EMPLOYMENT AGREEMENT
AGREEMENT made June 29, 1999, between ENESCO GROUP, INC., a
Massachusetts corporation (the "Company"), and Xxxxxxx X. Xxxxxxx of 000
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx ("Xxxxxxx").
NOW, THEREFORE, in consideration of the mutual undertakings set forth
below, the parties agree as follows:
1. Employment. The Company hereby employs Xxxxxxx, and Xxxxxxx agrees to
be employed by the Company, upon the terms and subject to the
conditions hereinafter set forth effective forthwith. Unless sooner
terminated as hereinafter provided, the initial term of this
employment shall be three (3)years commencing as of the date first
written above, with an automatic extension of one day at the end of
each day thereafter while Xxxxxxx remains employed by the Company (so
that the remaining term at the end of every day thereafter shall be
three (3) years).
2. Duties. Xxxxxxx shall be employed as President and Chief Executive
Officer of the Company. He shall continue to serve as a member of its
Board of Directors for the balance of his current term and thereafter
as re-elected by the Shareholders of the Company. During his
employment, Xxxxxxx agrees to faithfully and diligently perform the
duties of his office on a full time basis in the best interests of
the Company. Nothing herein shall prohibit Xxxxxxx from pursuing
personal investments provided that such activities do not interfere
with the performance of Xxxxxxx'x duties hereunder. Although it is
contemplated that Xxxxxxx will undertake some travel as part of
performing the foregoing duties, Xxxxxxx'x principal place of
employment shall be in the Itasca, Illinois area.
3. Compensation. While employed by the Company during the term of this
agreement, Xxxxxxx will receive the following compensation for
services:
(a) Base Salary. A base annual salary, payable in equal bi-weekly
installments less applicable deductions, of $495,000.00 (Four
Hundred Ninety-Five Thousand Dollars). The base salary shall be
subject to review and adjustment annually by the Board of Directors
acting in its sole discretion provided that the base salary shall
not be less than $495,000.00 during the term of this agreement.
(b) Annual Bonus. Xxxxxxx shall be entitled to participate in the
Management Incentive Plan maintained by the Company with a target
bonus of minimally 65% of his annual base salary. His objectives
shall be determined under the usual procedures of such Plan.
(c) Other Benefits. Xxxxxxx shall be entitled to participate in
all standard insurance and other benefit programs maintained by the
Company for its employees and directors at not less than the
current coverage and benefit amounts in the case of the life and
disability insurance, annual supplemental medical and financial
planning bonuses and monthly automobile allowance(subject to
increase based on the periodic review by the Company's Treasury
Department). The Company shall continue coverage for both Xxxxxxx
and his spouse under the Company's Health Plan after retirement
until (in the case of each of them) the earlier of their 65th
birthdays, eligibility for Medicare or death. However, in the case
of the death of Xxxxxxx before his 65th birthday or eligibility for
Medicare, coverage shall be continued for his spouse until the
earlier of her 65th birthday, eligibility for Medicare or death.
(d) Stock Options. Xxxxxxx shall be entitled to participate in
stock options under the Company's Plans offered to him in respect
of Company shares from time to time.
(e) Expenses. The Company shall reimburse Xxxxxxx for all
ordinary and necessary expenses paid or incurred by him in the
course of the performance of his duties pursuant to this agreement,
subject to the Company's requirements with respect to the manner of
reporting such expenses.
4. Termination of Employment.
(a) Termination by the Company for Cause. The Company may
terminate this agreement and Xxxxxxx'x employment hereunder by
giving ten (10) days' prior written notice to Xxxxxxx upon its
determination of:
(i) Dishonesty or willful misconduct involving moral turpitude
by Xxxxxxx in the performance of his duties under this
agreement (the term "misconduct" includes, without limitation,
any material and willful breach by Xxxxxxx of the terms of
Paragraph 5 hereof), or
(ii) Material disregard of, and material failure to comply
with, the written instructions, policies or guidelines
established by the Company's Board of Directors, or material
failure to perform his duties hereunder.
In the event of termination of this agreement under this Paragraph
4(a), Xxxxxxx shall be entitled to all amounts due him under
Paragraph 3 accrued to the date of termination, excluding the bonus
for the fractional portion of the year of termination under
Paragraph 3(b) above.
(b) Termination Upon Death of Xxxxxxx. Upon the death of Xxxxxxx
during the term of this agreement, his estate shall be entitled to
receive all amounts due under Paragraph 3 accrued to the date of
death, including, without limitation, the actual bonus pro-rated
for the fractional portion of the year of death.
(c) Termination Upon Total Disability. If, at any time during the
term of this agreement, Xxxxxxx becomes unable to perform his
duties hereunder due to illness or physical or mental incapacity
for a continuous period of one hundred and eighty (180) days, the
Company, may, at or after the expiration of such one hundred and
eighty (180) day period and provided that Xxxxxxx'x incapacity is
then continuing, elect to terminate Xxxxxxx'x employment under this
agreement. During such one hundred and eighty (180) day period and
until the Company so terminates his employment, Xxxxxxx shall be
entitled to all amounts payable or accrued under Paragraph 3 above
until the date of termination, including, without limitation, the
actual bonus prorated for the fractional portion of the year of
termination.
(d) Other Benefits Unaffected. Life or disability insurance
benefits which may otherwise be payable are not affected by the
provisions of Paragraphs 4(b) and 4(c) above.
(e) Termination by Company Other Than For Cause or Total Disability.
If the Company shall terminate Xxxxxxx'x employment other than for
cause under Paragraph 4(a) above or for Total Disability under
Paragraph 4(c) above, and his employment has not terminated by
reason of his death under Paragraph 4(b) above, Xxxxxxx shall
receive (at the times such payments would have been made had there
not been a termination) all amounts that would otherwise have been
paid to him, or benefits provided, for the remaining term of this
agreement under Paragraphs 3(a), 3(b), and 3(c), (except that the
Health Plan coverage provided under Paragraph 3(c) shall continue
for the duration as required in that Paragraph 3(c)) had Xxxxxxx'x
employment not been terminated, except that no payments will be
made for periods following his death. For purposes of the bonus
payment made for any year under this provision, the target bonus
shall be based on the Profit Plan objectives for such year and any
bonus shall be determined based on the corporate performance versus
those Plan objectives. In return for the payments to be made under
this subparagraph (e), Xxxxxxx agrees to execute and deliver to the
Company a Release in the form as deemed appropriate or necessary by
the Company.
(f) Termination by Xxxxxxx. Xxxxxxx may terminate this agreement
and his employment hereunder at any time by giving six (6) months'
prior written notice to the Company or such lesser notice period as
the Company may accept. In the event of a termination of this
agreement under this Paragraph 4(f), Xxxxxxx shall be entitled to
all amounts due to him under Paragraph 3 to the date of
termination, including, without limitation, the actual bonus
pro-rated for the fractional portion of the year of termination.
(g) Change in Control. The amount payable to Xxxxxxx under
Paragraph 4(e) of this agreement shall be reduced on a
proportionate basis (over the remaining term of this agreement) by
any amount paid to Xxxxxxx under the Change in Control Agreement
between Xxxxxxx and the Company dated June 15, 1998, without giving
effect to the Gross-Up Payment under Paragraph 1(c) thereof for
this purpose.
(h) Survival of Rights and Obligations. In the event of termination
of Xxxxxxx'x employment under either Paragraphs 4(a), 4(b), 4(e) or
4(f), then, except to the extent specifically provided for in
Paragraphs 3, 4, 5 and 6, neither party shall have any right,
claim, or action against, or obligation or responsibility to, the
other party arising out of, or resulting from, such termination of
employment.
5. Confidential Information, Covenant Not to Compete and
Non-Solicitation.
(a) Xxxxxxx agrees that he will not use or disclose to anyone
(other than for the benefit of the Company) either during the term
of his employment or at any time thereafter, any Confidential
Information obtained by him or made known to him while employed by
the Company, and will make all reasonable, necessary and
appropriate efforts to safeguard all such Confidential Information
from disclosure to anyone other than as permitted hereby. As used
herein "Confidential Information" includes, but is not limited to,
trade secrets, business and sales policies, methods, plans and
customer lists, including any lists written or other of such
persons or entities, whether of the Company or any other
organization associated or affiliated with or owned by or owning
the Company, but shall not include information which becomes
generally available to the public other than as a result of
disclosure by Xxxxxxx'x act or default or the acts or defaults of
Xxxxxxx'x agents or representatives.
(b) In consideration of Xxxxxxx'x continued employment in
accordance with the terms of this agreement, Xxxxxxx agrees that he
will not, during the term hereof and for the period ending one (1)
year (or such longer period as he is paid hereunder) from the date
he ceases to be employed by the Company, either alone or in
conjunction with any individual, firm, corporation, association or
other entity (except for the benefit of the Company), either as
principal, agent, officer, employee, director, investor,
consultant, shareholder, associate or in any other capacity
whatsoever:
(i) carry on, participate in, or be engaged in, concerned with,
or interested in, directly or indirectly, any undertaking which
is in whole or in part competitive with any of the businesses
carried on by the Company within the respective territories in
which such businesses are then carried on (except for any equity
share investment in a public company whose shares are listed on
a recognized stock exchange where such share investment does not
in the aggregate exceed 5% of the issued equity shares of such
company);
(ii) attempt to solicit any suppliers, customers, employees or
independent dealers away from the Company;
(iii) carry on, participate in, or be engaged in, concerned
with, or interested in, directly or indirectly, any undertaking
which bears any name similar to that of the Company; or
(iv) take any act as a result of which the relations between the
Company and its suppliers, customers, employees or others may be
impaired or which may otherwise be detrimental to the business
of the Company.
Competition shall be deemed to include (i) any dealings with the
Company's employees or independent dealers, and (ii) the use in any
way of the Company's customer or mailing lists. Competition shall
be deemed to exclude employment by another company or enterprise
whose principal business activity is not the creation, making or
manufacturing of gifts, giftware or collectibles. The reference to
Company in this Paragraph 5 shall include all subsidiaries and
affiliated entities of the Company. Xxxxxxx agrees that the remedy
at law for breach by him of the foregoing covenant will be
inadequate and that the Company shall be entitled to injunctive
relief.
6. Discoveries. Xxxxxxx will promptly disclose in writing to the Company
when requested, each improvement, discovery, idea and invention
relating to the business of the Company made or conceived by him from
and after the date hereof either alone or in conjunction with others
and while employed by the Company or within one (1) year after the
termination of such employment if such improvement, discovery, idea
or invention then results from or was suggested by such employment
(whether or not patentable, whether or not made or conceived (i) at
the request of or upon the suggestion of the Company, (ii) during his
usual hours of work, or (iii) in or about the premises of the Company
and whether or not prior or subsequent to the execution hereof). He
will not disclose any such improvement, discovery, idea or invention
to any person, except the Company. Each such improvement, discovery,
idea and invention shall be the sole and exclusive property of, and
is hereby assigned to, the Company, and at the request of the
Company, Xxxxxxx will assist and cooperate with the Company and any
person or persons from time to time designated by the Company to
obtain for the Company the grant of any letters patent in the United
States and/or such other country or countries as may be designated by
the Company, covering any such improvement, discovery, idea or
invention and will, in connection therewith, execute such
applications, statements, assignments or other documents, furnish
such information and data and take all such other actions (including,
without limitation, the giving of testimony) as the Company may from
time to time reasonably request.
7. Applicable Law. This agreement shall be construed in accordance with
the laws of the State of Illinois.
8. Notices. Any notice or other writing required or permitted to be given
hereunder or for the purposes hereof (hereinafter in this Paragraph 8
called a "notice") to any party shall be sufficiently given if
delivered personally, if sent by prepaid registered mail or if
transmitted by facsimile machine or other form of recorded
communication tested prior to transmission to such party:
(a) in the case of notice to Xxxxxxx to him at:
000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
(b) in the case of a notice to the Company to it at:
Enesco Group, Inc.
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or at such other address as the party to whom such writing is to be
given shall have last notified the party giving the same in the
manner provided in this paragraph. Any notice delivered to the party
to whom it is addressed as hereinbefore provided shall be deemed to
have been given and received on the day it is so delivered at such
address, provided that if such day is not a Business Day (Monday
through Friday excluding federal and state holidays) then the notice
shall be deemed to have been given and received on the Business Day
next following such day. Any notice mailed as aforesaid shall be
deemed to have been given and received on the seventh Business Day
next following the date of its mailing. Any notice transmitted by
telex or other form of recorded communication shall be deemed given
and received on the first Business Day after its transmission.
9. Entirety of Agreement. This agreement constitutes the entire agreement
between the parties and no amendment, waiver, alteration or
modification of this agreement shall be valid unless in each instance
such amendment, waiver, alteration or modification is agreed to in
writing by all of the parties.
10. Assignment. Neither party may assign this agreement or any of the
rights or duties hereunder, except that the Company must assign its
rights, obligations and responsibilities under this agreement to (i)
a successor or assignee of all or substantially all of its business
or assets, or (ii) any corporation with which it merges or with which
it may be consolidated. Subject to the foregoing, this agreement
shall inure to the benefit of and be binding upon the Company and
Xxxxxxx and their respective successors, assigns, heirs and legal
representatives.
11. Invalidity of any Provision. If any provision of this agreement or the
application thereof to any party or circumstance is held invalid or
unenforceable, the remaining provisions of this agreement and the
application of such provisions to the other party or circumstances
will not be affected thereby, the provisions of this agreement being
severable in any such instance.
IN WITNESS WHEREOF, the parties have executed this Agreement.
ENESCO GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman of the Board
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
