EXHIBIT 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
dated as of the 19th day of June, 2007, is entered into by and between People's
Liberation, Inc. ("Company") and Xxxxxx X. Xxxx ("Executive").
WHEREAS, Company and Executive previously entered into an Employment
Agreement dated January 12, 2007 (the "Effective Date"), and modified and
supplemented by that certain Addendum entered into as of May 21, 2007
(collectively, the "Employment Agreement");
WHEREAS, Company and Executive desire to amend and restate the
Employment Agreement on the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, terms and conditions contained herein, it is hereby agreed as
follows:
1. EMPLOYMENT PERIOD. Subject to the provisions for earlier termination
hereinafter provided, Executive's employment hereunder shall be for a
term (the "Employment Period") commencing on the Effective Date and
ending on the third (3rd) anniversary of the Effective Date (the
"Initial Termination Date"); provided, however, that this Agreement
shall be automatically extended for one additional year on the Initial
Termination Date and on each subsequent anniversary of the initial
Termination Date, unless either Executive or Company elects not to so
extend the term of the Agreement by notifying the other party, in
writing, of such election not less than ninety (90) days prior to the
last day of the term as then in effect.
2. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the Employment Period, Executive shall serve
as Creative Director of Company and shall perform
such employment duties as are usual and customary for
such positions and such other duties as the Board of
Directors of Company (the "Board") shall from time to
time reasonably assign to Executive. Executive shall
report to the Board of Directors of Company and shall
serve as Co-Chairman of the Board. During the
Employment Period, Executive shall perform his duties
at the Company's offices in the Los Angeles
metropolitan area.
(ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote substantially
all of his business time, energy, skill and best
efforts to the performance of his duties hereunder in
a manner that will faithfully and diligently further
the business and interests of Company.
Notwithstanding the foregoing, during the Employment
Period it shall not be a violation of this Agreement
for Executive to (A) serve on corporate, civic or
charitable boards or committees consistent with
Company's conflicts of interests policies and
corporate governance guidelines in effect from time
to time, (B) deliver lectures or fulfill speaking
engagements or (C) manage his personal investments,
so long as such activities do not interfere with the
performance of
Executive's responsibilities as an executive officer
of Company. It is expressly understood and agreed
that to the extent that any such activities have been
conducted by Executive prior to the Effective Date
and fully disclosed to Company, the continued conduct
of such activities subsequent to the Effective Date
shall not thereafter be deemed to interfere with the
performance of Executive's responsibilities to
Company; provided, however, that no such activity
shall be permitted that violates any written conflict
of interest agreement between the parties or prevents
Executive from devoting substantially all of his
business time to the fulfillment of his duties
hereunder.
(b) COMPENSATION.
(i) BASE SALARY. For the period from the Effective Date
until June 30, 2007, Executive shall receive a base
salary comprised of Four Hundred Thousand Dollars
($400,000) per annum, and during the period from July
1, 2007 through the remainder of the Employment
Period, Executive shall receive a base salary
comprised of Two Hundred Thousand Dollars ($200,000)
per annum (the based salary payable to Executive
hereunder is referred to herein as the "Base
Salary"). The Base Salary shall be paid at such
intervals as Company pays executive salaries
generally with the gross sales portion to be paid
quarterly on the first payroll of each quarter.
During the Employment Period, the Base Salary shall
be reviewed at least annually for possible increase
(but not decrease) in Company's sole discretion, as
determined by Company's compensation committee or
full Board; provided, however, that Executive shall
be entitled to any annual cost-of-living increases in
Base Salary that are granted to senior executives of
Company generally. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to
Executive under this Agreement. The term "Base
Salary" as utilized in this Agreement shall refer to
Base Salary as so adjusted.
(ii) INTENTIONALLY OMITTED.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, Executive shall be eligible to
participate in all other incentive plans, policies
and programs, and all savings and retirement plans,
policies and programs, in each case that are
applicable generally to senior executives of Company.
(iv) WELFARE BENEFIT PLANS. During the Employment Period,
Executive and Executive's eligible family members
shall be eligible for participation in the welfare
benefit plans, practices, policies and programs
(including, if applicable, medical, dental,
disability, employee life, group life and accidental
death insurance plans and programs) maintained by
Company for its senior executives. The Company shall
pay one hundred percent (100%) of the premiums owed
by Executive and his family for all applicable plans
or programs.
(v) EXPENSES. During the Employment Period, Executive
shall be entitled to receive prompt reimbursement for
all reasonable business expenses incurred by
Executive in accordance with the policies, practices
and procedures of Company provided to senior
executives of Company. The Company shall maintain
appropriate Directors' and Officers' liability
insurance to indemnify Executive in conjunction with
the performance of his duties.
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(vi) FRINGE BENEFITS. During the Employment Period,
Executive shall be entitled to such fringe benefits
and perquisites as are provided by Company to its
senior executives from time to time, in accordance
with the policies, practices and procedures of
Company. Executive shall enjoy first class travel in
conjunction with all business matters.
(vii) VACATION. During the Employment Period, Executive
shall be entitled to paid vacation in accordance with
the plans, policies, programs and practices of
Company applicable to its senior executives.
(viii) Company shall pay $10,000 of Executive's legal fees
in conjunction with the drafting and negotiation of
this Agreement. This $10,000 payment is in addition
to the $10,000 previously paid by Company to
Executive in conjunction with the drafting and
negotiation of the Employment Agreement.
(ix) AUTOMOBILE. Executive shall be entitled to an
automobile allowance of Twelve Hundred Dollars
($1,200) per month inclusive of insurance, gas and
maintenance on Executive's vehicle.
(c) ADDITIONAL AGREEMENTS. If not entered into previously, as a
condition to Company entering into this Agreement, Executive
shall concurrently herewith enter into a Confidentiality and
Non-Disclosure Agreement with Company (the "Non-Disclosure
Agreement"), a form of which is set forth as Exhibit B hereto.
3. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. Executive's employment will terminate
automatically upon Executive's death. Executive's employment
may be terminated if Executive suffers a Disability. For
purposes of this Agreement, "Disability" means Executive's
inability by reason of physical or mental illness to fulfill
his obligations hereunder for ninety (90) consecutive days or
on a total of one hundred fifty (150) days in any twelve (12)
month period which, in the reasonable opinion of an
independent physician selected by Company or its insurers and
reasonably acceptable to Executive or Executive's legal
representative, renders Executive unable to perform the
essential functions of his job, even after reasonable
accommodations are made by Company. Company is not, however,
required to make unreasonable accommodations for Executive or
accommodations that would create an undue hardship on Company.
(b) CAUSE. Company may terminate Executive's employment during the
Employment Period for Cause or without Cause. For purposes of
this Agreement, "Cause" shall mean the occurrence of any one
or more of the following events:
(i) Executive's willful failure to perform or gross
negligence in performing Executive's duties owed to
Company, which is not cured within ten (10) days
following written notice delivered to Executive by
the Board, which notice specifies such failure or
negligence;
(ii) Executive's commission of an act of fraud or
dishonesty in the performance of Executive's duties;
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(iii) Executive's conviction of, or entry by Executive of a
guilty or no contest plea to, any (x) felony or (y)
any misdemeanor involving moral turpitude;
(iv) Any breach by Executive of Executive's fiduciary duty
or duty of loyalty to Company; or
(v) Executive's material breach of any of the provisions
of this Agreement, which is not cured within ten (10)
days following written notice thereof from Company.
The termination of employment of Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to Executive a copy
of a resolution duly adopted by the affirmative vote of a majority the Board at
a meeting of the Board called and held for such purpose (after reasonable notice
is provided to Executive and Executive is given an opportunity to be heard
before the Board), finding that, in the good faith opinion of the Board,
sufficient Cause exists to terminate Executive pursuant to this Section 3(b);
provided, that if Executive is a member of the Board, Executive shall not
participate in the deliberations regarding such resolution, vote on such
resolution, nor shall Executive be counted in determining a majority of the
Board.
(c) GOOD REASON. Executive's employment may be terminated by
Executive for Good Reason or without Good Reason. For purposes
of this Agreement, "Good Reason" shall mean the occurrence of
any one or more of the following events without Executive's
prior written consent, unless Company fully cures the
circumstances constituting Good Reason (provided such
circumstances are capable of cure) within thirty (30) business
days of receipt of written notice of such circumstances by
Company from Executive:
(i) A material reduction in Executive's titles, duties,
authority and responsibilities, or the assignment to
Executive of any duties materially inconsistent with
Executive's position, authority, duties or
responsibilities without the written consent of
Executive;
ii) Company's reduction of Executive's annual base salary
as in effect on the date hereof or as the same may be
increased from time to time;
(iii) The relocation of Company's headquarters to a
location more than thirty-five (35) miles from
Company's current headquarters in Los Angeles,
California; or
(iv) Company's failure to cure a material breach of its
obligations under the Agreement within thirty (30)
days after written notice is delivered to the Board
by Executive which specifically identifies the manner
in which Executive believes that Company has breached
its obligations under the Agreement.
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(d) NOTICE OF TERMINATION. Any termination by Company for Cause,
or by Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in
accordance with Section 8(c) of this Agreement. For purposes
of this Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable,
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date
of receipt of such notice, specifies the termination date
(which date shall be not more than thirty (30) days after the
giving of such notice). The failure by Executive or Company to
set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of Executive or Company,
respectively, hereunder or preclude Executive or Company,
respectively, from asserting such fact or circumstance in
enforcing Executive's or Company's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if
Executive's employment is terminated by Company for Cause, or
by Executive for Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein
(which date shall not be more than 30 days after the giving of
such notice), as the case may be, (ii) if Executive's
employment is terminated by Company other than for Cause or
Disability, the Date of Termination shall be the date on which
Company notifies Executive of such termination, unless
otherwise agreed by Company and Executive, (iii) if
Executive's employment is terminated by Executive without Good
Reason, the Date of Termination shall be the thirtieth (30th)
day after the date on which Executive notifies Company of such
termination, unless otherwise agreed by Company and Executive,
and (iv) if Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date
of death or Disability of Executive, as the case may be.
4. OBLIGATION OF COMPANY UPON TERMINATION.
(a) WITHOUT CAUSE OR FOR GOOD REASON. If, during the Employment
Period, (x) Company shall terminate Executive's employment
without Cause, or (y) if the Executive shall terminate his
employment for Good Reason, or (z) if (i) Company shall fail
to extend the term of the Employment Period as provided in
Section 1; and (ii) at any time within six months following
expiration of the Employment Period, Company terminates
Executive's employment without Cause or Executive terminates
his employment for Good Reason or without Good Reason:
(i) Executive shall be paid;
(1) Executive's earned but unpaid Base Salary
and accrued but unpaid vacation pay through
the Date of Termination (the "Accrued
Obligations"), and
(2) in the event of termination pursuant to
clauses (x) or (y) of Paragraph 4(a), an
amount of $600,000, and in the event of
termination pursuant to clauses (z) of
Paragraph 4(a), an amount of $300,000 (such
amount, as applicable, is referred to herein
as the "Severance Amount");
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(ii) The Accrued Obligations shall be paid at the time
they would otherwise have been paid had the
Executive's employment continued and the Severance
Amount shall be paid in twelve (12) equal monthly
payments on the last day of the month commencing with
the last day of the month in which Executive's
employment terminates, subject to any delays in
payment contemplated by Section 8(k) of this
Agreement;
(iii) Intentionally Omitted;
(iv) For a period of eighteen (18) months following the
Date of Termination, Company shall continue to
provide Executive and Executive's eligible family
members with group health insurance coverage at least
equal to that which would have been provided to them
if Executive's employment had not been terminated (or
at Company's election, pay the applicable COBRA
premium for such coverage); provided, however, that
if Executive becomes re-employed with another
employer and is eligible to receive group health
insurance coverage under another employer's plans,
Company's obligations under this Section shall
terminate and any such coverage shall be reported by
Executive to Company;
(v) All outstanding stock options, restricted stock and
other equity awards granted to Executive under any of
Company's equity incentive plans (or awards
substituted therefore covering the securities of a
successor company) shall accelerate and become fully
vested on the Date of Termination; and
(vi) To the extent not theretofore paid or provided,
Company shall timely pay or provide to Executive any
vested benefits and other amounts or benefits
required to be paid or provided or which Executive is
eligible to receive as of the Date of Termination
under any plan, contract or agreement of Company and
its affiliates (such other amounts and benefits shall
be hereinafter referred to as the "Other Benefits")
to which Executive is a party. Notwithstanding the
foregoing, it shall be a condition to Executive's
right to receive the amounts provided for in Sections
4(a)(i)(2) and 4(a)(iii) and (iv) above that
Executive execute, deliver to Company and not revoke
a release of claims in substantially the form
attached hereto as Exhibit A.
(b) FOR CAUSE OR WITHOUT GOOD REASON. Except as set forth in
Paragraph 4(a), if Executive's employment shall be terminated
or not extended by Company for Cause or by Executive without
Good Reason during the Employment Period, Company shall have
no further obligations to Executive under this Agreement
except to pay to Executive the Accrued Obligations when due
under California law and to provide the Other Benefits.
(c) DEATH OR DISABILITY. If Executive's employment is terminated
by reason of Executive's death or Disability during the
Employment Period:
(i) The Accrued Obligations shall be paid to Executive's
estate or beneficiaries or to Executive, as
applicable, in cash within thirty (30) days of the
Date of Termination;
(ii) A lump sum payment of $400,000 shall be paid to
Executive's estate or beneficiaries or to Executive,
as applicable, in cash within thirty (30) days of the
Date of Termination;
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(iii) Intentionally Omitted;
(iv) All outstanding stock options, restricted stock and
other equity awards granted to Executive under any of
Company's equity incentive plans (or awards
substituted therefore covering the securities of a
successor company) shall accelerate and become fully
vested on the Date of Termination and Executive, or
his Estate, as applicable, shall be entitled to such
stock once vested;
(v) For a period of eighteen (18) months following the
Date of Termination, Executive as applicable and
Executive's eligible family members shall continue to
be provided with group health insurance coverage at
least equal to that which would have been provided to
them if Executive's employment had not been
terminated (or at Company's election, pay the
applicable COBRA premium for such coverage);
provided, however, that if Executive becomes
re-employed with another employer and is eligible to
receive group health insurance coverage under another
employer's plans, Company's obligations under this
Section shall terminate, and any such coverage shall
be reported by Executive to Company; and
(vi) The Other Benefits shall be paid or provided to
Executive's estate or beneficiaries or to Executive,
as applicable, on a timely basis.
5. FULL SETTLEMENT. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and
except as expressly provided, such amounts shall not be reduced whether
or not Executive obtains other employment. If any party to this
Agreement institutes any action or claim for relief against the other
party, then the prevailing party shall be entitled to recover from the
other party all costs and expenses incurred, including reasonable
attorneys' fees and costs, in bringing or defending such action.
6. CERTAIN ADDITIONAL PAYMENTS BY COMPANY. In the event that any payments
under this Agreement or any other compensation, benefit or other
amounts payable from the Company for the benefit of the Executive are
subject to the tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code") (including any applicable interest and
penalties, the "Excise Tax"), no such payment ("Parachute Payment")
shall be reduced (except for required tax withholdings) and the Company
shall pay to the Executive by the earlier of the date such Excise Tax
is withheld from payments made to the Executive or the date such Excise
Tax becomes due and payable by the Executive, an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive
(after deduction of any Excise Tax on the Parachute Payments, taxes
based upon the Tax Rate (as defined below) upon the payment provided
for by this Section 6 and Excise Tax upon the payment provided for by
this Section 6), shall be equal to the amount the Executive would have
received if no Excise Tax had been imposed. A Tax counsel chosen by the
Company's independent auditors, provided such person is reasonably
acceptable to the Executive ("Tax Counsel"), shall determine in good
faith whether any of the Parachute Payments are subject to the Excise
Tax and the amount of any Excise Tax, and Tax Counsel shall promptly
notify the Executive of its determination. The Company and the
Executive shall file all tax returns and reports regarding such
Parachute Payments in a manner consistent with the Company's reasonable
good faith determination. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay taxes at the Tax
Rate applicable at the time of the Gross-Up Payment. In the event that
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the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time a Parachute Payment is made,
the Executive shall repay to the Company promptly following the date
that the amount of such reduction in Excise Tax is finally determined
the portion of the Gross-Up Payment attributable to such reduction
(without interest). In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time a Parachute
Payment is made (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall pay the Executive an additional amount with
respect to the Gross-Up Payment in respect of such excess (plus any
interest or penalties payable in respect of such excess) at the time
that the amount of such excess is finally determined. The Company shall
reimburse the Executive for all reasonable fees, expenses, and costs
related to determining the reasonableness of any Company position in
connection with this paragraph and preparation of any tax return or
other filing that is affected by any matter addressed in this
paragraph, and any audit, litigation or other proceeding that is
affected by any matter addressed in this Section 6 and an amount equal
to the tax on such amounts at the Executive's Tax Rate. For the
purposes of the foregoing, "Tax Rate" means the Executive's effective
tax rate based upon the combined federal and state and local income,
earnings, Medicare and any other tax rates applicable to the Executive,
all at the highest marginal rate of taxation in the country and state
of the Executive's residence on the date of determination, net of the
reduction in federal income taxes which could be obtained by deduction
of such state and local taxes.
7. SUCCESSORS. This Agreement is personal to Executive and without the
prior written consent of Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by
Executive's legal representatives. This Agreement shall inure to the
benefit of and be binding upon Company and its successors and assigns.
The Company may only assign this Agreement with the written consent of
Executive.
8. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) ARBITRATION. To the fullest extent allowed by law, any
controversy, claim or dispute between Executive and Company
(and/or any of its owners, directors, officers, employees,
affiliates, or agents) relating to or arising out of
Executive's employment or the cessation of that employment
will be submitted to final and binding arbitration in the
County of Los Angeles, State of California, for determination
in accordance with the American Arbitration Association's
("AAA") National Rules for the Resolution of Employment
Disputes, as the exclusive remedy for such controversy, claim
or dispute. In any such arbitration, the parties may conduct
discovery in accordance with the applicable rules of the
arbitration forum, except that the arbitrator shall have the
authority to order and permit discovery as the arbitrator may
deem necessary and appropriate in accordance with applicable
state or federal discovery statutes. The arbitrator shall
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issue a reasoned, written decision, and shall have full
authority to award all remedies which would be available in
court. The parties shall share the filing fees required for
the arbitration, provided that Executive shall not be required
to pay an amount in excess of the filing fees required by a
federal or state court with jurisdiction. Company shall pay
the arbitrator's fees and any AAA administrative expenses. The
award of the arbitrator shall be final and binding upon the
parties and may be entered as a judgment in any California
court of competent jurisdiction and the parties hereby consent
to the exclusive jurisdiction of the courts of California.
Possible disputes covered by the above include (but are not
limited to) unpaid wages, breach of contract, torts, violation
of public policy, discrimination, harassment, or any other
employment-related claims under laws including but not limited
to, Title VII of the Civil Rights Act of 1964, the Americans
With Disabilities Act, the Age Discrimination in Employment
Act, the California Fair Employment and Housing Act, the
California Labor Code, and any other statutes or laws relating
to an employee's relationship with his/her employer,
regardless of whether such dispute is initiated by the
employee or Company. Thus, this bilateral arbitration
agreement applies to any and all claims that Company may have
against an employee, including but not limited to, claims for
misappropriation of Company property, disclosure of
proprietary information or trade secrets, interference with
contract, trade libel, gross negligence, or any other claim
for alleged wrongful conduct or breach of the duty of loyalty
by an employee. However, notwithstanding anything to the
contrary contained herein, Company and Executive shall have
their respective rights to seek and obtain injunctive relief
with respect to any controversy, claim or dispute to the
extent permitted by law. Claims for workers' compensation
benefits and unemployment insurance (or any other claims where
mandatory arbitration is prohibited by law) are not covered by
this arbitration agreement, and such claims may be presented
by either Executive or Company to the appropriate court or
government agency. BY AGREEING TO THIS BINDING ARBITRATION
PROVISION, BOTH EXECUTIVE AND COMPANY GIVE UP ALL RIGHTS TO
TRIAL IN A COURT OF LAW.
(c) NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Executive: at Executive's most recent address on
the records of Company
If to Company: People's Liberation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Board of Directors
with a copy to: Xxxxxx Xxxxxxxx & Markiles, LLP
00000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. XxXxxxxx
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by
the addressee.
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(d) XXXXXXXX-XXXXX ACT OF 2002. Notwithstanding anything herein to
the contrary, if Company determines, in its good faith
judgment, that any transfer or deemed transfer of funds
hereunder is likely to be construed as a personal loan
prohibited by Section 13(k) of the Exchange Act and the rules
and regulations promulgated thereunder, then such transfer or
deemed transfer shall not be made to the extent necessary or
appropriate so as not to violate the Exchange Act and the
rules and regulations promulgated thereunder.
(e) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement. In
the event any provision or term hereof is deemed to have
exceeded applicable legal authority or shall be in conflict
with applicable legal limitations, such provision shall be
reformed and rewritten as necessary to achieve consistency and
compliance with such applicable law.
(f) WITHHOLDING. Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any
applicable law or regulation. In addition, notwithstanding any
other provision of this Agreement, Company may, in its sole
discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the
benefit of Executive, all or any portion of any Excise Tax
Gross-Up Payment and Executive hereby consents to such
withholding.
(g) NO WAIVER. Executive's or Company's failure to insist upon
strict compliance with any provision of this Agreement or the
failure to assert any right Executive or Company may have
hereunder, including, without limitation, the right of
Executive to terminate employment for Good Reason pursuant to
Section 3(c) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or
right of this Agreement.
(h) ENTIRE AGREEMENT. This Agreement, the Non-Disclosure Agreement
and any equity award agreements entered into between Company
and Executive, constitute the final, complete and exclusive
agreement between Executive and Company with respect to the
subject matter hereof and replaces and supersedes any and all
other agreements, offers or promises, whether oral or written,
made to Executive by Company or any representative thereof,
including, without limitation, the Employment Agreement.
(i) CONSULTATION WITH COUNSEL. Executive acknowledges that
Executive has had a full and complete opportunity to consult
with counsel and other advisors of Executive's own choosing
concerning the terms, enforceability and implications of this
Agreement, and that Company has not made any representations
or warranties to Executive concerning the terms,
enforceability or implications of this Agreement other than as
reflected in this Agreement.
(j) COUNTERPARTS. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original
but which together shall constitute one and the same
instrument.
(k) SECTION 409A. Unless otherwise expressly provided, any payment
of compensation by Company to Executive, whether pursuant to
this Agreement or otherwise, shall be made within two and
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one-half months (2 1/2 months) after the later of the end of
the calendar year of the Company's fiscal year in which
Executive's right to such payment vests (i.e., is not subject
to a "substantial risk of forfeiture" for purposes of Code
Section 409A of the Internal Revenue Code of 1986, as amended
("Code")). To the extent that any severance payments
(including payments on termination for "good reason") come
within the definition of "involuntary severance" under Code
Section 409A, such amounts up to the lesser of two times the
Executive's annual compensation for the year preceding the
year of termination or two times the 401(a)(17) limit for the
year of termination, shall be excluded from "deferred
compensation" as allowed under Code Section 409A, and shall
not be subject to the following Code Section 409A compliance
requirements. All payments of "nonqualified deferred
compensation" (within the meaning of Section 409A) are
intended to comply with the requirements of Code Section 409A,
and shall be interpreted in accordance therewith. Neither
party individually or in combination may accelerate any such
deferred payment, except in compliance with Code Section 409A,
and no amount shall be paid prior to the earliest date on
which it is permitted to be paid under Code Section 409A. In
the event that Executive is determined to be a "key employee"
(as defined in Code Section 416(i) (without regard to
paragraph (5) thereof)) of Company at a time when its stock is
deemed to be publicly traded on an established securities
market, payments determined to be "nonqualified deferred
compensation" payable following termination of employment
shall be made no earlier than the earlier of (i) the last day
of the sixth (6th) complete calendar month following such
termination of employment, or (ii) Executive's death,
consistent with the provisions of Code Section 409A. Any
payment delayed by reason of the prior sentence shall be paid
out in a single lump sum at the end of such required delay
period in order to catch up to the original payment schedule.
Notwithstanding anything herein to the contrary, no amendment
may be made to this Agreement if it would cause the Agreement
or any payment hereunder not to be in compliance with Code
Section 409A.
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IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and, pursuant to
the authorization from the Board, Company has caused these presents to be
executed in its name on its behalf, all as of the day and year first above
written.
"Executive"
Dated: June 19, 2007 By: /s/ Xxxxxx X. Xxxx
---------------------- ------------------------
Name: Xxxxxx X. Xxxx
"Company"
PEOPLE'S LIBERATION, INC.
Dated: June 19, 2007 /s/ Xxxxx Xxxx
---------------------- -----------------------
Name: Xxxxx Xxxx
Title: Chief Executive Officer
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EXHIBIT A
RELEASE
For a valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the undersigned does hereby release and forever discharge
the "Releasees" hereunder, consisting of People's Liberation, Inc. and each of
its subsidiaries, associates, affiliates, successors, heirs, assigns, agents,
directors, officers, employees, representatives, lawyers, insurers, and all
persons acting by, through, under or in concert with them, or any of them, of
and from any and all manner of action or actions, cause or causes of action, in
law or in equity, suits, debts, liens, contracts, agreements, promises,
liability, claims, demands, damages, losses, costs, attorneys' fees or expenses,
of any nature whatsoever, known or unknown, fixed or contingent to the extent
permissible under applicable law (hereinafter called "Claims"), which the
undersigned now has or may hereafter have against the Releasees, or any of them,
by reason of any matter, cause, or thing whatsoever from the beginning of time
to the date hereof. The Claims released herein include, without limiting the
generality of the foregoing, any Claims in any way arising out of, based upon,
or related to the employment or termination of employment of the undersigned by
the Releasees, or any of them; any alleged breach of any express or implied
contract of employment; any alleged torts or other alleged legal restrictions on
Releasee's right to terminate the employment of the undersigned; and any alleged
violation of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, the Americans With
Disabilities Act, and the California Fair Employment and Housing Act.
THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL
AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY
WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR
COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
The undersigned represents and warrants that there has been no
assignment or other transfer of any interest in any Claim which he may have
against Releasees, or any of them, and the undersigned agrees to indemnify and
hold Releasees, and each of them, harmless from any liability, Claims, demands,
damages, costs, expenses and attorneys' fees incurred by Releasees, or any of
them, as the result of any such assignment or transfer or any rights or Claims
under any such assignment or transfer. It is the intention of the parties that
this indemnity does not require payment as a condition precedent to recovery by
the Releasees against the undersigned under this indemnity.
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The undersigned agrees that if he hereafter commences any suit arising
out of, based upon, or relating to any of the Claims released hereunder or in
any manner asserts against Releasees, or any of them, any of the Claims released
hereunder, then the undersigned agrees to pay to Releasees, and each of them, in
addition to any other damages caused to Releasees thereby, all attorneys' fees
incurred by Releasees in defending or otherwise responding to said suit or
Claim.
The undersigned further understands and agrees that neither the payment
of any sum of money nor the execution of this Release shall constitute or be
construed as an admission of any liability whatsoever by the Releasees, or any
of them, who have consistently taken the position that they have no liability
whatsoever to the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Release this ____
day of ______________________, ______.
"Executive"
Name:
----------------------------
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EXHIBIT B
CONFIDENTIALITY & NON-DISCLOSURE AGREEMENT
This Confidentiality and Non-Disclosure Agreement ("Agreement") is made
as of this ____ of January, 2006 by and between People's Liberation, Inc.
("Company"), and Xxxxxx X. Xxxx ("Executive").
WHEREAS, concurrently with the execution of this Agreement, Company and
Executive have entered into an Employment Agreement, pursuant to which Company
has agreed to employ Executive, and Executive has agreed to be employed by
Company, as its Chief Executive Officer and/or Creative Director (the
"Employment Agreement");
WHEREAS, Company and Executive agree that, in connection with the
execution of the Employment Agreement and Executive's employment, Executive will
not disclose Company proprietary information pursuant to the terms and
conditions hereof;
WHEREAS, capitalized terms used herein without definition shall have
the meanings ascribed thereto in the Employment Agreement.
NOW, THEREFORE, in furtherance of the foregoing and in exchange for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. PROPRIETARY INFORMATION. Executive acknowledges that during the
course of Executive's employment with Company, Executive has had and will
necessarily have access to and make use of proprietary information and
confidential records of Company. Executive covenants that Executive shall not,
during the term of his employment with Company or at any time thereafter
(irrespective of the circumstances under which Executive's employment with
Company terminates), directly or indirectly, use for Executive's own purpose or
for the benefit of any Person other than Company, nor otherwise disclose, any
proprietary information of which Executive has knowledge to any Person, unless
such disclosure has been authorized in writing by Company or such Affiliates or
is otherwise required by law. Executive acknowledges and understands that the
term "proprietary information" includes, but is not limited to, patents,
copyrights and trade secrets such as: (a) designs, drawings, sketches, fabrics,
accessories and ornaments utilized or incorporated in or proposed to be utilized
or incorporated in any product of Company; (b) the software products, programs,
applications and processes utilized by or on behalf of Company (other than
off-the-shelf software programs); (c) the name and/or address of any customer or
vendor of Company or any information concerning the transactions or relations of
any customer or vendor of Company with Company or any of its stockholders,
principals, directors, officers, employees or agents; (d) any information
concerning any product, technology or procedure employed by or on behalf of
Company but not generally known to its customers, vendors or competitors, or
under development by or being tested by or on behalf of Company but not at the
time offered generally to customers or vendors; (e) any proprietary information
relating to Company's computer software, computer systems, pricing or marketing
methods, sales margins, cost or source of raw materials, supplies or goods,
capital structure, operating results, borrowing arrangements or business plans;
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(f) any information which is generally regarded as confidential or proprietary
in any line of business engaged in by or on behalf of Company; (g) any business
plans, budgets, advertising or marketing plans of Company; (h) any information
contained in any of the written or oral policies and procedures or manuals of
Company; (i) any information belonging to customers, vendors of Company or any
other individual or entity which Company has agreed to hold in confidence; and
(j) all written, graphic and other material (whether in writing on magnetic tape
or in electronic or other form) relating to or containing any of the foregoing.
Executive acknowledges and understands that information that is not novel or
copyrighted or trademarked or patented may nonetheless be proprietary
information. The term "proprietary information" shall not include information
generally available to and known by the public, information developed
independently by Executive or information that is or becomes available to
Executive on a non-confidential basis from a source other than Company or
Company's stockholders, principals, directors, officers, employees or agents
(other than as a result of a breach of any obligation of confidentiality).
Notwithstanding the foregoing, nothing in the attached Agreement or this Exhibit
B ("Confidentiality and Non-Disclosure Agreement") is intended to classify or
include as proprietary, confidential or trade secret information of the Company
any information which is publicly known or information related to contacts
(vendors, ETC.) utilized by the Company which were known to Executive prior to
his employment with the Company or which were obtained as a result of
Executive's relationships with such individuals or entities
2. CONFIDENTIALITY AND SURRENDER OF RECORDS. Executive shall not during
the term of his employment with Company or at any time thereafter (irrespective
of the circumstances under which Executive's employment with Company
terminates), except as required by law or as is necessary for the performance of
Executive's duties hereunder, directly or indirectly, publish, make known or in
any fashion disclose any confidential records to, or permit any inspection or
copying of confidential records by, any individual or entity, nor shall
Executive retain, and will deliver promptly to Company, any of the same
following termination of Executive's employment hereunder for any reason or upon
request by Company. The term "confidential records" means all correspondence,
memoranda, files, manuals, books, designs, sketches, lists, financial,
operating, or marketing records, magnetic tape, or electronic or other media or
equipment or records of any kind which may be in Executive's possession or under
Executive's control or accessible to Executive which contain any proprietary
information. All confidential records shall be and remain the sole property of
Company during the term of Executive's employment and thereafter.
3. DISCLOSURE REQUIRED BY LAW. In the event Executive is required by
law or court order to disclose any proprietary information or confidential
records of Company, Executive shall provide Company with prompt written notice
so that Company may seek a protective order or other appropriate remedy, and if
such protective order or other remedy is not obtained, Executive shall furnish
only that portion of the proprietary information or confidential records that is
legally required.
4. NO OTHER OBLIGATIONS. Executive represents and warrants to Company
that Executive is not precluded or limited in Executive's ability to undertake
or perform the duties described herein by any contract, agreement or restrictive
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covenant. Executive covenants that Executive shall not employ the trade secrets
or proprietary information of any other Person in connection with Executive's
employment by Company.
5. DEVELOPMENTS THE PROPERTY OF COMPANY. All discoveries, inventions,
designs, drawings, sketches, products, processes, methods and improvements
conceived, developed or otherwise made by Executive at any time, alone or with
others, and in any way relating to the present or future business or products of
Company, including fabric or other designs, whether or not subject to copyright
protection and whether or not reduced to tangible form during the period of
Executive's employment with Company (collectively referred to as
"Developments"), shall be the sole property of Company. Executive agrees to, and
hereby does, assign to Company all of Executive's right, title and interest
throughout the world in and to all Developments. Executive agrees that all such
Developments that are copyrightable shall constitute works made for hire under
the copyright laws of the United States and Executive hereby assigns to Company
all copyrights and other proprietary rights Executive may have in any such
Developments to the extent that they might not be considered works made for
hire. Any provision in this Agreement requiring Executive to assign Executive's
rights in all Developments shall not apply to an invention that qualifies fully
under the provisions of California Labor Code section 2870, the terms of which
are incorporated herein. Executive shall make and maintain adequate and current
written records of all Developments, and shall disclose all Developments fully
and in writing to Company promptly after development of the same, and at any
time upon request; provided, however, that Developments excluded under the
preceding sentence shall be received by Company in confidence.
6. NON-SOLICITATION OF EMPLOYEES. Executive acknowledges and agrees
that the Company has expended and will continue to expend significant time,
effort and resources in the hiring, training and development of an unusual and
extraordinary workforce whose identities and abilities the Executive would not
know of or learn but for the Executive's relationship with the Company. The
Executive therefore agrees that, during the Executive's employment under this
Agreement, and for a period of one (1) year subsequent to termination this
Agreement, Executive shall not, directly or indirectly: (a) solicit, or attempt
to solicit, any employee of or consultant to the Company to work for, contract
with, become a partner with or otherwise be retained by any other entity or
person; (b) assist or advise any other entity or person in hiring, employing,
retaining or soliciting such employees or consultants; or (c) encourage any such
employee or consultant to be hired, employed, retained or solicited by any other
person or entity.
7. ENFORCEMENT. Executive acknowledges and agrees that, by virtue of
Executive's position, Executive's services, and access to and use of
confidential records and proprietary information, any violation by Executive of
any of the undertakings contained in this Agreement would cause Company or its
Affiliates immediate, substantial and irreparable injury for which it has no
adequate remedy at law. Accordingly, Executive agrees that in the event of a
breach by Executive of any said undertakings, Company will be entitled to
temporary and permanent injunctive relief in any court of competent jurisdiction
(without the need to post any bond and without proving that damages would be
inadequate).
8. AMENDMENTS. No amendment or modification to this Agreement shall be
valid unless in writing signed by Executive and an authorized officer of
Company.
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9. NO ALTERATION OF EMPLOYMENT STATUS. The execution of this Agreement
shall not be construed in any manner to alter Executive's employment with
Company as provided in Executive's Employment Agreement.
10. EFFECT OF WAIVER. The waiver by any party of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach thereof or as a waiver of any other provisions of this
Agreement. The remedies set forth herein are nonexclusive and are in addition to
any other remedies that any party may have at law or in equity.
11. NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive: at Executive's most recent address on the records
of Company
If to Company:
with a copy to:
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
12. MISCELLANEOUS. This Agreement is entered into and shall be governed
and interpreted in accordance with the laws of the State of California, without
regard to or application of choice of law rules or principles. It shall be
binding upon and inure to the benefit of the parties, and to their respective
heirs, personal representatives, successors and assigns. In the event that any
provision of this Agreement is found by a court, arbitrator or other tribunal to
be illegal, invalid or unenforceable, then the remaining provisions of this
Agreement shall not be voided, but shall be enforced to the maximum extent
permissible by law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
"Executive"
Dated: By:
---------------------- ------------------------
Name: Xxxxxx X. Xxxx
"Company"
PEOPLE'S LIBERATION, INC.
Dated:
---------------------- -----------------------
Name:
Title:
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