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Exhibit 10.49
ROCKY SHOES & BOOTS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 27th day of April, 1999, (the
"Agreement") between Rocky Shoes & Boots, Inc., an Ohio corporation ("Rocky
Shoes"), and Xxxx X. Friday (the "Employee").
Recitals
A. Rocky Shoes is the owner, directly or indirectly, of all of the issued
capital stock of Lifestyle Footwear, Inc., a Delaware corporation, and Five Star
Enterprises Ltd., a Cayman Islands corporation, (individually a "Subsidiary" and
collectively the "Subsidiaries").
B. Rocky Shoes and its Subsidiaries (collectively, the "Company") design,
manufacture and market high quality men's and women's footwear and related
products.
C. Rocky Shoes and Employee desire to enter into an employment
relationship.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT.
(a) Rocky Shoes hereby employs Employee and Employee accepts such
employment upon the terms and conditions hereinafter set forth.
(b) Employee represents that no personnel or executive search firm
has been involved in or facilitated his employment by the Company and that no
such fees are payable to any such firm for assisting Employee.
(c) Employee represents and warrants that he is not a party to any
agreement, oral or written, or subject to any other legal restriction whatsoever
which would prevent him from performing his duties to the Company as provided in
this Agreement or which would expose the Company to a risk of suit by reason of
his employment by the Company.
2. DUTIES.
(a) Employee shall be employed to serve as Executive Vice
President -- Sales of Rocky Shoes, and to serve in like capacities for each of
the Subsidiaries, if so elected, subject to the authority and direction of the
Board of Directors of Rocky Shoes or the Subsidiary, as the case may be.
(b) Employee shall also perform such other duties and
responsibilities and exercise such other authority, perform such other or
additional duties and responsibilities and
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have such other or different title (or have no title) as the Board of Directors
of Rocky Shoes may, from time to time, prescribe.
(c) So long as he is employed under this Agreement, Employee
agrees to devote his full time and efforts exclusively on behalf of the Company
and to competently, diligently and effectively discharge his duties hereunder.
Employee shall not be prohibited from engaging in such personal, charitable, or
other nonemployment activities as do not interfere with his full time employment
hereunder and which do not violate the other provisions of this Agreement.
Employee further agrees to comply fully with all reasonable policies of the
Company as are from time to time in effect.
(d) Notwithstanding the foregoing paragraph 2(c), Employee may
continue his ownership and management of FriRock & Associates, Inc., a Rocky
sales representative organization, through December 31, 1999, on the condition
that Employee causes FriRock to hire an experienced, qualified person reasonably
satisfactory to the Company to travel and sell Rocky products in Northern
Illinois or wherever necessary, and that Xxxx Xxxxxxx and Xxxx Friday assume
responsibility for day-to-day management of FriRock & Associates, Inc. for the
remainder of 1999. After December 31, 1999, neither Employee nor members of his
immediate family will have any interest in FriRock, either as an owner,
employee, consultant or otherwise.
3. COMPENSATION.
(a) As compensation for all services rendered to the Company
pursuant to this Agreement, in whatever capacity rendered, the Company shall pay
to Employee a minimum base salary at the rate of $165,000 per year for 1999 and
$200,000 for 2000 (the "Basic Salary"), payable monthly or in other more
frequent installments, as determined by the Company. Thereafter, the Basic
Salary may be increased, but not decreased, from time to time, by the Board of
Directors of the Company.
(b) The Employee shall also be included in the Company's cash
bonus program in 1999 consistent with the plan adopted by the Board of Directors
for 1999 for other executive officers. The 1999 bonus program will pay Employee
an amount equal to 34% of his Basic Salary for 1999 if the Company attains 100%
up to 114% of budgeted net income. If the Company attains 85% up to 99% of
budgeted net income, Employee's bonus would be 20% of his Basic Salary for 1999,
and if the Company attains 115% or more of budgeted 1999 net income, Employee's
bonus would be 44% of his Basic Salary for 1999. Although Employee will begin
employment with the Company in April, 1999, the bonus will not be prorated for
the number of months employed during 1999. By way of example, if Rocky attains
its budgeted net income for 1999, Employee's bonus would be 34% of $165,000 or
$56,100. Employee must remain employed by the Company through December 31, 1999
to earn the bonus, as the bonus is based on annual results. The cash bonus
program is determined annually by the Stock Option and Compensation Committee of
the Board of Directors and may change in 2000 and future years.
(c) Employee shall receive an incentive stock option under the
Company's 1995 Stock Option Plan to purchase 50,000 shares of common stock at
their fair market value,
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which option shall vest based on continuing employment at 25% per year beginning
on the first anniversary of the date of grant, and shall terminate on the
earlier of eight years from the date of grant or until it has been exercised in
full; provided, however, that the grant of this option is conditioned on
Employee agreeing to cancellation of the nonstatutory option granted to him in
1998 on 10,000 shares.
(d) The Company will reimburse Employee for up to 50% of the
brokerage commissions Employee pays on the sale of his Naperville home, but no
more than 3.5% of the sales price. In addition, the Company will pay Employee
$25,000 at the commencement of his employment and an additional $25,000 when he
has permanently relocated his family from Naperville to the Central Ohio area.
Employee will be required to reimburse the Company 100% of such payments if he
voluntarily leaves Rocky's employ prior to January 1, 2000, and 50% of such
payments if he voluntarily leaves prior to January 1, 2001.
4. BUSINESS EXPENSES. The Company shall promptly pay directly, or
reimburse Employee for, all business expenses to the extent such expenses are
paid or incurred by Employee during the term of employment in accordance with
Company policy in effect from time to time and to the extent such expenses are
reasonable and necessary to the conduct by Employee of the Company's business
and properly substantiated.
5. FRINGE BENEFITS. During the term of this Agreement and Employee's
employment hereunder, the Company shall provide to Employee such insurance,
vacation, sick leave and other like benefits as are provided from time to time
to its other employees holding equivalent executive positions with the Company
in accordance with the policy of the Company as may be established from time to
time.
6. TERM; TERMINATION. Employee is employed by the Company "at will."
Employee's employment may be terminated at any time as provided below. For
purposes of this paragraph 6, "Termination Date" shall mean the date on which
any notice period required under this paragraph 6 expires or, if no notice
period is specified in this paragraph 6, the effective date of the termination
referenced in the notice.
(a) Employee may terminate his employment upon giving at least 14
days' advance written notice to the Company and the Company will pay Employee
the earned but unpaid portion of Employee's Basic Salary through the Termination
Date. If Employee gives notice of termination hereunder, the Company shall have
the right to relieve Employee, in whole or in part, of his duties under this
Agreement and to advance the Termination Date from the date set by Employee's
notice to any earlier date within the notice period.
(b) The Company may terminate Employee's employment without cause
upon giving 14 days' advance written notice to Employee. If the Company gives
notice of termination under this paragraph, the Company shall have the right to
relieve Employee, in whole or in part, of his duties under this Agreement at any
time during the notice period. If Employee's employment is terminated without
cause under this paragraph, the Company will pay Employee the earned but unpaid
portion of Employee's Basic Salary through the Termination Date and will
continue to pay Employee his Basic Salary for six months following the
Termination Date (the "Severance Period"); provided, however, that the
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Company may terminate payment of the Basic Salary during the Severance Period if
Employee accepts other employment.
(c) The Company may terminate Employee's employment upon a
determination by the Company that "good cause" exists for Employee's termination
and the Company serves written notice of such termination upon the Employee. As
used in this Agreement, the term "good cause" shall refer only to any one or
more of the following grounds:
(i) commission of an act of dishonesty, including, but not
limited to, misappropriation of funds or any property of
the Company;
(ii) engagement in activities or conduct clearly injurious
to the reputation of the Company;
(iii) refusal to perform his assigned duties and
responsibilities;
(iv) gross insubordination by the Employee;
(v) the clear violation of any of the material terms and
conditions of this Agreement or any written agreement or
agreements the Employee may from time to time have with the
Company (following 30-days' written notice from the Company
specifying the violation and Employee's failure to cure
such violation within such 30-day period); or,
(vi) commission of a misdemeanor involving an act of moral
turpitude or a felony.
In the event of a termination under this paragraph 6(c), the Company will pay
Employee the earned but unpaid portion of Employee's Basic Salary through the
Termination Date.
(d) Employee's employment shall terminate upon the death or
permanent disability of Employee. For purposes hereof, "permanent disability,"
shall mean the inability of the Employee, as determined by the Board of
Directors of the Company, by reason of physical or mental illness to perform the
duties required of him under this Agreement for more than 180 days in any one
year period. Successive periods of disability, illness or incapacity will be
considered separate periods unless the later period of disability, illness or
incapacity is due to the same or related cause and commences less than six
months from the ending of the previous period of disability. Upon a
determination by the Board of Directors of Rocky Shoes that the Employee's
employment shall be terminated under this paragraph 6(d), the Board of Directors
shall give the Employee 30 days' prior written notice of the termination. If a
determination of the Board of Directors under this paragraph 6(d) is disputed by
the Employee, the parties agree to abide by the decision of a panel of three
physicians. The Company will select a physician, the Employee will select a
physician and the physicians selected by the Company and the Employee will
select a third physician. The Employee agrees to make himself available for and
submit to examinations by such physicians as may be directed by the Company.
Failure to submit to any examination shall constitute a breach of a material
part of this Agreement.
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7. NO CONFLICTS. Employee represents that the performance by Employee of
all the terms of this Agreement, as a former or continuing employee of the
Company, does not and will not breach any agreement as to which Employee is or
was a party and which requires Employee to keep any information in confidence or
in trust. Employee has not entered into, and will not enter into, any agreement
either written or oral in conflict herewith.
8. JURISDICTION AND VENUE. The parties designate the Court of Common
Pleas of Athens County, Ohio, as the court of competent jurisdiction and venue
of any actions or proceedings relating to this Agreement and hereby irrevocably
consent to such designation, jurisdiction and venue. Such jurisdiction and venue
is exclusive. The parties further agree that the mailing by certified or
registered mail, return receipt requested, of any process required by any such
court shall constitute valid and lawful service of process against them, without
the necessity for service by any other means provided by statute or rule of
court.
9. WITHHOLDING. The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.
10. ASSIGNMENT. This Agreement is personal to the Employee, and Employee
may not assign or delegate any of his rights or obligations hereunder. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the respective parties hereto, their heirs, executors, administrators,
successors and assigns.
11. WAIVER. The waiver by either party hereto of any breach or violation
of any provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.
12. NOTICES. Any and all notices required or permitted to be given under
this Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to Employee at the address for Employee appearing in the Company's
personnel records and to the Company at:
Rocky Shoes & Boots, Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: President
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
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13. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of Ohio.
14. AMENDMENT. This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.
15. SECTION HEADINGS. Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.
16. ENTIRE AGREEMENT. This Agreement terminates, cancels and supersedes
all previous employment agreements or other agreements relating to the
employment of Employee with the Company, written or oral, entered into between
the parties hereto, and this Agreement contains the entire understanding of the
parties hereto with respect to the subject matter of this Agreement, except for
that certain Confidentiality, Assignment and Non-Competition Agreement for Key
Personnel of even date hereof. This Agreement was fully reviewed and negotiated
on behalf of each party and shall not be construed against the interest of
either party as the drafter of this Agreement. EMPLOYEE ACKNOWLEDGES THAT,
BEFORE PLACING HIS SIGNATURE HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF
THIS EMPLOYMENT AGREEMENT AND HAS THIS DAY RECEIVED A COPY HEREOF.
17. SEVERABILITY. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.
18. SURVIVAL. Sections 8 through 10 of this Agreement and this Section 18
shall survive any termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Employee: ROCKY SHOES & BOOTS, INC.
/s/ Xxxx X. Friday By:/s/ Xxxx Xxxxxx
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Xxxx X. Friday Xxxx Xxxxxx, President
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