Exhibit 10.113
EXECUTIVE EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is made as of this 15th day of
February 2003, by and between I.C. Xxxxxx & Company LP, a Delaware limited
partnership ("the Company"), and Xxxxxx Xxxxxxxxxxx, (the "Executive").
1. Employment. The Company hereby employs the executive as Senior Vice
President of Merchandising - Girbaud Division. The Executive will report to
either the President of the Company's Girbaud Division or to a person of higher
rank in the Company.
2. Term. This agreement shall be effective as of February ______, 2003
("the Effective Date") and shall continue until December 31, 2005 (the "Initial
Term"). This Agreement shall be automatically extended for additional periods of
one calendar year (each, a "Renewal Term") commencing with calendar year 2006
unless, on or before September 30 of the last calendar year of the Initial Term
or the then current Renewal Term, as the case may be, either party gives notice
to the other of its or her intention not to extend the Agreement beyond the end
of the Initial Term or the then current Renewal Term. The Initial Term and all
Renewal Terms taken together are hereinafter collectively referred to as the
"Term."
3. Base Salary. The Executive's base salary during the Term shall be paid
at a rate of $310,000 per annum. The payment of the Executive's base salary and
all other payments made and to be made to the Executive under this Agreement
shall be made net of all current and lawful withholdings and deductions,
including those for federal, state and local taxes.
4. Incentive Compensation. In addition to her base salary, the Executive
shall be entitled to receive incentive compensation calculated and paid, as
follows:
(a) The Company shall pay a bonus of $38,750 to the Executive with
respect to each calendar year or part thereof during the Term in which the
annual "EBIT Target" specified by the Company for such year or period shall
be met.
(b) The Company shall pay a bonus of $31,000 to the Executive in the
event that the increase in cash and cash equivalents reflected on the
consolidated statement of cash flows contained in Xxxxxx' annual audited
financial statements shall be equal to or greater than 95% of the annual
"Cash Flow Target" specified by the Company for each calendar year or part
thereof during the Term.
(c) The Company shall pay a bonus of $7,750 to the Executive in the
event that the number of turns of the Company's inventory shall be equal to
or greater than 95% of the annual "Inventory Turn Target" specified by the
Company for each calendar year or part thereof during the Term.
(d) For purposes of this Agreement, the term:
(i) "EBIT Target" shall mean the amount that the Company shall
designate as the earnings before interest and taxes that the Company's
parent, I.C. Xxxxxx & Company, Inc. ("Xxxxxx") must achieve in order
for the Executive to earn the bonus described in Section 4(a) of this
Agreement;
(ii) "Cash Flow Target" shall mean the amount that the Company
shall designate as the increase in cash and cash equivalents that
Xxxxxx must achieve in order for the Executive to earn the bonus
described in Section 4(b) of this Agreement; and
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(iii) "Inventory Turns Target" shall mean the number of turns of
the Company's inventory that the Company must achieve, as designated
by the Company, in order for the Executive to earn the bonus described
in Section 4(c) of this Agreement.
(e) The EBIT Target, Cash Flow Target and Inventory Turns Target shall be
specified in writing by the Company not more than 30 days after the Effective
Date with respect to the Initial Term, and not more than 30 days after the first
day of each Renewal Term with respect to such Renewal Term.
(f) Determination of the achievement of:
(i) the EBIT Target shall be made by subtracting the sum of the
interest expense net of interest income, and income tax expense
reflected on the consolidated statement of operations contained in
Xxxxxx' annual audited consolidated financial statements (the "Xxxxxx
Financial Statements") for the year in question from the income from
continuing operations before taxes reflected on such consolidated
statement of operations;
(ii) the Cash Flow Target shall be made by reference to the line
item entitled "Increase in cash and cash equivalents" reflected on the
consolidated statement of cash flows contained in the Xxxxxx Financial
Statements for the year in question; and
(iii) the Inventory Turns Target shall be made by reference to
the quotient obtained by dividing:
1) the cost of goods sold reflected on the consolidated statement of
operations contained in the Xxxxxx Financial Statements for the year in
question by
2) the quotient derived by dividing the sum of the beginning and
ending inventories for the year in question, as determined by reference to
the notes to the Xxxxxx Financial Statements for such year, by the number
2.
(g) Each of the bonuses described in Sections 4(a), (b) and (c) which shall
be earned during any calendar year or part thereof during the Term shall be paid
not more than 10 days after the date upon which Xxxxxx' Annual Report on Form
10-K for the year in question shall be filed with the SEC.
(h) Anything contained elsewhere in this Agreement to the contrary
notwithstanding, in the event that the aggregate amount of the bonuses to be
paid to the Executive pursuant to Sections 4(a), (b) and (c) of this Agreement
shall be less than $15,000 with respect to calendar year 2003, the Company shall
pay the difference between $15,000 and such aggregate amount to the Executive.
Payment of such amount shall be made in accordance with the provisions of
Section 4(g) of this Agreement.
5. Stock Options. In addition to her base salary, and the incentive
compensation entitlements described in Section 4, the Executive also shall
receive a non-qualified stock option (the "Option") to purchase 25,000 shares of
the common stock, par value $.0001 per share (the "Common Stock"), of Xxxxxx.
The Option shall be granted under, and shall be subject to all of the terms and
conditions of, Xxxxxx' Amended and Restated Omnibus Stock Option Plan, as
amended (the "Option Plan"). The Option shall be exercisable, notwithstanding
any contrary provision or requirement contained in the Option Plan, for a period
of five years commencing on the Effective Date (the "Option Term"), provided
that (i) the Executive shall have been in the continuous employ of the Company
during the Initial Term; and (ii) the Executive's employment shall not be
terminated for "Cause" (as such term is hereinafter defined) at any time during
the Option Term. The Option shall be exercisable at the price per share which
must be applied to all non-qualified stock options granted under the Option Plan
on the Effective Date. The Executive's right to purchase Common Stock pursuant
to the Option shall vest ratably on the first, second and third anniversaries of
the Effective Date.
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6. Benefits. During the Term, the Executive shall also be entitled to
participate in or receive benefits under all of the Company's benefit plans,
programs, arrangements and practices, including pension, disability, and group
life, sickness, accident or health insurance programs, if any, as may be
established from time to time by the Company for the benefit of executive
employees serving in similar capacities with the Company (and/or its
affiliates), in accordance with the terms of such plans, as amended by the
Company from time to time; it being understood that there is no assurance with
respect to the establishment of such plans or, if established, the continuation
of such plans during the term of this Agreement.
7. Vacation and Sick Leave.
(a) The Executive shall be entitled to a total of three weeks of
vacation each year, such vacation to be in accordance with the terms of the
Company's announced policy for executive employees, as in effect from time
to time. The Executive may take her vacation at such time or times as shall
not interfere with the performance of her duties under this Agreement.
(b) The Executive shall be entitled to paid sick leave and holidays in
accordance with the Company's announced policy for executive employees, as
in effect from time to time.
8. Expenses. The Company shall reimburse the Executive for all reasonable
expenses incurred in connection with her duties on behalf of the Company,
(including business class service for international air travel) provided that
the Executive shall keep, and present to the Company, records and receipts
relating to reimbursable expenses incurred by her. Such records and receipts
shall be maintained and presented in a format, and with such regularity, as the
Company reasonably may require in order to substantiate the Company's right to
claim income tax deductions for such expenses. Without limiting the generality
of the foregoing, the Executive shall be entitled to reimbursement for any
business-related travel, business-related entertainment, and other costs and
expenses reasonably incident to the performance of her duties on behalf of the
company.
9. Termination of Employment for Cause. Notwithstanding the provisions of
Section 2 of this Agreement, the Executive's employment (and all of her rights
and benefits under this Agreement) shall terminate immediately and without
further notice upon the happening of any one or more of the following events
(each of which individually, and all of which collectively, shall be hereinafter
referred to as "Cause"):
(a) The Executive has been or is guilty of (i) a criminal offense
involving moral turpitude, (ii) criminal or dishonest conduct pertaining to
the business or affairs of the Company (including, without limitation,
fraud and misappropriation), (iii) any act or omission the intended or
likely consequence of which is material injury to the Company's business,
property or reputation (iv) gross negligence or willful misconduct.
(b) The Executive persists, for a period of 15 days after written
notice from the Company, in willful misconduct injurious to the Company's
interest, willful breach in the performance of her duties under this
Agreement, or habitual neglect by the Executive in the performance of her
duties.
(c) The Executive's death; or
(d) The continuous and uninterrupted inability to perform the
Executive's duties and responsibilities under this Agreement, on behalf of
the Company for a period of 180 days from the first day of such inability
to perform her duties.
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Upon a termination of the Executive's employment for Cause, the Company
shall pay the Executive her base salary through the effective date of the
employment termination, and the Executive shall immediately thereafter forfeit
all rights and benefits she otherwise would have been entitled to receive under
this Agreement, including but not limited to any right to (i) receive
compensation and incentive compensation pursuant to Sections 3 and 4 of this
Agreement, except to the extent that such benefits shall have vested and
continue after the termination of the Executive's employment under the terms of
the applicable benefit plans and programs; and (ii) exercise any then
unexercised portion of the Option. The Company and the Executive thereafter
shall have no further obligations under this Agreement except as otherwise
provided in this Section and in Section 11 of this Agreement.
10. Termination of Employment by the Company Without Cause. Notwithstanding
the provisions of Section 2 of this Agreement, the Company may terminate the
Executive's employment as provided under this Agreement, at any time, for
reasons other than for Cause by notifying the Executive in writing of such
termination. If the Executive's employment is terminated pursuant to this
Section 10, the Company shall pay the Executive in accordance with the normal
payroll practices of the Company, an amount equal to the Executive's base salary
for a period of six months commencing on the effective date of the termination
of the Executive's Employment (the "Severance Period"). The payments described
in the immediately preceding sentence shall be reduced by any compensation paid
to the Executive during the Severance Period from other employment or consulting
services she performs for other persons or entities.
11. Confidential Information. The Executive agrees that, during the term of
her employment with the Company, and for a period of one year after the
termination of her employment for any reason whatsoever (including the
non-renewal of this agreement by either party), she shall not disclose to any
person or use the same in any way, other than in the discharge of her duties
under this Agreement in connection with the business of the Company, any trade
secrets or confidential or proprietary information of the Company, including,
without limitation, any information or knowledge relating to (i) the business,
operations or internal structure of the Company, (ii) the clients (or customers)
or potential clients (or potential customers) of the Company, (iii) any method
and/or procedure (such as records, programs, systems, correspondence, or other
documents), relating or pertaining to projects developed by the Company or
contemplated to be developed by the Company, or (iv) the Company's business,
which information or knowledge the Executive shall have obtained during the term
of this Agreement, and which is otherwise of a secret or confidential nature.
Further, upon leaving the employ of the Company for any reason whatsoever, the
Executive shall not take with her, without prior written consent of the Company,
any documents, forms or other reproductions of any data or any information
relating to or pertaining to the Company, any clients (or customers) or
potential clients (or potential customers) of the Company, or any other
confidential information or trade secrets and will promptly return any such
materials already in her possession to the Company. The provisions of this
Section 11 shall survive the termination of this Agreement.
12. Miscellaneous.
(a) Notices. Any notice, demand, claim, or consent or other
communication to be given hereunder ("Notice") shall be given in writing
and shall be sent by overnight delivery service, such as Federal Express or
Airborne, and addressed, in the case of the Company, to its principal
office in New York, New York, or in the case of the Executive, to the last
address that the Executive has given to the Company.
(b) Benefit; Non-Assignment. This Agreement shall be binding upon and
inure to the benefit of, the parties, their successors, assigns, personal
representatives, distributes, heirs and legatees. Neither party shall have
the right to assign this Agreement, or to delegate its or her respective
obligations hereunder, except that the Company may assign this Agreement
and all of its rights hereunder to any parent or the Company, any wholly
owned subsidiary of such parent or to any successor in interest to the
Company.
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(c) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without giving
effect to the principles of conflicts of law thereof.
(d) Resolution of Disputes. Any dispute regarding any aspect of this
Agreement or any act which allegedly has or would violate any provision of this
Agreement will be submitted to binding arbitration. Such arbitration shall be
conducted before a single arbitrator sitting in New York, New York, in
accordance with the rules of the American Arbitration Association then in
effect. Each party will be entitled to limited discovery, to consist of a
maximum of three depositions (maximum two hours each), document discovery and 25
written interrogatories per party, which will be completed within 120 days
following the selection of the arbitrator. Judgment may be entered on the award
of the arbitrator in any court having competent jurisdiction.
(e) Headings. The headings used in this Agreement are solely for
convenience of reference and will not be deemed to limit, characterize, or in
any way affect any provision of this Agreement, and all provisions of this
Agreement will be enforced and construed as if no heading had been used.
(f) Merger; Modification; Amendment. This Agreement (i) represents the
complete terms of the parties' agreement regarding the subject matter set forth
herein; (ii) supersedes any and all prior oral or written agreements and/or
understandings between and among the parties with respect to the subject matter
hereof; and (iii) may not be amended or modified except in a writing signed by
both parties. There are no representations, inducements or promises not set
forth herein on which either party has relied or may rely.
(g) Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, and all of
which, when taken together, shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first hereinabove written.
I.C. XXXXXX & COMPANY L.P.
By: I.C. XXXXXX & COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, President
Girbaud Division
/s/ Xxxxxx Xxxxxxxxxxx
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Xxxxxx Xxxxxxxxxxx
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