November 10, 2015
Exhibit 10.1
November
10, 2015
Xxxx X.
Xxxx
0000
Xxxxxxx Xxxxx Xxxx
Xxxxxxx,
XX 00000
Dear
Xx. Xxxx:
The
purpose of this letter is to confirm your continuing employment
with Lakeland Industries, Inc. on the following terms and
conditions:
1. THE PARTIES
This is
an Agreement between Xxxx X. Xxxx, residing at 0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000 (hereinafter referred to as
“you”), and Lakeland Industries, Inc., a Delaware
corporation, with a principal place of business located at 0000
Xxxxxxxx Xxxxxxxx Xxx, Xxxxx X, Xxxxxxxxxx, XX 00000-0000
(hereinafter the “Company”).
2. TERM
The
term of the Agreement shall be for a three-year period, from
November 10, 2015 through and including November 9,
2018.
3. CAPACITY
You
shall be employed in the capacity of Chief Financial Officer for
Lakeland Industries, Inc. or such other position or positions as
may be determined from time to time by the Company.
You
agree to devote your full time and attention and best efforts to
the faithful and diligent performance of your duties to the Company
and shall serve and further the best interests and enhance the
reputation of the Company to the best of your ability.
4. COMPENSATION
As full
compensation for your services, you shall receive the
following from the Company:
(a)
A base
annual salary of $215,000 payable bi-weekly (the “Base
Salary”); and
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(b)
Participation, if
and when eligible, in any of the Company’s pension plans,
profit sharing plans, medical and disability plans, restrictive
stock or appreciation rights plans, and/or stock option plans,
401(k) plans when any such plans are or become effective;
and
(c)
Such benefits as
are provided from time to time by the Company to its officers and
employees; provided however that your annual vacation shall be for
a period of 3 weeks; and
(d)
Reimbursement for
any dues and expenses incurred by you that are necessary and proper
in the conduct of the Company’s business; and
(e)
Participation in
the Company’s 2015 Restricted Stock Plan.
5. ANNUAL BONUS
During
the Term, in addition to Base Salary, you have the opportunity to
earn an Annual Bonus under an incentive compensation plan as
determined by the Compensation Committee of the Board of Directors
of the Company (the “Board”). In May of each year
during the Term commencing in 2016, you may be awarded an Annual
Bonus of between 80% and 120% of your target bonus amount of
$35,000, subject to adjustment by the Compensation Committee from
time to time (the “Target Bonus Amount”). Such Annual
Bonus shall be calculated based upon the Company’s actual
earnings per share (“EPS”) as compared to an EPS target
amount (the “FY EPS Target”), EPS threshold amount (the
“FY EPS Threshold”) or EPS maximum amount (the
“FY EPS Maximum”) for such year set by the Board of
Directors with input from you; provided, however, the Compensation
Committee shall have final decision-making authority. More
particularly, (i) 80% of the Target Bonus Amount will be awarded to
you as an Annual Bonus if the Company’s actual EPS equals or
exceeds the FY EPS Threshold but is less than the FY EPS Target,
(ii) 100% of the Target Bonus Amount will be awarded to you as an
Annual Bonus if the Company’s actual EPS equals or exceeds
the FY EPS Target but is less than the FY EPS Maximum, and (iii)
120% of the Target Bonus Amount will be awarded to you as an Annual
Bonus if the Company’s actual EPS equals or exceeds the FY
EPS Maximum. Payment of the Annual Bonus, if any, due you, shall be
made in accordance with the Company’s normal payroll
procedures, but no later than June 18 following the year for which
the Annual Bonus was earned. The Annual Bonus will be calculated
each May during the Term.
6. NON-COMPETITION/SOLICITATION/CONFIDENTIALITY
During
your employment with the Company and for one year thereafter, (if
you are receiving your normal compensation from the Company under
Section 7 (a), (e) or (f)) you shall not, either directly or
indirectly, as an agent, employee, partner, stockholder, director,
investor or otherwise, engage in any business in competition with
the business of the Company within the Company’s market
area(s). You shall also abide by the Code of Ethics Agreement
and other Corporate Governance Rules. You shall disclose
prior to the execution of this Agreement (or later on as the case
may be) all business relationships you presently have or
contemplate entering into or enter into in the future that might
affect your responsibilities or loyalties to the
Company.
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During
your employment with the Company and for one year thereafter, you
shall not, directly or indirectly, hire, offer to hire or otherwise
solicit the employment or services of, any employee of the Company
on behalf of yourself or any other person, firm or
entity.
Except
as may be required to perform your duties on behalf of the Company,
you agree that during your employment with the Company and for a
period of one year thereafter, you shall not, directly or
indirectly, solicit, service, or accept business from, on your own
behalf or on behalf of any other person, firm or entity, any
customers or potential customers of the Company with whom you had
contact during your employment or about whom you acquired
confidential information during your employment.
Except
as required in your duties to the Company, you shall not at any
time during or after your employment, directly or indirectly, use
or disclose any confidential or proprietary information relating to
the Company or its business or customers which is disclosed to you
or known by you as a consequence of or through your employment by
the Company and which is not otherwise generally obtainable by the
public at large.
In the
event that any of the provisions in this Section 6 shall ever be
adjudicated to exceed limitations permitted by applicable law, you
agree that such provisions shall be modified and enforced to the
maximum extent permitted under applicable law.
7. TERMINATION
You or
the Company may terminate your employment prior to the end of the
Term upon written notice to the other party in accordance with the
following provisions:
(a) Voluntary
Termination. You may terminate your employment voluntarily
at any time during the Term by providing the Company with 60 days
prior written notice. If you do so, except for Good Reason (as
defined below), you shall be entitled to receive from the Company
your (i) accrued and unpaid Base Salary through the date of
termination (which shall be on the date that is 60 days after the
date on which you give notice of resignation to the Company), (ii)
any Annual Bonus earned for the year completed prior to the year of
termination but not yet paid, and (iii) any other employee benefits
generally paid by the Company up to the date of termination
(collectively (i), (ii), and (iii), the “Accrued
Obligations”). If the Company fails to notify you that it
will not renew this contract 180 days before July 31, 2018, it
shall pay (i) through (iii) above for 180 days after its notice of
non-renewal of this contract.
(b)
Death. This Agreement shall
automatically terminate on the date of your death without further
obligation to you other than for payment by the Company to your
estate or designated beneficiaries, as designated in writing to the
Company, of (i) the Accrued Obligations through the last day of the
month in which your death occurs, and (ii) a pro-rata portion of
the Annual Bonus, if any, for the year of termination up to and
including the date of death which shall be determined in good faith
by the Compensation Committee of the Board. Your estate or
beneficiaries, as applicable, shall also be entitled to all other
benefits generally paid by the Company on an employee’s
death.
(c) Disability.
This Agreement and your employment shall terminate without any
further obligation to you if you become “totally
disabled” (as defined below) other than for payment by the
Company of (i) the Accrued Obligations though the last day of the
month in which you are deemed to be totally disabled and (ii) a
pro-rata portion of the Annual Bonus, if any, for the year of
termination up to and including the date you are deemed to be
totally disabled as determined in good faith by the Compensation
Committee of the Board.
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You
shall be deemed to be “totally disabled” in you are
unable, for any reason, to perform any of your duties and
obligations to the Company, with or without a reasonable
accommodation, for a period of 90 consecutive days or for periods
aggregating 120 days in any period of 180 consecutive
days.
(d) Cause.
The Company may terminate your employment at any time for
“Cause” (as defined below) and this Agreement shall
terminate immediately with no further obligations to you other than
the Company shall pay you, within thirty days of such termination,
the Accrued Obligations up to the date of such termination for
Cause.
(e) Termination
by the Company Without Cause or by you for Good
Reason. If, during the Term, the Company terminates
your employment without Cause or you terminate your employment for
Good Reason (as defined below), in either such case, other than
within 24 months after a Change in Control (which is covered by
Subsection (f) below), you shall be entitled to receive from the
Company, subject to your continued compliance with the restrictive
covenants contained in Section 6 hereof and your execution and
non-revocation of a release of claims substantially in the form
attached hereto as Annex
A, (i) the Accrued Obligations payable within 15 days after
the date of termination (or, in the case of the prior year’s
Annual Bonus, at such time such bonus is payable pursuant hereto),
(ii) an additional 12 months of your then current Base Salary,
payable in equal monthly installments beginning with the first
payroll date after the date on which the release of claims becomes
effective and can no longer be revoked, and (iii) a pro rata
portion of the Annual Bonus, if any, for the year of termination up
to and including the date of termination which shall be determined
in good faith by the Compensation Committee of the Board and paid
at such time as such bonus is payable pursuant hereto.
(f)
Termination by the Company Without Cause or by
you for Good Reason within 24 Months After a Change in
Control. If, during the Term, the Company terminates your
employment without Cause or you terminate your employment for Good
Reason, in either such case, within 24 months after a Change in
Control (as defined below), you shall be entitled to receive from
the Company, subject to your continued compliance with the
restrictive covenants contained in Section 6 hereof and your
execution and non-revocation of a release of claims substantially
in the form attached hereto as Annex A, (i) the Accrued
Obligations payable within fifteen days after termination (or, in
the case of the prior year’s Annual Bonus, at such time such
bonus is payable pursuant hereto), (ii) a lump sum amount equal to
24 months of Base Salary in effect as of the date of termination of
employment or the year immediately prior to the Change in Control,
whichever is higher, and (iii) two times the Target Bonus Amount in
effect as of the date of termination of employment or the year
immediately prior to the Change in Control, whichever is higher.
The severance payments under sub-paragraphs (ii) and (iii) hereof
shall be paid with the first payroll date after the date on which
the release of claims becomes effective and can no longer be
revoked.
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(g)
Notwithstanding the
foregoing, if your severance payments payable hereunder constitute
nonqualified deferred compensation subject to 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and the
period in which you must execute the release begins in one calendar
year and ends in another, the severance payments will be made in
the later calendar year.
(h)
For purposes of
this Agreement:
(i)
“Cause”
shall mean termination based upon: (A) your failure to
substantially perform your material duties and responsibilities
with the Company, after a written demand for such performance is
delivered to you by the Company, which identifies the manner in
which you have not performed your duties or responsibilities and a
cure period of 60 days, (ii) your commission of an act of fraud,
theft, misappropriation, dishonesty or embezzlement, (iii) your
conviction for a felony or pleading nolo contendere to a felony, (iv) your
willful and continuing failure or refusal to carry out, or comply
with, in any material respect any reasonable directive of the
President or the Board consistent with the terms of this Agreement,
or (v) your material breach of any provision of this
Agreement.
(ii)
“Good
Reason” shall mean the occurrence of any of the following
events without your prior written consent:
(A)
the failure of the
Company to pay your Base Salary or Annual Bonus when due and if
earned, other than an inadvertent administrative error or failure,
within 10 days of receipt of notice by you,
(B)
a material
diminution in your authority or responsibilities from those
described herein,
(C)
any material breach
of this Agreement by the Company, or
(D)
a failure of the
Company to have any successor assume in writing the obligations
under this Agreement.
(ii)
“Change in
Control” shall mean the occurrence of any of the following
events during the Term:
(A)
any person, or more
than one person acting as a group within the meaning of Code
Section 409A and the regulations issued thereunder, acquires
ownership of stock of the Company that, together with stock held by
such person or group, constitutes more than 50% of the total fair
market value and total voting power of the stock of the Company;
provided, however, that for purposes of this subsection (A), the
following acquisitions shall not be deemed to result in a Change in
Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company or an affiliate of the
Company, or (3) any acquisition by (x) any employee
benefit plan (or related trust) intended to be qualified under
Section 401(a) of the Code or (y) any trust
established in connection with any broad-based employee benefit
plan sponsored or maintained, in each case, by the Company or any
corporation controlled by the Company (collectively (1), (2) and
(3), the “Exempt Acquisitions”);
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(B)
any person, or more
than one person acting as a group within the meaning of Code
Section 409A and the regulations issued thereunder, acquires
(or has acquired during the 12-month period ending on the date of
the most recent acquisition) ownership of stock of the Company
possessing 30% or more of the total voting power of the
Company’s stock; provided, however, that none of the Exempt
Acquisitions shall constitute a Change in Control.
(C)
individuals who, as
of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”))
or other actual or threatened solicitation of proxies or consents
by or on behalf of an individual, entity or group (a
“Person” within the meaning of the Exchange Act) other
than the Board; or
(D)
a person, or more
than one person acting as a group within the meaning of Code
Section 409A and the regulations issued thereunder (other than
a subsidiary or an affiliate of the Company), acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition) assets of the Company that have a total gross
fair market value equal to or more than 50% of the total gross fair
market value of all assets of the Company immediately before such
acquisition(s).
Notwithstanding the
foregoing, a Change in Control shall not include any event,
circumstance or transaction that results from an action of any
Person, entity or group which includes, is affiliated with or is
wholly or partly controlled by one or more executive officers of
the Company and in which you participate directly or actively
(other than a renegotiation of your employment arrangements or in
your capacity as an employee of the Company or any successor entity
thereto or to the business of the Company).
8. NOTICES
Any
notices required to be given under this Agreement shall, unless
otherwise agreed to by you and the Company, be in writing and by
certified mail, return receipt requested and mailed to the Company
at its headquarters at 0000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx X,
Xxxxxxxxxx, XX 00000-0000 or to you at your home address at
0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxx, XX 00000
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9. ASSIGNMENT AND
SUCCESSORS
The
rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors of
the Company. This Agreement may not be assigned by the
Company unless the assignee or successor (as the case may be)
expressly assumes the Company’s obligations hereunder in
writing. In the event of a successor to the Company or the
assignment of the Agreement, the term “Company” as used
herein shall include any such successor or assignee.
10. WAIVER OR
MODIFICATION
No
waiver or modification in whole or in part of this Agreement or any
term or condition hereof shall be effective against any party
unless in writing and duly signed by the party sought to be
bound. Any waiver of any breach of any provision hereof or
right or power by any party on one occasion shall not be construed
as a waiver of or a bar to the exercise of such right or power on
any other occasion or as a waiver of any subsequent
breach.
11. SEPARABILITY
Any
provision of this Agreement which is unenforceable or invalid in
any respect in any jurisdiction shall be ineffective in such
jurisdiction to the extent that it is unenforceable or invalid
without effecting the remaining provisions hereof, which shall
continue in full force and effect. The unenforceability or
invalidity of any provision of the Agreement in one jurisdiction
shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. GOVERNING LAW AND
ARBITRATION
This
Agreement shall be interpreted and construed in accordance with the
laws of the State of New York without regard to its choice of law
principles. Any dispute, controversy or claim of any kind
arising under, in connection with, or relating to this Agreement or
your employment with the Company shall be resolved exclusively by
binding arbitration. Such arbitration shall be conducted in
New York City in accordance with the rules of the American
Arbitration Association (“AAA”) then in effect.
The costs of the arbitration (fees to the AAA and for the
arbitrator(s)) shall be shared equally by the parties, subject to
apportionment or shifting in the arbitration award. In
addition, the prevailing party in arbitration shall be entitled to
reimbursement by the other party for its reasonable
attorney’s fees incurred. Judgment may be entered on
the arbitration award in any court of competent
jurisdiction.
13. HEADINGS
The
headings contained in this Agreement are for convenience only and
shall not effect, restrict or modify the interpretation of this
Agreement.
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AGREED
AND
ACCEPTED:
By:
/s/ Xxxx X.
Xxxx
Xxxx X.
Xxxx
Chief
Financial Officer
Date:
November 10, 2015
By:
/s/
Xxxxxxxxxxx X. Xxxx
By: /s/
Xxxxxx XxXxxxx
Xxxxxxxxxxx X.
Xxxx, CEO and President
Xxxxxx XxXxxxx,
Compensation Committee Chairman
Date:
November 10,
2015
Date:
November 10,
2015
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ANNEX A
General Release
IN
CONSIDERATION OF good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the terms and
conditions contained in the Employment Agreement, effective as of
July 31, 2015 (the “Agreement”), by and between
Xxxx X. Xxxx (the
“Executive”) and Lakeland Industries, Inc. (the
“Company”), the Executive on behalf of himself and his
heirs, executors, administrators, assigns, attorneys, successors,
and assigns, knowingly and voluntarily, hereby waives, remits,
releases and forever discharges the Company and its past, present
and future subsidiaries, divisions, affiliates and parents, and
their respective current and former officers, directors,
stockholders, employees, agents, attorneys, lenders, and/or owners,
and their respective successors, and assigns and any other person
or entity claimed to be jointly or severally liable with the
Company or any of the aforementioned persons or entities, both
individually and in their business capacities, and their employee
benefit plans and programs and their administrators and fiduciaries
(the “Released Parties”) of and from any and all manner
of actions and causes of action, suits, debts, dues, accounts,
bonds, covenants, contracts, agreements, judgments, charges,
claims, complaints, damages, demands, and obligations of any other
nature whatsoever, past or present, known or unknown
(“Losses”) which the Executive and his heirs,
executors, administrators, and assigns have, had, or may hereafter
have, against the Released Parties or any of them arising out of or
by reason of any cause, matter, or thing whatsoever from the
beginning of the world to the date hereof, relating to the
Executive’s employment by the Company and the cessation
thereof, and any and all matters arising under any federal, state,
or local statute, rule, or regulation, or principle of contract law
or common law relating to the Executive’s employment by the
Company and the cessation thereof, including, but not limited to, the Family
and Medical Leave Act of 1993, as amended, 29 U.S.C. §§
2601 et seq., Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. §§ 2000 et seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C.
§§ 621 et seq. (the “ADEA”), the Americans
with Disabilities Act of 1990, as amended, 42 U.S.C. §§
12101 et seq., the Worker Adjustment and Retraining Notification
Act of 1988, as amended, 29 U.S.C. §§2101 et seq., the
Employee Retirement Income Security Act of 1974, as amended, 29
U.S.C. §§ 1001 et seq., the New York State and New York
City Human Rights Laws, the New York Labor Laws, and any other
equivalent or similar federal, state, or local statute, and any
claim for or obligation to pay for attorneys’ fees, costs,
fees, or other expenses; provided, however, that the Executive does
not release or discharge the Released Parties from (i) any
rights to any payments, benefits or reimbursements due to the
Executive under the Agreement; or (ii) any rights to any
vested benefits due to the Executive under any employee benefit
plans sponsored or maintained by the Company. It is
understood that nothing in this general release is to be construed
as an admission on behalf of the Released Parties of any wrongdoing
with respect to the Executive, any such wrongdoing being expressly
denied.
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Included in this
general release are any and all claims for future damages allegedly
arising from the alleged continuation of the effect of any past
action, omission or event. Notwithstanding the foregoing, Executive
shall retain the right, if any to claim unemployment insurance with
respect to the termination of his employment.
The
Executive represents and warrants that he fully understands the
terms of this General Release, that he has been encouraged to seek,
and has sought, the benefit of advice of legal counsel, and that he
knowingly and voluntarily, of his own free will, without any
duress, being fully informed, and after due deliberation, accepts
its terms and signs below as his own free act. Except as otherwise
provided herein, the Executive understands that as a result of
executing this General Release, he will not have the right to
assert that the Company or any other of the Released Parties
unlawfully terminated his employment or violated any of his rights
in connection with his employment or otherwise.
The
Executive further represents and warrants that he has not filed,
and will not initiate, or cause to be initiated on his behalf any
complaint, charge, claim, or proceeding against any of the Released
Parties before any federal, state, or local agency, court, or other
body relating to any claims barred or released in this General
Release thereof, and will not voluntarily participate in such a
proceeding. However, nothing in this General Release shall
preclude or prevent the Executive from filing a claim, which
challenges the validity of this General Release solely with respect
to the Executive’s waiver of any Losses arising under the
ADEA. The Executive shall not accept any relief obtained on his
behalf by any government agency, private party, class, or otherwise
with respect to any claims covered by this General
Release.
The
Executive may take twenty-one (21) days to consider whether to
execute this General Release. Upon the Executive’s
execution of this general release, the Executive will have seven
(7) days after such execution in which he may revoke such
execution. In the event of revocation, the Executive must present
written notice of such revocation to the office of the
Company. If seven (7) days pass without receipt of such
notice of revocation, this General Release shall become binding and
effective on the eighth (8th) day after the execution hereof (the
“Effective Date”).
INTENDING
TO BE LEGALLY BOUND, I hereby set my hand below:
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Xxxx X.
Xxxx
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Dated:
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____________________________________________
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STATE OF NEW
YORK
)
)
s/s:
COUNTY OF
_______
)
On the
___ day of _________, 2015, before me personally came Xxxx X. Xxxx,
to me known, and known to me to be the individual described in, and
who executed the foregoing General Release, and duly acknowledged
to me that he executed the same.
____________________________
Notary
Public
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