EMPLOYMENT AGREEMENT
Exhibit
10.5
THIS
AGREEMENT (this “Agreement”), made in New York, New York as of November 13,
2007 between I.C. Xxxxxx & Company, Inc., a Delaware corporation
(the “Company”), and Xxxxxx X. Xxxx (“Executive”).
WHEREAS,
the Company has entered into an exclusive license agreement (the “Girbaud Men’s
Agreement”) with Girbaud Design, Inc. and its affiliates, to manufacture and
market men’s jeanswear, casual, outerwear and active influenced sportswear under
the Girbaud brand and related trademarks (the “Gibraud Marks”);
WHEREAS,
the Company has also entered into an exclusive license agreement (the “Girbaud
Women’s Agreement”) with Latitude Licensing Corp. to manufacture and market
women’s jeanswear, casualwear and outerwear, including active influenced
sportswear under the Gibraud Marks;
WHEREAS,
the Company will engage in negotiations with Girbaud Designs and its affiliates,
including Latitude Licensing Corp., to extend the exclusive license agreements
and to make other changes to the Girbaud Men’s Agreement and the Girbaud Women’s
Agreement;
WHEREAS,
the Company desires that, from and after the full execution of an agreement
or
agreements to extend the exclusive license agreements, Executive shall service
as its President and Chief Executive Officer, and Executive desires to accept
such employment on the terms and conditions hereinafter set forth;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants and agreements hereinafter
set forth, the Company and Executive agree as follows:
1. Term.
This
Agreement shall become effective upon, and is conditional upon the full
execution of an agreement or agreements to extend the exclusive licenses under
the Girbaud Men’s Agreement and the Girbaud Women’s Agreement (the “Extension
Agreement”). Unless earlier terminated in accordance with Section 4
hereof, the term of this Agreement shall commence on the date on which the
Extension Agreement is fully executed and shall end on December 31, 2009 (the
“Term”). The Term may be extended by the Company for an additional
two-year period by providing Executive written notice of its election to extend
the Term on or before June 30, 2009.
2. Employment.
(a) Employment
by the Company; Director. Executive agrees to be employed by the
Company during the Term upon the terms and subject to the conditions set forth
in this Agreement. Executive shall serve as the President and Chief
Executive Officer of the Company and shall report to the Board of Directors
of
the Company (the “Board of Directors”). Executive is currently a
member of the Company’s Board of Directors and agrees to continue serving in
such capacity.
(b) Performance
of Duties. Throughout the Term, Executive shall faithfully and
diligently perform Executive’s duties in conformity with the directions of the
Board of Directors and serve the Company to the best of Executive’s
ability. Executive shall devote substantially all of his business
time and best efforts to the business and affairs of the Company. In
his capacity as the President and Chief Executive Officer of the Company,
Executive shall have such duties and responsibilities as are customary for
Executive’s positions and any other duties or responsibilities that he may be
assigned by the Board of Directors.
(c) Place
of Performance. Executive shall be principally based at the
Company’s offices in New York, New York. Executive recognizes that
his duties may require, at the Company’s expense, travel to domestic and
international locations.
3. Compensation
and Benefits.
(a) Base
Salary. The Company agrees to pay to Executive a base salary
(“Base Salary”) at the annual rate of $660,000 through December 31, 2008, and at
the annual rate of $700,000 thereafter. Payments of the Base Salary
shall be payable in accordance with the Company’s standard payroll
practices.
(b) Sign-On
Bonus. The Company shall pay Executive, promptly after the
effective date of this Agreement, a $150,000 cash payment as an inducement
to
enter into this Agreement. Fifty percent of such cash payment (i.e.,
$75,000) shall be an advance of Executive’s annual performance bonus pursuant to
Section 3(c) hereof (the “Advance Bonus Payment”).
(c) Performance
Bonus. During the Term, Executive shall be eligible to receive an annual
performance bonus equal to of 50% of Base Salary (“Target Bonus”) for meeting
the budgeted financial targets for such year, 25% of Base Salary (“Threshold
Bonus”) for meeting 80% of the budgeted financial targets for such year and 150%
of Base Salary (“Maximum Bonus”) for meeting 300% of the budgeted
financial targets for such year. The annual performance bonus for a
year, if any, shall be paid to the Executive during the first 90 days of the
year following the year to which the bonus relates. Notwithstanding
the foregoing, the payment of the first $75,000 of bonuses earned by Executive
under this Section 3(c) shall be offset by the Advance Bonus
Payment.
(d) Restricted
Stock Units. The Company shall grant to Executive 500,000
restricted stock units (individually, an “RSU” and collectively, the
“RSUs”). Each RSU represents the obligation of the Company to deliver
a share of common stock of the Company, in accordance with and subject to the
provisions of the I.C. Xxxxxx & Company, Inc. 2007 Stock Incentive Plan, as
it may be amended from time to time, and a Restricted Stock Unit Agreement
in
substantially the form attached hereto as Exhibit A. One third
of the RSUs shall immediately vest upon the grant of the RSUs and an additional
one-third of the RSUs shall vest on each of the first and second anniversary
of
the date on which the RSUs are granted. The Company shall deliver to
Executive a share of Company common stock with respect to each vested RSU on
the
third anniversary of the date on which the RSUs are granted (the “Delivery
Date”); provided, however, if the Delivery Date is during a “blackout period”
under the Company’s policy regarding securities trading, then the delivery of
the shares of Company common stock to Executive shall be delayed until the
first
day following the end of the blackout period; provided further, that, in all
events, such shares shall be delivered to Executive no later than the later
of
(i) the last day of the calendar year in which the Delivery Date occurs or
(ii)
the 15th day of
the third calendar month following the Delivery Date.
(e) Benefits
and Perquisites. Executive shall be entitled to participate in
any benefit plans and programs, or to receive any benefits and perquisites,
generally provided by the Company to senior executives of the Company, including
without limitation family medical insurance (subject to applicable employee
contributions). Executive shall be entitled to receive twenty (20)
days of annual paid vacation.
(f) Business
Expenses. The Company agrees to reimburse Executive, in
accordance with its standard senior executive policies from time to time in
effect, for all reasonable and necessary travel, business entertainment and
other business expenses incurred by Executive in connection with the performance
of his duties under this Agreement. Such reimbursements shall be made
by the Company on a timely basis upon submission by Executive of reasonable
documentation supporting such expenses.
(g) Payment. Payment
of all compensation and benefits to Executive specified in this Section 3 and
in
Section 5 of this Agreement (i) shall be made in accordance with the relevant
Company policies in effect from time to time to the extent the same are
consistently applied, and (ii) shall be subject to all legally required and
customary withholdings.
(h) Cessation
of Employment. Subject to and as provided in Section 5, in the
event Executive shall cease to be employed by the Company for any reason, then
Executive’s compensation and benefits, if any, shall cease on the date of such
event, except as otherwise specifically provided herein or as required by
law.
4. Termination
of Employment. Executive’s employment hereunder may be terminated
prior to the end of the Term under the following circumstances.
(a) Death. Executive’s
employment hereunder shall terminate upon Executive’s death.
(b) Executive
Becoming Totally Disabled. The Company may terminate Executive’s
employment hereunder at any time after Executive becomes “Totally
Disabled.” For purposes of this Agreement, Executive shall be
“Totally Disabled” in the event Executive is unable to perform the duties and
responsibilities contemplated under this Agreement for a period of 90
consecutive days due to physical or mental incapacity or
impairment. During any period that Executive fails to perform
Executive’s duties hereunder as a result of incapacity due to physical or mental
illness (the “Disability Period”), Executive shall continue to receive the
compensation and benefits provided by Section 3 of this Agreement until
Executive’s employment hereunder is terminated; provided, however, that the
amount of base compensation and benefits received by Executive during the
Disability Period shall be reduced by the aggregate amounts, if any, payable
to
Executive under any disability benefit plan or program provided to Executive
by
the Company; and provided further that in no event shall such payments be made
for a period in excess of 29 months.
(c) Termination
by the Company for Cause. The Company may terminate Executive’s
employment hereunder for Cause at any time after providing written notice to
Executive. For purposes of this Agreement, the term “Cause” shall
mean any of the following: (i) the neglect or failure or refusal of
Executive to perform any material duty of Executive hereunder (other than as
a
result of total or partial incapacity due to physical or mental illness), which
neglect or refusal has, in the good faith determination of the Board, a negative
impact on the Company; (ii) the engaging by Executive in gross negligence
or misconduct which is injurious to the Company or any of its affiliates,
monetarily or otherwise; (iii) perpetration of an intentional and knowing fraud
against or affecting the Company or any of its affiliates or any customer,
client, agent, or employee thereof; (iv) any willful or intentional act that
could reasonably be expected to injure the reputation, business, or business
relationships of the Company or any of its affiliates or Executive’s reputation
or business relationships; (v) Executive’s material failure to comply with,
and/or a material violation by Executive of, the internal policies of the
Company or any of its affiliates and/or procedures or any laws or regulations
applicable to Executive’s conduct as an employee of the Company; (vi)
Executive’s conviction (including conviction on a nolocontendere
plea) of a felony or any crime involving fraud, dishonesty or moral turpitude;
(vii) the breach of a covenant set forth in Section 6; or (viii) any other
material breach by Executive of this Agreement; provided, however, that, if
susceptible of cure, a termination by the Company under Sections 4(c)(i),
4(c)(v) or 4(c)(viii) shall be effective only if, within 14 days following
delivery of a written notice by the Company to Executive that the Company is
terminating his employment for Cause, Executive has failed to cure the
circumstances giving rise to Cause.
(d) Termination
by the Company Without Cause. The Company may terminate
Executive’s employment hereunder at any time for any reason or no reason by
giving Executive sixty (60) days prior written notice of the
termination. Following any such notice, the Company may reduce or
remove any and all of Executive’s duties, positions and titles with the
Company.
(e) Termination
by Executive for Good Reason. Executive may terminate his
employment hereunder for Good Reason at any time after providing written notice
to the Company. For purposes of this Agreement, the term “Good
Reason” shall mean any of the following: (i) the Company fails to pay
the compensation described in Sections 3(a), 3(b) and 3(c) (in accordance with,
and subject to, such provisions); (ii) Executive no longer holds the offices
of
President and Chief Executive Officer or an office of equivalent stature, or
his
functions and/or duties are materially diminished by the Board of Directors;
or
(iii) Executive’s job site is relocated to a location outside of New York, New
York, unless the parties mutually agree to such relocation; provided, however,
that a termination by Executive for Good Reason shall be effective only if,
within 14 days following delivery of a written notice by Executive to the
Company that Executive is terminating his employment for Good Reason, the
Company has failed to cure the circumstances giving rise to Good
Reason.
(f) Termination
by Executive Without Good Reason. Executive may terminate his
employment hereunder at any time for any reason or no reason by giving the
Company sixty (60) days prior written notice of the
termination. Following any such notice, the Company may reduce or
remove any and all of Executive’s duties, positions and titles with the Company,
and any such reduction or removal shall not constitute Good Reason.
5. Compensation
Following Termination Prior to the End of the Term. In the event
that Executive’s employment hereunder is terminated prior to the end of the Term
for any reason, Executive shall be entitled only to the following compensation
and benefits upon such termination:
(a) General. On
any termination of Executive’s employment, he shall be entitled to:
|
(i)
|
any
accrued but unpaid Base Salary for services rendered through the
date of
termination; provided, however, that in the event Executive’s employment
is terminated pursuant to Section 4(b), the amount of Base Salary
received
by Executive during the Disability Period shall be reduced by the
aggregate amounts, if any, payable to Executive under any disability
benefit plan or program provided to Executive by the
Company;
|
|
(ii)
|
any
vacation accrued to the date of termination;
and
|
|
(iii)
|
any
accrued but unpaid expenses through the date of termination required
to be
reimbursed in accordance with Sections 3(f) of this
Agreement.
|
(b) Termination
by the Company Without Cause; Termination by Executive for Good
Reason. In the event that Executive’s employment is terminated
prior to the expiration of the Term by the Company without Cause pursuant to
Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), Executive
shall be entitled only to the following:
|
(i)
|
those
items identified in Section 5(a);
|
|
(ii)
|
the
sign-on bonus pursuant to Section 5(b) hereof if not previously
paid;
|
|
(iii)
|
a
pro rata annual performance bonus pursuant to Section 5(c) hereof
for the
year in which Executive’s employment is terminated, determined by
multiplying the amount Executive would have received had employment
continued through the end of the year by a fraction, the numerator
of
which is the number of days during the year of termination that Executive
is employed by the Company and the denominator of which is 365, and
payable (after being offset by the Advance Bonus Payment, to the
extend
applicable) at the time the annual performance bonus would have been
paid
if Executive’s employment had not terminated;
and.
|
|
(iv)
|
the
continued payment of the Base Salary (as determined pursuant to Section
3(a)) for 18 months (such sums to be paid at the times and in the
amounts
such Base Salary would have been paid had Executive’s employment not
terminated).
|
(c) Termination
by Company Without Cause After a Change in Control; Termination by Executive
for
Good Reason After a Change in Control. In the event that
Executive’s employment is terminated by the Company without Cause pursuant to
Section 4(d) or by Executive for Good Reason pursuant to Section 4(e), in either
case, within 12 months after a Change in Control but prior to the end of the
Term, Executive shall be entitled to only the following:
|
(i)
|
those
items identified in Section 5(a);
|
|
(ii)
|
the
sign-on bonus pursuant to Section 5(b) hereof if not previously
paid;
|
|
(iii)
|
an
amount equal to Executive’s Target Bonus pursuant to Section 5(c) hereof
for the year in which Executive’s employment is terminated, payable (after
being offset by the Advance Bonus Payment, to the extend applicable)
at
the time the annual performance bonus would have been paid if Executive’s
employment had not terminated;
|
|
(iv)
|
the
continued payment of the Base Salary (as determined pursuant to Section
3(a)) for 18 months (such sums to be paid at the times and in the
amounts
such Base Salary would have been paid had Executive’s employment not
terminated); and
|
|
(v)
|
continued
eligibility for benefits provided under Section 3 hereof for 18 months,
provided that Executive’s eligibility for such benefits shall terminate to
the extent that, Executive becomes eligible for such benefits from
a
subsequent employer.
|
“Change
of Control” shall mean (i) the sale of all or substantially all of the assets of
the Company, (ii) the sale of more than 50% of the outstanding capital stock
of
the Company in a non-public sale, (iii) the dissolution or liquidation of the
Company, or (iv) any merger, share exchange, consolidation or other
reorganization or business combination of the Company if immediately after
such
transaction either (A) persons who were members of the Board of Directors of
the
Company immediately prior to such transaction do not constitute at least a
majority of the Board of Directors of the surviving entity, or (B) persons
who
hold a majority of the voting capital stock of the surviving entity are not
persons who held voting capital stock of the Company immediately prior to such
transaction.
(d) No
Further Liability; Release. Payment made and performance by the
Company in accordance with this Section 5 shall operate to fully discharge
and
release the Company and its directors, officers, employees, affiliates,
stockholders, successors, assigns, agents and representatives from any further
obligation or liability with respect to Executive’s employment and termination
of employment. Other than providing the compensation and benefits
provided for in accordance with this Section 5, the Company and its directors,
officers, employees, affiliates, stockholders, successors, assigns, agents
and
representatives shall have no further obligation or liability to Executive
or
any other person under this Agreement. The payment of any amounts
pursuant to this Section 5 (other than payments required by law) is expressly
conditioned upon the delivery by Executive to the Company of a release in form
and substance reasonably satisfactory to the Company of any and all claims
Executive may have against the Company and its directors, officers, employees,
affiliates, successors, assigns, agents and representatives.
(d) Offset;
No Obligation to Mitigate. The Company’s obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right, or action that the Company may have against
the
Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains
other
employment.
6. Exclusive
Employment; Noncompetition; Nonsolicitation; Nondisclosure of Proprietary
Information; Surrender of Records; Developments.
6.1 No
Conflict; No Other Employment. During the period of Executive’s
employment with the Company, Executive shall not: (i) engage in any
activity which conflicts or interferes with or derogates from the performance
of
Executive’s duties hereunder nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain or profit
and including service as a director of any other company, except as approved
in
advance in writing by the Company; provided, however, that Executive shall
be
entitled to manage his personal investments and otherwise attend to personal
affairs, including charitable, social and political activities, in a manner
that
does not unreasonably interfere with his responsibilities hereunder, or (ii)
accept or engage in any other employment, whether as an employee or consultant
or in any other capacity, and whether or not compensated
therefor. Notwithstanding the foregoing, the Company agrees that,
subject to the second sentence of Section 2(b) hereof, and provided that the
activity does not conflict or interfere with or derogated from the performance
of Executives duties to the Company, Executive may continue to act in the
following positions with the following companies during the Term: (x)
Chairman and Chief Executive Officer of Prestige Brands of North Carolina,
LLC,
a home furnishings company, and (y) Chief Executive Officer of Brand Force
One,
LLC, a marketing consulting company.
6.2 Noncompetition;
Nonsolicitation.
(a) Executive
acknowledges and recognizes the highly competitive nature of the Company’s
business and that access to the Company’s confidential records and proprietary
information renders him special and unique within the Company’s
industry. In consideration of the payment by the Company to Executive
of amounts that may hereafter be paid to Executive pursuant to this Agreement
(including, without limitation, pursuant to Sections 3 and 5 hereof) and other
obligations undertaken by the Company hereunder, Executive agrees that during
(i) his employment with the Company and (ii) the period beginning on the date
of
termination of employment for any reason and ending 18 months after the date
of
termination of employment (the “Post-Employment Period”), Executive shall not,
directly or indirectly, engage (as owner, investor, partner, stockholder,
employer, employee, consultant, advisor, director or otherwise) in any Competing
Business, provided that ownership by Executive of less than 1% of the
outstanding common stock of a publicly-traded company that is a Competing
Business will not be a breach of the provisions of this Section
6.2(a). For purposes of this Agreement, “Competing Business” shall
mean (i) any business engaged in the design or marketing of branded jeanswear
and sportswear; (ii) any business in which the Company is currently engaged
anywhere in the world, and (iii) any other business which the Company engages
in
anywhere in the world during Executive’s employment with the
Company.
(b) In
further consideration of the payment by the Company to Executive of amounts
that
may hereafter be paid to Executive pursuant to this Agreement (including,
without limitation, pursuant to Sections 3 and 5 hereof) and other obligations
undertaken by the Company hereunder, Executive agrees that during his employment
and the Post-Employment Period, he shall not, directly or indirectly, (i)
solicit, encourage or attempt to solicit or encourage any of the employees,
agents, consultants or representatives of the Company or any of its affiliates
to terminate his, her, or its relationship with the Company or such affiliate;
(ii) solicit, encourage or attempt to solicit or encourage any of the
employees of the Company or any of its affiliates to become employees or
consultants of any other person or entity; (iii) solicit, encourage or attempt
to solicit or encourage any of the consultants of the Company or any of its
affiliates to become employees or consultants of any other person or entity,
provided that the restriction in this clause (iii) shall not apply if (A) such
solicitation, encouragement or attempt to solicit or encourage is in connection
with a business which is not a Competing Business and (B)
the
consultant’s rendering of services for the other person or entity will not
interfere with the consultant’s rendering of services to the Company; (iv)
solicit or attempt to solicit any licensor, customer, vendor or distributor
of
the Company or any of its affiliates with respect to any product or service
being furnished, made, sold or leased by the Company or such affiliate, provided
that the restriction in this clause (iv) shall not apply if such solicitation
or
attempt to solicit is (A) in connection with a business which is not a Competing
Business and (B) does not interfere with, or conflict with, the interests of
the
Company or any of its affiliates; or (v) persuade or seek to persuade any
licensor or customer of the Company or any affiliate to cease to do business
or
to reduce the amount of business which any licensor or customer has customarily
done or contemplates doing with the Company or such affiliate, whether or not
the relationship between the Company or its affiliate and such licensor or
customer was originally established in whole or in part through Executive’s
efforts. For purposes of this Section 6.2(b) only, the terms
“licensor”, “customer,” “vendor” and “distributor” shall mean a licensor,
customer, vendor or distributor who has done business with the Company or any
of
its affiliates within twelve months preceding the termination of Executive’s
employment.
(c) During
Executive’s employment with the Company and during the Post-Employment Period,
Executive agrees that upon the earlier of Executive’s (i) negotiating with any
Competitor (as defined below) concerning the possible employment of Executive
by
the Competitor, (ii) receiving an offer of employment from a Competitor, or
(iii) becoming employed by a Competitor, Executive will (A) immediately provide
written notice to the Company of such circumstances and (B) provide copies
of
Section 6 of this Agreement to the Competitor. Executive further
agrees that the Company may provide notice to a Competitor of Executive’s
obligations under this Agreement, including without limitation Executive’s
obligations pursuant to Section 6 hereof. For purposes of this
Agreement, “Competitor” shall mean any entity (other than the Company or any of
its affiliates) that engages, directly or indirectly, in any Competing
Business.
(d) Executive
understands that the provisions of this Section 6.2 may limit his ability to
earn a livelihood in a business similar to the business of the Company or its
affiliates but nevertheless agrees and hereby acknowledges that the
consideration provided under this Agreement, including any amounts or benefits
provided under Sections 3 and 5 hereof and other obligations undertaken by
the
Company hereunder, is sufficient to justify the restrictions contained in such
provisions. In consideration thereof and in light of Executive’s
education, skills and abilities, Executive agrees that he will not assert in
any
forum that such provisions prevent him from earning a living or otherwise are
void or unenforceable or should be held void or unenforceable.
6.3 Proprietary
Information. Executive acknowledges that during the course of his
employment with the Company he will necessarily have access to and make use
of
proprietary information and confidential records of the Company and its
affiliates. Executive covenants that he shall not during the Term or
at any time thereafter, directly or indirectly, use for his own purpose or
for
the benefit of any person or entity other than the Company, nor otherwise
disclose, any proprietary information to any individual or entity, unless such
disclosure has been authorized in writing by the Company or is otherwise
required by law. Executive acknowledges and understands that the term
“proprietary information” includes, but is not limited to: (a) the
software products, programs, applications, and processes utilized by the Company
or any of its affiliates; (b) the name and/or address of any licensor,
customer or vendor of the Company or any of its affiliates or any information
concerning the transactions or relations of any licensor, customer or vendor
of
the Company or any of its affiliates with the Company or such affiliate or
any
of its or their partners, principals, directors, officers or agents; (c) any
information concerning any product, technology, or procedure employed by the
Company or any of its affiliates but not generally known to its or their
customers, vendors or competitors, or under development by or being tested
by
the Company or any of its affiliates but not at the time offered generally
to
customers or vendors; (d) any information relating to the computer software,
computer systems, pricing or marketing methods, sales margins, cost of goods,
cost of material, capital structure, operating results, borrowing arrangements
or business plans of the Company or any of its affiliates; (e) any information
which is generally regarded as confidential or proprietary in any line of
business engaged in by the Company or any of its affiliates; (f) any business
plans, budgets, advertising or marketing plans; (g) any information contained
in
any of the written or oral policies and procedures or manuals of the Company
or
any of its affiliates; (h) any information belonging to customers or vendors
of
the Company or any of its affiliates or any other person or entity which the
Company or any of its affiliates has agreed to hold in confidence; (i) any
Developments (as defined below) covered by this Agreement; and (j) all
written, graphic and other material relating to any of the
foregoing. Executive acknowledges and understands that
information that is not novel or copyrighted or patented may nonetheless be
proprietary information. The term “proprietary information” shall not
include information generally available to and known by the public or
information that is or becomes available to Executive on a non-confidential
basis from a source other than the Company, any of its affiliates, or the
directors, officers, employees, partners, principals or agents of the Company
or
any of its affiliates (other than as a result of a breach of any obligation
of
confidentiality).
6.4 Confidentiality
and Surrender of Records. Executive shall not during the Term or
at any time thereafter (irrespective of the circumstances under which
Executive’s employment by the Company terminates), except as required by law,
directly or indirectly publish, make known or in any fashion disclose any
confidential records to, or permit any inspection or copying of confidential
records by, any individual or entity other than in the course of such
individual’s or entity’s employment or retention by the Company. Upon
termination of employment for any reason or upon request by the Company,
Executive shall deliver promptly to the Company all property and records of
the
Company or any of its affiliates, including, without limitation, all
confidential records. For purposes hereof, “confidential records”
means all correspondence, reports, memoranda, files, manuals, books, lists,
financial, operating or marketing records, magnetic tape, or electronic or
other
media or equipment of any kind which may be in Executive’s possession or under
his control or accessible to him which contain any proprietary
information. All property and records of the Company and any of its
affiliates (including, without limitation, all confidential records) shall
be
and remain the sole property of the Company or such affiliate during the Term
and thereafter.
6.5 Inventions
and Patents. All inventions, innovations or improvements
(including policies, procedures, products, improvements, software, ideas and
discoveries, whether patent, copyright, trademark, service xxxx, or otherwise)
conceived or made by Executive, either alone or jointly with others, in the
course of his employment by the Company, belong to the
Company. Executive will promptly disclose in writing such inventions,
innovations or improvements to the Company and perform all actions reasonably
requested by the Company to establish and confirm such ownership by the Company,
including, but not limited to, cooperating with and assisting the Company in
obtaining patents, copyrights, trademarks, or service marks for the Company
in
the United States and in foreign countries.
6.6 Enforcement. Executive
acknowledges and agrees that, by virtue of his position, his services and access
to and use of confidential records and proprietary information, any violation
by
him of any of the undertakings contained in this Section 6 would cause the
Company and/or its affiliates immediate, substantial and irreparable injury
for
which it or they have no adequate remedy at law. Accordingly,
Executive agrees and consents to the entry of an injunction or other equitable
relief by a court of competent jurisdiction restraining any violation or
threatened violation of any undertaking contained in this Section
6. Executive waives posting by the Company or its affiliates of any
bond otherwise necessary to secure such injunction or other equitable
relief. Rights and remedies provided for in this Section 6 are
cumulative and shall be in addition to rights and remedies otherwise available
to the parties hereunder or under any other agreement or applicable
law.
7. Key
Man Insurance. Executive recognizes and acknowledges that the
Company or its affiliates may seek and purchase one or more policies providing
key man life insurance with respect to Executive, the proceeds of which would
be
payable to the Company or such affiliate. Executive hereby consents
to the Company or its affiliates seeking, purchasing and maintaining such
insurance and will provide such information, undergo such medical examinations
(at the Company’s expense), execute such documents, and otherwise take any and
all actions reasonably necessary or desirable in order for the Company or its
affiliates to seek, purchase, and maintain in full force and effect such policy
or policies.
8. Assignment
and Transfer.
(a) Company. This
Agreement shall inure to the benefit of and be enforceable by, and may be
assigned by the Company without Executive’s consent to, any purchaser of all or
substantially all of the Company’s business or assets, or to any successor to
the Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise).
(b) Executive.
The parties hereto agree that Executive is obligated under this Agreement to
render personal services during the Term of a special, unique, unusual,
extraordinary and intellectual character, thereby giving this Agreement special
value. Executive’s rights and obligations under this Agreement shall
not be transferable by Executive by assignment or otherwise, and any purported
assignment, transfer or delegation thereof shall be void; provided, however,
that if Executive shall die, all amounts then payable to Executive hereunder
shall be paid in accordance with the terms of this Agreement to Executive’s
estate.
9. Miscellaneous.
(a) Other
Obligations. Executive represents and warrants that neither
Executive’s employment with the Company nor Executive’s performance of
Executive’s obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other obligations, legal or otherwise, which Executive
may
have. Executive covenants that he shall perform his duties hereunder
in a professional manner and not in conflict or violation, or otherwise
inconsistent with other obligations legal or otherwise, which Executive may
have.
(b) Nondisclosure;
Other Employers. Executive will not disclose to the Company, use,
or induce the Company to use, any proprietary information, trade secrets or
confidential business information of others. Executive represents and
warrants that Executive does not possess any property, proprietary information,
trade secrets and confidential business information belonging to any prior
employers.
(c) Cooperation. Following
termination of employment with the Company for any reason, Executive shall
cooperate with the Company, as requested by the Company, to effect a transition
of Executive’s responsibilities and to ensure that the Company is aware of all
matters being handled by Executive. The Company shall reimburse
Executive’s reasonable out-of-pocket expenses incurred in connection with the
obligations in this Section 9(c).
(d) Protection
of Reputation. During the Term and thereafter, Executive agrees
that he will take no action which is intended, or would reasonably be expected,
to harm the Company or any of its affiliates or its or their reputation or
which
would reasonably be expected to lead to unwanted or unfavorable publicity to
the
Company or its affiliates. Nothing herein shall prevent Executive
from making any truthful statement in connection with any legal proceeding
or
investigation by the Company or any governmental authority.
(e) Governing
Law. This Agreement shall be governed by and construed (both as
to validity and performance) and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of
law
or where the parties are located at the time a dispute arises.
(f) Arbitration.
|
(i)
|
General. Executive
and the Company specifically, knowingly, and voluntarily agree that
they
shall use final and binding arbitration to resolve any dispute (an
“Arbitrable Dispute”) between Executive, on the one hand, and the Company
(or any affiliate of the Company), on the other hand. This
arbitration agreement applies to all matters relating to this Agreement
and Executive’s employment with and/or termination of employment from the
Company, including without limitation disputes about the validity,
interpretation, or effect of this Agreement, or alleged violations
of it,
any payments due hereunder and all claims arising out of any alleged
discrimination, harassment or retaliation, including, but not limited
to,
those covered by Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act of 1967, as amended, the
Americans With Disabilities Act, the New York State Human Rights
Law, the
New York City Human Rights Law, the New York Labor Law, or any other
federal, state or local law relating to discrimination in
employment.
|
|
(ii)
|
Injunctive
Relief. Notwithstanding anything to the contrary contained
herein, the Company and any affiliate of the Company (if applicable)
shall
have the right to seek injunctive or other equitable relief from
a court
of competent jurisdiction to enforce Section 6 of this
Agreement. For purposes of seeking enforcement of Section 6,
the Company and Executive hereby consent to the jurisdiction of any
state
or federal court sitting in the City, County and State of New
York.
|
|
(iii)
|
The
Arbitration. Any arbitration pursuant to this Section 9(f)
will take place in New York, New York, under the auspices of the
American
Arbitration Association, in accordance with the Employment Arbitration
Rules and Mediation Procedures of the American Arbitration Association
then in effect, and before one arbitrator selected in accordance
with such
rules. Judgment upon the award rendered by the arbitrators may
be entered in any state or federal court sitting in the City, County
and
State of New York, or any other court of competent
jurisdiction.
|
|
(iv)
|
Fees
and Expenses. In any arbitration pursuant to this Section
9(f), except as otherwise required by law, each party shall be responsible
for the fees and expenses of its own attorneys and witnesses, and
the fees
and expenses of the arbitrators shall be divided equally between
the
Company, on the one hand, and Executive, on the other
hand. Notwithstanding the foregoing, the prevailing party on a
claim to enforce the terms of this Agreement shall be entitled to
the
reimbursement of his, her or its reasonable fees and expenses in
connection with such claim, including reasonable attorneys’ fees, from the
other party.
|
|
(v)
|
Exclusive
Forum. Except as permitted by Section 9(f)(ii) hereof,
arbitration in the manner described in this Section 9(f) shall be
the
exclusive forum for any Arbitrable Dispute. Except as permitted
by Section 9(f)(ii), should Executive or the Company attempt to resolve
an
Arbitrable Dispute by any method other than arbitration pursuant
to this
Section 9(f), the responding party shall be entitled to recover from
the
initiating party all damages, expenses, and attorneys’ fees incurred as a
result of that breach.
|
(g) Entire
Agreement. This Agreement (including the plans referenced in
Section 3(e)) contains the entire agreement and understanding between the
parties hereto in respect of Executive’s employment and supersedes, cancels and
annuls any prior or contemporaneous written or oral agreements, understandings,
commitments and practices between them respecting Executive’s employment,
including all prior employment agreements between the Company and Executive,
which agreement(s) hereby are terminated and shall be of no further force or
effect.
(h) Amendment. This
Agreement may be amended only by a writing which makes express reference to
this
Agreement as the subject of such amendment and which is signed by Executive
and,
on behalf of the Company, by its duly authorized officer.
(i) Severability.
If any provision of this Agreement or the application of any such provision
to
any party or circumstances shall be determined by any court of competent
jurisdiction or arbitration panel to be invalid or unenforceable to any extent,
the remainder of this Agreement, or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid or unenforceable, shall not be affected thereby, and each provision
hereof shall be enforced to the fullest extent permitted by law. If
any provision of this Agreement, or any part thereof, is held to be invalid
or
unenforceable because of the scope or duration of or the area covered by such
provision, the parties hereto agree that the court or arbitration panel making
such determination shall reduce the scope, duration and/or area of such
provision (and shall substitute appropriate provisions for any such invalid
or
unenforceable provisions) in order to make such provision enforceable to the
fullest extent permitted by law and/or shall delete specific words and phrases,
and such modified provision shall then be enforceable and shall be
enforced. The parties hereto recognize that if, in any judicial or
arbitral proceeding, a court or arbitration panel shall refuse to enforce any
of
the separate covenants contained in this Agreement, then that invalid or
unenforceable covenant contained in this Agreement shall be deemed eliminated
from these provisions to the extent necessary to permit the remaining separate
covenants to be enforced. In the event that any court or arbitration
panel determines that the time period or the area, or both, are unreasonable
and
that any of the covenants is to that extent invalid or unenforceable, the
parties hereto agree that such covenants will remain in full force and effect,
first, for the greatest time period, and second, in the greatest geographical
area that would not render them unenforceable.
(j) Construction. The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this
Agreement. The language in all parts of this Agreement shall be in
all cases construed according to its fair meaning and not strictly for or
against the Company or Executive. As used herein, the words “day” or
“days” shall mean a calendar day or days.
(k) Nonwaiver. Neither
any course of dealing nor any failure or neglect of either party hereto in
any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or privilege in any other instance. All waivers by either party
hereto must be contained in a written instrument signed by the party to be
charged and, in the case of the Company, by its duly authorized
officer.
(l) Notices. Any
notice required or permitted hereunder shall be in writing and shall be
sufficiently given if personally delivered or if sent by registered or certified
mail, postage prepaid, with return receipt requested, addressed: (i)
in the case of the Company, to I.C. Xxxxxx & Company, Inc., 000 00xx Xxxxxx,
0xx Xxxxx,
Xxx Xxxx,
XX 00000, attn.: Chairman of the Board of Directors, with a copy to
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attn.: Xxxxxxxx X. Xxxx, Esq.; and (ii) in the case
of Executive, to Executive’s last known address as reflected in the Company’s
records, or to such other address as Executive shall designate by written notice
to the Company. Any notice given hereunder shall be deemed to have
been given at the time of receipt thereof by the person to whom such notice
is
given if personally delivered or at the time of mailing if sent by registered
or
certified mail.
(m) Assistance
in Proceedings, Etc. Executive shall, without additional
compensation, during and after the Term, upon reasonable notice, furnish such
information and proper assistance to the Company as may reasonably be required
by the Company in connection with any legal or quasi-legal proceeding, including
any external or internal investigation, involving the Company or any of its
affiliates. The Company shall reimburse Executive’s out-of-pocket
expenses incurred in connection with the obligations in this Section
9(n).
(n) Survival. Cessation
or termination of Executive’s employment with the Company shall not result in
termination of this Agreement. The respective obligations of
Executive and the Company as provided in Sections 5, 6, 8 and 9 of this
Agreement shall survive cessation or termination of Executive’s employment
hereunder.
(o) Condition
Precedent. This Agreement shall be of no force and effect if the
Extension Agreement is not fully executed.
(p) No
Representations Regarding Tax Implications. The Company makes no
representations regarding the tax implications of the compensation and benefits
to be paid to Executive under this Agreement, including, without limitation,
under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”). Notwithstanding anything herein to the contrary, in the
event that Executive is deemed to be a “specified employee” as defined in
Section 409A(2)(B)(i) of the Code and Treasury Regulation Section 1.409A(i)
as
of the date of the termination of his employment with the Company, any payment
from the Company triggered by such termination of employment (other than as
a
result of your death) that is subject to Section 409A shall not be paid before
the date that is six months after the date of such termination. Any
such amounts not paid within the first six months following the termination
of
your employment shall be accumulated and paid on the first day of the seventh
month following such termination. All payments made to Executive
hereunder are intended to constitute separate payments for purposes of Section
1.409A-2(b)(2) of the Treasury Regulations.
(q) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall be deemed to be one and
the
same instrument.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
on
its behalf by an individual thereunto duly authorized and Executive has duly
executed this Agreement, all as of the date and year first written
above.
I.C.
XXXXXX & COMPANY,
INC. EXECUTIVE:
By:
/s/ XXXXX X.
XXXXX /s/
XXXXXX X. XXXX
Name: Xxxxx
X.
Xxxxx
Xxxxxx X. Xxxx
Title: Chief Financial Officer
