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EXHIBIT 10.14(a)
FORM OF
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") dated as of
_______________, 199_ (the "Effective Date") is made by and between
_______________ (the "Executive") and Barry's Jewelers, Inc., a California
corporation (the "Company").
RECITALS
WHEREAS, the Company wishes to obtain the future services of the
Executive for the Company; and
WHEREAS, the Executive is willing, upon the terms and conditions herein
set forth, to provide services hereunder;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and intending to be legally bound hereby, the parties agree as
follows:
1. EMPLOYMENT.
1.1 Position as an Officer. Subject to Section 8, the Company hereby
employs the Executive, and the Executive hereby accepts such employment, during
the Term of Employment, as ________________________ of the Company to perform
such duties and responsibilities, consistent with such position, as may be
reasonably assigned to the Executive from time to time by the Board of Directors
of the Company (the "Board"). (The definitions of capitalized terms used in this
Agreement are contained in Section 11 of this Agreement.)
1.2 Position as a Director. The Company shall cause the Executive to be
nominated and renominated as a director of the Company for each term of office
commencing during the Term of Employment.
2. Devotion of Time.
During the Term of Employment, the Executive shall perform his duties
hereunder faithfully and to the best of his ability, at the principal executive
office of the Company, under the direction of the Board. Except for
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vacations and reasonable absences due to temporary illness and incapacity, the
Executive shall devote his full business time and attention to the performance
of his duties hereunder. Notwithstanding the foregoing, the Executive may (i)
make and manage passive personal business investments of his choice and serve in
any capacity with any civic, educational or charitable organization, without
seeking or obtaining approval by the Board, provided such activities and service
do not materially interfere or conflict with the performance of his duties
hereunder and (ii) with the approval of the Board, serve on the boards of
directors of other corporations or any trade association. Nothing contained
herein shall require Executive to follow any directive or to perform any act
which would violate any laws, ordinances, regulations or rules of any
governmental, regulatory or administrative body, agency or authority, any court
or judicial authority, or any public, private, industry, professional,
regulatory or licensing authority (collectively, the "Regulations"). Executive
shall act in good faith in accordance with all Regulations.
3. Term of Employment.
The term of the Executive's employment hereunder shall commence on the
Effective Date and shall end on ____________________ (the "Expiration Date");
provided, however, that on the Expiration Date, and on each anniversary of the
Expiration Date (the Expiration Date and the date of each anniversary thereof
being a "Renewal Date"), the term shall be automatically extended so as to
terminate _______ year from such Renewal Date, unless at least 90 days prior to
such Renewal Date either party hereto gives written notice to the other that the
term shall not be so extended. Notwithstanding anything to the contrary herein,
it is hereby acknowledged and understood that either party may give notice to
the other at least 90 days prior to the Expiration Date or any Renewal Date of
its intent to renegotiate the Terms of this Agreement in good faith, and such
notice shall not be treated as a notice of non-renewal for purposes of the
definition of "Good Reason" or any other purpose hereunder. The term, as
extended in the manner described in the preceding sentence, is referred to
herein as the "Term of Employment." Notwithstanding the foregoing, the Term of
Employment may be terminated prior to the expiration thereof, by the Company
pursuant to Section 8.2 or by the Executive pursuant to Section 8.3, in which
event the Term of Employment shall end on the Date of Termination.
4. Compensation.
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During the Term of Employment, the Executive shall be compensated as
follows:
4.2 Base Salary. The Company shall pay the Executive a base salary
at the rate of $_______ per annum, payable in arrears not less frequently than
monthly in accordance with the normal payroll practices of the Company. Such
base salary shall be subject to review each year by the Board in its sole
discretion, but shall in no event be decreased from its then-existing level.
4.2 Annual Bonus. In addition, the Executive shall be eligible to
receive a bonus ("Annual Bonus") with respect to each fiscal year of the
Company, beginning with its year ended May 31, 1998, to the extent that the
performance targets for such year are achieved; provided, however, that his
Annual Bonus shall not exceed an amount (the "Annual Bonus Cap") equal to ____%
of his base salary for such year. Such performance targets shall be agreed upon
by the Executive and the Board, in writing, prior to the beginning of each
fiscal year. On the Annual Bonus Payment Date for such year, the Company shall
pay the Executive his Annual Bonus determined based on actual achievement of the
performance targets. On November 1 of each year during the Term of Employment,
the Company shall advance to the Executive an amount equal to ____ percent of
his Annual Bonus Cap for the fiscal year of the Company that includes such date.
The Executive shall be entitled to retain this advance whether or not any of the
performance targets are actually achieved and whether or not his employment by
the Company terminates during such fiscal year.
4.3 Incentive Bonus.
4.3.1 In addition, the Executive shall be entitled to receive
a one-time incentive bonus (the "Incentive Bonus"), in an amount equal to ___
(__) times the Executive's average annual base salary over the Term of
Employment, upon the achievement of performance goals (including, without
limitation, cash flow and pre-tax earnings goals) and other terms of an
incentive bonus program to be mutually agreed upon by the Board and the
Executive prior to ______, 1997 and set forth on a schedule which shall be
attached hereto (the "Incentive Bonus Targets"). The Incentive Bonus shall be
paid in a cash lump sum within thirty days after the Incentive Bonus Targets
are achieved; provided, however, that, except to the extent provided herein,
the Incentive Bonus will not be paid to the Executive if he is not employed by
the Company on the date such Incentive Bonus is payable.
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4.3.2 In the event that Company has become subject to a
Bankruptcy Proceeding during the Term of Employment, in lieu of the Incentive
Bonus under Section 4.3.1 (assuming it has not previously been paid), the
Executive shall be eligible to earn an Incentive Bonus in an amount equal to
___ (__) times the Executive's average annual base salary over the Term of
Employment. The Incentive Bonus shall be subject to Incentive Bonus Targets
which shall be set by mutual agreement between the Company and the Executive
prior to the commencement of any Bankruptcy Proceeding, provided that the
Incentive Bonus Target for _____ (__) percent of such Incentive Bonus shall be
the consummation of a plan of reorganization that has been approved by the
Bankruptcy Court within two years of the date the order for relief is entered
in connection with such proceeding (the "Reorganization Target"). In the event
that the parties cannot reach agreement as to the additional Incentive Bonus
Targets as provided above, than _____ (__) percent of such Incentive Bonus
shall be based on the Reorganization Target. The Incentive Bonus shall be paid
in a cash lump sum within thirty days after all Incentive Bonus Targets are
achieved, provided, however, that, except to the extent provided in Section 8
hereof, the Incentive Bonus will not be paid to the Executive if he is not
employed by the Company on the date such Incentive Bonus is payable.
4.4 Stock Options. The Company and the Executive will enter into a
stock option agreement substantially in the form of Exhibit A hereto.
4.5 Other Incentive Compensation. In addition, the Executive
shall be eligible to receive awards under the Company's 1994 employee Stock
Option Plan (the "Option Plan") and any other stock option or other equity
based incentive compensation plan or arrangement now in effect or hereafter
adopted by the company for which senior executives are eligible. The level of
the Executive's future participation in any such plan or arrangement shall be
in the sole discretion of the Board.
5. Reimbursement of Expenses.
During the Term of Employment, the Company shall reimburse the
Executive for expenses in accordance with the Company's policies and the rules
and regulations of the Internal Revenue Service.
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6. Benefits.
During the Term of Employment, the Executive shall be entitled to
benefits, as follows:
6.1 Company Plans. The Executive shall be entitled to perquisites
and benefits established by the Company, from time to time, for management of
the Company (including, without limitation, health and dental insurance,
disability insurance, participation in the Company's 401(k) and deferred
compensation plans), subject to the policies and procedures of the Company of
general applicability in effect, from time to time, regarding participation in
such benefits.
6.2 Automobile. In addition, the Company, at its expense, shall
provide the Executive with an automobile of a kind to be selected by the
Executive for the business use of the Executive, provided that its payments for
such automobile and related costs for maintenance and insurance shall not
exceed, on average, $____ per month. At the Executive's option, the Company
shall pay the Executive a monthly allowance of $______ in lieu of providing him
with an automobile.
6.3 Insurance. In addition, the Company shall be obligated to pay
the premium on a life insurance policy for the benefit of the Executive with a
face amount of $______ and long-term disability insurance with coverage equal
to (i) one times the Executive's base salary, less (ii) the amount of long-term
disability insurance coverage provided to the Executive under Company-sponsored
long-term disability plans.
6.4 Relocation Allowance. In addition, the Company shall pay the
Executive a relocation allowance equal to the lesser of (i) ten percent of his
annual base salary and (ii) the actual cost of the Executive's relocation to
Los Angeles, at such time as the Executive leases or purchases a residence in
the Los Angeles area.
6.5 Vacation. In addition, the Executive shall be entitled to four
(4) weeks of paid vacation during each year.
7. Purchase of Shares. The Executive shall have the right, but not the
obligation, to be exercised no later than ________, 199__, to purchase from the
Company ______ shares of common stock of the Company for an aggregate purchase
price of $______, $______ of which shall be
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payable in cash and $_________ of which shall be payable by delivery of a
non-recourse promissory note due ____ months after the date of purchase,
bearing interest at the applicable federal rate and secured by all of such
shares. In the event that the Executive elects to purchase such shares, the
Company shall use its best efforts to grant the Executive demand registration
rights with respect thereto, exercisable at any time after the first
anniversary of the Effective Date.
8. TERMINATION OF EMPLOYMENMT.
8.1 Termination Due to Death or Disability. Subject to the payments
contemplated by Section 8.8, the Executive's employment by the Company shall
terminate upon the death of the Executive or upon the Executive becoming
Disabled.
8.2 Early Termination by the Company. Subject to the payments
contemplated by Sections 8.4 and 8.5, the Executive's employment by the Company
may be terminated at any time by the Company (after adoption of a resolution by
the Board to do so) as follows:
8.2.1 For Cause; or
8.2.2 For any other reason or no reason, it being understood that no
reason is required.
Such termination by the Company shall be effected by delivery by the Company to
the Executive of a written notice of termination (which notice shall include a
copy of the resolution adopted by the Board) specifying the Date of Termination
and stating in the case of termination for Cause, the grounds which the Board
has determined exist for such termination, and shall be subject to the
requirements for advance notice and opportunity to cure provided in this
Agreement, if and to the extent applicable.
8.3 Early Termination by the Executive. Subject to the payments
contemplated by Sections 8.4 and 8.5, the Executive's employment by the Company
may be terminated at any time by the Executive, as follows:
8.3.1 For Good Reason; or
8.3.2 For any other reason or no reason, it being understood that no
reason is required.
Such termination by the Executive shall be effected by delivery by the
Executive to the Company of a written notice
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of termination, specifying the Date of Termination and stating in the case of
termination for Good Reason, the grounds which the Executive has determined
exist for such termination, and shall be subject to the requirements for
advance notice and opportunity to cure provided in this Agreement, if and to
the extent applicable.
8.4 Payments if Termination by the Company for Cause or by the
Executive without Good Reason. In the event that the Executive's employment by
the Company is terminated by the Company for Cause or by the Executive without
Good Reason, the Company shall be obligated to:
8.4.1 Pay to the Executive his Accrued Salary and Benefits, in a lump
sum in cash, within five (5) business days after the Date of Termination
(provided, however, that any portion of the Accrued Salary and Benefits which
consists of deferred compensation or post-termination benefits shall be
determined and paid in accordance with the terms of the relevant plan as
applicable to the Executive); and
8.4.2 Pay to the Executive a prorated portion of the Annual Bonus
with respect to the fiscal year of the Company in which such termination
occurs, in a lump sum in cash, on the Annual Bonus Payment Date for such year,
provided that the performance targets for such year are met.
8.5 Payments if Termination by the Company Without Cause or by the
Executive for Good Reason. In the event that the Executive's employment by the
Company is terminated by the Company without Cause or by the Executive for
Good Reason, the Company shall be obligated to:
8.5.1 Pay to the Executive his Accrued Salary and Benefits in a lump
sum, in cash, within five (5) business days after the Date of Termination
(provided, however, that any portion of the Accrued Salary and Benefits which
consists of deferred compensation or post-termination benefits shall be
determined and paid in accordance with the terms of the relevant plan as
applicable to the Executive);
8.5.2 Pay to the Executive a prorated portion of the Annual Bonus
with respect to the fiscal year of the Company in which such termination
occurs, in a lump sum in cash, on the Annual Bonus Payment Date for such year,
based on the Annual Bonus Cap for such year (without regard to whether the
performance targets for such year have been met);
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8.5.3 Pay to the Executive, in a lump sum in cash, within five (5)
business days after the Date of Termination, an amount equal to the amount of
the Incentive Bonus (as applicable to the Executive under Section 4.3.1 or
4.3.2 hereof), prorated by a fraction the numerator of which is the total
number of months the Executive was employed by the Company (including the month
in which his employment was terminated) and the denominator of which is (i) in
the case of 4.3.1., 36 months and (ii) in the case of 4.3.2, 24 months;
provided, however, that in no event shall such prorated amount exceed 100% of
the Incentive Bonus; and provided, further, that if such termination occurs
within the one-year period following a Change of Control or results from
termination by the Company without Cause in anticipation of a Change of
Control, the full amount of the Incentive Bonus shall be paid without any
proration, unless the three-year incentive bonus period has expired as of the
Date of Termination. Such Incentive Bonus shall be paid to the Executive
whether or not the Incentive Bonus Targets are achieved prior to the Date of
Termination. The amount, if any, of such Incentive Bonus shall be reduced by
the amount of any such Bonus paid to the Executive prior to the Date of
Termination;
8.5.4 Continuation of Executive's base salary in the same manner as it
was being paid as of the Date of Termination for a period of ____________
(____) months following the Date of Termination, unless such termination occurs
either (a) within the one-year period following a Change of Control or results
from termination by the Company without Cause in anticipation of a Change of
Control or (b) as a result of Good Reason pursuant to item (ix) of the
definition thereof (relating to a Bankruptcy Proceeding), in which events such
amount shall be equal to a multiple of the Executive's base compensation (which
shall be _________ (____) in the case of item (a) above and ________ (____) in
the case of item (b) above) reduced by the "Acceleration Amount", if any. For
purposes hereof the "Acceleration Amount" is the amount of the Incentive Bonus
paid to the Executive pursuant to 8.5.4 hereof that is in excess of the portion
of the Incentive Bonus that has been earned by the Executive as of the Date of
Termination, with such earned amount to be determined based on the Company's
degree of achievement (expressed on a percentage basis) under the Incentive
Bonus Targets. In the event the parties cannot reach agreement as to the
Acceleration Amount, the determination of the Acceleration Amount shall be made
by a nationally recognized independent compensation consulting firm selected by
mutual agreement of the parties hereto, the cost of which shall be
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borne solely by the Company. The determination of such firm shall be final and
binding on the parties;
8.5.5 If the Executive determines that he would become subject to the
excise tax imposed by Section 4999 of the Code for any reason, he may notify
the Company that he wishes to renegotiate certain payments provided by this
Agreement so that such excise tax will not apply, and the Company shall
negotiate with the Executive in good faith to accomplish such result; and
8.5.6 In its sole discretion, the Company may elect prior to the Date
of Termination to extend the Restricted Period for twelve (12) months beyond
the Date of Termination, in which case it shall pay to the Executive, in a cash
lump sum within five (5) business days after the Date of Termination, an amount
equal to twelve (12) months of the Executive's base salary as of the Date of
Termination.
8.6 Proration of Annual Bonus. For purposes of Sections 8.4 and 8.5,
the Executive's Annual Bonus with respect to any fiscal year of the Company
shall be prorated by a fraction, the numerator of which is the number of months
in such fiscal year in which the Executive was employed by the Company
(including the month in which his employment was terminated) and the
denominator of which is 12. The amount advanced, if any, to the Executive
pursuant to Section 4.2 shall be credited against the payment of such prorated
Annual Bonus. Notwithstanding anything to the contrary contained in this
Agreement, if the Executive's employment by the Company is terminated due to
his death or Disability, he shall be entitled to receive his full Annual Bonus
without any proration thereof, but less any portion of such Bonus already paid
him.
8.7 Election to Defer. Not later than July 31, 1997, the Company
shall implement a deferred compensation plan which shall entitle the Executive
to elect to defer a portion of his Base Salary, Annual Bonus and Incentive
Bonus.
8.8 Payment if Termination due to Death or Disability. In the event
that the Executive's employment by the Company is terminated due to the
Executive's death or disability, the Company shall be obligated to:
8.8.1 Pay to the Executive his Accrued Salary and Benefits, in a lump
sum in cash, within five (5) business days after the Date of Termination
(provided, however, that any portion of the Accrued Salary and Benefits would
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consists of deferred compensation or post-termination benefits shall be
determined and paid in accordance with the terms of the relevant plan as
applicable to the Executive);
8.8.2 Pay to the Executive his full Annual Bonus without proration
with respect to the fiscal year of the Company in which such Termination
occurs, in a lump sum in cash, on the Annual Bonus Payment Date for such year,
based on the Annual Bonus Cap for such year (without regard to whether the
performance targets for such year have been met);
8.8.3 Pay to the Executive the Incentive Bonus, prorated by a fraction
the numerator of which is the total number of months the Executive was employed
by the Company (including the month in which his employment was terminated) and
the denominator of which is 36 months; provided, however, that in no event
shall such prorated amount exceed 100% of the Incentive Bonus. Such Incentive
Bonus shall be paid to the Executive whether or not the Incentive Bonus Targets
are achieved prior to the Date of Termination. The payment, if any, of such
Incentive Bonus shall be reduced to the extent that it was paid to the
Executive prior to the Date of Termination;
8.8.4 Pay to the Executive an amount equal to ___ months of the
Executive's base salary as of the Date of Termination, with such payment to be
made in equal monthly installments.
The payments described in this Section 8.8 shall be in addition to any
life insurance and disability benefits payable to the Executive from the
Company.
8.9 No Additional Severance Payments. Except for the payments
provided in this Section 8, the Executive shall not be entitled to any payments
by the Company in the event of the termination of his employment by the
Company. In such event, the Executive shall have no obligation to seek other
employment to mitigate damages and any income earned by the Executive from
other employment or self-employment shall not be offset against any of the
Company's payment obligations under this Section 8.
9. Confidential Information.
9.1 Nondisclosure of Confidential Information. During and after the
Term of Employment, Executive will not disclose to any person, or use or
otherwise exploit for the Executive's own benefit or for the benefit of anyone
other
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than the Company, any Confidential Information of the Company, whether prepared
by the Executive or not. At the request of the Company, the Executive agrees to
deliver to the company, at any time during the Term of Employment, or
thereafter, all Confidential Information which he may possess or control. The
Executive agrees that all Confidential Information of the Company (whether now
or hereafter existing) conceived, discovered or made by him during the Term of
Employment exclusively belongs to the Company (and not to the Executive). The
Executive will promptly disclose such Confidential Information to the Company
and perform all actions reasonably requested by the Company to establish and
confirm such exclusive ownership.
9.2 Exceptions to Nondisclosure Obligations. The provisions of
Section 9.1 shall not apply to (i) information disclosed in the performance of
the Executive's duties to the Company based on his good faith belief that such
disclosure is in the best interests of Company; (ii) information that is public
knowledge; (iii) information disseminated by the Company to third parties in
the ordinary course of business; (iv) information lawfully received by the
Executive from a third party who, based upon inquiry by the Executive, is not
bound by a confidential relationship to the Company; (v) information disclosed
under a requirement of law or as directed by applicable legal authority having
jurisdiction over the Executive; or (vi) information necessary in order to
enforce his rights under this Agreement or necessary to defend himself against
a claim asserted directly or indirectly by the Company or any of its affiliated
companies.
9.3 Survival of Nondisclosure Obligations. The terms of this Section
9 shall survive the termination of this Agreement regardless of who terminates
this Agreement or the reasons therefor.
10. Non-competition; Non-Solicitation. During the Restricted Period, the
Executive shall not, without the prior written approval of the Board, directly
or indirectly, as an employee, agent, consultant, stockholder, director,
co-partner or in any other individual or representative capacity, (i) recruit
or solicit for employment any person who is employed by the Company on the Date
of Termination; or (ii) engage in any business which competes, directly or
indirectly, with the Business in the Market ("Competitive Business") without
regard to (A) whether the Competitive Business has its office, manufacturing or
other business facilities within or without the Market, (B) whether any of the
activities of the Executive referred to above occur or
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are performed within or without the Market or (C) whether the Executive
resides, or reports to an office, within or without the Market; provided,
however, that the Executive may, directly or indirectly, in one or a series of
transactions, own, invest or acquire an interest in up to five percent (5%) of
the capital stock of a corporation whose capital stock is traded publicly.
11. Definitions. Capitalized terms used in this Agreement shall have the
meanings set forth in this Section 11.
"Accrued Salary and Benefits" means, as of the applicable date, the sum
of (i) the Executive's base salary under Section 4.1 through such date to the
extent not theretofore paid, and (ii) any vacation pay, expense reimbursements
and other cash entitlements accrued by the Executive as of such date to the
extent not theretofore paid.
"Annual Bonus" is defined in Section 4.2.
"Annual Bonus Cap" is defined in Section 4.2.
"Annual Bonus Payment Date" means with respect to any fiscal year of
the Company, a date which is no later than thirty days after the day on which
the Company's independent public accountants sign their report with respect to
such year.
"Bankruptcy Proceeding" means a case commenced under Title 11 of the
United States Code in which an order for relief is entered in respect of the
Company under either Chapter 11 or Chapter 7 thereof.
"Board" is defined in Section 1.1.
"Business" means any business conducted, or engaged in, by the Company
or its subsidiaries at any time during the Term of Employment.
"Cause" shall mean any of the following:
(i) The Executive's conviction for, or plea of nolo
contendere to, any felony:
(ii) The Executive's willful fraud or material dishonesty in
connection with the Executive's performance of his duties hereunder;
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(iii) The Executive's failure, other than due to illness,
disability or death or as a result of any event that constitutes Good Reason
hereunder, to substantially perform his duties hereunder that results in
material harm to the Company; or
(iv) The Executive's gross negligence in the performance of
his duties hereunder (other than arising solely due to physical or mental
disability) that results in material harm to the Company;
in each case, for purposes of clauses (iii) and (iv), after the Board has
provided the Executive with 30 days' written notice of such circumstances and
the possibility of an event giving rise to termination for Cause, and the
Executive fails to cure such circumstances within those 30 days.
"Change of Control" shall mean the occurrence of (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or consolidation of
the Company with one or more corporations as a result of which the Company is
not the surviving corporation or as a result of which it is the surviving
corporation and its outstanding voting securities are converted to or
reclassified as cash, securities of another corporation or other property
(unless the principal purpose of such transaction is to change the state of the
Company's incorporation), (iii) upon a sale of assets of the Company or its
subsidiaries having a fair market value equal to more than 50% of the total
fair market value of the Company's assets to an entity which is not
controlling, controlled by or under common control with the Company, or (iv)
the acquisition of a record or beneficial interest in more than 30% of the then
outstanding voting securities of the Company, either in a single transaction or
a series of transactions, by an entity or "group" within the meaning of Section
13(d) of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder which is not an affiliate of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Company" is defined in the introduction.
"Confidential Information" means any confidential information of the
Company including, without limitation, any study, data, calculations, software
storage media or other compilation of information, patent, patent application,
copyright, trademark, trade name, service xxxx, service name, "know-how," trade
secrets, customer lists,
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details of client or consultant contracts, pricing policies, operational
methods, marketing plans or strategies, product development techniques or plans,
business acquisition plans or any portion or phase of any scientific or
technical information, ideas, discoveries, designs, computer programs (including
source or object codes), processes, procedures, formulas, improvements of other
proprietary or intellectual property of the Company or relating to its business,
whether or not in written or tangible form, and whether or not registered, and
including all files, records, manuals, books, catalogues, memoranda, notes,
summaries, plans, reports, records, documents and other evidence thereof,
whether existing now or hereafter discovered or developed.
"Date of Termination" means (i) in the event of a termination of the
Executive's employment pursuant to Section 8.2, the date specified in the
written notice of termination from the Company, (ii) in the event of a
termination of the Executive's employment pursuant to Section 8.3, the date
specified in the written notice of termination from the Executive, (iii) in the
event of the Executive's death, the date of the Executive's death and (iv) in
the event of the Executive's Disability, the date he is determined to be
Disabled.
"Disabled" or "Disability" means, with respect to the Executive, the
occurrence of an event or events that renders the Executive with respect to his
physical or mental condition unable to perform, in the view of the Board and as
certified in writing by a competent medical physician, his duties hereunder and
which results in his being entitled to benefits under the Company's disability
insurance plan.
"Effective Date" is defined in the introduction.
"Executive" means __________________ or his estate, if deceased.
"Good Reason" means any of the following:
(i) A material diminution in the Executive's duties or
responsibilities as set forth in Section 1;
(ii) Failure of the shareholders or the Board to elect or
re-elect the Executive as a director of the Company;
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(iii) A breach by the Company of the compensation and benefit
provisions set forth in Sections 4 through 6;
(iv) A written notice of non-renewal of this Agreement being
given by the Company to the Executive pursuant to Section 3.
(v) The inability of the Company and the Executive to reach
agreement on the terms of a new employment agreement prior to the
Expiration Date or any Renewal Date that follows notice by the Company
to the Executive of its intent to renegotiate the terms of this
Agreement.
(vi) Any termination by the Executive within twelve (12) months
following the occurrence of a Change in Control;
(vii) The inability of the Company to perform its obligations
under the Incentive Stock Option Agreement attached as Exhibit A hereto;
(viii) A material breach by the Company of any other term of
this Agreement; or
(ix) During the pendency of a Bankruptcy Proceeding, (a) an
order of the Bankruptcy Court providing for the assumption of this
Agreement is not entered within 90 days of the order for relief (b) a
motion to reject this Agreement is filed with the Bankruptcy Court, or
(c) the Company fails to satisfy its obligations under Section 12.16;
provided that in any such case, the Executive agrees, if requested by
the Company, to continue to serve in his position (and on the same terms
and conditions applicable under this Agreement) until a successor can be
hired by the Company, but for a period that shall not exceed 120 days
from the date of the event that gives rise to Good Reason hereunder.
"Incentive Bonus" is defined in Section 4.3.
"Incentive Bonus Target" is defined in Section 4.3.
"Market" means any state in the United States of America in which the
Business is conducted by or engaged in by the Company at any time during the
Term of Employment.
"Plan" is defined in Section 4.4.
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"Renewal Date" is defined in Section 3.
"Restricted Period" means the period beginning on the Effective Date
and ending on (i) the Date of Termination, or (ii) if the Term of Employment is
terminated prior to the Expiration Date by the Company without Cause or by the
Executive for Good Reason and if the Company elects, pursuant to Section 8.5.6,
to extend the provisions of Section 10, the date which is twelve (12) months
following the Date of Termination, provided the Company continues to make all
payments to the Executive required by Section 8.5 hereof.
"Term of Employment" is defined in Section 3.
12. General.
12.1 Notice. Any notice, request, demand or other communication
required or permitted to be given under this Agreement shall be given in
writing and delivered personally, or sent by certified or registered mail,
return receipt requested, as follows (or to such other addressee or address as
shall be set forth in a notice given in the same manner).
If to Executive: -------------------------------------
-------------------------------------
-------------------------------------
If to Company: Barry's Jewelers, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Chairman of the Board
Any such notices shall be deemed to be given on the date personally delivered or
such return receipt is issued.
12.2 Executive's Representations. The Executive hereby warrants and
represents to the Company that the Executive has carefully reviewed this
Agreement, including his obligations hereunder, and has consulted with such
attorneys and advisors as the Executive considers appropriate in connection
with this Agreement, and is not subject to any covenants, agreements or
restrictions, including without limitation any covenants, agreements or
restrictions arising out of the Executive's prior employment which would be
breached or violated by the Executive's execution of this Agreement or by the
Executive's performance of his duties hereunder.
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12.3 Validity. If, for any reason, any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the other
provisions hereof shall not be affected thereby.
12.4 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12.5 Tax Withholding. The Company shall provide for the withholding of
any taxes required to be withheld by federal, state, or local law with respect
to any payment in cash, shares of stock and/or other property made by or on
behalf of the Company to or for the benefit of the Executive under this
Agreement or otherwise. The Company may, at its option: (i) withhold such taxes
from any cash payments owing from the Company to the Executive, (ii) require
the Executive to pay to the Company in cash such amount as may be required to
satisfy such withholding obligations and/or (iii) make other satisfactory
arrangements with the Executive to satisfy such withholding obligations.
12.6 Waiver of Breach; Attorneys' Fees. The waiver by the Company or
the Executive of a breach of any provision of this Agreement by the other party
shall not operate or be construed as a waiver of any other breach of such other
party. Each of the parties to this Agreement will be entitled to enforce its
respective rights under this Agreement and to exercise all other rights existing
in its favor. In the event either party takes legal action or commences an
arbitration proceeding to enforce any of the terms or provisions of this
Agreement, the nonprevailing party shall pay the successful party's costs and
expenses, including but not limited to, attorneys' fees, incurred in such
action or proceeding.
12.7 Governing Law. This Agreement shall be governed by, construed,
applied and enforced in accordance with the laws of the state of California,
except that no doctrine of choice of law shall be used to apply any law other
than that of California, and no defense, counterclaim or right of setoff given
or allowed by the laws of any other state or
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jurisdiction, or arising out of the enactment, modification or repeal of any
law, regulation, ordinance or decree of any foreign jurisdiction, shall be
interposed in any action hereon.
12.8 Specific Performance. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of Section 9 or 10 of this Agreement and that the Company may in its
sole discretion apply for specific performance and/or injunctive relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions in order to enforce or prevent any violations of such provisions of
this Agreement.
12.9 Forum. The Executive and the Company agree that any action or
proceeding arising out of this Agreement (excluding any actions or proceedings
subject to the mandatory arbitration provisions of Section 12.10, but including
any action to confirm an award of such arbitrators and enter judgment thereon)
may be commenced in the courts of the State of California located in the County
of Los Angeles or the United States District Courts located in the County of
Los Angeles. The Executive and the Company consent to in personam jurisdiction
with respect to such courts, agree that venue will be proper in such courts
and waive any objections based upon forum non conveniens. The choice of forum
set forth in this Section 12.9 shall not be deemed to preclude the enforcement
of any judgment obtained in such forum or the taking of any action under this
Agreement to enforce same in any other jurisdiction.
12.10 Arbitration. The Company and the Executive agree that, with the
exception of actions for specific performance, restraining orders or other
injunctive relief pursuant to Section 12.8 and actions to enforce an
arbitration award, all claims and disputes between the Company and the
Executive in connection with this Agreement or otherwise related to the
Executive's employment by the Company (including without limitation the
termination of Executive's employment) shall be submitted to final and binding
arbitration administered and conducted by the American Arbitration Association
in Los Angeles, California pursuant to its Labor Arbitration Rules then in
effect; provided that, the party seeking to submit a claim or dispute
hereunder to arbitration shall give the other party written notice of any
arbitration proceeding at least 60 days prior to such proceeding; provided,
further, that the parties mutually agree to negotiate in good faith to resolve
their differences prior to such arbitration proceeding.
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12.11 Assignment; Third Parties. The Executive may not assign,
transfer, pledge, hypothecate, encumber or otherwise dispose of this Agreement
or any of his respective rights or obligations hereunder, without the prior
written consent of the Company. Except as expressly provided herein, the
Company may not assign or transfer this Agreement or any of its rights or
obligations hereunder, without the prior written consent of the Executive. The
Company may assign its rights and obligations hereunder to its successor in
connection with a merger, consolidation, sale of assets, acquisition,
recapitalization or other similar transaction (and such successor shall
thereafter be deemed the "Company" for purposes of this Agreement). The
provisions of this Agreement shall be binding upon, and shall inure to the
benefit of, the respective heirs, legal representatives and successors of the
parties hereto.
12.12 Prior Understandings. This Agreement, together with the
exhibits and schedules attached hereto which are incorporated herein by this
reference, embodies the entire understanding of the parties hereto and
supersedes all other oral or written agreements or understandings between them
regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in a writing specifically referring hereto and signed
by the Executive and the Chairman of the Board of the Company or his designee.
The headings in this Agreement are for convenience and reference only and shall
not be construed as part of this Agreement or to limit or otherwise affect the
meaning hereof. Section references refer to this Agreement unless otherwise
specified.
12.13 Further Action. The Executive and the Company agree to perform
any further acts and to execute and deliver any document which may be
reasonable to carry out the provisions hereof.
12.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
12.15 Indemnification. During the Term of Employment and thereafter,
the Company shall indemnify the Executive to the fullest extent permitted by
applicable law, and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its directors and officers, with respect to all expenses, judgments, fines,
settlements and other amounts (including, without limitation, attorneys'
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fees) incurred or sustained by the Executive in connection with any action,
suit or proceeding to which he may be made a party by reason of being or having
been a director, officer or employee of the Company or his serving or having
served any other enterprise as a director, officer or employee at the request
of the Company.
12.16 Bankruptcy Proceeding. In the event that the Company becomes
subject to a Bankruptcy Proceeding during the Term of Employment, and the
Company is reorganized as a result of the Bankruptcy Proceeding, the
Executive's rights to purchase the Company's common stock under Section 4.4 and
Section 7 hereof shall be converted into rights to purchase an equivalent
interest in the common voting shares of the entity into which the Company is
reorganized. The aggregate number of new shares (the "New Share") of the
reorganized entity that the Executive shall attain the right to acquire
hereunder shall represent the same percentage equity ownership interest of the
Company, on a fully diluted basis, as is represented by __________ shares of
the Company's common stock on the Effective Date. The Executive may purchase
all or any portion of the New Shares, at his option, but shall not be required
to purchase the New Shares. The purchase price of the New Shares shall be set
at the closing trading price of the New Shares on the date that is 30 days
following the date of consummation of a plan or reorganization. The Executive's
right to acquire the new Shares shall otherwise be exercisable on terms and
conditions that are comparable to those applicable under Sections 4.4 and 7
hereof.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first written above.
EXECUTIVE:
---------------------------------------
[NAME]
COMPANY:
BARRY'S JEWELERS, INC.
By: -----------------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board
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