EMPLOYMENT AGREEMENT
Exhibit 10.45
This Employment Agreement (hereinafter referred to as “Agreement”) is entered into by and between Xxxxx Xxxxx International, Inc. (hereinafter referred to as the “Company”) and Xx. Xxxx Xxxxxxxxx (hereinafter referred to as “Xx. Xxxxxxxxx”).
WHEREAS, the Company desires to employ Xx. Xxxxxxxxx in the capacity of President, Xxxxx Xxxxx Brand; and
WHEREAS, the Company and Xx. Xxxxxxxxx desire to set forth in this Agreement all of the terms and conditions of said employment, and to establish a mechanism to resolve disputes relating to said employment, and to establish limitations on post-term solicitation, use of confidential information, and competition;
NOW, THEREFORE, in consideration of the mutual promises and obligations contained in this Agreement, the Company and Xx. Xxxxxxxxx agree as follows;
| 1. | Effective Date and Term. |
This Agreement is effective as of August 1, 2007 (the “Effective Date”). This Agreement is for an indefinite term and can be terminated at any time by either party in accordance with the terms and conditions expressly set forth herein.
| 2. | Duties and Responsibilities. |
The Company hereby employs Xx. Xxxxxxxxx as Group President, Xxxxx Xxxxx and Premium Brands, with such powers and duties in those capacities as may be established from time to time by the Company in its discretion. Xx. Xxxxxxxxx will report directly to Xxxxx Xxxxxxxxxxx, Vice Chairman, President and Chief Operating Officer of the Company. Xx. Xxxxxxxxx will work for the Company on a full working time basis and devote his full time, attention and energies to the Company’s business. During his employment, Xx. Xxxxxxxxx will not actively or passively, if same would materially detract from his duties hereunder, engage in any other business activities on his own behalf or for any other entity, other than for the benefit of the Company, regardless of whether such activity is pursued for profits, gains, or other pecuniary advantage. However, nothing in this Agreement shall prevent Xx. Xxxxxxxxx from passively investing in business activities so long as such investments require no active participation by Xx. Xxxxxxxxx, or from engaging in other charitable or civic activities so long as such activities do not materially detract from Xx. Xxxxxxxxx’x job duties herein. Xx. Xxxxxxxxx shall be based at the Company’s principal offices in New York, New York except for required travel on the Company’s business.
| 3. | Compensation. |
a. Base Salary. The Company promises to pay Xx. Xxxxxxxxx an annualized base salary of Five Hundred Thousand Dollars ($500,000.00), less applicable deductions, payable in installments according to the Company’s normal payroll practices.
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Xx. Xxxxxxxxx shall be eligible to receive annual zed increases in compensation, at the discretion of the Company, to become effective on or before May 1 of the applicable calendar year, if Xx. Xxxxxxxxx’x job performance merits an increase in pay.
b. Management Incentive Program. In addition to the Base Salary described in Paragraph 3.a of this Agreement, the Xx. Xxxxxxxxx shall participate in the Company’s Management Incentive Program (hereinafter, “MIP”). The amount and method of payment of any compensation paid to Xx. Xxxxxxxxx shall be determined in accordance with the applicable terms of the MIP. Xx. Xxxxxxxxx shall be eligible for up to 40% target bonus under the MIP. Xx. Xxxxxxxxx shall be eligible to receive a prorated portion of his MIP bonus in the event Xx. Xxxxxxxxx is terminated without “Cause” as defined herein after the end of the third quarter of the fiscal year. The amount of the prorated bonus shall be calculated by multiplying Xx. Xxxxxxxxx’x regular bonus (the amount that he would have received had he continued in employment until the end of the fiscal year) by a fraction, the numerator of which is the number of full months that have expired at the time of Xx. Xxxxxxxxx’x termination, and the denominator of which is the number twelve (12).
c. Vacation and Personal Leave. Xx. Xxxxxxxxx shall be eligible for up to four (4) weeks of paid vacation each calendar year of his employment, and up to six (6) days of personal leave each calendar year of his employment. Any accrued but unused vacation and/or personal leave may not be carried forward from year to year but will be paid out on the termination of Xx. Xxxxxxxxx’x employment for any reason.
d. Other Employee Benefits. Xx. Xxxxxxxxx will be eligible to participate in any other group employee benefit plan that is generally available to all Company employees, so long as Xx. Xxxxxxxxx meets the applicable eligibility requirements of individual benefit plan and subject to the terms and conditions of each benefit plan.
e. Expense Reimbursement. During Xx. Xxxxxxxxx’x term of employment, the Company, upon the submission of supporting documentation by Xxxxxxxxx, and in accordance with Company policies for its executives, shall reimburse Xxxxxxxxx for all reasonable expenses actually paid or incurred by Xxxxxxxxx in the course of and pursuant to the business of the Company, including expenses for travel and entertainment.
| 4. | Change in Control |
In the event that, within the 12 month period following a Change in Control (as herein defined), Xx. Xxxxxxxxx’x employment is terminated by the Company other than for Cause, or Xx. Xxxxxxxxx terminates his employment for Good Reason (as herein defined), he shall be entitled to the following benefits: (a) any granted but unvested Stock and/or Option to purchase the Company’s common stock will become fully vested and exercisable immediately upon such termination and shall thereafter remain exercisable [till the earlier of 60 days or the expiration date of such Option]; and (b) a severance payment in the aggregate amount of one year of Xx. Xxxxxxxxx’x then-current Base Salary (as defined in Paragraph 3(a) hereof) plus an amount equal to any incentive compensation
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paid to Xx. Xxxxxxxxx pursuant to Paragraph 3(b) hereof during the Company’s fiscal year preceding any such termination. In order to receive the benefits described in this Paragraph, Xx. Xxxxxxxxx shall be required to execute a waiver of claims and general release in a form reasonably satisfactory to both parties.
For purposes of this Paragraph 4, the term “Change in Control” shall mean the occurrence of any of the following events:
| 1. | the acquisition by any person, entity or “group” (as defined in section 13(d) of the Exchange Act) (other than (x) any subsidiary or affiliate of the Company or (y) any entity owned, directly or indirectly, 50% or more by Xxxxx Xxxxx International, Inc. or (z) any employee benefit plan of any such entity) through one transaction or a series of related transactions of 50% or more of the combined voting power of the then outstanding voting securities of the Company; |
| 2. | The complete liquidation or dissolution of the Company (other than a dissolution occurring upon a merger or consolidation thereof); or |
| 3. | The sale, transfer or other disposition of all or substantially all of the assets of the Company through one transaction or a series of related transactions to one or more persons or entities that are not, immediately prior to such sale, transfer or other disposition, affiliates of the Company; or |
| 4. | The termination or replacement of Xxxxxx Xxxxxxxxxxx as Chairman and Chief Executive Officer of Xxxxx Xxxxx International, Inc.; provided, however, that the death or retirement of Xxxxxx Xxxxxxxxxxx shall not trigger a Change in Control under this Section 4. |
“Good Reason” means, without Xx. Xxxxxxxxx’x written consent: (i) a material diminution of Xx. Xxxxxxxxx’x titles, duties or responsibilities or the assignment of duties or responsibilities that are materially inconsistent with his titles, duties and responsibilities hereunder; (ii) a change in direct reporting relationship to someone other than Xxxxx Xxxxxxxxxxx; (iii) a reduction in the Executive’s Base Salary, annual bonus or incentive compensation opportunity (it being understood that a reduction in the dollar amount of Xx. Xxxxxxxxx’x annual bonus from year to year solely as the result of achievement or failure to achieve the target performance objectives provided in the annual bonus plan shall not constitute a reduction in Xx. Xxxxxxxxx’x annual bonus opportunity); or (iv) requiring Xx. Xxxxxxxxx’x principal place of business to be located other than New York, New York.
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| 5. | Xx. Xxxxxxxxx’x Death or Inability to Perform |
In the event of Xx. Xxxxxxxxx’x death, this Agreement and the Company’s obligation to pay Xx. Xxxxxxxxx’x salary and compensation automatically end. If Xx. Xxxxxxxxx becomes unable to perform his employment duties during the Term of this agreement, and he has no paid leave of absence available to him, his compensation under this Agreement shall automatically end until such time as Xx. Xxxxxxxxx becomes able to resume his job duties for the Company. In the event that Xx. Xxxxxxxxx becomes unable to perform his employment duties for a cumulative period of six months within any span of twelve months, this Agreement and Xxxxxxxxx’x employment will be automatically terminated. In such case, Xx. Xxxxxxxxx’x salary and compensation shall automatically end.
| 6. | Termination by Company for Cause. |
The Company may terminate this Agreement and Xx. Xxxxxxxxx’x employment “for Cause” at any time with or without notice. As used herein, “for Cause” shall mean any one of the following:
| • | Mr, Xxxxxxxxx’x habitual neglect of his job duties and responsibilities; or |
| • | Conviction of any felony, excluding minor traffic offenses; or |
| • | Commission of a material act of dishonesty or a material breach of a fiduciary duty; or |
| • | Commission of a serious violation of any of the Company’s personnel policies, including but not limited to violations of the Company’s policies against any form of harassment; or |
| • | A material breach of this Agreement, provided that Xx. Xxxxxxxxx has failed to cure such material act or omission within 30 days after written notice thereof. |
In the event Xx. Xxxxxxxxx is termininated “for Cause,” his pay and benefits shall end on his last date of employment and any unvested benefits shall forfeit, and Xx. Xxxxxxxxx shall be entitled to no other compensation from that day forward, but will be promptly be paid for accrued compensation as of that date, except as otherwise provide in paragraph 3(c) above.
| 7. | Termination by Company Without “Cause” |
The Company may terminate this Agreement and Xx. Xxxxxxxxx’x employment without Cause at any time and for any reason upon thirty (30) days written notice to Xx. Xxxxxxxxx. In the event that the Company terminates Xx. Xxxxxxxxx’x employment without Cause, the Company will pay Xx. Xxxxxxxxx severance pay in the amount of six (6) months of Base Salary. Xx. Xxxxxxxxx shall be required to execute a Severance Agreement and General Release in a form that is reasonably satisfactory to both parties in order to receive severance pay. Xx. Xxxxxxxxx shall not be entitled to any compensation or benefits from the date of his termination forward.
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| 8. | Termination of Agreement by Xx. Xxxxxxxxx |
Xx. Xxxxxxxxx may terminate this Agreement and his employment with the Company upon thirty (30) days prior written notice to the Company. In such case, Xx. Xxxxxxxxx may be required to perform his business duties and will be paid his regular salary up to the date of termination. At the option of the Company, the Company may require Xx. Xxxxxxxxx to depart from the Company at any time during such thirty (30) day period upon receiving said thirty (30) days notice from Xx. Xxxxxxxxx of the termination of the Agreement, and in such event, the Company shall only be required to pay Xx. Xxxxxxxxx for the balance of his salary and benefits for that workweek, and not be required to continue to pay Xx. Xxxxxxxxx any salary or benefits for the remainder of the thirty (30) day period.
| 9. | Cooperation |
Upon the termination of this Agreement for any reason, Xx. Xxxxxxxxx agrees to cooperate with the Company in effecting a smooth transition of the management of the Company with respect to the duties and responsibilities which Xx. Xxxxxxxxx performed for the Company. Further, after termination of this Agreement, Xx. Xxxxxxxxx will upon reasonable notice furnish such information and proper assistance to the Company as it may reasonably require in connection with any litigation to which the Company is or may become a party.
| 10. | Covenant Not To Compete |
During the term of his employment (whether under this Agreement or otherwise) and for a period of six (6) months following the termination of Xx. Xxxxxxxxx’x employment (for any reason, whether initiated by Xx. Xxxxxxxxx or the Company), Xx. Xxxxxxxxx promises and agrees that he will not enter into any employment or other agency relationship (whether as a principal, agent, partner, employee, investor, owner, consultant, board member or otherwise) with any of the following business organizations, or their affiliated organizations that directly compete with the Company, if any: (1) Haggar; (2) Liz Claiborne, Inc.; (3) Philips Van Heusen; (4) Xxxxxxx Xxxx; or (5) DKNY, provided, that Xx. Xxxxxxxxx may hold the securities and/or passively invest in shares of capital stock or other equity securities of any such entity so long as does not acquire a controlling interest in or become a member of a group which exercises direct or indirect control of more than five percent of any class of capital stock of such entity. Xx. Xxxxxxxxx acknowledges that the business entities identified in the preceding sentence are competitors of Xxxxx Xxxxx and that the restrictive covenant herein is necessary to protect Xxxxx Xxxxx legitimate business interests. This restrictive covenant may be assigned by Xxxxx Xxxxx to any successor entities.
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| 11. | Agreement Not to Disclose Trade Secrets or Confidential Information |
(a) Trade Secrets. During the term of his employment and after (whether under this Agreement or otherwise) Xx. Xxxxxxxxx’x termination from employment with the Company or any successor organization (for any reason by Xx. Xxxxxxxxx or the Company), Xx. Xxxxxxxxx promises and agrees that he will not disclose or utilize any trade secrets, confidential information, or other proprietary information acquired during the course of his service with the Company and/or its related business entities. As used herein, “trade secret” means the whole or any portion or phase of any formula, pattern, device, combination of devices, or compilation of information which is for use, or is used in the operation of the Company’s business and which provides the Company an advantage or an opportunity to obtain an advantage over those who do not know or use it. “Trade Secret” also includes any scientific, technical, or commercial information, including any design, list of suppliers, list of customers, or improvement thereof, as well as pricing information or methodology, contractual arrangement with vendors or suppliers, business development plans or activities, or Company financial information.
(b) Confidential Information. During the term of his employment and after Xx. Xxxxxxxxx’x termination of employment (whether under this Agreement or otherwise) with Xxxxx Xxxxx or any successor organization (for any reason, whether initiated by Xx. Xxxxxxxxx or the Company), Mr, Xxxxxxxxx shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way any Confidential Information pertaining to the business of the Company. Any Confidential Information or Data now or hereafter acquired by Xx. Xxxxxxxxx with respect to the business of the Company (which shall include, but not be limited to information concerning the Company’s financial condition, prospects, technology, customers, suppliers, methods of doing business and promotion of the Company’s products and services) shall be deemed a valuable special and unique asset of the Company that is received by Xx. Xxxxxxxxx in confidence and as a fiduciary. For purposes of this Agreement, “Confidential Information” means information disclosed to Xx. Xxxxxxxxx as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by Xx. Xxxxxxxxx) prior to or after the date hereof and not generally known or in the public domain, about the Company or its business.
| 12. | Agreement Not to Solicit Or Hire Company Employees |
If Xx. Xxxxxxxxx leaves the employment of the Company for whatever reason, Xx. Xxxxxxxxx promises and agrees that during the twelve (12) months following his departure from the Company, he will not, without the express written permission of the Company, directly employ as a consultant or employee any person who is a “Protected Employee.” “Protected Employee” shall mean any person who is employed by XXXXX XXXXX or its subsidiaries affiliates as of the Effective Date or at any time during Xx. Xxxxxxxxx’x employment hereunder and who has, as part of that employment: (a) been exposed to or had knowledge of confidential business information or trade secrets of XXXXX XXXXX; (b) is a party to any restrictive covenant with XXXXX XXXXX; or (c) has relationships with customers, vendors, or manufacturers and has the potential ability to adversely impact XXXXX XXXXX’ goodwill in any customer, vendor or manufacturer relationship to any degree. However, the term “Protected Employee” shall not
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include any person whose employment has been voluntarily or involuntarily terminated by XXXXX XXXXX and who, following such termination, has not been employed by XXXXX XXXXX for at least six (6) months. Xx. Xxxxxxxxx agrees not to solicit, recruit or directly or indirectly hire or employ any of XXXXX XXXXX’x Protected Employees for twelve (12) months following the termination of Xx. Xxxxxxxxx’x employment for any reason, with the exception of the Executive Administrative Assistants of Xx. Xxxxxxxxx.
| 13. | Injunctive Relief |
In recognition of the unique services to be performed by Xx. Xxxxxxxxx and the possibility that any violation by Xx. Xxxxxxxxx of paragraphs 10, 11, or 12 of this Agreement may cause irreparable or indeterminate damage or injury to Company, Xx. Xxxxxxxxx expressly stipulates and agrees that the Company shall be entitled upon ten (10) days written notice to Xx. Xxxxxxxxx to obtain an injunction from any court of competent jurisdiction regarding any violation or threatened violation of this Agreement. Such right to an injunction shall be in addition to, and not in limitation of, any other rights or remedies the Company may have for actual or liquidated damages.
| 14. | Survival |
Anything contained in this Agreement to the contrary notwithstanding, the provisions of paragraphs 10, 11, or 12 and the other provisions of this Agreement necessary to effectuate the survival of Sections 10, 11, or 12 shall survive termination of this Agreement and any termination of Xxxxxxxxx’x employment hereunder.
| 15. | Judicial Modification of Agreement. |
The Company and Xx. Xxxxxxxxx specifically agree that a court of competent jurisdiction (or an arbitrator as appropriate) may modify or amend paragraphs 10, 11, or 12 of this Agreement if absolutely necessary to conform with relevant law or binding judicial decisions in effect at the time the Company seeks to enforce any or all of said provisions.
| 16. | Resolution of Disputes by Arbitration |
Any claim or controversy that arises out of or relates to this Agreement, or the breach of it, will be resolved by arbitration in the City of Miami in accordance with the rules then obtaining of the American Arbitration Association. Judgment upon the award rendered may be entered in any court possessing jurisdiction over arbitration awards. This Section shall not limit or restrict the Company’s right to obtain injunctive relief for violations of paragraphs 10, 11, or 12 of this Agreement. The prevailing party shall be entitled to payment for all costs and reasonable attorney’s fees (both trial and appellate) incurred by the prevailing party in regard to the proceedings.
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| 17. | Adequate Consideration |
Xx. Xxxxxxxxx expressly agrees that the Company is providing adequate, reasonable consideration for the obligations imposed upon him in this Agreement.
| 18. | Effect of Prior Agreements. |
This Agreement supersedes any prior verbal or written agreement or understanding between the Company and Xx. Xxxxxxxxx.
| 19. | Limited Effect of Waiver by Company |
If the Company waives a breach of any provision of this Agreement by Xx. Xxxxxxxxx, that waiver will not operate or be construed as a waiver of other breaches of this Agreement by Xx. Xxxxxxxxx.
| 20. | Severability |
If any provision of this Agreement is held invalid for any reason, said invalidity shall not affect the enforceability of any other provision of this Agreement, and all other provisions of this Agreement will remain in effect.
| 21. | Assumption of Agreement by Company’s Successors and Assigns. |
At the Company’s sole option, the Company’s rights and obligations under this Agreement will inure to the benefit of and be binding upon the Company’s successors and assigns, Xx. Xxxxxxxxx may not assign his rights and obligations under this Agreement.
| 22. | Applicable Law |
Xx. Xxxxxxxxx and the Company agree that this Agreement shall be subject to and enforceable under the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 30th day of October, 2007.
| Xxxxx Xxxxx International, Inc. | Xxxx Xxxxxxxxx | |||||
| By: | /s/ Xxxxx Xxxxxx |
/s/ Xxxx Xxxxxxxxx | ||||
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