Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AND NON-COMPETITION AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AND NON-COMPETITION AGREEMENT (this
"Agreement"), dated as of September 24, 2007 is between CSAV, INC., a
Massachusetts corporation (the "Employer"), and Xxxxxx Xxxxxx (the "Employee").
WHEREAS, the Employer and the Employee are parties to that certain
Employment and Non-Competition Agreement, dated as March 31, 2004 (as amended,
supplemented or otherwise modified from time to time to the date hereof, the
"Existing Employment Agreement"); and
WHEREAS, the Employer and the Employee desire to amend and restate the
terms of the Existing Employment Agreement pursuant to the terms of this
Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
SECTION 1. EMPLOYMENT. The Employer hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and subject to the conditions
hereinafter set forth.
SECTION 2. DUTIES. The Employee shall be employed as the Vice President -
Sales and General Manager of Chief Products. In such capacity, the Employee
shall have the responsibilities and duties customary for the applicable position
and such other responsibilities and duties as are assigned by the Board of
Directors (the "Board") of CSAV Holding Corp., a Delaware corporation
("Holdings"), or the Chief Executive Officer of the Employer (the "CEO"), which
are consistent with the Employee's position. At all times during the performance
of this Agreement, the Employee will adhere to the rules and regulations (the
"Policies") that have been or may hereafter be established by the Board for the
conduct of its employees or for the position or positions held by the Employee.
The Employee agrees to devote his full time and best efforts to the performance
of his duties to the Employer.
SECTION 3. TERM. The initial term of employment of the Employee hereunder
shall commence on September 24, 2007 (the "Commencement Date") and shall
continue until the third anniversary of the Commencement Date (the "Initial
Term"), unless earlier terminated pursuant to Section 6, and shall be renewed
automatically for additional one (1) year terms thereafter unless terminated by
either party by written notice to the other given at least ninety (90) days
prior to the expiration of the then current term.
SECTION 4. COMPENSATION AND BENEFITS. Until the termination of the
Employee's employment hereunder, in consideration for the services of the
Employee hereunder, the Employer shall compensate the Employee as follows:
(a) BASE SALARY. The Employer shall pay the Employee, in accordance
with the Employer's then current payroll practices, a base salary (the "Base
Salary"). The Base Salary will be paid at an annual rate of $210,600. Any future
increases to the Base Salary are to be determined by the CEO (with the consent
of the Board).
(b) INCENTIVE BONUS. At the end of each fiscal year of the Employer
during the Term, beginning with the fiscal year ending December 31, 2007, the
Employee shall be eligible to receive from the Employer an annual incentive
bonus (the "Bonus"). The Bonus criteria for each fiscal year (i) will be
determined by the CEO (with the consent of the Board) (and the Employer will
advise the Employee of such determination) prior to the end of the first fiscal
quarter of such fiscal year, and (ii) may be based solely on the achievement of
individual performance criteria, solely on the achievement by the Employer of
elements of its business plan or on a combination of these two types of
criteria. It is currently contemplated that the Bonus range for the fiscal year
ending December 31, 2007 will be up to 50% of the Base Salary depending upon the
satisfaction of the Bonus criteria to be set in accordance with the immediately
preceding sentence. The Bonus (if any) payable in connection with any fiscal
year shall be paid within thirty (30) days after the determination that the
Employee is to receive the Bonus, which determination will be made by the Board
promptly following completion by the Employer of its audit of the financial
statements for the applicable fiscal year. In any event, the Bonus will be paid
to the Employee no later than during the calendar year following the fiscal year
in which it was earned. The amount of any Bonus payable for any fiscal year
shall be paid in cash.
(c) VACATION. The Employee shall be entitled to three (3) weeks
vacation each calendar year, provided, that (i) with respect to the 2007
calendar year, such number of weeks shall be reduced by any vacation time taken
prior to the Commencement Date under the Existing Employment Agreement, and (ii)
the Employee shall be entitled to additional vacation time based on the
Employee's length of service with the Employer. Any increase in the amount of
the Employee's vacation time that is based on the Employee's length of service
with the Employer shall be on a basis consistent with the Employer's standard
policy governing length of service and vacation. Any vacation shall be taken at
the reasonable and mutual convenience of the Employer and the Employee. Up to
one (1) week of accrued vacation that has not been used as of the end of any
calendar year may be carried forward for use in the next calendar year.
(d) INSURANCE; OTHER BENEFITS. The Employee shall be entitled to
receive any health, accident, disability and life insurance and family leave
benefits provided by the Employer under group health, accident, disability, and
life insurance and family leave plans maintained by the Employer for its
full-time, salaried employees as such employment benefits may be modified from
time to time by the Board for all full-time, salaried employees. The Employer
will provide the Employee with such forms and take such action on its part as
are required by the terms of the Employer's health insurance plan to enable the
Employee, his wife and his children to be eligible for coverage under the
Employer's health insurance plan as of the Commencement Date.
(e) WITHHOLDING. All amounts payable by the Employer to the Employee
hereunder (including, but not limited to, the Base Salary) shall be reduced
prior to the delivery of such payment to the Employee by an amount sufficient to
satisfy any applicable federal, state, local or other withholding tax
requirements.
SECTION 5. EXPENSES. The Employer shall reimburse the Employee for all
reasonable expenses of types authorized by the Employer and incurred by the
Employee in the performance
of his duties hereunder. The Employee shall comply with such budget limitations
and approval and reporting requirements with respect to expenses as the Employer
may establish from time to time.
SECTION 6. TERMINATION. The Employee's employment hereunder shall commence
on the Commencement Date and continue until the expiration of the Initial Term,
and any extension of such term pursuant to Section 3 above, except that the
employment of the Employee hereunder shall earlier terminate:
(a) DEATH. Upon the death of the Employee during the term of his
employment hereunder.
(b) DISABILITY. Subject to applicable law, including the Americans
with Disabilities Act of 1990, as amended, at the option of the Employer, in the
event of the Employee's Disability (as defined below), upon thirty (30) days'
written notice from the Employer. For purposes hereof, the Employee shall be
deemed to have a "Disability" if the Employee is unable (as reasonably
determined in good faith by the Board), on account of a physical or mental
illness, injury or disease or combination thereof, to perform his duties and
obligations under this Agreement for a period of more than 90 consecutive days
or for a total of 120 days (in either case excluding vacation days) within any
12 month period.
(c) FOR CAUSE. For "Cause" immediately upon written notice by the
Employer to the Employee. For purposes of this Agreement, a termination shall be
for Cause if the Board shall reasonably determine that any one or more of the
following has occurred:
(i) the Employee shall have committed an act of fraud,
embezzlement, misappropriation or breach of fiduciary duty against the
Employer or any of or any of the Employer's parent or subsidiaries
(collectively, the "Companies"), including, but not limited to, the offer,
payment, solicitation or acceptance of any unlawful bribe or kickback with
respect to the business of any of the Companies; or
(ii) the Employee shall have been convicted by a court of
competent jurisdiction of, or pleaded guilty or nolo contendere to, any
felony; or
(iii) the Employee shall have committed a material breach of any
of the covenants, terms and provisions of Sections 7, 8 or 9 hereof; or
(iv) the Employee shall have breached in any material respects
any one or more of the provisions of this Agreement (excluding Sections 7,
8 and 9 hereof), including, without limitation, any failure to comply with
the Policies, or any one or more of the provisions of the Stockholder
Agreement, dated as of August 29, 2003, among Holdings and its
stockholders, and, in each case, such breach shall have continued for a
period of ten (10) days after written notice to the Employee specifying
such breach in reasonable detail; or
(v) the Employee shall have refused, after explicit written
notice, to obey any lawful resolution of or direction by the Board or the
CEO which is consistent with his duties hereunder; or
(vi) the Employee shall be chronically absent from work
(excluding vacation, illnesses or leaves of absence approved by the Board
or the CEO) and such absence shall continue following written notice to the
Employee.
(d) RESIGNATION FOR GOOD REASON. At the option of the Employee for
"Good Reason" upon written notice to the Employer. For purposes of this
Agreement, "Good Reason" shall mean a breach by the Employer of any material
provision of this Agreement that shall have continued for a period of ten (10)
days after written notice to the Employer specifying such breach in reasonable
detail and that is continuing as of the date of termination.
(e) RESIGNATION OR TERMINATION WITHOUT CAUSE. At any time, upon
written notice by either the Employer or the Employee to the other party hereto.
(f) RIGHTS AND REMEDIES ON TERMINATION.
(i) If the Employee's employment hereunder is terminated pursuant
to Section 6(a), Section 6(b) or Section 6(c), by the Employee pursuant to
Section 6(e) or pursuant to Section 3 in connection with the expiration of
the Initial Term or any subsequent term hereunder then the Employee (or his
estate, as applicable) shall be entitled to receive his Base Salary through
the date of termination or expiration.
(ii) If the Employee's employment hereunder is terminated (x) by
the Employee pursuant to Section 6(d) or (y) by the Employer pursuant to
Section 6(e), then the Employee shall continue to receive payment, in
accordance with the Employer's then current payroll practices, of the
Employee's Base Salary in effect at the time of termination of employment
(the "Termination Date") for a six (6) month period following the
Termination Date ( "Severance"); provided, however, that (A) the Employee's
right to receive the foregoing payment is expressly conditioned upon
receipt by the Employer within 30 days following the Termination Date of a
written release executed by the Employee, in form and substance
satisfactory to the Employer, of any and all claims or causes of action of
any nature relating directly or indirectly to such Employee's employment or
termination of employment by the Employer and (B) in the event that the
Employee breaches any of the covenants, terms or provisions of Sections 7,
8 or 9 hereof, without limiting any other rights that the Employer may
have, the Employer's obligation to make payments under this Section
6(f)(ii) shall immediately terminate.
(iii) Except as otherwise set forth in this Section 6(f), the
Employee shall not be entitled to any severance, bonus or other
compensation after termination other than payment of any expense
reimbursements under Section 5 hereof for expenses incurred in the
performance of his duties prior to termination or benefits or compensation
to which the Employee is entitled pursuant to applicable law (e.g. COBRA).
SECTION 7. INVENTIONS; ASSIGNMENT. All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining thereto)
related to the business of any of the Companies, whether or not patentable,
copyrightable, registrable as a trademark, or reduced to writing, that the
Employee may discover, invent or originate during the term of his employment
hereunder, either alone or with others and whether or not during working hours
or by the use of the facilities of any of the Companies ("Inventions"), shall be
the exclusive property of the Companies. The Employee shall promptly disclose
all Inventions to the Employer, shall execute at the request of the Employer any
assignments or other documents the Employer may deem necessary to protect or
perfect the rights of the Companies therein, and shall assist the Companies, at
the Companies' expense, in obtaining, defending and enforcing the Companies'
rights therein. The Employee hereby appoints the Employer and each of the other
Companies, individually, as his attorney-in-fact to execute on his behalf any
assignments or other documents deemed necessary by the Employer or any of the
other Companies to protect or perfect their rights to any Inventions.
SECTION 8. CONFIDENTIAL INFORMATION. The Employee recognizes and
acknowledges that certain assets of the Companies, including, without
limitation, information regarding customers, pricing policies, methods of
operation, proprietary production processes, proprietary computer programs,
sales, products, profits, costs, markets, key personnel, formulae, product
applications, technical processes, and trade secrets (hereinafter called
"Confidential Information") are valuable, special, and unique assets of the
Companies and their affiliates. The Employee shall not, during or after his term
of employment, disclose any or any part of the Confidential Information to any
person, firm, corporation, association, or any other entity for any reason or
purpose whatsoever, directly or indirectly, except as may be required pursuant
to his employment hereunder; provided, that Confidential Information shall in no
event include (a) Confidential Information which was generally available to the
public at the time of disclosure by the Employee or (b) Confidential Information
which becomes publicly available other than as a consequence of the breach by
the Employee of his confidentiality obligations hereunder. In the event of the
termination of his employment, whether voluntary or involuntary and whether by
the Employer or the Employee, the Employee shall deliver to the Employer all
documents and data pertaining to the Confidential Information and shall not take
with him any documents or data of any kind or any reproductions (in whole or in
part) or extracts of any items relating to the Confidential Information. Nothing
contained within this Section 8 shall prohibit the Employee from disclosing
Confidential Information if such disclosure is required by law, governmental
process or valid legal process. In the event that the Employee is legally
compelled to disclose any of the Confidential Information, he shall provide the
Employer with prompt written notice so that the Employer, at its sole cost and
expense, may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Employer waives
compliance with the provisions of this Agreement, Employee shall furnish only
that portion of the Confidential Information that he is advised by counsel is
legally required to be disclosed.
SECTION 9. NON-COMPETITION. During the term of the Employee's employment
hereunder and for the Designated Period (as defined below) after termination of
the Employee's employment hereunder, the Employee will not (a) anywhere in the
world, engage, directly or indirectly, alone or as a shareholder (other than as
a holder of less than two percent (2%) of the
common stock of any publicly traded corporation), partner, officer, director,
employee, consultant or advisor, or otherwise in any way participate in or
become associated with, any other business organization that is engaged or
becomes engaged in any business that is the same or substantially identical
business of any of the Companies, or is directly competitive with, any business
activity that any of the Companies is conducting at the time of the Employee's
termination or has notified the Employee that it proposes to conduct and for
which any of the Companies have, prior to the time of such termination, expended
substantial resources (the "Designated Industry"), (b) divert to any competitor
of any of the Companies any customer of any of the Companies, or (c) solicit any
employee of any of the Companies to leave its employ for alternative employment,
or hire or offer employment to any person to whom the Employee actually knows
any of the Companies has offered employment. For purposes hereof, the term
"Designated Period" shall mean two (2) years. The Employee acknowledges that the
provisions of this Section 9 are essential to protect the business and goodwill
of the Companies. The Employee will continue to be bound by the provisions of
this Section 9 until their expiration and shall not be entitled to any
compensation from the Employer with respect thereto except as provided above. If
at any time the provisions of this Section 9 shall be determined to be invalid
or unenforceable by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 9 shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Employee agrees that
this Section 9 as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein. The Employee hereby
acknowledges that he has agreed to be bound by the provisions of this Section 9
in consideration for the compensation, severance and other benefits to be
provided by the Employer to the Employee pursuant to the terms of this
Agreement.
SECTION 10. GENERAL.
(a) NOTICES. All notices and other communications hereunder shall be
in writing or by written telecommunication, and shall be deemed to have been
duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or sent by written telecommunication or
telecopy, to the relevant address set forth below, or to such other address as
the recipient of such notice or communication shall have specified to the other
party hereto in accordance with this Section 10(a):
If to the Employer, to:
CSAV, Inc.
c/x Xxxxxxxx Xxxxxxxxx & Xxxx LLC
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
With a copies to:
CSAV, Inc.
00000 Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
Xxxxxxx XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Employee, to:
Xxxxxx Xxxxxx
(b) SECTION 409A. This Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder (together, "Section 409A"), and shall, to
the extent practicable, be construed in accordance therewith. If any amount
payable pursuant to Section 6(f) of this Agreement constitutes a "deferral of
compensation" subject to Section 409A and if, at the date of the Employee's
"separation from service," as such term is defined in Section 409A, from the
Employer (his "Separation from Service"), the Employee is a "specified
employee", within the meaning of Section 409A, of the Employer as determined by
the Employer from time to time, then each such payment that would otherwise be
payable to the Employee within the six (6) month period following the Employee's
Separation from Service shall be delayed and paid to the Employee without
interest on the first business day of the seventh month following the Employee's
Separation from Service. For the avoidance of doubt, for purposes of Section
6(f) and this Section 10(b), any amount which would not be considered a
"deferral of compensation" within the meaning of Section 409A by reason of
Treas. Reg. Sections 1.409A-1(b)(4) or 1.409A-1(b)(9) shall not be considered a
deferral of compensation for which payment shall be delayed in accordance with
the preceding sentence. For purposes of this Agreement, each payment to which
the Employee may be entitled pursuant to Section 6(f), including each of the
payments of Severance upon each payroll period, shall be considered a separate
payment within the meaning of Treas. Reg. Section 1.409A-2(b)(2).
Notwithstanding the foregoing, to the extent that this Agreement or any payment
or benefit hereunder shall be deemed not to comply with Section 409A, then
neither the Employer, nor any of its principals, employees, designees or agents,
shall be liable to the Employee or to any other person to the extent such
failure to comply results from any actions, decisions or determinations made in
good faith.
(c) EQUITABLE REMEDIES. Each of the parties hereto acknowledges and
agrees that upon any breach by the Employee of his obligations under Sections 7,
8 and 9 hereof, the
Employer will have no adequate remedy at law, and accordingly will be entitled
to specific performance and other appropriate injunctive and equitable relief.
(d) SEVERABILITY. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.
(e) WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege.
(f) COUNTERPARTS. This Agreement may be executed in multiple
counterparts (including by telecopier), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(g) ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the heirs and successors of each of the parties hereto, including any
entity which acquires substantially all of the assets or stock of the Employer.
(h) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties and supersedes all prior agreements and understandings relating
to the subject matter hereof. This Agreement shall not be amended except by a
written instrument hereafter signed by each of the parties hereto.
(i) GOVERNING LAW. This Agreement and the performance hereof shall be
construed and governed in accordance with the laws of Minnesota.
(j) AMENDMENT AND RESTATEMENT. The Existing Employment Agreement shall
continue in force and effect only as amended and restated herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed as of the date and year
first above written.
CSAV, INC.
By: /s/ Xxxxx Xxxx
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Title: President
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
