Employment Agreement
Exhibit 10.11
Employment
Agreement, dated as of October 28, 2005, by and between Iconix Brand Group,
Inc., a Delaware corporation (the “Company” or “Employer”) and Xxxxxxx Xxxxxx
Xxxxx (the “Executive”).
W
I T
N E S S E T H
WHEREAS,
the Executive is currently the Company’s Senior Vice President and General
Counsel; and
WHEREAS,
the Company and Executive entered into a two-year Employment Agreement dated
as
of February 1, 2004 (the “Original Agreement”); and
WHEREAS,
the Company wishes, among other things, to continue the Executive’s employment
with the Company beyond the term currently provided by the Original Agreement
pursuant to the terms as provided herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Employer and Executive hereby
agree as follows:
1. Term.
The
Company hereby agrees to employ the Executive for a period commencing on the
date hereof and ending on December 31, 2007 (the “Term”).
2. Title;
Duties.
The
Executive shall render services to the Company as chief counsel to the Company
in the position of Senior Vice President - General Counsel. Executive's duties
and responsibilities shall be consistent with the duties undertaken by the
senior legal officer of a corporation. Executive may work four days a week
so
long as there is no material interruption of her services. Executive shall
report directly to Xxxx Xxxx.
3. Compensation.
(a) Base
Salary.
Executive's base salary for the First Year (as defined below) will be at the
current rate of $215,000 until January 1, 2006, at which time it shall increase
to not less than $220,000 per annum paid in accordance with the Company’s
payroll practices and policies. Executive's base salary for the Second Year
(as
defined below) will be at a rate of not less that $230,000 per annum paid in
accordance with the Company’s payroll practices and policies. For the purposes
of this Agreement, the “First Year” shall mean the period through December 31,
2006 and the “Second Year” shall mean the period January 1, 2007 through
December 31, 2007.
(b) Bonus.
Executive will be eligible for a bonus consistent with other executive officers
pursuant to the Company’s executive bonus program.
(c) The
Company shall pay to Executive a monthly car allowance of $1,500.
(d) In
connection with this Agreement, the Company will grant to the Executive 60,000
options to purchase the common stock of the Company vesting
immediately.
4. Other
Benefits and Expenses.
(a) Executive
shall be permitted during the Term to participate (without any waiting periods)
in any and all benefit plans, hospitalization, medical, health, disability,
officer/director or employee liability insurance plans, pension and 401K plans
or other benefit plans (including any to-be-established bonus plans) on the
same
terms and conditions as extended to other executive officers of the
Company.
(b) The
Company shall promptly reimburse Executive for all reasonable and necessary
travel and entertainment expenses and other disbursements or costs Executive
may
incur in connection with promoting the business of the Company.
(c) Executive
shall be entitled to four weeks of paid vacation per year. If, in any year,
Executive does not take some or all of her vacation, such unused days will
be
banked and carried over into the next year, as may be applicable.
5. Establishment
and Operation of Legal Department.
(a) Executive
shall be entitled to a full-time dedicated secretary or assistant.
(b) Executive
shall be permitted to attend such professional conferences, receive such
professional publications, acquire such professional books and materials to
build a library, and receive such other facilities and support as are reasonable
and necessary to establish a legal department and perform her duties
hereunder.
(c) Executive
shall be provided with all reasonable and necessary facilities and equipment
to
carry out her duties, including but not limited to a laptop computer, cellular
phone and home fax machine.
6. Termination.
(a) Executive's
employment may be terminated by the Company prior to the expiration of the
Term
of this Agreement only for “Cause” by giving Executive prior written notice of
the basis for the proposed termination and a reasonable chance to cure. As
used
in this agreement, the term “Cause” shall mean: (a) Executive's willful and
continuing malfeasance and failure to perform having a material adverse effect
on the Company; (b) Executive's willful engagement in fraud or dishonesty
against the Company having a material adverse effect on the Company; or (c)
Executive's conviction of a felony involving moral turpitude.
(b) Executive
may terminate this Agreement at any time for “Good Reason” by giving the Company
prior written notice of the basis for the proposed termination and a reasonable
chance to cure. “Good Reason” shall mean any of the following: (i) a breach by
the Company of any of its payment obligations to Executive hereunder; (ii)
relocation of the Company outside a 50-mile radius of New York City unless
the
Company shall provide Executive with a suitable location from which to work
within such radius; (iii) a proposed material modification or reduction of
Executive's duties or position as chief counsel; (iv) the bankruptcy,
reorganization or liquidation of the Company; or (v) a failure of any successor
corporation to the Company to assume the obligations under this
Agreement.
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7. Effect
of Termination.
(a) Upon
termination of Executive’s employment for Cause (or upon Executive’s death or
disability rendering her unable to perform), Executive (or Executive’s heirs and
representatives) shall receive any accrued salary, pro-rated bonus and vacation
due through the date of termination and be reimbursed for any outstanding
business expenses (including those relating to Executive’s car) incurred prior
to the date of termination. Executive (or Executive’s heirs or representatives,
if applicable) shall also be entitled to continuation of health and medical
benefits for 3 months from the date of termination.
(b) If
the
Company terminates Executive’s employment without Cause or Executive terminates
Executive’s employment for Good Reason within 12 months after a Change in
Control (as defined in Subsection 7(d)), then the Company shall pay to Executive
in complete satisfaction of its obligations under this Agreement, as severance
pay and as liquidated damages (because actual damages are difficult to
ascertain), in a lump sum, in cash, within 15 days after the date of Executive’s
termination, an amount equal to $100 less than three times Executive’s
“annualized includable compensation for the base period” (as defined in Section
280G of the Internal Revenue Code of 1986); provided,
however,
that if
such lump sum severance payment, either alone or together with other payments
or
benefits, either cash or non-cash, that Executive has the right to receive
from
the Company, including, but not limited to, accelerated vesting or payment
of
any deferred compensation, options, stock appreciation rights or any benefits
payable to Executive under any plan for the benefit of employees, which would
constitute an “excess parachute payment” (as defined in Section 280G of the
Internal Revenue Code of 1986), then such lump sum severance payment or other
benefit shall be reduced to the largest amount that will not result in receipt
by Executive of a parachute payment. The determination of the amount of the
payment described in this subsection shall be made by the Company’s independent
auditors at the sole expense of the Company. For purposes of clarification
the
value of any options described above will be determined by the Company’s
independent auditors using a Black-Scholes valuation methodology.
(c) If
within
12 months after the occurrence of a Change of Control, the Company shall
terminate Executive’s employment without Cause or Executive terminates
Executive’s employment for Good Reason, then notwithstanding the vesting and
exercisability schedule in any stock option agreement between the Company and
Executive, all unvested stock options granted by the Company to Executive
pursuant to such agreement shall immediately vest and become exercisable and
shall remain exercisable for not less than 180 days thereafter.
(d) A
“Change
in Control” shall mean any of the following:
(1) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
common stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company common stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger;
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(2) any
sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the
Company;
(3) any
approval by the stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;
(4) the
cessation of control (by virtue of their not constituting a majority of
directors) of the Company’s Board of Directors by the individuals (the
“Continuing Directors”) who (x) at the date of this Agreement were directors or
(y) become directors after the date of this Agreement and whose election or
nomination for election by the Company’s stockholders, was approved by a vote of
at least two-thirds of the directors then in office who were directors at the
date of this Agreement or whose election or nomination for election was
previously so approved); or
(5) (A)
the
acquisition of beneficial ownership (“Beneficial Ownership”), within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of an aggregate of 25% or more of the voting power of the
Company’s outstanding voting securities by any person or group (as such term is
used in Rule 13d-5 under the Exchange Act) who beneficially owned less than
10%
of the voting power of the Company’s outstanding voting securities on the
effective date of this Agreement, (B) the acquisition of Beneficial Ownership
of
an additional 15% of the voting power of the Company’s outstanding voting
securities by any person or group who beneficially owned at least 10% of the
voting power of the Company’s outstanding voting securities on the effective
date of this agreement, or (C) the execution by the Company and a stockholder
of
a contract that by its terms grants such stockholder (in its, hers or his
capacity as a stockholder) or such stockholder’s Affiliate (as defined in Rule
405 promulgated under the Securities Act of 1933 (an “Affiliate”)) including,
without limitation, such stockholder’s nominee to the Company’s Board of
Directors (in its, hers or his capacity as an Affiliate of such stockholders),
the right to veto or block decisions or actions of the Company’s Board of
Directors’ provided however,
that
notwithstanding the foregoing, the events described in items (A), (B) or (C)
above shall not constitute a Change in Control hereunder if the acquiror is
(aa)
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or one of its affiliated entities and acting in such capacity,
(bb) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of voting
securities of the Company or (cc) a person or group meeting the requirements
of
clauses (ii) and (ii) of Rule 13d-1(b)(1) under the Exchange Act;
(6) subject
to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of
a
trustee or the conversion of a case involving the Company to a case under
Chapter 7.
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(e) Executive
shall not be required to mitigate the amount of any payment provided for in
this
Section 7 by seeking other employment or otherwise, nor shall the amount of
any
payment provided for in this Section 7 be reduced by any compensation earned
by
Executive as the result of Executive’s employment by another employer or
business or by profits earned by Executive from any other source at any time
before and after Executive date of termination.
8. Indemnification.
The
Employer shall indemnify and hold harmless the Executive against any and all
expenses reasonably incurred by her in connection with or arising out of (a)
the
defense of any action, suit or proceeding in which she is a party, or (b) any
claim asserted or threatened against her, in either case by reason of or
relating to her being or having been an employee, officer or director of the
Company, whether or not she continues to be such an employee, officer or
director at the time of incurring such expenses, except insofar as such
indemnification is prohibited by law. Such expenses shall include, without
limitation, the fees and disbursements of attorneys, amounts of judgments and
amounts of any settlements, provided that such expenses are agreed to in advance
by the Employer. The foregoing indemnification obligation is independent of
any
similar obligation provided in the Employer’s Certificate of Incorporation or
Bylaws, and shall apply with respect to any matters attributable to periods
prior to the Effective Date, and to matters attributable to Executive's
employment hereunder, without regard to when asserted.
9. Miscellaneous.
(a) This
Agreement shall be governed by the laws of the State of New York and each Party
agrees that in the event of a dispute relating to the terms hereof the other
will submit to the exclusive jurisdiction of the state or federal courts sitting
within the City of New York.
(b) If
not
terminated in accordance with its terms, this Agreement shall be binding upon,
and inure to the benefit of, the Parties, their heirs, legal representatives,
successors and permitted assigns.
(c) The
invalidity or unenforceability of any provision hereof shall not in any way
affect the validity or enforceability of any other provision. This Agreement
reflects the entire understanding between the Parties.
(d) This
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of the Executive
by
the Employer and contains all of the covenants and agreements between the
parties with respect to such employment in any manner whatsoever. Any
modification or termination of this Agreement will be effective only if it
is in
writing signed by the party to be charged.
(e) This
Agreement may be executed by the parties in one or more counterparts, each
of
which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement, and shall become effective when one
or
more counterparts has been signed by each of the parties hereto and delivered
to
each of the other parties hereto.
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10. Notices.
All
notices relating to this Agreement shall be in writing and shall be either
personally delivered, sent by telecopy (receipt confirmed) or mailed by
certified mail, return receipt requested, to be delivered at such address as
is
indicated below, or at such other address or to the attention of such other
person as the recipient has specified by prior written notice to the sending
party. Notice shall be effective when so personally delivered, one business
day
after being sent by telecopy or five days after being mailed.
To
the
Employer:
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx Xxxx, Chief Executive Officer
With
a
copy in the same manner to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxxx, Esq.
To
the
Executive:
Xxxxxxx
Xxxxxx Xxxxx
00
Xxxxxxxx Xxxxx Xxxx
Xxxxx
Xxxxxxxx, XX 00000
IN
WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date
above written.
By:
/s/ Xxxx Xxxx
Xxxx
Xxxx,
Chief
Executive Officer
/s/
Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxx
Xxxxxx Xxxxx
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