33
We are excited to give you this opportunity to share in our future success.
Please indicate your acceptance of this option grant and the terms of the Plan
by signing and returning a copy of this letter.
Sincerely,
BAUBLE HOLDINGS CORP.
By: /s/ Xxxxx Milken
-------------------------
Name: Xxxxx Milken
Title: Secretary
Agreed to and Accepted by:
/s/ Xxxx Xxxxx
-----------------------------
Xxxx Xxxxx
34
Exhibit C
BAUBLE HOLDINGS CORP.
c/o Apollo Management VI, L.P.
00000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
May 29, 2007
Xxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx X00 0XX
Re: Award of Shares
Dear Xxxx:
This will evidence our agreement, effective on May 29, 2007 (the "Effective
Date"), relating to the award from Bauble Holdings Corp., a Delaware corporation
(the "Company"), of 162,500 shares of the Company's common stock (the "Common
Stock") on the terms and conditions set forth in this letter agreement (the
"Letter Agreement"). Of the 162,500 shares of Common Stock so awarded, 112,500
are hereinafter referred to as the "Investment Shares" and 50,000 are
hereinafter referred to as the "Incentive Shares", and collectively are referred
to as the "Shares". Capitalized terms used below and not otherwise defined in
the text shall have the meaning set forth in paragraph 7.
1. Vesting. All of the Investment Shares will be treated as "Vested Shares"
on the Effective Date. The Incentive Shares will be "Unvested Shares" and
will become "Vested Shares" as to 25% of the total number of Shares on
each of the first four anniversaries of the Effective Date, provided that
all of the Unvested Shares will become Vested Shares upon a "Change of
Control" (as defined in the Employment Agreement among you and the Company
dated as of May 29, 2007 (the "Employment Agreement")), and provided
further that upon termination of your employment by reason of your death
or "Total Disability" as defined in your Employment Agreement, a number of
Unvested Shares shall become Vested Shares as is equal to the number of
Unvested Shares that would have become Vested Shares on the next scheduled
vesting date had your employment not so terminated, multiplied by a
fraction, the numerator of which is the number of days that elapsed from
the most recent vesting date to the date of such termination, and the
denominator of which is 365.
2. Forfeiture; Repurchase Right; Put Right.
(a) Upon termination of your employment with the Company and its
Affiliates for any reason, all of your Unvested Shares shall immediately
be forfeited to the Company for no consideration.
(b) The Company shall have the right (but not the obligation) to
repurchase any or all of your Vested Shares upon termination of your
employment with the Company and its Affiliates for any reason. Such right
shall be exercisable by the Company during the one year period following
the date of such termination unless prior to the Company's exercise of
such right you have disposed of the Shares in accordance with the terms of
this Letter Agreement. Notwithstanding the foregoing, this paragraph 2(b)
shall not apply to any of the Investment Shares.
(c) The price per Share to be paid by the Company should it choose
to exercise its repurchase right pursuant to paragraph 3(b) shall equal
the Fair Market Value per Share; provided, however, that the price per
Share to be paid by the Company shall equal the lower of the price per
Share you paid to the Company (if any), less any distributions you
received in respect of such Share, or the Fair Market Value per Share if
the Shares are to be repurchased following termination of your employment
for Cause, or are to be repurchased following your termination of
employment for any reason, and prior to such repurchase you engage in
"Specified Conduct". For these purposes "Specified Conduct" means (i) your
unauthorized disclosure of confidential information relating to the
Company or its Affiliates, (ii) your engaging, directly or indirectly, as
an employee, partner, consultant, director, stockholder, owner, or agent
in any business that is competitive with the businesses conducted by the
Company and its Affiliates at the time of your termination of employment,
(iii) your soliciting or inducing, directly or indirectly, any former,
present or prospective customer or client of the Company or its Affiliates
to purchase any services or products offered by the Company or its
Affiliates from any Person other than the Company or its Affiliates, or
(iv) your hiring, directly or indirectly, any individual who was an
employee of the Company or its Affiliates within the six month period
prior to your termination of employment, or your soliciting or inducing,
directly or indirectly, any such individual to terminate his or her
employment with the Company or its Affiliates.
(d) The price per Share to be paid by the Company should it choose
to exercise its repurchase right, or should you choose to exercise your
right under paragraph (f) below, shall be made paid by cash or plain check
against delivery of certificates representing the Shares repurchased by
the Company. The Company may offset against the payment of the repurchase
price any amounts owed by you to the Company or any Affiliate of the
Company. In such case the amount owed will to the extent of the offset be
treated as satisfied.
(e) Should the Company choose not to exercise its repurchase right,
or is prohibited by law or contract from doing so, each Bauble Investor or
its controlling Affiliates may exercise such right as if it were the
Company.
(f) Should your employment terminate on or prior to December 31,
2007 by reason of the provision of a Notice of Expiration by either party
under your Employment Agreement
on or before 31 October 2007, then you shall have the right, during the 30
day period following such termination, to require the Company to
repurchase up to 37,500 Investment Shares for such amount as mutually
agreed by you and the Company. Should you choose to exercise this right,
your Investment Option which is being granted to you as of the date hereof
as it relates to 37,500 shares of Common Stock shall be immediately
forfeited (or, to the extent already exercised, the shares acquired upon
exercise shall be forfeited back to the Company and you shall receive a
return of your exercise price).
3. Restrictions/Rights on Shares.
(a) Drag-Along Right. If one or more Bauble Investors notifies you
that it or they desire to sell shares of Common Stock representing at
least a majority of the outstanding shares of Common Stock of the Company
(disregarding any sale to Affiliates of such Bauble Investor) and
specifies the terms and conditions of such proposed sale, then you shall
take all necessary and desirable actions reasonably requested by such
Bauble Investors in connection with the consummation of such sale, and
within ten (10) business days of the receipt of such notice (or such
longer period of time as such Bauble Investors shall designate in such
notice) you shall cause a pro rata number of your Shares to be sold to the
designated purchaser on the same terms and conditions for the same per
share consideration and at the same time as the shares of Common Stock
being sold by such Bauble Investors. In furtherance, and not in
limitation, of the foregoing, in connection with such a sale, you will,
(i) consent to and raise no objections against the sale or the process
pursuant to which it was arranged, (ii) waive any dissenter's rights and
other similar rights and (iii) execute all documents containing such terms
and conditions as those executed by such Bauble Investors as directed by
such Bauble Investors.
(b) Tag-Along Right. If one or more Bauble Investors desires to sell
shares of Common Stock representing at least a majority of the outstanding
shares of Common Stock of the Company (disregarding any sale to Affiliates
of such Bauble Investor), the Company shall notify you in writing of the
impending sale. After such notice, you may, but are not obligated to, by
written notice, request that such Bauble Investor cause such designated
purchaser to purchase on the same terms and conditions as are applicable
to such Bauble Investor's Shares, the number of your shares of Common
Stock to be sold, which as a percentage of your shares of Common Stock
shall not exceed the percentage of such Bauble Investor's Shares to be
sold. The Company shall cause such Bauble Investor to agree, within ten
(10) business days of the receipt of such notice (or such longer period of
time as such Bauble Investor shall designate in such notice) to cause your
shares of Common Stock to be purchased by the designated purchaser on the
same terms and conditions for the same per share consideration and at the
same time as the sale of the Bauble Investor's Shares. In furtherance, and
not in limitation, of the foregoing, in connection with such a sale, you
will, (i) consent to and raise no objections against the sale or the
process pursuant to which it was arranged, (ii) waive any dissenter's
rights and other similar rights and (iii) execute all documents containing
such terms and conditions as those executed by such Bauble Investor as
directed by such Bauble Investor.
(c) Restrictions on Transfer. Except for transfers made pursuant to
paragraphs 2, 3(a) and 3(b), the Shares may not be sold, pledged,
encumbered or otherwise transferred, other
than by the laws of decent and distribution (but the Shares shall in any
event remain subject to the terms of this Letter Agreement).
(d) Voting. You hereby irrevocably appoint Apollo Management VI,
L.P. on behalf of certain affiliated co-investment partnerships (with full
power of substitution), as your proxy and attorney-in-fact (in such
capacity, the "Proxy Holder") to vote and give or withhold consent, with
respect to all shares of Common Stock held by you at any time, for all
matters subject to your vote from time to time in such manner as the Proxy
Holder shall determine in its sole and absolute discretion, whether at any
meeting (whether annual or special and whether or not an adjourned
meeting) of the Company or by written consent or otherwise, giving and
granting to the Proxy Holder all powers you would possess if personally
present and hereby ratifying and confirming all that the Proxy Holder
shall lawfully do or cause to be done by virtue hereof. The Proxy Holder
shall not have any liability to you as a result of any action taken or
failure to take action pursuant to the foregoing proxy except for any
action or failure to take action not taken or omitted in good faith or
which involves intentional misconduct or a knowing violation of applicable
law. You hereby affirm that this irrevocable proxy is given in
consideration for the mutual agreements contained in this Agreement and
that this irrevocable proxy is coupled with an interest and may, under no
circumstances, be revoked. The Company hereby acknowledges receipt of and
the validity of the foregoing irrevocable proxy, and agrees to recognize
the Proxy Holder as the sole attorney and proxy for you at all times. You
intend that this irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of Section 212 of the
Delaware General Corporation Law.
(e) Qualified IPO. The restrictions and rights contained in
paragraphs 2(b), 3(a), 3(b) and 3(d) shall lapse upon a Qualified IPO, and
the restrictions contained in paragraph 3(c) shall lapse on the first
anniversary of a Qualified IPO; provided, however, that paragraph 3(c)
shall remain in effect with respect to Unvested Shares until they become
Vested Shares; provided further, that unless otherwise determined by the
Company, you shall enter into such standstill agreements and related
agreements as the managing underwriters of such Qualified IPO may request.
(f) Certificates for Shares. The Shares issued may be evidenced in
such manner as the Company shall determine. If certificates representing
the Shares are registered in your name, the certificates evidencing your
Shares may bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to your Shares, and the Company may retain
physical possession of the certificates, in which case you shall be
required to have delivered a power of transfer to the Company, endorsed in
blank, relating to your Shares.
4. Representations.
(a) Authority. You have the requisite power, authority and capacity
to execute this Letter Agreement and to perform your obligations under
this Letter Agreement and to consummate the transactions contemplated
hereby, and your acceptance has been duly and validly executed and
delivered by you and constitutes your legal, valid and binding obligation,
enforceable against you in accordance with its terms, except to the extent
that such validly binding effect and enforceability may be limited by
applicable bankruptcy,
reorganization, insolvency, moratorium and other laws relating to or
affecting creditors' rights generally.
(b) Shares Unregistered. You acknowledge that (i) the offer and
sale, or grant of the Shares has not been registered under applicable
securities laws; (ii) the Shares acquired by you must be held
indefinitely; (iii) there is no established market for the Shares and it
is not anticipated that there will be any such market for the Shares in
the foreseeable future; (iv) you are acquiring the Shares for the purpose
of investment and not with a view to, or for resale in connection with,
the distribution thereof, and not with any present intention of
distributing the Shares and you have no present plan or intention to sell
any of the Shares; (v) you are an "accredited investor" under Rule 501(a)
of the Securities Act of 1933, and your knowledge and experience in
financial and business matters are such that you are capable of evaluating
the merits and risks of your investment in the Shares; (vi) you and your
representatives, including your professional, financial, tax and other
advisors, if any, have carefully considered your proposed investment in
the Shares, and you understand and have taken cognizance of (or have been
advised by your representatives as to) the risk factors related to the
acquisition of the Shares, and no representations or warranties have been
made to you or your representatives concerning the Shares, the Company or
the Company's business, operations, financial condition or prospects or
other matters; (vii) in making your decision to acquire the Shares, you
have relied upon independent investigations made by you and, to the extent
believed by you to be appropriate, your representatives, including your
professional, financial, tax and other advisors, if any; and (viii) you
and your representatives have been given the opportunity to request to
examine all documents of, and to ask questions of, and to receive answers
from, the Company and its representatives concerning the terms and
conditions of the acquisition of the Shares and to obtain any additional
information which you or your representatives deem necessary.
(c) Acknowledgement. You acknowledge: (i) that this award of the
opportunity to accept the Shares is a one-time benefit, which does not
create any contractual or other right to receive future awards, or
benefits in lieu of awards; (ii) that all determinations with respect to
any such future awards, including, but not limited to, the times when
awards shall be granted, the number of shares subject to each award, the
exercise or purchase price, and the time or times when each award shall
vest, will be at the sole discretion of the Company; (iii) that the
acceptance of the Shares shall not create a right to further employment
with the Company and shall not interfere with the Company's or your
ability to terminate your employment relationship at any time with or
without cause; (iv) that your acceptance the Shares is voluntary; and (v)
that this award is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of
service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments.
5. Withholding. The Company shall have the right to withhold from any amount
payable or allocable to you such amounts as may be required in order for
the Company to satisfy any withholding obligation that it may have under
applicable law, and may condition the vesting of any Shares on your making
arrangements necessary to enable the Company to satisfy any such
withholding obligation.
6. Definitions.
(a) "Affiliate" means, with respect to any Person, any other Person
that controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
its correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of securities, by contract or otherwise.
(b) "Bauble Investor" shall mean any of Apollo Investment Fund VI,
L.P., Apollo Investors Claire's A LLC, and Apollo Investors Claire's B
LLC, and each of their successors or assigns.
(c) "Cause" shall have the meaning ascribed thereto in the
Employment Agreement.
(d) "Fair Market Value" of the Shares on any given date shall be
determined in good faith by the Board of Directors of the Company, taking
into account such factors as the Board determines are appropriate.
(e) "Person" means an individual, partnership, corporation, limited
liability company or partnership, trust, unincorporated organization,
joint venture, government (or agency or political subdivision thereof) or
any other entity of any kind.
(f) "Qualified IPO" means a sale by the Company of shares of Common
Stock in an initial underwritten (firm commitment) public offering
registered under the Securities Act of 1933, with gross proceeds to the
Company of not less than $300 million, resulting in the listing of the
common stock on a nationally recognized stock exchange, including without
limitation the Nasdaq National Market System.
7. Employee Data Privacy. As a condition of the award of this opportunity
to receive the Shares, you consent to the collection, use and transfer of
personal data as described in this paragraph 7. You understand that the Company
and its Affiliates hold certain personal information about you including, but
not limited to, your name, home address and telephone number, date of birth,
social security number, salary, nationality, job title, common shares or
directorships held in the Company, details of all other entitlement to common
shares awarded, cancelled, exercised, vested, unvested or outstanding in your
favor, for the purpose of managing and administering the award of this
opportunity to receive Shares ("Data"). You further understand that the Company
and/or its Affiliates will transfer Data amongst themselves as necessary for the
purposes of implementation, administration and management of this award, and
that the Company and/or any of its Affiliates may each further transfer Data to
any third parties assisting the Company in such implementation, administration
and management. You authorize them to receive, possess, use, retain and transfer
Data in electronic or other form, for the purposes of implementing,
administering and managing the award of this opportunity to receive Shares,
including any requisite transfer of such Data as may be required for the
administration of this award and/or the subsequent holding common shares on your
behalf to a broker or other third party with whom the shares acquired on
exercise may be deposited. You understand that he or she may, at any time, view
the Data, require any necessary amendments to it or withdraw the consent herein
in writing by contacting the local human resources representative.
8. Third Party Beneficiaries Rights. Bauble Investors and their Affiliates
shall be third party beneficiaries under paragraphs 2(e) and 3(a) above,
and Apollo Management VI, L.P. shall be a third party beneficiary under
paragraph 3(d), and they each shall be entitled to enforce their rights
thereunder.
9. Confidentiality. You agree not to disclose or discuss in any way the terms
of this offer to or with anyone other than members of your immediate
family, or your personal counsel or financial advisors (and you will
advise such persons of the confidential nature of this offer).
10. Governing Law. All questions concerning the construction, validity and
interpretation of this Letter Agreement shall be governed and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Illinois, except to the extent that laws of the Delaware apply as a result
of the Company being incorporated in Delaware.
* * * *
Sincerely,
BAUBLE HOLDINGS CORP.
By: /s/ Xxxxx Milken
--------------------------
Name: Xxxxx Milken
Title: Secretary
Agreed to and Accepted by:
/s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx
EXHIBIT D
Definition of Change of Control
"Change of Control" means:
(1) any event occurs the result of which is that any "Person," as such
term is used in Sections 13(d) and 14(d) of the Exchange Act, other than one or
more Permitted Holders or their Related Parties, becomes the beneficial owner,
as defined in Rules l3d-3 and l3d-5 under the Exchange Act (except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire within one year) directly or indirectly, of more
than 50% of the Voting Stock of Holdings or any successor company, including,
without limitation, through a merger or consolidation or purchase of Voting
Stock of Holdings; provided that none of the Permitted Holders or their Related
Parties have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board; provided further that
the transfer of 100% of the Voting Stock of Holdings to a Person that has an
ownership structure identical to that of Holdings prior to such transfer, such
that Holdings becomes a wholly owned Subsidiary of such Person, shall not be
treated as a Change of Control;
(2) after an initial public offering of Capital Stock of Holdings, during
any period of two (2)consecutive years, individuals who at the beginning of such
period constituted the Board, together with any new directors whose election by
such Board or whose nomination for election by the stockholders of Holdings was
approved by a vote of a majority of the directors of Holdings then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board then in office;
(3) the sale, lease, transfer, conveyance or other disposition, in one or
a series of related transactions other than a merger or consolidation, of all or
substantially all of the assets of Holdings and its Subsidiaries taken as a
whole to any Person or group of related Persons other than a Permitted Holder or
a Related Party of a Permitted Holder; or
(4) the adoption of a plan relating to the liquidation or dissolution of
Holdings.
For purposes of this definition, the following terms shall have the
meanings set forth below:
An "Affiliate" of any specified Person means any other Person, whether now
or hereafter existing, directly or indirectly controlling or controlled by, or
under direct or indirect common control with, such specified Person. For
purposes hereof, "control" or any other form thereof, when used with respect to
any Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Apollo" means Apollo Management V, L.P. and its Affiliates or any entity
controlled thereby or any of the partners thereof.
"Board" means the Board of Directors of Holdings or any committee thereof
duly authorized to act on behalf of such Board of Directors.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in, however designated, equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holdings" means Bauble Holdings Corp., a Delaware corporation.
"Permitted Holder" means Apollo.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, business trust, joint-stock company,
estate, trust, unincorporated organization, government or other agency or
political subdivision thereof or any other legal or commercial entity.
"Preferred Stock" as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes, however designated, that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"Related Party" means:
(1) any controlling stockholder, 50% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Permitted Holder;
or
(2) any trust, corporation, partnership, limited liability company or
other entity, the beneficiaries, stockholders, partners, members, owners or
Persons beneficially holding a 50% or more controlling interest of which consist
of any one or more Permitted Holders and/or such other Persons referred to in
the immediately preceding clause (1).
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency and after giving effect to any
voting agreement or stockholders' agreement that effectively transfers voting
power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that
Person (or any combination thereof).
"Voting Stock" of an entity means all classes of Capital Stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
