EXHIBIT 10a
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SIGHT RESOURCE CORPORATION
000 XXXXXXX XXXXXX
XXXXXXXXX, XX 00000
As of August 17, 1998
Xxxxx X. Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
This letter is to confirm our understanding with respect to (i) your
employment by Sight Resource Corporation, a Delaware corporation (the
"Company"), (ii) your agreement not to compete with the Company and (iii) your
agreement to protect and preserve information and property which is confidential
and proprietary to the Company, subject to your agreement with the terms hereof
as indicated by your execution of this letter on the final page (the terms and
conditions agreed to in this letter shall hereinafter be referred to as the
"Agreement"). In consideration of the mutual promises and covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, we have agreed as follows:
1. Employment. The Company will employ you, and you agree to work for the
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Company, as its Vice President-Finance and Chief Financial Officer, to have such
responsibilities, duties and authority as are customary to such positions. You
will also have such other responsibilities, duties and authority as may from
time to time be assigned to you by the Chief Executive Officer or the Board of
Directors (the "Board") that are consistent with your status as Vice President-
Finance and Chief Financial Officer of the Company. You agree to devote your
full business time and energies to the business and affairs of the Company and
its subsidiaries, if any, as is necessary from time to time for your fulfillment
of your obligations to the Company hereunder; however, nothing contained in this
Paragraph 1 shall be deemed to prevent or limit your right to: (a) make passive
investments in the securities of any publicly-owned corporation, (b) make any
other passive investments with respect to which you are not obligated or
required to, and which you do not in fact, devote any substantial managerial
efforts which interfere with your fulfillment of your duties hereunder or (c)
serve as member of the board of directors of other for-profit or not-for-profit
corporations or entities, so long as such service (i) does not interfere with
the performance of your obligations hereunder or (ii) does not constitute a
violation of Section 10.
2. Term of Employment. (a) Your retention hereunder shall commence as of
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the date above and will continue until the third anniversary thereof (the
"Initial Term"); provided that the Initial Term, and any succeeding one-year
period thereafter, shall automatically be renewed for a one-year period, and for
successive one-year periods, unless, not later than 3 months prior to the
expiration of the Initial Term or any such successor one-year term (or such
shorter period as may mutually be agreed by you and the Company), either you or
the Company delivers written notice to the other stating that such term shall
not be so extended or renewed Notwithstanding the foregoing, your employment
hereunder shall be terminated by the first to occur of the following:
(i) Immediately upon your death;
(ii) Upon notice from the Company following your inability, due to
illness, accident or any other physical or mental incapacity, to perform
the services provided for hereunder for an aggregate of 180 business days
within any one year period during the term hereof;
(iii) By the Company upon notice, for Cause, as defined herein, and as set
forth below;
(iv) By the Company, upon notice subject to Section 3 hereof, without
Cause; or
(v) By you, upon notice to the Company, provided, that if you do not give
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at least 30 days' prior written notice of your intention to terminate your
employment hereunder, you will forfeit all unused vacation, prepaid
benefits, any unused but unpaid incentive compensation, and any stock
options which have not vested as of the date such notice is given.
The right of the Company to terminate your employment hereunder to which you
hereby agree, shall be exercisable by written notice sent to you by the Company
and shall be effective as of the date of such notice.
(b) The Company may, immediately and unilaterally, terminate your
employment hereunder for Cause at any time upon ten (10) days' advance written
notice to you. Termination of your employment by the Company shall constitute a
termination for Cause if such termination is for one or more of the following
reasons: (i) your willful misconduct or gross negligence; (ii) you are convicted
of a felony, either in connection with the performance of your obligations to
the Company or which conviction materially adversely affects your ability to
perform such obligations, or materially adversely affects the business
activities, reputation, good will or image of the Company; (iii) willful
disloyalty, deliberate dishonesty, breach of fiduciary duty or breach of the
terms of this Agreement; (iv) the commission by you of an act of fraud,
embezzlement or deliberate disregard of the rules or policies of the Company
which results in significant loss, damage or injury to the Company; (v) your
willful unauthorized disclosure of any trade secret or confidential information
of the Company; or (vi) your willful commission of an act which constitutes
unfair competition with the Company or which induces any employee or customer of
the Company to break a contract with the Company.
In making any determination under this Section, the Chief Executive Officer
and the Board of Directors shall act fairly and in utmost good faith and shall
give you an opportunity to appear and be heard at a meeting of the Board of
Directors or any committee thereof and present evidence on your behalf. For
purposes of this Section, no act, or failure to act, on your part shall be
considered "willful" unless done, or admitted to be done, by you in bad faith
and without reasonable belief that such action of omission was in the best
interest of the Company.
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In the event you are terminated for Cause, you shall be entitled to no
severance or other termination benefits, or any other benefits (except for any
health insurance benefits required by applicable law).
3. Compensation. (a) In consideration for your services under this
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Agreement, you shall be paid at the annual rate of One Hundred Sixty Thousand
Dollars ($160,000), subject to increase from time to time by action of the Chief
Executive Officer and the Board in accordance with your performance and the
Company's performance ("Base Salary"), and payable at such intervals as may be
agreed upon by the Company and you, less any amounts required to be withheld
under applicable law. Such compensation will be reduced by any disability
payments which you receive, after taking into account the tax benefits (if any)
of such payments. In addition, upon commencement of your employment you will be
granted options to purchase an aggregate of 99,999 shares of the Company's
Common Stock, at fair market value on the date of grant, vesting 1/3 after one
year and the remaining 2/3 in two equal annual installments thereafter, pursuant
to the Company's standard form of stock option agreement.
(b) In the event that (i) your employment shall be terminated by the
Company without Cause at any time, (ii) you terminate your employment
hereunder by reason of a material change in your duties imposed by the
Chief Executive Officer or Board of Directors of the Company or by reason
of any material breach by the Company of its obligations to you or (iii)
the Company elects not to renew the term of your employment hereunder at
the end of the Initial Term or any succeeding one-year period, then, in any
such case, the Company shall continue to pay you your Base Salary then in
effect and the cost of your health insurance for a period (the "Severance
Period") of one year.
(c) In the event your employment shall be terminated by the Company for
Cause, no further compensation or benefits of any kind shall be payable to
you hereunder (except for any health insurance benefits required by
applicable law); provided, however, that you shall continue to be bound by
the provisions of this Agreement, other than Section 1.
(d) In consideration for your services under this Agreement, you shall be
paid a "signing bonus" of Twelve Thousand Five Hundred Dollars ($12,500)
upon the commencement of your employment hereunder.
(e) In the event that, during the term of your employment hereunder and on
or prior to the second anniversary of the date hereof, you relocate your
primary residence from Marshfield, Massachusetts to a location more
convenient to the Company's home office in Holliston, Massachusetts, then
the Company shall pay to you Twelve Thousand Five Hundred Dollars
($12,500).
4. Bonuses. Following the commencement of your employment hereunder, for
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fiscal year 1998 you will be entitled to a bonus based principally on the
profitability of the Company, but not to exceed in any event an amount equal to
35% of your base salary base hereunder, determined on a pro rata basis.
Thereafter, you will be entitled to such bonuses as are determined pursuant to
bonus policies, procedures and formulae in effect from time to time as
determined by the Compensation Committee of the Board or by the Board of
directors, but such
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policies, procedures and formulae will not be any less favorable to you than the
35% of annual base salary maximum bonus plan that will be in effect for the
balance of 1998.
5. Expenses. The Company will reimburse you for travel, entertainment and
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other business expenses reasonably incurred by you in connection with the
business of the Company to the extent and in a manner consistent with then
Company policy and appropriate to someone in a position of your stature.
6. Benefits. In connection with your employment hereunder, you will be
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entitled during your employment to the following additional benefits:
(a) You shall be entitled to no less than the number of vacation days in
each calendar year determined in accordance with the Company's vacation policy
as in effect from time to time, but not less than three (3) weeks in any
calendar year (prorated in any calendar year during which you are employed
hereunder for less than the entire such year in accordance with the number of
days in such calendar year in which you are so employed). You shall also be
entitled to all paid holidays and personal days given by the Company to its
executives.
(b) The Company shall furnish you with office space, stenographic
assistance and such other facilities and services as shall be suitable to and
appropriate for your position and for the performance of your duties as set
forth herein.
(c) In addition to the foregoing, you shall also be entitled to
participate in any employee benefit plans which the Company provides or may
establish for the benefit of its executive employees generally.
7. Termination upon Death or Disability. Your employment by the Company
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shall terminate upon your death, or if, by virtue of total and permanent
disability, you are unable to perform your duties hereunder.
The determination that, by virtue of total and permanent disability, you
are unable to perform your duties hereunder shall be made by a physician chosen
by the Company and reasonably satisfactory to you (or your legal
representative). The cost of such examination shall be borne by the Company.
Without limiting the generality of the foregoing, unless otherwise agreed, you
shall be conclusively presumed to be totally and permanently disabled hereunder
if for reasons involving mental or physical illness or physical injury you fail
to perform your duties hereunder for a period aggregating one hundred eighty
(180) days or more in any twelve (12) consecutive month period.
For purposes of this Paragraph 7, the termination date in the event of
death shall be the date of death and in the event of such total and permanent
disability shall be the earlier of the date of such physician's examination
pursuant to which such determination is made or the first business day after
which such 180 days has expired.
In the event of such a termination of employment as a result of your death
or total and permanent disability, the Company shall have no further obligations
hereunder except as provided in Paragraphs 3 and 9 hereof and except as provided
below in this Paragraph 7:
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(a) In the event of death, the Company shall pay to your estate amounts,
at the Base Salary rate in effect on the termination date, in monthly
payments, for a period of twelve (12) months following the termination
date; and
(b) In the event of total and permanent disability, the Company shall pay
to you (or your estate) amounts, at the Base Salary rate in effect on the
termination date, payable in monthly payments, for a period of twelve (12)
months following the termination date. Amounts to which you would otherwise
be entitled under this subparagraph (b) shall be reduced by the amount of
any disability insurance proceeds actually paid to you or paid for your
benefit (or to your estate or legal representatives) with respect to such
twelve (12) months following the termination date under any disability
policy provided by the Company.
8. Change of Control. (a) In the event you, the Company, or a successor to
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the Company elect to terminate your employment upon a Change of Control (as
defined in Section 8(b) below), provided that such notice of termination is
given within twelve (12) months of a Change of Control (a "Change of Control
Notice"), then upon such termination pursuant to this paragraph, you (or your
estate, if you die prior to receiving the payments hereinafter set forth in this
sentence) shall be entitled to receive within thirty (30) days of such
termination a lump sum payment equal to your Base Salary in effect on the date
of such termination. For the purposes of this Section 8(a), the time when a
termination occurs shall be the effective date of your termination. In
addition, in the event of such a termination pursuant to a Change of Control
Notice, the Company or a successor to the Company shall provide, and you shall
continue to be entitled to receive, such benefits you have been receiving
pursuant to Section 6(a) as of the date of your Change of Control Notice until
the earlier of (i) your full-time employment by a third-party who offers you at
least comparable benefits in the particular benefit category or (ii) two (2)
years following such date of termination. Any compensation payable under this
Section 8(a) shall be paid notwithstanding your total and permanent disability
or death occurring after termination of your employment hereunder. In addition,
the stock option agreements described in Section 3(a) above shall provide for
the automatic vesting of any unvested stock options upon the occurrence of a
Change of Control.
(b) As used herein a "Change of Control" shall be deemed to have occurred
if (i) any "person" (as such term is used in sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended), is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing twenty-
five percent (25%) or more of the outstanding Common Stock of the Company, or
(ii) ten (10) days following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by any "person" of twenty-five percent
(25%) or more of the outstanding Common Stock of the Company, provided, however,
that at the conclusion of such ten (10) day period such person has not
discontinued or rescinded his intention to make a tender or exchange offer or
(iii) if during any consecutive twelve (12) month period beginning on or after
the date on which this Agreement is executed individuals who at the beginning of
such period were directors of the Company cease, for any reason, to constitute
at least a majority of the Board of Directors of the Company; or (iv) if a
merger of, or consolidation involving, the Company in which the Company's stock
is converted into securities of another corporation or into cash shall be
consummated, or a plan of complete liquidation of the Company (whether or not in
connection with a sale of all or substantially all of the Company's assets)
shall be adopted
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and consummated, or substantially all of the Company's operating assets are sold
(whether or not a plan of liquidation shall be adopted or a liquidation occurs),
excluding in each case a transaction solely for the purpose of reincorporating
the Company in a different jurisdiction or recapitalizing the Company's stock.
9. Accrued Compensation. In the event of any termination of your
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employment for any reason, you (or your estate) shall be paid such portion of
your Base Salary and bonuses as has accrued by virtue of your employment during
the period prior to termination and has not yet been paid, together with any
amounts for expense reimbursement and similar items which have been properly
incurred in accordance with the provisions hereof prior to termination and have
not yet been paid. Such amounts shall be paid within ten (10) days of the
termination date. The amount due to you (or your estate) under this Paragraph 9
in payment of any bonus shall be a proportionate amount of the bonus that would
otherwise have been due to you as if such termination had not occurred.
10. Prohibited Competition. You agree and covenant that, with respect to
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the business of the Company, until your termination of employment, whether or
not such termination is voluntary or involuntary, and, subject to the last
sentence of this paragraph 10, for a period of one (1) year following such
termination, you shall not, without the prior written consent of the Company,
for yourself or on behalf of any other, directly or indirectly, either as
principal, agent, stockholder, employee, consultant, representative or in any
other capacity, own, manage, operate or control, or be concerned, connected or
employed by, or otherwise associate in any manner with, engage in or have a
financial interest in any business which is directly or indirectly competitive
with the retailing of optical goods and services business of the Company;
provided, however, that nothing contained herein shall preclude you from
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purchasing or owning stock in any such business if such stock is publicly
traded, and provided that your holdings do not exceed three percent (3%) of the
issued and outstanding capital stock of such business. Notwithstanding anything
in this Agreement to the contrary, the provisions of this Section 10 shall not
apply to the one (1) year period following termination of your employment in the
event that such termination is caused by or related in any manner to (i) a
change (without your consent) by the Board of Directors in your title of Vice
President-Finance and Chief Financial Officer to any lesser office or (ii) a
relocation (without your consent) of the position of Vice President-Finance or
Chief Financial Officer to a location outside of the Commonwealth of
Massachusetts and the States of Rhode Island and New Hampshire.
11. Protected Information. You shall not, without the prior written
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consent of the Company, use, except in the course of performance of your duties
for the Company, disclose or give to others any fact or information which was
disclosed to or developed by you during the course of performing services for or
receiving training from, the Company, and is not generally available to the
public, including but not limited to information and facts concerning business
plans, customers, prospects, client lists, or any other scientific, technical,
trade or business secret or confidential or proprietary information of the
Company.
12. Ownership of Ideas, Copyrights and Patents. You agree that all ideas,
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discoveries, creations, manuscripts and properties, innovations, improvements,
know-how, inventions, developments, apparatus, techniques, methods, and formulae
(all of the foregoing being hereinafter referred to as "the inventions") which
may be used in the business of the Company, whether patentable, copyrightable or
not, which you may conceive or develop during
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your term of employment with the Company, alone or in conjunction with another,
or others, whether during or out of regular business hours, and whether at the
request, or upon the suggestion of the Company, or otherwise, shall be the sole
and exclusive property of the Company, and that you shall not publish any of the
inventions without the prior consent of the Company. You hereby assign to the
Company all of your right, title and interest in and to all of the foregoing.
You further represent and agree that to the best of your knowledge and belief
none of the inventions will violate or infringe upon any right, patent,
copyright, trademark or right of privacy, or constitute libel or slander against
or violate any other rights of any person, firm or corporation, and that you
will use your best efforts to prevent any such violation.
At any time during or after your term of employment with the Company, you
agree that you will fully cooperate with the Company, its attorneys and agents,
in the preparation and filing of all papers and other documents as may be
required to perfect the Company's rights in and to any of such inventions,
including, but not limited to, joining in any proceeding to obtain letters
patent, copyrights, trademarks or other legal rights of the United States and of
any and all other countries on such inventions, provided that the Company will
bear the expense of such proceedings, and that any patent or other legal right
so issued to you, personally, shall be assigned by you to the Company without
charge by you.
13. Parties. This Agreement is personal and shall in no way be subject to
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assignment by you except as contemplated hereby. This Agreement shall be
binding upon and shall inure to the benefit of the Company and its successors
and assigns either by merger, operation of law, consolidation, assignment,
purchase or otherwise of a controlling interest in the business of the Company
and shall be binding upon and shall inure to the benefit of you, your heirs,
executors, administrators, personal and legal representatives, distributees,
devisees, legatees, successors and permitted assigns. If you should die while
any amounts would still be payable to you hereunder if you had continued to live
(other than amounts to which you would be entitled by reason of continued
employment), all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to your devisees, legatees or
other designees or, if there be no such designee, to your estate. The Company
agrees that a successor in interest by merger, operation of law, consolidation,
assignment, purchase or otherwise of a controlling interest in the business of
the Company will be informed prior to such event of the existence of this
Agreement. The Company will require any successor (whether direct or indirect,
by purchase, merger, operation of law, consolidation, assignment or otherwise of
a controlling interest in the business, stock or other assets of the Company) to
assume expressly and agree to perform this Agreement. As used in this
Agreement, "the Company" shall mean the Company as hereinbefore defined and any
successor as aforesaid.
14. Invalidity. We intend this Agreement to be enforced as written.
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However, if any term or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a duly authorized court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
term or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, each term and
provision of this Agreement shall be valid and be enforceable to the fullest
extent permitted by law and the illegal or unenforceable term or provision shall
be deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
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15. Notices. All notices and communications required or permitted to be
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given hereunder shall be duly given by delivering the same in hand or by
depositing such notice or communication in the mail, sent by certified or
registered mail, return receipt requested, postage prepaid, or by delivery by
overnight courier, with a receipt obtained therefor, as follows:
If sent to the Company: Sight Resource Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If sent to you: Xxxxx X. Xxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
or such other address as either party furnishes to the other by like notice,
provided, however, that any notice of a change of address shall be effective
only upon receipt.
16. Entire Agreement. This Agreement embodies the entire agreement and
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understanding between us in relation to the subject matter hereof and there are
no promises, representations, conditions, provisions or terms related thereto
other than those set forth or referred to in this Agreement and the exhibits
hereto. This Agreement supersedes all previous understandings, agreements and
representations between the Company and you regarding your employment by the
Company, whether written or oral.
17. Headings. All captions in this Agreement are intended solely for the
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convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provision hereof.
18. Waiver. No failure of the Company or you to exercise any power
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reserved to it or you, respectively, by this Agreement, or to insist upon strict
compliance by you or the Company, respectively, with any obligation or condition
hereunder, and no custom or practice of the parties at variance with the terms
hereof, shall constitute a waiver of the Company's or your right, as the case
may be, to demand exact compliance with any of the terms hereof. Waiver by
either party of any particular default by the other party hereto shall not
affect or impair the waiving party's rights with respect to any subsequent
default of the same, similar or different nature, nor shall any delay,
forbearance or omission of either party to exercise any power or right arising
out of any breach or default by the other party of any of the terms, provisions
or covenants hereof, affect or impair our or your right to exercise the same,
nor shall such constitute a waiver by the Company or you, as the case may be, of
any right hereunder, or the right to declare any subsequent breach or default
and to terminate this Agreement prior to the expiration of its term.
19. Subsidiaries. As used herein, the term "Subsidiaries" shall mean all
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corporations a majority of the capital stock of which entitling the holder
thereof to vote is owned by the Company or a Subsidiary.
20. Governing Law. This Agreement shall be construed under and be
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governed in all respects by the law of the Commonwealth of Massachusetts.
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21. Excise Tax. In the event you are subject to any excise tax ("Excise
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Tax") on your compensation by the Company or any of its Affiliates (including
but not limited to excise taxes imposed under Section 4999 of the Internal
Revenue Code), the Company agrees that it will then "gross-up" your compensation
by making an additional payment to you in an amount which, after reduction for
any income or excise taxes payable as a result of receiving such additional
payment, is equal to the Excise Tax.
22. Mitigation. You shall not be required to mitigate the amount of any
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payment provided for in this Agreement by seeking other employment or otherwise,
nor, other than as provided in Section 7(a) hereof, shall the amount of any
payment or benefit provided for herein be reduced by any compensation or
benefits earned by you as the result of employment by another employer after the
date of your termination by the Company.
23. Amendment. No amendment or modification to this Agreement shall be
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effective unless in writing and signed by both parties hereto.
24. Counterparts. This Agreement may be executed in any number of
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counterparts, each executed counterpart constituting an original and such
counterparts together constituting one agreement.
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If you agree with the terms of your employment as set forth in this
Agreement, please execute the duplicate copy hereof in the space provided below.
SIGHT RESOURCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President & CEO
ACCEPTED AND AGREED
as of the date above:
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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