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Exhibit 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made as of the 30th day of March,
1999 between David's Bridal, Inc., a Florida corporation (the "Company") and
Xxxxxx Xxxx, ("Executive").
WHEREAS, the Company desires to employ the Executive upon the terms and
conditions hereinafter set forth; and
WHEREAS, the Executive is willing to enter into this Agreement with
respect to his employment and services upon the terms and conditions hereinafter
set forth.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto, intending to be legally bound, agree as follows:
1. Employment. The Company hereby employs Executive, and Executive hereby
accepts such employment and agrees to perform Executive's duties and
responsibilities hereunder, in accordance with the terms and conditions
hereinafter set forth.
2. Term. The term of this Agreement (the "Employment Term") shall commence
on the date of the initial public offering of common stock of the Company, if
such offering is completed prior to December 31, 1999 (the "IPO") and shall
continue from that date for three (3) years. The Employment Term shall be
subject to one (1) year extensions at the mutual agreement of the Executive and
the Board of Directors. The one year extensions must be exercised within
forty-five (45) days of the expiration of each contract year.
3. Position and Duties. During the Employment Term, Executive shall serve
as the President and Chief Executive Officer of the Company, reporting to the
Board of Directors of the Company (the "Board"). Executive shall perform all
duties and accept all responsibility for, the general management and operation
of the Company and its subsidiaries, or as may be assigned to Executive by the
Board, and Executive shall cooperate fully with the Board. Executive shall at
all times be subject to the direction and control of The Board. Executive shall
use his best efforts in the business of the Company, and shall devote his full
time, attention and energy to the business and affairs of the Company and its
subsidiaries, provided, however, that the foregoing shall not be construed as
preventing Executive from making personal passive investments, participating in
charitable or non-profit pursuits or participating on the board of directors of
Stage Stores, Inc. or boards of directors of other companies approved by the
Board, as long as such activities will not conflict or interfere with
Executive's duties and responsibilities hereunder. The Executive shall be a
member of the Board on the first day of the Employment Term, and the Board shall
propose the Executive for re-election to the Board throughout the Employment
Term.
4. Compensation, Benefits and Expense Reimbursement.
(a) Salary. The Company shall pay Executive an annual salary of
$500,000 ("Annual Salary") payable in the manner consistent with the payroll
practices for the executive officers of the Company. The Annual Salary shall be
subject to review and increase by the Compensation Committee
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of the Board, in its sole discretion, with such review to be conducted at least
annually at such time as it reviews the salaries of the Company's officer.
(b) Bonus. Executive will participate in a bonus plan to be adopted
by the Compensation Committee of the Board with a target award of 55% of
Executive's base salary in each calendar year based upon achievement of
performance goals established annually by the Compensation Committee.
(c) Fringe Benefits. The Company shall provide to Executive such
fringe benefits as are accorded to other executive officers of the Company,
including use of an automobile of the same quality as currently provided to
Executive.
(d) Expense Reimbursement. The Company shall reimburse Executive for
all ordinary and necessary business expenses incurred by him in the performance
of his duties hereunder, which shall be accounted for in accordance with the
reimbursement policies of the Company.
5. Stock Options. The Company agrees to grant to Executive options to
purchase one (1%) percent of the Company's common stock (the "Stock Options")
outstanding immediately following the IPO pursuant to the Stock Option Plan of
the Company (the "Plan"). The Stock Options shall be granted as options under
the terms of the Plan and shall be granted on the day of the IPO at the IPO
price before giving effect to underwriter's discounts. Options shall vest in
three (3) years in accordance with the Plan and, in the event of termination due
to disability or without Cause pursuant to Section 7, Executive shall continue
to be considered employed by the Company for purposes of Stock Option vesting
and exercisability period so long as he continues to receive Annual Salary
pursuant to Section 7.
6. Confidentiality and Non-compete.
(a) Executive recognizes and acknowledges that by reason of his
employment by and service to the Company, he has had and will continue to have
(both during the Employment Term and at any time thereafter during which he may
be employed by the Company), access to confidential information of the Company
and its affiliates, including, without limitation, information and knowledge
pertaining to products and services offered, inventions, innovations, designs,
ideas, plans, trade secrets, proprietary information, manufacturing, packaging,
advertising, distribution and sales methods and systems, sales and profit
figures, customer and client lists, and relationships between the Company and
its affiliates and dealers, distributors, wholesalers, customers, clients,
suppliers and others who have business dealings with the Company and its
affiliates ("Confidential Information"). Executive acknowledges that such
Confidential Information is a valuable and unique asset and covenants that he
will not, either during or at any time after the Employment Term, disclose any
such Confidential Information to any person for any reason whatsoever (except as
his duties described herein my require) without the prior written authorization
of the Board, unless such information is in the public domain through no fault
of Executive or except as may be required by law.
(b) Non-Competition. During the Employment Term and for the
twenty-four (24) month period following the termination of employment of
Executive with the Company or any of its affiliates has ended (whether or not
such employment is pursuant to this Agreement), Executive will not, unless
acting pursuant hereto or with the prior written consent of the Board, directly
or indirectly, own, manage, operate, join, control, finance or participate in
the ownership, management, operation, control or
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financing of, or be connected as an officer, director, Executive, partner,
principal, agent, representative, consultant or otherwise with or use or permit
his name to be used in connection with, any business or enterprise engaged
within any portion of the United States (whether or not such business is
physically located within the United States) or any foreign market in which the
Company does business (i) in the retail sale and marketing of bridal gowns and
bridal related apparel for the female members of the bridal party, or (ii) any
of the same or similar type of products which the Company was designing,
developing, manufacturing, distributing or selling at the date of termination of
Executive's employment by the Company or at any time within two years prior
thereto (together, "Prohibited Products"), except that Executive may become
employed as an employee or officer of a retailer where Prohibited Products are
not a material percentage of sales, so long as supervising the sale of
Prohibited Products is not a material portion of his duties.
(c) Non-Solicit. During the Employment Term and for the twenty-four
(24) month period following the termination of employment of Executive with the
Company Executive will not, either directly or indirectly, solicit the
employment or hire any person who was employed by the Company or any of its
affiliates on a full or part-time basis at any time during the course of
Executive's employment, except that Executive may hire a person who has ceased
being employed by the Company for at least 90 days and whose separation from
employment with the Company did not directly or indirectly result from
solicitation by Executive or any representative of Executive.
(d) Geographic Scope. It is recognized by Executive that the
business of the Company and Executive in connection therewith is or will be
involved in activity throughout the United States, and that more limited
geographical limitations on this non-competition covenant (and the
non-solicitation covenant set forth in this Section 6) are therefore not
appropriate. In the event that any of the provisions of this Section 6 should
ever be adjudicated to exceed the time, geographic, product or service, or other
limitations permitted by applicable law in any Jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, product or service, or other limitations permitted by applicable
law.
(e) Equitable Relief. Executive acknowledges that the restrictions
contained in this Section 6 hereof are reasonable and necessary to protect the
legitimate interests of the Company and its affiliates, that the Company would
not have entered into this Agreement in the absence of such restrictions, and
that any violation of any provision of those Sections will result in irreparable
injury to the Company. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Section 6, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled.
7. Arbitration Clause. Any controversy between the parties to this
Agreement involving the construction or applications of the terms of this
Agreement, except for enforcement of the terms and provisions of Section 8 of
this Agreement, shall be submitted to binding arbitration, at the request of
either party hereto, in accordance with the rules of the American Arbitration
Association, with the situs of situs of such arbitration to be in the county and
state of the Company's offices in the Commonwealth of Pennsylvania.
8. Termination.
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8.1 Termination by the Company and Effect of Such Termination. The
Company may terminate this Agreement at any time upon delivery of written notice
to Executive, with the following effects:
(a) Without Cause. Upon termination of employment by the Company
without Cause prior to the end of the Employment Term, Executive will be paid
his then present base Annual Salary over the succeeding twelve (12) months.
(b) By Executive. If employment is terminated by Executive he will
only be entitled to compensation until his last day of employment.
(c) For Cause. In the event that Executive's employment hereunder is
terminated for Cause, as hereafter defined, this Agreement and rights of
Executive shall be terminated immediately. For these purposes, "Cause" shall
mean conviction of a crime, habitual absence from work, habitual insobriety or
drug addiction, material breach of this Agreement or failure to follow the
lawful directives of the Board of Directors after notice and a reasonable
opportunity to cure.
8.2 Death. If the Executive dies during the Employment Term, this
Employment Agreement shall automatically terminate, and thereafter the Company
shall not have any further liability or obligations under this Agreement to the
Executive, his executors, administrators, heirs, assigns or any other person
claiming under or through him except that the Executive's estate shall receive
any unpaid Annual Salary that has accrued through the date of termination plus
base Annual Salary over the succeeding six (6) months.
8.3 Total Disability. If the Executive becomes totally disabled (as
defined below), the Employment Term may be terminated by the Company, and the
Company shall have no further liability or obligation to the Executive under
this Agreement except as follows: the Executive shall receive any unpaid Annual
Salary that has accrued through the date of termination plus his then present
Annual Salary over twelve (12) months since the onset of the total disability.
The Executive shall be deemed to be "totally disabled" if the Executive is
considered totally disabled under the Company's group disability plan in effect
at that time, if any, or in the absence of any such plan, under applicable
Social Security regulations.
9. Notices. Any notices to Executive or company shall be deemed given if
delivered personally or mailed by certified mail to the address set forth below.
To Executive: Mr. Xxxxxx Xxxx
Oak Hill Condominium
0000 Xxxxxxx Xxxxx
Xxxxxxxxx X-000
Xxxx Xxxxxx, XX 00000
To the Company: David's Bridal, Inc.
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Erlbaum,
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Chairman of the Board
With a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
10. Applicable Law. The interpretation, validity and effect of this
Agreement shall be governed in accordance with the laws of the Commonwealth of
Pennsylvania.
11. Entire Agreement. This Agreement supersedes all prior agreements and
sets forth the entire understanding of the parties with respect to the terms of
Executive's employment with the Company, except that Executive shall further be
bound by the terms of all employee manuals, hand books and guidelines generally
applicable to employees, officers, or directors of the Company.
IN WITNESS WHEREOF, the parties hereof have executed this Employment
Agreement as of the day and year first above written.
DAVID'S BRIDAL, INC.
BY: /s/ Xxxxxx X. Erlbaum
__________________________________
Xxxxxx X. Erlbaum, Chairman
XXXXXX XXXX
/s/ Xxxxxx Xxxx
_______________________________________
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