Exhibit 10.6
XXXXXX XXXXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
TWEETER HOME ENTERTAINMENT GROUP, INC., a Delaware corporation,
whose principal place of business is 00 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxxxxx
00000 ("Employer" or "Tweeter"), and Xxxxxx XxXxxxx, whose address is 00
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 ("Employee"), in consideration
of the mutual promises made herein, hereby agree to enter into this
Amended and Restated Employment Agreement (this "Agreement") as follows:
ARTICLE 1.
TERM OF EMPLOYMENT DUTIES
1.01. TERM OF EMPLOYMENT. Employer hereby employs Employee and
Employee hereby accepts employment with Employer for the period beginning
on July 1, 2004 and ending three (3) years thereafter unless earlier
terminated pursuant to this Agreement. This Agreement shall be renewed
automatically for succeeding one (1) year terms unless either party gives
notice to the other at least 60 days prior to the expiration of any such
renewal term of such party's intention not to renew. As used herein the
phrase "employment term" refers to the entire period of employment of
Employee by Employer hereunder, whether for the periods provided above, or
whether terminated earlier as hereinafter provided or extended by mutual
agreement between Employer and Employee.
1.02. GENERAL DUTIES. Employee shall serve as the Senior Vice
President ("SVP") and Chief Financial Officer ("CFO") of Tweeter. In his
capacity as SVP and CFO of Tweeter, Employee shall report to Employer's
President, and shall do and perform all services, acts, or things, as
directed by said President or by Tweeter's Board of Directors (the
"Tweeter Board").
1.03. NON-COMPETITION AND NON-SOLICITATION. (a) Subject to the other
provisions of this Section 1.03, during the Restricted Period (as defined
below), the Employee shall not (whether as an owner, partner, officer,
director, trustee, agent, employee, consultant, advisor or otherwise), in
the Restricted Territory (as defined below), directly or indirectly,
compete with the Employer or engage or participate in the business
conducted by the Employer or enter into the employ of or provide any
services to any person engaged in a business that is competitive with the
business of the Employer. During the Restricted Period, the Employee also
(i) shall not interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between the Employer and any
customer, supplier, lessor, lessee, employee, consultant or investor of
the Employer, and (ii) shall not solicit or hire any employee or
consultant of the Employer. The "Restricted Period" shall mean the
Employee's employment term, and (A) any period thereafter in which the
Employer is paying Severance Pay to the Employee, or (B) if Employee is
terminated for Cause, or if Employee terminates employment (other than by
expiration of this Agreement) without Good Reason, two (2) years following
such termination, regardless of the remaining employment term. The
"Restricted Territory" shall mean the area within fifty (50) miles of any
retail store owned or operated by Employer (1) from time to time during
the employment term or (II) with respect to the period following
Employee's employment, at the time of termination of the Employee's
employment.
(b) It is the desire and intent of the parties that the
provisions of this Section 1.03 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any
particular subsection or portion of this Section 1.03 shall be adjudicated
to be invalid or unenforceable, this Section shall be deemed amended to
delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation
of this Section in the particular jurisdiction in which such adjudication
is made.
(c) In the event of any breach of the provisions of this
Section 1.03 by the Employee, any and all rights of the Employee following
termination of employment to receive any payments of Severance Pay
pursuant to Article 3 hereof shall automatically terminate, but the
foregoing shall not be construed so as to require repayment by the
Employee of any such Severance Pay that has been paid to the Employee.
1.04. INJUNCTIVE RELIEF. The Employee acknowledges and agrees that a
breach or threatened breach of the provisions of Section 1.03 of this
Agreement would result in irreparable economic harm to the Employer and
that a remedy at law for any such breach would be inadequate, and
therefore, if there is a breach or threatened breach of the provisions of
Sections 1.03 of this Agreement, the Employer shall be entitled to an
injunction restraining the Employee from such breach.
ARTICLE 2.
COMPENSATION OF EMPLOYEE
2.01. ANNUAL SALARY. As compensation for the services to be
performed hereunder, Employee shall receive a salary at the rate of three
hundred fifty thousand dollars ($350,000.00) per annum, payable at the
rate of twenty nine thousand one hundred sixty six dollars and sixty five
cents ($29,166.65 per month); plus such increases, if any, as may be
determined by the Tweeter Board or by Employer's President. Employee's
salary shall be payable in accordance with Employer's payroll payment
policies during his employment term.
2.02. BENEFITS. Employee shall be eligible to receive such benefits,
and to participate in such bonus or incentive plans, are as generally made
available to other senior executives of Employer or as may be specifically
provided to Employee as determined by Employer or its Compensation
Committee from time to time. In addition, Employer shall provide Employee
with a monthly automobile allowance of up to six hundred dollars ($600.00)
paid to Employee in addition to his salary and other benefits on the first
of each month.
ARTICLE 3.
TERMINATION OF EMPLOYMENT
3.0.1 TERMINATION EVENTS.
(a) Termination Upon Death or Disability. Employee's death
shall terminate his employment by Employer. In addition, if Employee
becomes physically or mentally incapacitated or is injured so that he is
unable to perform the services required of him under this Agreement and
such inability to perform continues for a period in excess of one hundred
twenty (120) days during any twelve month period (whether such disability
is continuous or
discontinuous during such twelve month period), Employer may terminate his
employment under this Agreement at any time thereafter, provided, however,
that such disability is continuing at the time of such termination notice.
(b) Termination For "Cause" or With or Without "Good Reason"
(i) Cause. Employer may terminate Employee's employment
at any time for Cause upon at least thirty (30) days written notice to
Employee. The term "Cause" shall mean (1) gross negligence or willful
misconduct in connection with the performance of the executive's material
duties under this Agreement, (2) a breach by Employee of any of his
material duties assigned to him by the Tweeter Board, the CEO or President
of Tweeter (other than by reason of physical or mental illness) and
Employee's failure to cure such breach within thirty (30) days of written
notice thereof, (3) conduct by Employee against the material best
interests of Tweeter or a material act of common law fraud by Employee
against Tweeter or its affiliates or employees, or (4) conviction of or
pleading nolo contendere to a felony.
(ii) Termination With Good Reason. Employee may
terminate his employment under this Agreement with Good Reason upon at
least thirty (30) days written notice to the Tweeter Board. Employee shall
have "Good Reason" upon, and the term "Good Reason" shall mean, the
occurrence of any of the following: (i) attempt by Tweeter to relocate
Employee outside the greater Boston area without Employee's consent, (ii)
breach by Tweeter of any of its material obligations under this Agreement
and failure by Tweeter to cure such breach within thirty (30) days of
notice thereof, (iii) without Employee's consent, a reduction in his title
from SVP and CFO or of his duties or responsibilities as SVP and CFO, or
(iii) a Change in Control of Tweeter, as defined below.
As used herein, a "Change in Control" shall mean, and shall be
deemed to occur if, the "Incumbent Directors" (as hereinafter defined)
cease for any reason, including without limitation as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Tweeter Board, provided, however, that any person
becoming a Director of the Company subsequent to such date whose election
was approved by a vote of at least two-thirds of the Incumbent Directors
or whose nomination for election was approved by a nominating committee
comprised of Incumbent Directors shall be deemed an Incumbent Director.
The "Incumbent Directors" shall mean persons who, as of the date of this
Agreement, constitute the Tweeter Board and those persons deemed Incumbent
Directors pursuant to the preceding sentence.
(iii) Termination Without Good Reason. Employee may
terminate his obligations under this Agreement without Good Reason by
giving Employer at least three (3) months notice in advance.
3.02 OBLIGATIONS OF EMPLOYER FOLLOWING TERMINATION.
(a) Termination by Death. In the event of termination of
employment by reason of Employee's death, Employee, or his estate or other
successors in interest, shall be entitled to receive any salary, pro rated
bonuses, and benefits earned by or accrued to Employee and unpaid at the
date of his death. Additionally, salary will continue to be paid for 60
days following Employee's death payable to Employee's wife or children.
(b) Termination by Reason of Disability. In the event of
termination of employment upon disability pursuant to Section 3.01(a)
above, Employer agrees to pay Employee his annual salary for one year
payable in the same manner as provided for the payment of salary herein
irrespective of any disability insurance or other benefits available to
Employee.
(c) Termination for "Cause". In the event of termination of
employment during the employment term for Cause, Employee shall be
entitled to receive his salary then in effect and benefits due or to
become due to him up to the date of termination of employment, and, in the
case of benefits, as may be mandated by law following termination of
employment, but Employee shall not be entitled to any other or further
salary or other compensation, bonuses (whether or not pro rated) or other
benefits.
(d) Termination by Employer Without Cause or by Employee With
Good Reason. Upon termination of Employee's employment by Employee for
Good Reason, or by Employer for any reason other than for Cause, death or
disability, (i) Employee shall be entitled to receive, subject to the
provisions of Section 1.03 above, "Severance Pay" equal to his salary then
in effect, payable for one (1) year following termination of employment,
and (ii) Tweeter shall pay Employee, within ninety (90) days of such a
termination, in cash, an amount equal to the prior year's paid bonus, if
any. No Severance Pay shall be payable to Employee if his employment
terminates due to expiration of this Agreement without renewal, provided,
however, that upon any such expiration Employer may elect, at its option,
to pay Employee Severance Pay for up to two (2) years following such
expiration, in which event Employee shall be bound by the provisions of
Section 1.03 above during the period in which such Severance Pay is paid.
Severance Pay shall be payable as salary continuation, payable over time
in the same manner as Employee's salary. Additionally, all stock options
of Employee under any incentive or stock option plan of Employer or any
Employer affiliate shall continue to vest during the period in which
Severance Pay is being paid, subject, however, to the specific terms of
any option or other agreement or plan relating thereto.
(e) Termination by Employee Without Good Reason. In the event
of a termination of employment by Employee without Good Reason, Employee
shall be entitled to receive any salary or bonuses earned by or accrued to
Employee and unpaid at the date of his death, but shall not receive any
further salary or other compensation hereunder, and without limiting the
foregoing, in such event, (i) Employee shall receive no Severance Pay,
(ii) vesting of all stock options and restricted stock shall cease upon
termination of employment, and (iii) Employee shall receive no payments in
respect of unvested accrued benefits under any long or short-term
incentive plan or retirement plan. The foregoing clauses (i) through (iii)
shall also apply if Employee's employment terminates due to expiration of
this Agreement, or of a renewal term of this Agreement, without further
renewal.
ARTICLE 4.
GENERAL PROVISIONS
4.01. NOTICES. Any notices to be given hereunder by either party to
the other shall be in writing and may be transmitted by personal delivery
or by mail, registered or certified, postage prepaid with return receipt
requested to such other party at the address first set forth above.
4.02 ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee
by Employer and contains all of the covenants and agreements between the
parties with respect to that employment in any manner whatsoever.
4.03. LAW GOVERNING AGREEMENT. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts, without regard to conflicts of laws principles.
4.04. ASSIGNMENT. This Agreement may be assigned by Employer but not
by Employee.
4.05. 1998 AGREEMENT. Reference is made to that certain Employment
Agreement between Employer and Employee dated July 21, 1998 (the "1998
Agreement"). Employer and Employee agree that the 1998 Agreement is
superseded in its entirety and terminated by this Amended and Restated
Employment Agreement.
Executed as of May 1,2004, at Canton, Massachusetts.
EMPLOYER:
TWEETER HOME ENTERTAINMENT GROUP, INC.
By: ______________________________________
Name: Xxxxxxx Xxxxx
Title: President, CEO
EMPLOYEE:
__________________________________________
Xxxxxx XxXxxxx
