EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS IS AN EMPLOYMENT AGREEMENT (the "Agreement") made as of
April 27, 1998, by and between WOLVERINE WORLD WIDE, INC., a Delaware
corporation (the "Employer"), and XXXXXXXX X. XXXXX, an individual (the
"Executive").
R E C I T A L S :
Executive has been employed by Employer as its Chief Executive
Officer. Executive has an existing employment agreement with Employer
dated April 17, 1993, which is superseded by this Agreement.
THEREFORE, in consideration of the foregoing and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. EMPLOYMENT. Employer hereby agrees to continue to employ
Executive and Executive agrees to continue to serve Employer in an
executive, managerial and supervisory capacity on the terms and conditions
set forth in this Agreement.
2. POSITION AND DUTIES. Executive shall serve as Chief Executive
Officer of Employer reporting only to Employer's Board of Directors.
Executive shall have supervision and control over, and responsibility for,
the general management and operation of Employer, and shall have such other
powers and duties as may from time to time be prescribed by Employer's
Board of Directors. Subject to the foregoing, Executive agrees to devote
his best efforts and substantially all his working time and attention to
the business of Employer and its subsidiaries, and to the performance of
such executive, managerial and supervisory duties as may be assigned to him
by Employer's Board of Directors; provided, that Executive shall be
permitted to serve on a reasonable number of boards of directors of other
companies, subject to the prior consent of Employer's Board of Directors,
and render occasional services in connection with such service, and
Executive shall be permitted to participate in charitable and civic
endeavors to the extent such service does not interfere with Executive's
obligations under this Agreement.
3. TERM OF EMPLOYMENT. Except in the case of early termination as
specifically provided in this Agreement, the term of Executive's employment
shall continue until April 30, 2000; if the Executive's employment
continues thereafter it will be terminable at will, or on such terms as the
parties may agree in writing, but the Executive's obligations under Section
15 of this Agreement, and the Employer's obligation to pay accrued
compensation called for by this Agreement, shall continue in effect.
4. COMPENSATION. For the services to be rendered by Executive as
provided in this Agreement, Employer agrees to pay Executive in thirteen
(13) equal installments during each year, a base salary of not less than
Six Hundred Thousand Dollars ($600,000) per annum, payable effective as of
April 27, 1998 and prorated for any partial year of employment.
Executive's base salary may be increased at the discretion of Employer's
Board of Directors and/or its Compensation Committee at any time and from
time to time during the term of this Agreement. Executive's base salary
may be decreased, with the consent of Executive, by Employer's Board of
Directors and/or its Compensation Committee at any time and from time to
time during the term of this Agreement. Upon any such increase or decrease
in Executive's base salary, the new rate shall without further action by
the parties be deemed to be substituted for the rate set forth in this
Agreement and this Agreement shall be deemed to be amended accordingly.
5. FRINGE BENEFITS. In addition to the compensation provided in
Section 4 of this Agreement, Executive shall also be entitled to the
following fringe benefits:
(a) Executive shall participate in both the Executive Long-
Term Incentive Plan ("Long-Term Bonus Plan") and the Executive
Short-Term Incentive Plan ("Annual Bonus Plan"), or any successor
or substitute plans, and in such other bonus plans as may be made
available to upper echelon executives of Employer. The Long-Term
Bonus Plan and the Annual Bonus Plan are collectively referred to
herein as the "Plans".
(b) Executive shall be entitled to a leased automobile of a
type to be mutually agreed upon by Executive and Employer. In
addition, Employer shall pay maintenance and all other operating
expenses, including gasoline, repairs and insurance, with respect
to such automobile in accordance with applicable regulations
issued or administered by the Internal Revenue Service.
(c) Employer shall pay for reasonable dues, assessments,
and other non-discretionary expenses and all business related
expenses, associated with a membership in two country clubs or
similar luncheon or social organizations to be selected by
Executive in the Grand Rapids, Michigan area or in such other
clubs or organizations as permitted by Employer's Compensation
Committee.
(d) Employer shall provide Executive with the benefits of a
term life insurance policy in the amount of Five Hundred Thousand
Dollars ($500,000) payable to his designated beneficiaries, in
addition to the benefits of all other life insurance plans as
provided in this Agreement. Upon termination of Executive's
-2-
employment (except for voluntary resignation by Executive without
Good Reason or termination of Executive's employment by the
Employer for Cause), such Five Hundred Thousand Dollar ($500,000)
life insurance policy shall be assigned to Executive and Employer
shall pay all premiums due after any such assignment until the
expiration of the term of this Agreement. In the event of
voluntary resignation without Good Reason by Executive or
termination of Executive for Cause, at Executive's option, such
life insurance policy shall be assigned to Executive and
Executive shall pay all premiums due after such assignment.
(e) Employer shall provide Executive with tax preparation
services and financial planning advice and services consistent
with Employer's past practice or as may be made available to
upper echelon executives of Employer.
(f) Employer shall pay Executive's reasonable legal
expenses related to the negotiation and execution of this
Agreement.
(g) Executive shall be entitled to four (4) weeks of
vacation per year, plus such additional vacation as may be
permitted with the concurrence of Employer's Board of Directors.
(h) Executive shall further be entitled to all benefits in
the way of "fringes" presently available or which may
subsequently be made available to upper echelon executives of
Employer as a class or benefits substantially equivalent thereto,
so long as such benefits or plans are in effect, including but
not limited to all retirement, stock option, incentive, group
life, disability, hospitalization, medical, dental and surgical
benefit plans presently or hereafter in effect and available to
upper echelon executives of Employer, or their equivalent.
(i) Employer and Executive are party to a Supplemental
Executive Retirement Plan ("SERP") Participation Agreement dated
January 1, 1996. In consideration of entering into this
Agreement, Executive will be credited with two (2) additional
years of "deemed service" under SERP Section 5.1(a).
Additionally, Executive's retirement benefits under the SERP will
be calculated based upon Executive's "Average Earnings" for 1997,
1998 and 1999 rather than "Average Earnings" for the four
consecutive highest compensation years out of the ten preceding
retirement, and without annualization of any earnings in 2000,
and the definition of "Average Earnings" in Executive's SERP
Agreement is hereby amended to provide for the calculation of
"Average Earnings" consistent with this provision.
-3-
(j) If Executive remains employed under this Agreement
through April 30, 2000, he will be credited with years of service
under the SERP equal to his actual service as of April 30, 2000,
(16 years, including years of deemed service in Section 5(i) of
this Agreement), plus four (4) additional years of "deemed
service" under SERP Section 5.1(a) (iii), (for the total years of
service under the SERP of 20 years). Executive shall also be
credited with an additional four (4) years of deemed service
under the SERP (for total years of service under the SERP of 24
years) if the Employer's Board of Directors determines that the
planning and effectuation of the transition from Executive to his
successor have been carried out successfully (such determination
to be made in the Board's good faith discretion, and to be made
by April 30, 2000). Additional years of "deemed service"
credited in accordance with this Section 5(j) are collectively
referred to as the "Additional SERP Benefit."
(k) Executive shall be awarded 40,000 restricted shares of
the Employer's common stock under the Employer's 1997 Stock
Incentive Plan or other plan designated by the Board of
Directors, on the following terms:
(i) If the Employer's net earnings as reported in
Employer's audited financial statements for its fiscal year
2001 exceed the Employer's net earnings for its fiscal year
2000 by at least 10%, all 40,000 shares shall vest as of
April 30, 2002; or
(ii) If the Employer's net earnings for its fiscal year
2001 exceed the Employer's net earnings for its fiscal year
2000 by at least 5% but less than 10%, the number of shares
that shall vest as of April 30, 2002 shall be: the
percentage increase in net earnings in excess of 5% divided
by 5% times 40,000 (for example, if the increase in net
earnings was 6.32%, the number of shares to vest would be
1.32% divided by 5% times 40,000 = 10,560), and the balance
of the 40,000 shares shall be forfeited; or
(iii) If the Employer's net earnings for its fiscal
year 2001 do not exceed the Employer's net earnings for its
fiscal year 2000 by at least 5%, all 40,000 shares shall be
forfeited.
(l) The Executive shall be awarded 22,500 restricted shares
of the Employer's common stock under the Employer's 1997 Stock
Incentive Plan or other plan designated by the Board of
Directors, on the following terms:
-4-
(i) If the average closing per share price of the
Employer's common stock as reported on the New York Stock
Exchange ("NYSE") for the 10 trading days preceding April
30, 2001 has increased by at least 15% over the average
closing per share price for the 10 trading days preceding
April 30, 2000, all 22,500 restricted shares shall vest,
effective as of April 30, 2001; or
(ii) If the average closing per share price of the
Employer's common stock as reported on the NYSE for the 10
trading days preceding April 30, 2001 is greater than the
average closing per share price for the 10 trading days
preceding April 30, 2000, but such increase is less than
15%, the number of restricted shares that shall vest as of
April 30, 2001 shall be the percentage increase in the
average closing per share price divided by 15% times 22,500
(for example, 7.5% divided by 15% times 22,500 = 11,250),
and the balance of the 22,500 restricted shares shall be
fortified; or
(iii) If the average closing per share price of the
Employer's common stock as reported on the NYSE for the 10
trading days preceding April 30, 2001 is equal to or less
than the average closing per share price of the Employer's
common stock for the 10 trading days preceding April 30,
2000, all 22,500 shares shall be forfeited.
In making the calculations called for by this Section 5(l), the
average per share price and the number of shares awarded to Executive shall
be adjusted to eliminate the effect of any stock split, stock dividend,
recapitalization or other similar transaction.
Notwithstanding any provision or term of this Agreement to the
contrary, Employer shall not be required or obligated to maintain, amend or
adopt any particular fringe benefit plan or policy, including those plans
or policies referenced in this Section, or to pay, credit or otherwise vest
in Executive as a participant any amount or level of award or grant under
any such plan; provided, however, that the foregoing shall not apply to any
deferred bonus, payment or other credit awarded to Executive under any such
plan, nor shall the foregoing limit in any way or allow the Employer to
avoid the commitment to Executive in Section 5(j), (k) and (l) above.
6. ADDITIONAL BENEFITS. The provisions of this Agreement with
respect to compensation and other benefits payable to Executive shall not
preclude or in any way affect the grant by Employer or the receipt by
Executive of increases in base salary or total compensation, or bonuses, or
additional compensation, contingent or otherwise, to be determined solely
-5-
in the discretion of Employer's Board of Directors and/or its Compensation
Committee, or by other persons or groups to whom such authority is legally
delegated.
7. EXPENSES. In addition to the compensation and benefits provided
in Sections 4 and 5 of this Agreement, Employer will reimburse or pay
Executive's reasonable and appropriate expenses for his business related
travel and entertainment in accordance with Employer's then current policy.
As a condition to such reimbursement or payment, Executive shall be
required to account to Employer for expenses incurred in the performance of
his employment duties. Executive shall be entitled, if Executive deems it
appropriate, to bring his spouse with him on up to two out of town trips
involving business of Employer per year, and Employer shall reimburse
Executive or pay the reasonable and appropriate expenses incurred for her
travel and entertainment. Employer may pay the travel and entertainment
expenses of Executive's spouse incurred on more than two business trips per
year with the prior approval of Employer's Board of Directors, and/or its
Compensation Committee.
8. TERMINATION OF EMPLOYMENT. During the term of this Agreement,
the Executive's employment may be terminated as follows:
(a) DEATH. The Executive's employment shall terminate
automatically in the event of his death.
(b) DISABILITY. If, as a result of Executive's incapacity
due to physical or mental illness, he shall have been absent from
his duties with Employer on a full time basis for six (6)
consecutive months, and if he shall have not returned to the full
time performance of his duties within thirty (30) days after
written notice after such six (6) month period, Employer may
terminate this Agreement for "Disability."
(c) TERMINATION BY EMPLOYER FOR CAUSE. Employer may
terminate Executive's employment for Cause. For purposes of this
Agreement, "Cause" shall mean: (i) the willful and continued
failure by Executive to substantially perform his duties with
Employer (other than any such failure resulting from Executive's
incapacity due to physical or mental illness, or any such actual
or anticipated failure resulting from Executive's termination for
Good Reason) after a demand for substantial performance is
delivered to Executive by Employer's Board of Directors (which
demand shall specifically identify the manner in which the Board
believes that Executive has not substantially performed his
duties); or (ii) the commission of a felony or other gross
misbehavior injurious to Employer or its reputation, as
determined by Employer's Board of Directors; or (iii) willful
-6-
misconduct by Executive which is intended to result in material
harm to the business or goodwill of the Employer. For purposes
of this Section, no act or failure to act on the part of
Executive shall be considered "willful" unless done or omitted to
be done by Executive not in good faith and without reasonable
belief that his action(s) or omission(s) was in the best
interests of Employer.
(d) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive
may terminate his employment at any time for Good Reason and, in
such event, Employer shall continue to be obligated to pay
Executive the amounts and benefits set forth in Sections 11 and
12 of this Agreement. For purposes of this Agreement, "Good
Reason" shall, without Executive's express written consent, mean:
(i) The assignment to Executive of any duties
inconsistent with this Agreement.
(ii) A reduction by Employer (without the consent of
Executive) in Executive's annual base salary as provided in
this Agreement or as the same may be increased from time to
time, except for across-the-board salary reductions, freezes
or reduced increases similarly affecting all executives of
Employer;
(iii) A failure by Employer to continue the
Employer's Plans as such may be modified from time to time
but substantially in the form presently in effect, or a
failure by Employer to continue Executive as a participant
in the Plans or to pay Executive any annual installment of a
previous award under the Plans or any deferred distribution
(as defined in the Plans) awarded under the Plans;
(iv) The relocation of Employer's principal executive
offices to a location outside Rockford, Michigan, or any
requirement that Executive be based anywhere other than
Employer's principal executive offices, except for required
travel on Employer's business to an extent substantially
consistent with Executive's present business travel
obligations, or, in the event Executive consents to any such
relocation of Employer's principal executive offices, the
failure by Employer to pay (or reimburse Executive for) all
reasonable moving expenses incurred by Executive relating to
a change of Executive's principal residence in connection
with such relocation and to indemnify Executive against any
loss (defined as the difference between the actual sale
price of such residence and the higher of (A) Executive's
-7-
aggregate investment in such residence or (B) the fair
market value of such residence as determined by a real
estate appraiser designated by Executive and reasonably
satisfactory to Employer) realized in the sale of
Executive's principal residence in connection with any such
relocation;
(v) The failure by Employer to continue to provide
Executive with benefits substantially similar to those
enjoyed by Executive under any benefit or compensation plan,
pension, life insurance, medical, health and accident or
disability plan in which Executive is currently
participating, the taking of any action by Employer which
would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such
plans or deprive Executive of any material fringe benefit
currently enjoyed by Executive, or the failure by Employer
to provide Executive with the number of paid vacation days
to which Executive is then entitled on the basis of years of
service with Employer in accordance with this Agreement and
Employer's normal vacation policy in effect on the date of
this Agreement;
(vi) The failure of Employer to obtain the assumption
of Employer's obligations under this Agreement by any
successor as contemplated in Section 14 of this Agreement;
(vii) Any purported termination of Executive's
employment which is not effected pursuant to a Notice of
Termination which satisfies the requirements of Section 9
below (and, if applicable, Section 8 above); or
(viii) Any other material breach by Employer of its
obligations under this Agreement.
(e) TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer may
terminate Executive's employment with Employer at will at any
time, subject to its obligations under this Agreement.
(f) TERMINATION BY EXECUTIVE OTHER THAN FOR GOOD REASON.
Executive may terminate his employment with Employer at will at
any time, subject to his obligations under Section 15 of this
Agreement and upon not less than (60) days advance notice to
Employer.
9. NOTICE OF TERMINATION. Any purported termination of Executive's
employment by Employer or by Executive shall be communicated by written
-8-
Notice of Termination to the other party. For purposes of this Agreement,
a "Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon (except in the
event of death of Executive or termination of Executive without Cause) and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated (including, if applicable, the requirements of
Section 8(c) hereof).
10. DATE OF TERMINATION. "Date of Termination" shall mean (a) the
date of Executive's death under Section 8(a); (b) if this Agreement is
terminated for Disability, the time specified in Section 8(b) of this
Agreement; and (c) if Executive's employment is terminated for any reason
other than death or Disability, the date specified in the Notice of
Termination (which, in the case of a termination pursuant to Section 8(d)
above shall not be more than sixty (60) days from the date such Notice of
Termination is given); provided, that, if within thirty (30) days after any
Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute
is finally resolved, either by mutual written agreement of the parties or
by a binding arbitration award; and provided further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution
of such dispute with reasonable diligence. Notwithstanding the pendency of
any such dispute, Employer will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue Executive as a
participant in all compensation, benefit and insurance plans, subject to
the terms of this Agreement, in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section. Amounts paid under this
Section are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement; provided, however, in the event that the Date of Termination
shall be extended by a notice of dispute and such dispute is resolved in
favor of the Employer, then the Employer may credit and offset any
compensation paid to Executive after the date specified in the Notice of
Termination against any payments due to Executive hereunder or, at
Employer's option, such payments shall be reimbursed by the Executive to
Employer.
11. COMPENSATION UPON TERMINATION. If during the term of this
Agreement Executive's employment is terminated for any reason, Employer
shall pay Executive:
-9-
(a) his full base salary through the Date of Termination
(as provided in this Agreement) at the rate in effect at the time
Notice of Termination is given; and
(b) accrued benefits and rights under all fringe benefit,
incentive, deferred compensation, stock option, restricted stock,
retirement and other plans and policies of the Employer as
provided under the terms of such plans and policies.
12. ADDITIONAL COMPENSATION UPON CERTAIN TERMINATIONS OF EMPLOYMENT.
If Executive's employment is terminated before April 30, 2000:
(a) By Executive's death or due to Executive's Disability,
Executive will be entitled to the payments and benefits provided
in Section 11 of this Agreement and will receive credit for eight
(8) years of "deemed service" under Section 5(j) (the Additional
SERP Benefit) the same as if all conditions for such credit were
satisfied under Section 5(j). If Executive's employment is
terminated before April 30, 2000 by Executive's death or due to
Executive's Disability, all 62,500 shares of restricted stock
covered by Sections 5(k) and (l) shall be forfeited.
(b) By the Employer without Cause and not due to
Executive's death or Disability, Executive shall be entitled to
Severance Payments under Section 13.
(c) By the Executive for Good Reason, Executive shall be
entitled to Severance Payments under Section 13.
13. SEVERANCE PAYMENTS. Executive shall receive the following
Severance Payments, if he is entitled thereto under Section 12 of this
Agreement, provided that no portion of the Severance Payments shall
duplicate payments to be received by the Executive pursuant to Section 11
of this Agreement.
(a) Employer shall pay to Executive in a lump sum on the
fifth day following the Date of Termination, the following
amounts:
(i) an amount equal to the amount, if any, of the
deferred portion of any awards which pursuant to the Plans
has been awarded to Executive but which have not yet been
paid to Executive as well as a bonus for the year prior to
termination if not yet awarded and for the year of
termination prorated through the date of termination, both
based on 100% of any bonus awarded Executive for the
immediately preceding year, or the average of Executive's
-10-
bonus awards pursuant to the Plans for the two immediately
preceding years, whichever is greater, and including in
either case the amount of deferred distributions, if any,
which have accrued to Executive's account;
(ii) In lieu of any further salary payments to
Executive for periods subsequent to the Date of Termination,
Employer shall pay Executive, the product of (A) the sum of
Executive's annual base salary at the rate in effect on the
Date of Termination plus the amounts awarded Executive under
the Plans for the year most recently ended (whether or not
fully paid), and (B) the number of years (rounded to the
nearest hundredth) between the Date of Termination and April
30, 2000;
(iii) Employer shall also pay all relocation and
indemnity payments as set forth in Section 8(d) of this
Agreement;
(iv) All reasonable legal fees and expenses incurred by
Executive as a result of such termination if Executive
substantially prevails in enforcing his rights under this
Agreement (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or
in seeking to obtain or enforce any right or benefit
provided by this Agreement);
(v) In lieu of the $1.00 par value per share common
stock of Employer ("Company Shares") issuable upon the
exercise of options that have been awarded to Executive
(whether or not exercisable or vested, but excluding options
or portions thereof which have lapsed without being
exercised by Executive), under any and all Employer stock
option plans or agreements, (which options shall be canceled
upon payment of the amount set forth below), Executive shall
receive an amount in cash equal to one hundred percent
(100%) of the aggregate positive spread between the exercise
prices of all such options held by Executive, whether or not
then fully exercisable, and the closing price of Company
Shares as reported on the New York Stock Exchange on the
Date of Termination or the last trading date preceding the
Date of Termination;
(b) If Employer shall terminate Executive's employment without
Cause or if Executive terminates his employment for Good Reason and at
the time of termination any restrictions against sale, transfer or
other disposition of Company Shares awarded to Executive under any
-11-
restricted stock plan or agreement have not lapsed on the Date of
Termination, (i) Employer shall declare the restrictions to have
lapsed with respect to those shares, provided such restrictions would
have lapsed prior to April 30, 2000; and (ii) all restrictions on the
62,500 shares of restricted common stock issued pursuant to Sections
5(k) and (l) of this Agreement shall immediately lapse, and all such
shares shall become the property of Executive without restrictions.
(c) Employer shall maintain in full force and effect,
through April 30, 2000, all employee benefit plans and programs
or arrangements in which Executive was entitled to participate
immediately prior to the Date of Termination (except for bonus
and stock option plans) provided that Executive's continued
participation is possible under the general terms and provisions
of such plans and programs. In the event that Executive's
participation in any such plan or program is barred, Employer
shall arrange to provide Executive with benefits substantially
similar to those which Executive is entitled to receive under
such plans and programs. At the end of the period of coverage,
Executive shall have the option to have assigned to him at no
cost and with no apportionment of prepaid premiums, any
assignable insurance policy owned by Employer and relating
specifically to Executive.
(d) If Employer terminates Executive's employment without
Cause or if Executive terminates his employment for Good Reason,
then in addition to the benefits to which Executive is entitled
under the retirement plans or programs in which Executive
participates or any successor plans or programs in effect on the
Date of Termination, Employer shall: (i) grant Executive the full
eight (8) years of deemed additional service under the SERP, as
if all of the conditions of Section 5(j) had been met; and (ii)
pay Executive in one lump sum in cash at Executive's normal
retirement age (or earlier retirement age should Executive so
elect) as defined in the retirement plans or programs in effect
on the Date of Termination, an amount equal to the actuarial
equivalent of the retirement pension to which Executive would
have been entitled under the terms of such retirement plans or
programs without regard to any vesting requirements of such plans
or programs, had Executive accumulated additional continuous
service through April 30, 2000, at Executive's salary rate in
effect on the Date of Termination plus the amount awarded
Executive under the Plans during the year most recently ended
(whether or not fully paid) (including subsequent annual salary
adjustments) under such retirement plans or programs and
including any Additional SERP Benefit credited under this
Agreement, reduced by the single sum actuarial equivalent of any
-12-
amount to which Executive is entitled pursuant to the provisions
of such retirement plans and programs. For purposes of this
Subsection, "actuarial equivalent" shall be determined using the
same methods and assumptions utilized under Employer's retirement
plans and programs immediately prior to the termination of
employment.
(e) If Employer shall terminate Executive's employment
without Cause or if Executive shall terminate his employment for
Good Reason, Employer shall provide Executive with executive out-
placement services by entering into a contract with a company
specializing in such services.
(f) If Executive's employment is terminated under
circumstances entitling Executive to payments and benefits under
this Agreement and the Executive Severance Agreement between
Executive and Employer (a "change in control termination"), all
payments and benefits due to Executive shall be determined
exclusively in accordance with the Executive Severance Agreement
and the terms of this Agreement shall not apply to the
determination of payments or benefits due to Executive in the
event of a change in control termination. Without limiting the
foregoing, in the event of a change in control termination,
Executive will not be entitled to credit for any additional years
of "deemed service" referenced in Section 5(j) (the Additional
SERP Benefit) or any of the restricted shares referenced in
Sections 5(k) or (l). Notwithstanding the foregoing, in the
event of a change in control termination, Executive shall be
entitled to the assignment of life insurance in accordance with
Section 5(d).
14. SUCCESSORS; BINDING AGREEMENT.
(a) Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of Employer,
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Employer would be
required to perform this Agreement if no such succession had
occurred. Failure of Employer to obtain such assumption and
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same
terms as Executive would be entitled (i) under Section 13(f); or
(ii) if Section 13(f) is inapplicable, as if Executive terminated
his employment for Good Reason, except that for purposes of
implementing the foregoing clause (ii), the date on which any
-13-
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Employer" shall mean
Employer as defined in this Agreement and any successor to its
business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die following
termination of employment with Employer while any amounts would
still be payable to him hereunder if Executive had continued to
live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to his
devisee, legatee, or other designee or, if there be no such
designee, to his estate.
15. NONCOMPETITION. Recognizing that his skill, experience and
knowledge are unique and are a material inducement to Employer to enter
into this Agreement, Executive agrees that during his employment, and for
an additional period of sixty (60) months after any termination of his
employment (provided the Employer complies with this Agreement), Executive
will not (i) enter employment with, or, directly or indirectly, own an
interest in, or manage, operate, control or participate in the business of,
or furnish services or advice to, any company whose business is similar to
or in competition with that of Employer without the express authorization
of Employer's Board of Directors; or (ii) solicit or suggest to any
customer, distributor or other person doing business with Employer that
they should cease or diminish their business with Employer or do business
with any other person or entity, to any extent, instead of Employer; or
(iii) solicit or suggest to any employee of Employer that s/he should
terminate employment with Employer or provide services or advice to any
competitor of Employer. This provision shall not, however, restrict the
right of Executive to own less than five percent (5%) of a class of equity
securities in any company listed on a national or regional stock exchange,
regardless of the nature of its business. The geographic scope of the
covenant against competition in this Section 15 is worldwide. The parties
hereto agree that in view of all the facts and circumstances, this
provision is neither an unreasonable restraint nor unconscionable.
16. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and such officer as may be
specifically designated by Employer's Board of Directors. No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of the same or similar or dissimilar
-14-
provisions or conditions at the same or at any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter of this Agreement have been made by
either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Michigan.
17. WITHHOLDING TAXES. Employer may withhold from all payments due
to Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law or regulation, Employer is
required to withhold therefrom.
18. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.
19. COUNTERPARTS. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
20. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration in Rockford, Michigan, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of
his right to be paid until the Date of Termination during the pendency of
any dispute or controversy arising under or in connection with this
Agreement.
21. WAR OR NATIONAL EMERGENCY. Employer agrees that, in the event of
a war or national emergency, Executive will, at his request, be granted a
leave of absence for military or governmental service and during said
period of leave of absence shall be paid such compensation as may be fixed
by, or with the authority of Employer's Board of Directors. During any
such leave of absence, Executive shall, except with respect to his rights
to the compensation provided in this Agreement and his obligation to
perform such active duties of Employer, be deemed, for the purposes of this
Agreement, to be continuing in the employment of Employer pursuant to the
Agreement.
22. NOTICE. Any and all notices referred to in this Agreement shall
be sufficient if furnished in writing, sent by certified or registered mail
or by overnight courier service, to the respective parties at the following
addresses:
-15-
If to Employer: Wolverine World Wide, Inc.
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxxx, XX 00000
Attn: General Counsel
If to Executive: Xxxxxxxx X. Xxxxx
000 Xxxxxxxxx, X.X.
Xxxx Xxxxx Xxxxxx, XX 00000
23. TERMINATION OF PRIOR AGREEMENTS. This Agreement terminates and
replaces in its entirety all prior employment agreements between the
parties, including the Amended Restated Employment Agreement dated April
27, 1993 and the Employment Agreement dated May 8, 1992, as amended.
WOLVERINE WORLD WIDE, INC.
By ___________________________________
Xxxxxx X. Xxxxxxx
Director and Chairman of the
Compensation Committee of the
Board of Directors
______________________________________
Xxxxxxxx X. Xxxxx
-16-
