EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of this 19th
day of May, 1998 between JLM Couture, Inc., a Delaware corporation
(hereinafter called the "Company") with offices at 000 Xxxx 00xx
Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and XXXXXX X.
XXXXXX, residing at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter called the "Executive").
W I T N E S S E T H
WHEREAS, the Company is a publicly-held company which
manufactures and markets bridal gowns, bridesmaids' gowns and
accessories;
WHEREAS, the Executive is experienced in the general
administration of small publicly-held companies; and
WHEREAS, the Company and the Executive entered into an
agreement dated February 1, 1995 as amended by an amendment thereto
dated June 17, 1996 for the employment of the Executive (the
"Prior Employment Agreement"); and
WHEREAS, the Company and the Executive desire to extend the
term of the employment of the Executive and to modify the terms of
the Prior Employment Agreement; and
WHEREAS, the Company and the Executive desire to enter into an
agreement to memorialize their understandings with regard to the
employment of the Executive by the Company.
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and promises contained herein, the parties hereby agree
as follows:
1. The Prior Employment Agreement. Subject to the
provisions hereof, the Company and the Executive agree to terminate
in all respects the Prior Employment Agreement.
2. Employment Term. The Company hereby agrees to employ
the Executive and the Executive agrees to enter the employ of the
Company on the terms and conditions set forth below for a term
commencing as of the date hereof (the "Commencement Date"), and
terminating five years from such date, unless sooner terminated as
herein provided (such term of this Agreement is herein referred to
as the "Term").
3. Duties. Subject to the authority, control and direction
of the Board of Directors of the Company, the Executive shall be
appointed President and Chief Executive officer ("CEO") of the
Company, and the Executive will perform such duties and services
commensurate with his position as President and CEO of the Company,
including such duties as may from time to time be assigned to him
by the Board of Directors.
4. Time Requirements. The Executive agrees that he will
devote 80% of his business time and attention during regular
business hours to the business affairs of the Company and that
during the period of such employment the Executive will not,
without the prior permission of the Board of Directors of the
Company, engage in any other business enterprise or enterprises
which require in excess of 20% of the Executive's time or
attention. It is understood that the Executive will perform certain
of the services contemplated in this Agreement outside of the
Company's offices. The foregoing shall not prevent the purchase,
ownership or sale by the Executive of investments or securities of
publicly-held companies and any other business which is not
competitive and does not have any business relations with the
Company or any subsidiary of the Company, provided the time or
attention devoted by the Executive to such activities does not
interfere with the performance of his duties hereunder.
5. Compensation. For the full, prompt and faithful
performance of all of the duties and services to be performed by
Executive hereunder, the Company agrees to pay, and the Executive
agrees to accept, the amounts set forth below.
(a) As a base compensation, the Executive shall be paid
at a rate of $200,000 per annum during the Term (the "Base
Compensation"), payable at such regular times and intervals as the
Company customarily pays its employees. On or about January 5 of
each year during the Term, the Board of Directors of Company agrees
to review the Executive's performance hereunder and, based on such
review, to grant to the Executive a bonus in an amount equal to 5
percent (5%) of pre-tax earnings of the Company for its most recent
fiscal year.
(b) As additional compensation, the Company shall grant
to the Executive a five year option to purchase 200,000 shares of
Common Stock of the Company exercisable at $2.5625 per share, which
represents the fair market value of the Company's Common Stock on
the date of this Agreement, (the "Option"). The Option shall be
exercisable at the rate of 50,000 shares per year commencing as of
the date hereof.
(c) The Company shall provide the Executive with health
benefits on the same terms as provided to other employees of the
Company.
(d) The compensation provided for herein shall be in
additional to any retirement, profit sharing, insurance (including
medical) or similar benefit which may at any time be payable to the
Executive pursuant to any plan or policy of the Company relating to
such benefits, which benefits shall be made available to the
Executive on the same basis as they are made available to other
similarly situated executives of the Company.
6. Vacation. The Executive shall be entitled to four weeks
of vacation per year during the Term, which shall be taken at such
time or times as shall be mutually determined by the Company and
the Executive.
7. Death. In the event of the death of the Executive
during the Term or any extension thereof, the employment of the
Executive hereunder shall terminate and come to an end on the last
day of the month three months following the death of the Executive.
The estate of the Executive (or such persons as the Executive shall
designate in writing) shall be entitled to receive, and the Company
agrees to pay, the Base Compensation of the Executive up to the end
of the three month period in which such death occurs.
8. Disability. In the event that the Executive shall,
because of illness or incapacity, physical or mental, be unable to
perform the duties and services to be performed by him hereunder
for a consecutive period of six months, or nine months during any
twelve month period, the Company may terminate the employment of
the Executive hereunder after the expiration of such period. The
Executive shall be entitled to receive his base salary up to the
date of such termination.
9. Administration; Expenses. The Executive shall report to
the Board of Directors of the Company, or to a person designated by
the Board of Directors, at such intervals as may be determined from
time to time. The Executive shall be reimbursed by the Company for
all expenses reasonably incurred by him on behalf of the Company in
accordance with the Company's standard policies with respect
thereto.
10. Restrictive Covenants.
10.1 Inventions. Any program, discovery, process,
design, invention or improvement which the Executive makes or
develops during his employment by the Company, whether or not
during regular working hours or in connection with the Company's
business or research activities as then conducted or contemplated,
shall belong to the Company and shall be promptly disclosed to the
Company. During the Executive's employment and for a period of two
years thereafter, the Executive shall, without additional
compensation, execute and deliver to the Company any instruments of
transfer and take such other action as the Company may request to
carry out the provisions of this Section 10.1, including without
limitation, filing, at the Company's expense, patent applications
for anything covered by this Section 10.1 and the prompt assignment
of the same to the Company.
10.2 Covenant Not to Compete. The Executive covenants
and agrees that for a period of two years following the termination
of his employment with the Company other than as a result of a
breach of this Agreement by the Company, he shall not directly or
indirectly compete with the Company in the bridal marketplace or in
any other business in which the Company may at such time be
engaged, nor induce any person associated with or employed by the
Company or any subsidiary of the Company, to leave the employ of or
terminate his association with the Company, or any subsidiary of
the Company, or solicit the employment of any such person on his
own behalf or on behalf of any other business enterprise. In the
event of termination of this Agreement by virtue of a breach by the
Company, termination without cause or expiration of the Term, the
aforesaid covenant will be applicable for a period of one year from
such event.
10.3 Nondisclosure. The Executive covenants and agrees
for a period of two years following the termination of his
employment with the Company, he will not, directly or indirectly,
during or after the term of employment disclose to any person not
authorized by the Company to receive or use such information,
except for the sole benefit of the Company, any of the Company's
confidential or proprietary data, information, designs, styles, or
techniques, including customer lists. Notwithstanding the
foregoing, this applies solely to information that is not generally
known to anyone other than the Company, its Board of Directors or
its employees.
10.4 If any term of this Article 10 is found by any
court having jurisdiction to be too broad, then and in that case,
such term shall nevertheless remain effective, but shall be
considered amended (as to the time or area or otherwise, as the
case may be) to a point considered by said court as reasonable, and
as so amended shall be fully enforceable.
10.5 In the event that the Executive shall violate any
provision of this Agreement (including but not limited to the
provisions of this Article 10) the Executive hereby consents to the
granting of a temporary or permanent injunction against him by any
court of competent jurisdiction prohibiting him from violating any
provision of this Agreement. In any proceeding for an injunction,
the Executive agrees that his ability to answer in damages shall
not be a bar or interposed as a defense to the granting of such
temporary or permanent injunction against the Executive. The
Executive further agrees that the Company will not have an adequate
remedy at law in the event of any breach by Executive hereunder and
that the Company will suffer irreparable damage and injury if the
Executive breaches any of the provisions of this Agreement.
11. Termination for Cause. The Company may terminate the
Executive's employment without liability (other than for payments
accrued to the date of termination) if the Executive's employment
is terminated "for cause". The term "for cause" shall, for the
purposes of this Agreement, mean (i) a material breach by the
Executive of the provisions of this Agreement, (ii) the commission
by the Executive of a fraud against the Company or the conviction
of the Executive for aiding or abetting, or the commission of, a
felony or of a fraud or a crime involving moral turpitude or a
business crime, (iii) the knowing possession or use of illegal
drugs or prohibited substances, the excessive drinking of alcoholic
beverages which impairs the Executive's ability to perform his
duties hereunder, (iv) being under the influence of such drugs,
substances or alcohol during the Executive's hours of employment,
or (v) any violation of the Company's corporate policies described
in the Company's employee handbook, which handbook may supplemented
or amended by the Company from time to time, a copy of which has
been provided to the Executive. In the event of such termination
for cause, Executive shall be entitled to receive his base salary
up to the date of such termination.
12. No Impediments. The Executive warrants and represents
that he is free to enter into this Agreement and to perform the
services contemplated thereby and that such actions will not
constitute a breach of, or default under, any existing agreement.
13. No Waiver. The failure of any of the parties hereto
to enforce any provision hereof on any occasion shall not be deemed
to be a waiver of any preceding or succeeding breach of such
provision or of any other provision.
14. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto and no amendment,
modification or waiver of any provision herein shall be effective
unless in writing, executed by the party charged therewith.
15. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with and shall be governed
by the laws of the State of New York applicable to agreements to be
wholly performed therein.
16. Binding Effect. This Agreement shall bind and inure
to the benefit of the parties, their successors and assigns.
17. Assignment and Delegation of Duties. This Agreement
may not be assigned by the parties hereto except that the Company
shall have the right to assign this Agreement in connection with a
sale or transfer of all or substantially all of its assets, a
merger or consolidation. This Agreement is in the nature of a
personal services contract and the duties imposed hereby are non-
delegable.
18. Paragraph Headings. The paragraph headings herein have
been inserted for convenience of reference only and shall in no way
modify or restrict any of the terms or provisions hereof.
19. Notices. Any notice under the provisions of this
Agreement shall be given by registered or certified mail, return
receipt requested, directed to the addresses set forth above,
unless notice of a new address has been sent pursuant to the terms
of this paragraph.
20. Unenforceability; Severability. If any provision of
this Agreement is found to be void or unenforceable by a court of
competent jurisdiction, the remaining provisions of this Agreement,
shall, nevertheless, be binding upon the parties with the same
force and effect as though the unenforceable part has been severed
and deleted.
21. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be deemed to be duplicate
originals.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
JLM COUTURE, INC.
By:
Xxxxxx X. Xxxxxxxx, Chairman
Xxxxxx X. Xxxxxx
