EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 1, 2000 between SWANK,
INC., a Delaware corporation with an address at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Corporation"), and XXXX X. XXXX,
residing at 00 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000
("Employee").
W I T N E S S E T H:
WHEREAS, Employee has been in the employ of the
Corporation for more than 20 years; and
WHEREAS, the Corporation desires to continue to employ
Employee upon the terms and subject to the conditions hereinafter
set forth; and
WHEREAS, Employee is willing to be employed by the
Corporation upon such terms and conditions of employment.
NOW, THEREFORE, in consideration of the mutual cove
nants contained herein and for other good and valuable considera
tion, the receipt and sufficiency of which is hereby acknowl
edged, the Corporation and Employee hereby agree as follows:
1. Employment and Term.
The Corporation hereby employs Employee, and Employee
hereby accepts employment by the Corporation, on the terms and
conditions herein contained, to perform the duties described in
paragraph 2 for a term (the "Employment Term") commencing on
April 1, 2000 (the "Commencement Date") and, subject to the
remaining provisions of this Agreement, ending on March 31, 2005.
2. Duties.
(a) During the Employment Term, Employee shall serve
as a Senior Vice President of the Corporation. Employee will
perform such duties and responsibilities as from time to time
shall be designated in good faith by the Corporation's President
and/or its Board of Directors, which duties and responsibilities
shall be in accordance with past practice, and shall report to,
and shall be subject to the direction and supervision of, the
President of the Corporation. Employee shall serve the
Corporation faithfully and to the best of his ability and will
devote his full business time and attention to the business and
affairs of the Corporation and its subsidiaries except during
vacation periods and periods of illness or incapacity.
(b) The Corporation and Employee acknowledge and agree
that, while the duties of Employee under this paragraph 2 are
presently intended primarily to be performed at the Corporation's
offices located in the metropolitan New York City area (presently
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000), Employee shall spend
such time at the Corporation's other offices, including those
offices located in Massachusetts, and otherwise travel in
furtherance of the business of the Corporation or the performance
of Employees duties and responsibilities hereunder, as the Board
of Directors or the Corporation's President shall deem necessary,
in accordance with past practice.
3. Compensation and Benefits.
(a) During the Employment Term, in consideration for
the full and complete performance by Employee of his duties and
obligations under this Agreement, the Corporation agrees to pay
Employee a salary ("Base Salary") at the rate of $180,000 per
year payable in accordance with the Corporation's regular pay
intervals for its executive officers or in such other manner as
shall be mutually agreeable to Employee and the Corporation. The
Corporation's Board of Directors may, in its discretion, at any
time and from time to time, increase the Base Salary for Employee
and grant Employee other compensation in addition to that
provided for hereby (in that regard, consistent with past
practices, Employee will be considered by the Corporation for a
salary increase and annual bonus compensation at the same time as
the other executive officers of the Corporation are considered
for a salary increase and such bonus compensation). The Base
Salary described herein and other amounts payable to Employee
hereunder are, in each case, a gross amount, and Employee
acknowledges and agrees that the Corporation shall be required to
withhold, and such Base Salary and other amounts shall be reduced
by, deductions with respect to applicable federal, state and
local taxes, FICA, unemployment compensation taxes and other
required taxes, assessments and withholdings.
(b) During the Employment Term, in consideration for
the full and complete performance by Employee of his duties and
obligations under this Agreement, the Corporation also agrees to
pay Employee commission compensation in an amount equal to the
greater of (i) $160,000 or (ii) sum of (A) .0023 times (1) net
sales (as such term is defined in accordance with the commission
arrangement between Employee and the Corporation for fiscal 1999)
of the men's division of the Corporation (other than sales to
Target Stores) and (2) net sales of the Corporation of small
leather goods only to Target Stores, plus (B) .003 times net
sales of the men's special markets division of the Corporation.
Commissions shall otherwise be calculated and shall be payable in
accordance with past practice.
(c) During the Employment Term, Employee shall be
entitled to participate in any retirement, medical payment,
disability, health or life insurance and other similar benefit
plans and arrangements which may be or become available to
executive officers of the Corporation in general; provided, that
Employee shall be required to comply with the conditions
attendant to coverage by such plans and arrangements and shall
comply with, and be entitled to benefits only in accordance with,
the terms and conditions of such plans and arrangements.
(d) Employee shall be entitled to reimbursement for
expenses reasonably incurred by him in furtherance of the
business of the Corporation and in the performance of his duties
hereunder, on an accountable basis with such substantiation as
the Corporation may at the time require from its executive
officers.
(e) During the Employment Term, the Corporation shall
continue to provide Employee with an automobile consistent with
the current arrangement with Employee and, upon the expiration of
the current lease for such automobile, the Corporation shall
lease or otherwise provide Employee with an automobile of equal
value to that currently leased by the Corporation and provided to
Employee.
(f) Employee shall be entitled to four (4) weeks
vacation in each year during the Employment Term. Such vacation
shall be taken at such time or times as may be mutually agreed
upon by the Corporation and Employee and in accordance with the
vacation policies and procedures for employees of the Corporation
as in effect from time to time.
4. Termination for Disability or Death.
(a) If, during the Employment Term, in the good faith
judgment of the Corporation's Board of Directors, Employee shall,
because of physical or mental illness or incapacity, become
unable to perform the duties and services required of him
pursuant to this Agreement for a period of 120 consecutive days
or for a period of 150 days in any 365-day period, the
Corporation may, upon prior written notice given at any time
after the expiration of such 120-day period or 150-day period, as
the case may be, to Employee of its intention to do so, terminate
this Agreement and the Employment Term to such date as may be set
forth in such notice. In case of such termination, Employee
shall be entitled to receive (i) his Base Salary through the end
of the month in which this Agreement and the Employment Term
shall be terminated, (ii) accrued but unpaid Commissions through
the termination date, (iii) bonus compensation, if any, that
shall have been awarded to Employee prior to such termination,
but not paid to him prior to such termination, plus (iv) an
amount equal to the sum of (A) $160,000 plus (B) one year of his
Base Salary in effect on the date of termination (such sum, the
"Severance Base Amount"). The payment of the Severance Base
Amount provided for in clause (a)(iv) shall be payable in
installments in accordance with the Corporation's regular pay
intervals for its executive officers or in such other manner as
shall be mutually agreeable to Employee and the Corporation. The
foregoing amounts shall be in addition to amounts, if any, that
shall be payable to Employee upon his illness or incapacity under
any disability insurance policy or other disability plan of the
Company.
(b) If, during the Employment Term, Employee shall
die, Employee's legal representatives shall be entitled to
receive (i) his Base Salary through the end of the month in which
his death shall occur, (ii) accrued but unpaid Commissions
through the date of his death, (iii) bonus compensation, if any,
that shall have been awarded to Employee prior to his death, but
not paid to him prior to his death, plus (iv) an amount equal to
the Severance Base Amount. The payment of the Severance Base
Amount provided for in clause (b)(iv) shall be payable in
installments in accordance with the Corporation's regular pay
intervals for its executive officers or in such other manner as
shall be mutually agreeable to Employee's legal representatives
and the Corporation. If Employee shall die after the Employment
Term but during any period in which Employee shall be entitled to
receive amounts under paragraph 5(b) hereof, Employee's legal
representatives shall be entitled to receive all amounts that
Employee would have been entitled to receive under paragraph
5(b).
5. Termination by Corporation; Expiration of the
Employment Term.
(a) The Corporation may terminate this Agreement and
the Employment Term, without liability other than for payment of
accrued but unpaid Base Salary and Commissions through the date
this Agreement shall terminate and the Employment Term ends, "for
cause." The term "for cause" shall mean (i) a willful refusal or
failure (after not less than 14 days notice by the Corporation to
Employee that such refusal or failure will result in termination
of this Agreement and the Employment Term) by Employee to
perform, to the satisfaction of the President or the Board of
Directors, determined in good faith, any duties or
responsibilities assigned to Employee, (ii) a breach in any
material respect by Employee of a term or provision of this
Agreement which is not cured within 14 days after notice of such
breach shall have been given to Employee by the Corporation,
(iii) the commission by Employee of an act involving moral
turpitude, dishonesty, theft, misappropriation of assets, or
unethical business conduct, or any other conduct of Employee
which materially impairs or xxxxx the reputation, or is otherwise
to the material detriment, of the Corporation, or any of its
subsidiaries or affiliates, or which could reasonably be expected
to materially impair or harm the reputation, or be to the
material detriment, of the Corporation, (iv) the use of illegal
drugs or prohibited substances, (v) excessive drinking which, in
the good faith judgment of the President or the Board of
Directors, impairs Employee's ability to perform his duties and
responsibilities hereunder, (vi) the conviction of Employee of,
or the pleading of nolo contendere by Employee to, any felony, or
a misdemeanor involving any of the acts referred to in clause
(a)(iii) above, or the admission by Employee thereto, or (vii)
the breach by Employee of a fiduciary duty or fiduciary
obligation to the Corporation or any of its subsidiaries or
affiliates.
(b) The Corporation may also terminate this Agreement
and the Employment Term at any time without cause. In such
event, provided Employee shall not at any time be in violation of
paragraph 6 hereof, the Corporation shall pay to Employee during
the period commencing on the termination date of this Agreement
and the Employment Term and ending on March 31, 2006, in lieu of
all other compensation from the Company (except as otherwise
provided in this paragraph 5(b) or in paragraph 5(c) below), an
amount at the rate of $340,000 per annum (plus such per annum
amount equal to any increase in Employee's per annum Base Salary
over and above $180,000), which amount shall be payable in
installments in accordance with the Corporation's regular pay
intervals for its executive officers or in such other manner as
shall be mutually agreeable to Employee and the Corporation. In
such event, Employee shall also be entitled to receive accrued
but unpaid Commissions through the termination date and bonus
compensation, if any, that shall have been awarded to Employee
prior to such termination, but not paid to him prior to such
termination.
(c) Notwithstanding anything contained in this
Agreement to the contrary, in the event that Employee's
employment with the Corporation and/or its subsidiaries and
affiliates shall terminate and he shall be entitled to receive
amounts under that certain Termination Agreement effective
January 1, 1999 between the Corporation and Employee (as the same
may be amended, modified or supplemented, and together with any
successor agreements, the "Termination Agreement"), at Employee's
option, Employee shall be entitled to receive either (i) the
amounts, if any, to which he may be entitled under this Agreement
in respect of such termination, or (ii) the amounts to which
Employee may be entitled to receive under the Termination
Agreement, but not both amounts. Employee shall exercise his
option by giving the Corporation written notice thereof in
accordance with the terms and conditions of this Agreement not
later than 14 days after such termination; provided, that if
Employee shall not give such notice, Employee shall be considered
to have opted for the amounts referred to in clause (c)(ii) in
lieu of the amounts referred to in clause (c)(i).
6. Certain Covenants and Agreements.
(a) In consideration of Employee's employment
hereunder, Employee agrees that during the Employment Term and
for a period of one year after the Employment Term expires or is
earlier terminated, as the case may be, (and for such additional
period, if any, during which Employee shall be receiving amounts
from the Corporation pursuant to paragraph 5 hereof), Employee
will not directly or indirectly (i) solicit, induce or entice for
employment, retention or affiliation, recommend to any
corporation, entity or other person the solicitation, inducement
or enticement for employment, retention or affiliation of, or
employ, retain or affiliate with, any employee, consultant,
independent contractor or other person employed or retained by,
or affiliated with, the Corporation, or any of its subsidiaries
or affiliates, (ii) engage in any activity intended to terminate,
disrupt or interfere with the Corporation's or any of its
subsidiary's or affiliate's relationship with any customer,
supplier, lessor or other person or entity, or (iii) engage or
participate in, or have any interest in any corporation, person,
or other entity, that engages or participates in any business or
activity engaged or participated in by the Corporation on date of
termination of the Employment Term. For purposes of this
paragraph 6(a), Employee will be deemed directly or indirectly to
be engaged or participating in the operation of such a business
or activity, or to have an interest in a corporation, or other
person or entity, if he is a proprietor, partner, joint venturer,
shareholder, director, officer, lender, manager, employee,
consultant, advisor or agent, or if he, directly or indirectly
(including as a member of a group), controls all or any part
thereof; provided, that nothing in this paragraph 6(a) shall
prohibit Employee from holding less than two percent (2%) of a
class of a corporation's outstanding securities that are listed
on a national securities exchange or traded in the over-the-
counter market.
(b) Employee acknowledges that by his employment he
will be in a confidential relationship with the Corporation and
will have access to confidential information and trade secrets of
the Corporation, its subsidiaries and affiliates (collectively,
the "Confidential Information"). Confidential Information
includes, but is not limited to, customer and client lists,
financial information, price lists, marketing and sales
strategies and procedures, computer programs, databases and
software, supplier, vendor and service information, personnel
information, operating procedures and techniques, business plans
and systems, and all other records, files, and information in
respect of the Corporation. During the Employment Term and
thereafter, Employee shall maintain the strictest confidentiality
of all Confidential Information and shall not use or permit the
use of, or disclose, discuss, communicate or transmit or permit
the disclosure, discussion, communication or transmission of, any
Confidential Information. This paragraph 6(b) shall not apply to
(i) information that, by means other than Employee's direct or
indirect disclosure, becomes generally known to the public, or
(ii) information the disclosure of which is compelled by law
(including judicial or administrative proceedings and legal pro
cess). In that connection, in the event that Employee is
requested or required (by oral question, interrogatories,
requests for information or documents, subpoenas, civil
investigative demand or other legal process) to disclose any
Confidential Information, Employee agrees to provide the
Corporation with prompt written notice of such request or
requirement so that the Corporation may seek an appropriate
protective order or relief therefrom or may waive the
requirements or this paragraph 6(b). If, failing the entry of a
protective order or the receipt of a waiver hereunder, Employee
is, in the opinion of counsel, compelled to disclose Confidential
Information under pain of liability for contempt or other censure
or penalty, Employee may disclose such Confidential Information
to the extent so required.
(c) In the event of a breach or threatened breach by
Employee of any of the provisions of this paragraph 6, the
Corporation shall be entitled to an injunction to be issued by
any court or tribunal of competent jurisdiction to restrain
Employee from committing or continuing any such violation. In
any proceeding for an injunction, Employee agrees that his abil
ity to answer in damages shall not be a bar or be interposed as a
defense to the granting of a temporary or permanent injunction
against him. Employee acknowledges that the Corporation will not
have an adequate remedy at law in the event of any breach by him
as aforesaid and that the Corporation may suffer irreparable
damage and injury in the event of such a breach by him. Nothing
contained herein shall be construed as prohibiting the Corpora
tion from pursuing any other remedy or remedies available to the
Corporation in respect of such breach or threatened breach.
(d) If any term or provision of this paragraph 6 shall
be held invalid or unenforceable because of its duration,
geographic scope, or for any other reason, the Corporation and
Employee agree that the court making such determination shall
have the power to modify such provision, whether by limiting the
geographic scope, reducing the duration, or otherwise, to the
minimum extent necessary to make such term or provision valid and
enforceable, and such term or provision shall be enforceable in
such modified form.
(e) The provisions of this paragraph 6 shall survive
the termination of this Agreement and the Employment Term.
7. Employee's Representations.
(a) Employee represents and warrants that he has full
authority and legal capacity to execute and deliver this
Agreement and perform his duties and obligations hereunder and is
not under any contractual, legal or other restraint or
prohibition that would restrict, prohibit or prevent Employee
from performing this Agreement and his duties and obligations
hereunder.
(b) Employee acknowledges that he is free to seek
advice from independent counsel with respect to this Agreement.
Employee has obtained such advice and is not relying on any
representation or advice from the Company or any of its officers,
directors, attorneys, or other representatives regarding this
Agreement, its contents or effect.
8. Assignability.
This Agreement may not be assigned by Employee and all
of its terms and conditions shall be binding upon and inure to
the benefit of Employee and his heirs, executors, administrators,
legal representatives and assigns. This Agreement may be
assigned, in whole or in part, by the Corporation and shall be
binding upon and inure to the benefit of the Corporation, its
successors and assigns. Successors of the Corporation shall
include, without limitation, any corporation or other entity
acquiring directly or indirectly all or a substantial part of the
assets of the Corporation whether by merger, consolidation,
purchase, lease or otherwise, and such successor shall thereafter
be deemed the "Corporation" for purposes hereof.
9. Notices.
Except as otherwise expressly provided, any notice,
request, demand or other communication permitted or required to
be given under this Agreement shall be in writing, shall be sent
by one of the following means to Employee at his address set
forth on the first page of this Agreement and to the Corporation
at its address set forth on the first page of this Agreement,
Attention: Xx. Xxxx X. Xxxxx, President, (or to such other
address as shall be designated hereunder by notice to the other
parties and persons receiving copies, effective upon actual
receipt) and shall be deemed conclusively to have been given:
(a) on the first business day following the day timely deposited
for overnight delivery with Federal Express (or other equivalent
national overnight courier service) or United States Express
Mail, with the cost of delivery prepaid or for the account of the
sender; (b) on the fifth business day following the day duly sent
by certified or registered United States mail, postage prepaid
and return receipt requested; or (c) when otherwise actually
received by the addressee on a business day (or on the next
business day if received after the close of normal business hours
or on any non-business day). A copy of each notice, request,
demand or other communication given to the Corporation by
Employee shall be given to Xxxxxxx X. Xxxxxxxx, Esq., Xxxxxx
Xxxxxx, LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. A copy of each notice, request, demand or
other communication given to Employee by the Corporation shall be
given to Xxxx X. Xxxxxx, Esq., Xxxxxxx & Xxxxxx, LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
10. No Waiver by Action, Cumulative Rights, Etc.
Any waiver or consent from either party respecting any
term or provision of this Agreement shall be effective only in
the specific instance and for the specific purpose for which
given and shall not be deemed, regardless of frequency given, to
be a further or continuing waiver or consent. The failure or
delay of either party at any time or times to require performance
of, or to exercise any of its powers, rights or remedies with
respect to, any term or provision of this Agreement in no manner
shall affect that party's right at a later time to enforce any
such term or provision.
11. Interpretation, Headings.
The parties acknowledge and agree that the terms and
provisions of this Agreement have been negotiated, shall be
construed fairly as to all parties hereto, and shall not be
construed in favor of or against any party. The section headings
contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
12. Severability.
The invalidity or unenforceability of any provision of
this Agreement shall not affect, impair or invalidate any other
provision of this Agreement.
13. Counterparts; New York Governing Law; Amendments,
Entire Agreement.
This Agreement may be executed in two counterpart
copies, each of which may be executed by one of the parties
hereto, but both of which, when taken together, shall constitute
a single agreement binding upon the parties hereto. This
Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without
regard to principles of conflicts of laws (or any other
principles or laws that would make the laws of any jurisdiction
other than the State of New York applicable hereto). Each and
every modification and amendment of this Agreement shall be in
writing and signed by the parties hereto, and any waiver of, or
consent to any departure from, any term or provision of this
Agreement shall be in writing and signed by the party granting
the waiver or consent. This Agreement contains the entire
agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or
otherwise, between the parties with respect to the matters
contained herein.
IN WITNESS WHEREOF, the Corporation and Employee have
signed this Agreement on the date set forth on the first page of
this Agreement.
SWANK, INC.
/s/ Xxxx Xxxxx
By: __________________________
Xxxx Xxxxx, President
/s/ Xxxx X. Xxxx
_________________________
Xxxx X. Xxxx
