LAKELAND INDUSTRIES, INC.
Exhibit 10.1
LAKELAND
INDUSTRIES, INC.
July
19, 2019
Xx.
Xxxxx Xxxxxxx
000
Xxxx Xxxx
Xxx
Xxxx, XX 00000
Dear
Xx. Xxxxxxx:
The
purpose of this letter is to confirm your employment with Lakeland
Industries, Inc. on the following terms and
conditions:
1.
THE PARTIES
This is
an Agreement, effective as of August 12, 2019 (the “Effective
Date”), between Xxxxx Xxxxxxx, residing at 000 Xxxx Xxxx, Xxx
Xxxx, XX 00000 (hereinafter referred to as “you”), and
Lakeland Industries, Inc., a Delaware corporation, with a principal
place of business located at 0000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxx
X, Xxxxxxxxxx, XX 00000-0000 (hereinafter the
“Company”).
2.
TERM
The
term of the Agreement shall be for an 18 month period, from the
Effective Date through and including February 11,
2021.
3.
CAPACITY
You
shall be employed in the capacity of Chief Financial Officer of
Lakeland Industries, Inc. with such responsibilities and duties as
may be assigned to you from time to time by the
Company.
You
agree to devote your full time and attention and best efforts to
the faithful and diligent performance of your duties to the Company
and shall serve and further the best interests and enhance the
reputation of the Company to the best of your ability.
4.
COMPENSATION
As full
compensation for your services, you shall receive the
following from the Company:
(a)
A base annual
salary of $240,000 payable bi-weekly (the “Base
Salary”); and
(b)
A stock option,
upon commencement of employment, to purchase 24,900 shares of
common stock of the Company. Such option will be for a term of 10
years, be exercisable at the fair market value of the common stock
on the date of grant, become exercisable as to 8,300 shares on each
of the one year, two year and three year anniversaries of the grant
date and be an “incentive” stock option to the extent
permissible under the Internal Revenue Code of 1986, as amended
(the “Code”); and
(c)
Participation, if
and when eligible, in any of the Company’s pension plans,
profit sharing plans, medical and disability plans and 401(k) plans
when any such plans are or become effective; and
(d)
Such benefits as
are provided from time to time by the Company to its officers and
employees; provided however that your annual vacation shall be for
a period of 3 weeks; and
(e)
Reimbursement for
any dues and expenses incurred by you that are necessary and proper
in the conduct of the Company’s business; and
(f)
Participation, as
determined in the discretion of the Compensation Committee of the
Board of Directors of the Company (the “Compensation
Committee”), in the Company’s 2017 Equity Incentive
Plan and any other restrictive stock, stock appreciation rights,
stock option or other equity plans of the Company as may become
effective; in this connection, it is intended that you will receive
a prorated grant of restricted stock, pursuant to the
Company’s LTIP program, at the time of next grant;
and
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(g)
In respect of the
fiscal year ending January 31, 2020, a bonus for up to 20% of Base
Salary, based upon such parameters, as determined by the
Compensation Committee, in conjunction with consultation with you
and thereafter, if determined in its sole discretion by the
Compensation Committee, an annual bonus in such amount, and based
upon such parameters (if any), as determined by the Compensation
Committee (an “Annual Bonus”).
5.
NON-COMPETITION/SOLICITATION/CONFIDENTIALITY
During
your employment with the Company and for one year thereafter, you
shall not, either directly or indirectly, as an agent, employee,
partner, stockholder, director, investor or otherwise, engage in a
business that carries on a like business to the business conducted
by the Company, in the market areas in which the Company generates
sales. You shall also abide by the Code of Ethics and other
corporate governance rules of the Company. You shall disclose
prior to the execution of this Agreement (or later on as the case
may be) all business relationships you presently have or
contemplate entering into or enter into in the future that might
affect your responsibilities or loyalties to the
Company.
During
your employment with the Company and for one year thereafter, you
shall not, directly or indirectly, hire, offer to hire or otherwise
solicit the employment or services of, any employee of the Company
on behalf of yourself or any other person, firm or
entity.
Except
as may be required to perform your duties on behalf of the Company,
you agree that during your employment with the Company and for a
period of one year thereafter, you shall not, directly or
indirectly, solicit, service, or accept business from any customers
of the Company, on your own behalf or on behalf of any other
person, firm or entity that carries on a like business to the
business conducted by the Company.
Except
as required in your duties to the Company, you shall not at any
time during or after your employment, directly or indirectly, use
or disclose any confidential or proprietary information relating to
the Company or its business or customers which is disclosed to you
or known by you as a consequence of or through your employment by
the Company and which is not otherwise generally obtainable by the
public at large. Confidential or proprietary information includes,
but is not limited to, commercial relationships or contacts with
specific or existing vendors, contractors, suppliers or clients;
pricing information and methodology; compensation; customer lists;
customer data and information; mailing lists and prospective
customer information; financial and investment information;
management and marketing plans; business strategy, technique and
methodology; business models and data; processes and procedures;
and Company provided files, software, code, reports, documents,
manuals and forms used in the business which are treated as
confidential to the business entity, in whatever medium provided or
preserved, such as in writing or stored
electronically.
In the
event that any of the provisions in this Section 5 shall ever be
adjudicated to exceed limitations permitted by applicable law, you
agree that such provisions shall be modified and enforced to the
maximum extent permitted under applicable law.
You
understand and agree that the Company may not be adequately
compensated by damages for a breach by you of any of the covenants
and agreement contained in this Section 5, and that the Company
shall, in addition to all other remedies, be entitled to injunctive
relief and specific performance. You hereby affirmatively waive the
requirement that the Company post any bond. Nothing herein
contained will be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of money damages, and if
the Company prevails, it shall also be entitled to the payment of
any and all reasonable fees, disbursements, and other charges of
the attorneys and collection agents, court costs, and all others
costs of enforcement. Likewise, if you prevail, you shall also be
entitled to the payment of any and all reasonable fees
disbursements and other charges of the attorneys and collections
agents, court costs, and all other costs of defense.
For
purposes of this Section 5, the term the “Company”
shall include all direct and indirectly owned subsidiaries of the
Company.
6.
TERMINATION
You or
the Company may terminate your employment prior to the end of the
Term upon written notice to the other party in accordance with the
following provisions:
(a)
Voluntary Termination. You may terminate
your employment voluntarily at any time during the Term by
providing the Company with 60 days prior written notice. If you do
so, except for Good Reason (as defined below), you shall be
entitled to receive from the Company your (i) accrued and unpaid
Base Salary through the date of termination, (ii) any Annual Bonus
earned for the year completed prior to the year of termination but
not yet paid, and (iii) any other employee benefits generally paid
by the Company up to the date of termination (collectively (i),
(ii), and (iii), the “Accrued
Obligations”).
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(b)
Death. This Agreement shall
automatically terminate on the date of your death without further
obligation to you other than for payment by the Company to your
estate or designated beneficiaries, as designated in writing to the
Company, of (i) the Accrued Obligations through the last day of the
month in which your death occurs, and (ii) a pro-rata portion of
the Annual Bonus, if any, for the year of termination up to and
including the date of death which shall be determined in good faith
by the Compensation Committee. Your estate or beneficiaries, as
applicable, shall also be entitled to all other benefits generally
paid by the Company on an employee’s death.
(c)
Disability. This Agreement and your
employment shall terminate without any further obligation to you if
you become “totally disabled” (as defined below) other
than for payment by the Company of (i) the Accrued Obligations
though the last day of the month in which you are deemed to be
totally disabled and (ii) a pro-rata portion of the Annual Bonus,
if any, for the year of termination up to and including the date
you are deemed to be totally disabled as determined in good faith
by the Compensation Committee.
You
shall be deemed to be “totally disabled” if you are
unable, for any reason, to perform any of your duties and
obligations to the Company, with or without a reasonable
accommodation, for a period of 90 consecutive days or for periods
aggregating 120 days in any period of 180 consecutive
days.
(d)
Cause. The Company may terminate
your employment at any time for “Cause” (as defined
below) and this Agreement shall terminate immediately with no
further obligations to you other than the Company shall pay you,
within thirty days of such termination, the Accrued Obligations up
to the date of such termination for Cause.
(e)
Termination by the Company Without Cause or by
you for Good Reason. If, during the Term, the Company
terminates your employment without Cause or you terminate your
employment for Good Reason (as defined below), in either case,
other than within 18 months after a Change in Control (which is
covered by Subsection (f) below), you shall be entitled to receive
from the Company, subject to your continued compliance with the
restrictive covenants contained in Section 5 hereof and your
execution and non-revocation of a release of claims substantially
in the form attached hereto as Annex A, (i) the Accrued
Obligations payable within 15 days after the date of termination
(or, in the case of the prior year’s Annual Bonus, if any, at
such time such bonus is payable pursuant hereto), (ii) an
additional 12 months of your then current Base Salary, payable in
equal monthly installments beginning with the first payroll date
after the date on which the release of claims becomes effective and
can no longer be revoked, and (iii) a pro rata portion of the
Annual Bonus, if any, for the year of termination up to and
including the date of termination which shall be determined in good
faith by the Compensation Committee and paid at such time as such
bonus is payable pursuant hereto.
(f)
Termination by the Company Without Cause or by
you for Good Reason within 18 Months After a Change in
Control. If, during the Term, the Company terminates your
employment without Cause or you terminate your employment for Good
Reason, in either such case, within 18 months after a Change in
Control (as defined below), you shall be entitled to receive from
the Company, subject to your continued compliance with the
restrictive covenants contained in Section 5 hereof and your
execution and non-revocation of a release of claims substantially
in the form attached hereto as Annex A, (i) the Accrued
Obligations payable within fifteen days after termination (or, in
the case of the prior year’s Annual Bonus, if any, at such
time such bonus is payable), (ii) a lump sum amount equal to 24
months of Base Salary in effect as of the date of termination of
employment or the year immediately prior to the Change in Control,
whichever is higher, and (iii) two times a target bonus amount, if
any, in effect as of the date of termination of employment. The
severance payments under sub-paragraphs (ii) and (iii) hereof shall
be paid with the first payroll date after the date on which the
release of claims becomes effective and can no longer be
revoked.
(g)
Notwithstanding the
foregoing, if your severance payments payable hereunder constitute
nonqualified deferred compensation subject to 409A of the Code and
the period in which you must execute the release begins in one
calendar year and ends in another, the severance payments will be
made in the later calendar year.
(h)
For purposes of
this Agreement:
(i)
“Cause”
shall mean termination based upon: (A) your failure to
substantially perform your material duties and responsibilities
with the Company, after a written demand for such performance is
delivered to you by the Company, which identifies the manner in
which you have not performed your duties or responsibilities and a
cure period of 60 days, (ii) your commission of an act of fraud,
theft, misappropriation, dishonesty or embezzlement, (iii) your
conviction for a felony or pleading nolo contendere to a felony, (iv) your
willful and continuing failure or refusal to carry out, or comply
with, in any material respect any reasonable directive of the Chief
Executive Officer or the Board of Directors of the Company
consistent with the terms of this Agreement, or (v) your material
breach of any provision of this Agreement.
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(ii)
“Good
Reason” shall mean the occurrence of any of the following
events without your prior written consent:
(A)
the failure of the
Company to pay your Base Salary or Annual Bonus, if any, when due
and if earned, other than an inadvertent administrative error or
failure, within 10 days of receipt of notice by you,
(B)
a material
diminution in your authority or responsibilities from those
described herein,
(C)
any material breach
of this Agreement by the Company, or
(D)
a failure of the
Company to have any successor assume in writing the obligations
under this Agreement.
(iii)
“Change in
Control” shall mean the occurrence of any of the following
events during the Term:
(A)
any Person (which
for purposes of this Section 6(h)(iii) shall include natural
persons, partnerships, corporations and any other entities), or
more than one Person acting as a group (as the term
“group” is contemplated for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (“Group”), acquires
ownership of stock of the Company that, together with stock held by
such Person or Group, constitutes more than 50% of the total fair
market value and total voting power of the stock of the Company;
provided, however, that for purposes of this subsection (A), the
following acquisitions shall not be deemed to result in a Change in
Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company or an affiliate of the
Company, or (3) any acquisition by (x) any employee
benefit plan (or related trust) intended to be qualified under
Section 401(a) of the Code or (y) any trust
established in connection with any broad-based employee benefit
plan sponsored or maintained, in each case, by the Company or any
corporation controlled by the Company (collectively (1), (2) and
(3), the “Exempt Acquisitions”);
(B)
any Person, or more
than one Person acting as a Group, acquires (or has acquired during
the 12-month period ending on the date of the most recent
acquisition) ownership of stock of the Company possessing 30% or
more of the total voting power of the Company’s stock;
provided, however, that none of the Exempt Acquisitions shall
constitute a Change in Control.
(C)
individuals who, as
of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person or
group other than the Board; or
(D)
a Person, or more
than one Person acting as a Group (other than a subsidiary or an
affiliate of the Company), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition)
assets of the Company that have a total gross fair market value
equal to or more than 50% of the total gross fair market value of
all assets of the Company immediately before such
acquisition(s).
Notwithstanding the
foregoing, a Change in Control shall not include any event,
circumstance or transaction that results from an action of any
Person or group which includes, is affiliated with or is wholly or
partly controlled by one or more executive officers of the Company
and in which you participate directly or actively (other than a
renegotiation of your employment arrangements or in your capacity
as an employee of the Company or any successor entity thereto or to
the business of the Company).
7.
NOTICES
Any
notices required to be given under this Agreement shall, unless
otherwise agreed to by you and the Company, be in writing and by
certified mail, return receipt requested and mailed to the Company
at its offices at 000 Xxxxx Xxxx XX, Xxxxxxx, Xxxxxxx 00000, or to
you at your home address at 000 Xxxx Xxxx, Xxx Xxxx, XX 00000 or at
such other address as may be provided by the Company or
you.
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8.
ASSIGNMENT AND SUCCESSORS
The
rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors of
the Company. This Agreement may not be assigned by the
Company unless the assignee or successor (as the case may be)
expressly assumes the Company’s obligations hereunder in
writing. In the event of a successor to the Company or the
assignment of the Agreement, the term “Company” as used
herein shall include any such successor or assignee.
10.
WAIVER OR MODIFICATION
No
waiver or modification in whole or in part of this Agreement or any
term or condition hereof shall be effective against any party
unless in writing and duly signed by the party sought to be
bound. Any waiver of any breach of any provision hereof or
right or power by any party on one occasion shall not be construed
as a waiver of or a bar to the exercise of such right or power on
any other occasion or as a waiver of any subsequent
breach.
10.
SEPARABILITY
Any
provision of this Agreement which is unenforceable or invalid in
any respect in any jurisdiction shall be ineffective in such
jurisdiction to the extent that it is unenforceable or invalid
without effecting the remaining provisions hereof, which shall
continue in full force and effect. The unenforceability or
invalidity of any provision of the Agreement in one jurisdiction
shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.
GOVERNING LAW AND ARBITRATION
This
Agreement shall be interpreted and construed in accordance with the
laws of the State of New York without regard to its choice of law
principles. Any dispute, controversy or claim of any kind
arising under, in connection with, or relating to this Agreement or
your employment with the Company shall be resolved exclusively by
binding arbitration. Such arbitration shall be conducted in
New York City in accordance with the rules of the American
Arbitration Association (“AAA”) then in effect.
The costs of the arbitration (fees to the AAA and for the
arbitrator(s)) shall be shared equally by the parties, subject to
apportionment or shifting in the arbitration award. In
addition, the prevailing party in arbitration shall be entitled to
reimbursement by the other party for its reasonable
attorney’s fees incurred. Judgment may be entered on
the arbitration award in any court of competent
jurisdiction.
12.
ENTIRE AGREEMENT
This
Agreement and the Annex hereto constitutes the entire agreement
between the parties hereto with respect to the matters referred to
herein.
13.
HEADINGS
The
headings contained in this Agreement are for convenience only and
shall not effect, restrict or modify the interpretation of this
Agreement.
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AGREED
AND
ACCEPTED:
By:
/s/ Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
Date:
July 19,
2019
Lakeland
Industries, Inc.
By:
/s/ Xxxxxxxxxxx X.
Xxxx
Xxxxxxxxxxx X.
Xxxx, CEO and President
Date:
July 19,
2019
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