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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Agreement is made as of January 1, 1998, between BISCAYNE APPAREL
INC., a Florida corporation (the "COMPANY"), and Xxxxx Xxxxxxxxxx, Xx. (the
"EXECUTIVE").
NOW THEREFORE, in consideration of (a) the Executive's employment and
continued employment with the Company, (b) the compensation paid to the
Executive for his services hereunder and the benefits provided to the Executive
in connection therewith, (c) the use by the Executive of the facilities and
other resources of the Company, (d) the opportunity provided by the Company to
the Executive to acquire or use information relating to or based on the
business of the Company, and (e) the opportunity provided by the Company to the
Executive to acquire shares of its capital stock, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. INTERPRETATION OF THIS AGREEMENT.
(a) TERMS DEFINED. As used herein, the following terms when
used in this Agreement have the meanings set forth below:
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"BASE SALARY" shall have the meaning given to it under
Section 2(b) of this Agreement.
"BOARD" means the Board of Directors of the Company.
"BONUS YEAR" shall have the meaning given to it in Section
2(e) of this Agreement.
"CAUSE" means (i) the commission of any act by the Executive
constituting a material financial dishonesty against the Company or its
Affiliates, (ii) the conviction of the Executive of a felony, (iii) any breach
by the Executive of any of the material terms of this Agreement (including
without limitation Sections 3, 4, 5, and 6 hereof) that is not cured
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within 30 days of written notice by the Company to the Executive, or (iv)
grossly negligent conduct by the Executive which the Board in good faith
determines could reasonably be expected to have a material adverse effect on
the business, assets, results of operations, financial condition or prospects
of the Company or its Subsidiaries and that is not cured within 30 days of
written notice by the Company to the Executive.
"CHANGE OF CONTROL" means that designees of Trivest, Inc., a
Delaware corporation, shall cease to constitute a majority of the members of
the Board of Directors of the Company or the majority of the Company's common
stock or substantially all of its assets are sold or liquidated. As of the date
hereof, each of the members of the Company's Board of Directors shall be deemed
to be a designee of Trivest, Inc.
"COMPANY" has the meaning given to it in the first sentence
of this Agreement.
"COMPANY INFORMATION" means Confidential Information and
Trade Secrets.
"CONFIDENTIAL INFORMATION" means confidential data and
confidential information relating to the business of the Company and/or its
Affiliates (which does not rise to the status of a Trade Secret under
applicable law) which is or has been disclosed to the Executive or of which the
Executive became aware as a consequence of or through his employment with the
Company and which has value to the Company and/or its Affiliates and is not
generally known to the competitors of the Company and/or its Affiliates.
Confidential Information shall not include any data or information that (i) has
been voluntarily disclosed to the general public by the Company or its
Affiliates, (ii) has been independently developed and disclosed to the general
public by others, or (iii) otherwise entered the public domain through lawful
means.
"DISABILITY" means the Executive's inability to perform his
normal duties for any 90 consecutive calendar day period or any 90 business
days (whether or not consecutive) during any 365 calendar day period.
"DISPOSITION INCENTIVE COMPENSATION" shall have the meaning
given to it in Section 2 (f) of this Agreement.
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"EMPLOYMENT PERIOD" shall have the meaning given to it in
Section 2(a) hereof.
"EMPLOYMENT YEAR" means each calendar year during the
Employment Period beginning on January 1.
"EXECUTIVE" shall have the meaning given to it in the first
sentence of this Agreement.
"GOOD REASON" means (i) the assignment to the Executive of
any duties which, taken as a whole, are materially inconsistent with the
position of President, COO and CFO of the Company (excluding an isolated,
insubstantial or inadvertent action not taken in bad faith and which is
remedied by the Company after receipt of written notice from the Executive
setting forth in reasonable detail a description thereof), (ii) a reduction in
the Executive's Base Salary, or (iii) a requirement that the Executive be based
at any location other than the New York/New Jersey metropolitan area.
"INCENTIVE COMPENSATION" shall have the meaning given to it
in Section 2(e) of this Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a government entity (or any
department, agency or political subdivision thereof).
"SPECIAL BENEFIT PAYMENT" shall have the meaning given to it
in Section 2(b)(vi) of this Agreement.
"STOCK OPTION PLAN" means the Biscayne Apparel, Inc. 1997
Stock Option Plan, as the same may be amended from time to time.
"SUBSIDIARY" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns, directly or indirectly, a
majority of the common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
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"TRADE SECRETS" means information of the Company and its
Subsidiaries including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, financial data, financial plans,
product or service plans or lists of actual or potential customers or suppliers
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
(b) INTERPRETATION. The words "HEREIN", "HEREUNDER" and other
words of similar import refer to this Agreement as a whole, as the same from
time to time may be amended or supplemented and not any particular section,
paragraph, subparagraph or clause contained in this Agreement. Wherever from
the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and the pronouns stated in
masculine, feminine or neuter gender shall include the masculine, feminine and
the neuter.
2. EMPLOYMENT.
(a) DURATION. The Company agrees to employ the Executive and
the Executive accepts such employment for the period (the "EMPLOYMENT PERIOD")
beginning on the date hereof and ending upon the first to occur of (i) December
31, 1999 (the period from January 1, 1998 to December 31, 1999 being the
"Initial Term"), (ii) the Executive's voluntary resignation, (iii) the date on
which the Executive is terminated for Cause, (iv) the date on which the Board
determines in its absolute discretion that the Executive's employment with the
Company is no longer, in the best interest of the Company (termination pursuant
to this clause (iv) is sometimes referred to in this Agreement as "TERMINATION
WITHOUT CAUSE"), (v) the Executive's death, (vi) the Executive's Disability, or
(vii) if a Change of Control has occurred and the Executive terminates his
employment within 30 days after such event, or if the Executive terminates his
employment for Good Reason within 30 days after such event. The Executive
agrees to give the Board at least 30 days prior written notice of his
resignation for any reason other than Good Reason and he agrees to give the
Board 15 days prior written notice of his resignation for Good Reason.
Notwithstanding any provision of this Agreement to the contrary, the Company
shall not have the right to terminate the Executive's employment hereunder
without Cause at any time prior to December 31, 1998.
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(b) SALARY AND BENEFITS. During the Employment Period, the
Company will pay the Executive a base salary at the rate set forth below (the
"BASE SALARY"), payable in installments consistent with the Company's normal
payroll schedule, subject to applicable withholding and other taxes:
January 1, 1998 - December 31, 1998 $250,000
January 1, 1999 - December 31, 1999 275,000
The Executive's Base Salary for any partial year during the Employment Period
will be prorated based upon the number of days elapsed in such year. In
addition to the salary payable to Executive pursuant to this Section 2(b), the
Executive will be entitled to the following benefits during the Employment
Period:
(i) The Executive will be entitled to participate in
all medical and hospitalization plans, group life insurance plans, long-term
disability insurance plans, deferred compensation plans, dental plans, and any
and all other fringe benefit plans as are presently and hereafter provided by
the Company to its executives.
(ii) The Executive will be entitled to timely
reimbursement for reasonable business expenses incurred by the Executive, upon
submission of appropriate substantiation by the Executive.
(iii) The Executive will be entitled to at least
four weeks of vacation each year with salary in accordance with the Company's
prevailing policy for its executives; PROVIDED, HOWEVER, that in no event may a
vacation be taken at a time when to do so could, in the reasonable judgment of
the Company's Chairman and CEO, adversely affect the business of the Company.
(iv) During the term of this Agreement, the Company
shall continue to provide the Executive with the automobile presently provided
to the Executive, together with insurance and operating expenses thereof.
(v) The Company shall furnish the Executive with an
office, secretarial help and other facilities and services suitable to his
position and adequate for the performance of his duties hereunder.
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(vi) The Company shall pay the Executive an annual
lump sum amount of 10% of his base salary, or $25,000 for 1998 and $27,500 for
1999, (subject to applicable withholding and other taxes), which amount shall
be paid in equal quarterly installments, in advance, commencing on January 1,
1998 and continuing on the first day of each April, July and October thereafter
during the Employment Period (the "SPECIAL BENEFIT PAYMENT").
(c) SERVICES. During the Employment Period, the Executive
will serve as the President, COO and CFO of the Company and will render such
services of an executive and administrative character to the Company as the
Board or the Company's Chairman and CEO may reasonably from time to time
direct. The Executive will devote his best efforts and his full business time
and attention (except for vacation periods and reasonable periods of illness or
other incapacity) to the business of the Company.
(d) SEVERANCE PAY. In the event that
(i) this Agreement is not renewed by the Board,
for a term of at least one year, upon
expiration of the Initial Term or any
renewal term hereof, or in the event that
the Executive's employment is terminated
without Cause pursuant to Section 2(a)(iv)
above or as a result of the Executive's
Disability, or by the Executive for Good
Reason or following a Change of Control
pursuant to Section 2(a)(vii) above, or
(ii) in the event that the Executive's
employment terminates as a result of the
Executive's death,
the Company will pay to the Executive all amounts due to the Executive as Base
Salary pursuant to Section 2(b) above for a period of one year following the
date on which the Executive's employment is so terminated, such date being the
"Effective Termination Date". Any such severance pay shall be payable in
installments on the payment dates on which such Base Salary would have been
paid if the Employment Period had continued for such one year period. In
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addition, the Company will pay to the Executive an amount equal to the Special
Benefit Payment that would have otherwise been payable to him pursuant to
Section 2(b)(vi) above from the Effective Termination Date and continuing for
one year thereafter. In addition, during the one year period commencing on the
Effective Termination Date, the Company will use commercially reasonable
efforts to cause the Executive, his spouse and dependents to be provided with
dental, medical, hospitalization, group term life insurance, long-term
disability insurance and any other health benefits and coverage in amounts and
on terms no less favorable than provided immediately prior to the Effective
Termination Date, and in all other respects shall use all reasonable efforts to
cause the Executive to be treated in a manner that will cause him to remain
eligible for said coverage through and until the expiration of one year from
the Effective Termination Date at no cost to him (subject, however, to (x) any
applicable deductibles, (y) current co-payment charges, and (z) the current
employee portion of premium charges, if applicable). The Executive shall be
entitled to the use of the automobile presently provided by the Company,
together with insurance and operating expenses thereof, for one year from the
Effective Termination Date. Following termination of the Executive's employment
as contemplated in this section 2(d) (other than by reason of the Executive's
death), the Company shall reimburse the Executive for up to $25,000 of his
expenses for the use of outplacement consulting, secretarial and temporary
office services. Except as otherwise provided in Section 2(e) hereof, the
Company will have no further obligation to the Executive. If the Executive
commences full or part-time employment subsequent to the Effective Termination
Date, but within one year of the Effective Termination Date, all payments of
salary, benefits and the Special Benefit per this Section 2(d) and "Full
Incentive Compensation", as defined in Section 2(e), previously paid or payable
to the Executive subsequent to the Effective Termination Date shall be
pro-rated to the commencement of such subsequent employment, and all further
payments thereof shall be reduced by the amount of the Executive's part-time
earnings and shall cease upon the commencement of such full-time employment.
(e) INCENTIVE COMPENSATION. The Executive shall be entitled
to receive such Incentive Compensation, if any with respect to each of the
Company's fiscal years ending December 31, 1998 and 1999 (a "BONUS YEAR") as
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shall be determined annually at the discretion of the Board. For purposes of
this Agreement, the amount of Incentive Compensation payable with respect to
any Bonus Year (net of any tax or other amount properly withheld therefrom)
shall be paid by the Company to the Executive within 75 days after the end of
such Bonus Year. Notwithstanding the foregoing, if the Executive's employment
hereunder is terminated during any Bonus Year pursuant to Section 2(d)(i) or
(ii) herein, then notwithstanding the fact that the Executive is not employed
by the Company through the end of the Bonus Year in which such termination
occurs, the Executive shall be entitled to receive an amount equal to the
Incentive Compensation paid to the Executive for the calendar year immediately
preceding the year in which the Executive's employment is terminated, prorated
based upon the number of days elapsed in such year through the Effective
Termination Date. The Executive shall also be entitled to receive an amount
equal to the full Incentive Compensation (the "Full Incentive Compensation")
paid to the Executive for the calendar year immediately preceding the year of
the Effective Termination Date. Any such Incentive Compensation payable due to
termination, as noted herein, shall be paid to the Executive within 75 days of
the Effective Termination Date, net of any tax or other amount properly
withheld therefrom.
(f) DISPOSITION INCENTIVE COMPENSATION. Upon the disposition
of or liquidation of the majority of the common stock or the assets of one or
more of the Company's subsidiaries during the term of this Agreement (or within
18 months following an Effective Termination Date), the Executive shall be
entitled to receive Disposition Incentive Compensation, as follows:
Entity, for which the majority Disposition
of its common stock or assets Incentive
are disposed of or liquidated Compensation
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. M&L International, Inc. $125,000
. Mackintosh of New England $125,000
. Xxxxx Division of Biscayne Apparel
International, Inc. $125,000
If none of the majority of the above subsidiaries' common stock or assets are
disposed of or liquidated AND the majority of the Company's common stock or
assets are disposed or liquidated during the term of this Agreement (or within
18 months following an Effective Termination Date), the Executive shall be
entitled to $375,000. In no event shall the Executive be entitled to more than
$375,000 of Disposition Incentive Compensation. Payment of any or all such
earned Disposition Incentive Compensation amounts shall be made to the
Executive on the closing date of each such respective transaction.
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3. NONDISCLOSURE. While employed by the Company and during the periods
described in the last sentence of this Section 3 the Executive (a) will receive
and hold all Company Information in trust and in strictest confidence, (b) will
take reasonable steps to protect the Company Information from disclosure and
will in no event take any action causing, or fail to take any action reasonably
necessary to prevent, any Company Information to lose its character as Company
Information, and (c) except as required by the Executive's duties in the course
of his employment by the Company, will not, directly or indirectly, use,
disseminate or otherwise disclose any Company Information to any third party
without the prior written consent of the Company's Chief Executive Officer,
which may be withheld in such officer's absolute discretion. The provisions of
this Section 3 shall survive the termination of the Executive's employment (i)
for a period of two years with respect to Confidential Information, and (ii)
with respect to Trade Secrets, for so long as any such information qualifies as
a Trade Secret under applicable law.
4. BOOKS AND RECORDS. All books, records, reports, writings, notes,
notebooks, computer programs, sketches, drawings, blueprints, prototypes,
formulas, photographs, negatives, models, equipment, chemicals, reproductions,
proposals, flow sheets, supply contracts, customer lists and other documents
and/or things relating in any specific manner to the business of the Company
and its Affiliates (including but not limited to any of the same embodying or
relating to any Confidential Information or Trade Secrets), whether prepared by
the Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall not be copied, duplicated,
replicated, transformed, modified or removed from the premises of the Company
except pursuant to the business of the Company and its Affiliates and shall be
returned immediately to the Company upon the Company's request at any time.
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5. INVENTIONS AND PATENTS. The Executive agrees that all inventions,
innovations or improvements in the Company's method of conducting its business
(including new contributions, improvements, ideas and discoveries, whether
patentable or not) conceived or made by him during his employment with the
Company belong to the Company. The Executive will promptly disclose such
inventions, innovations or improvements to the Board and perform all actions
reasonably requested by the Board to establish and confirm such ownership.
6. OTHER BUSINESSES. During the Employment Period, the Executive
agrees that he will not, except with the express written consent of the Board,
become engaged in, render services for, or permit his name to be used in
connection with, any business other than the business of the Company and its
Subsidiaries and Affiliates, including Trivest, Inc.
7. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, or mailed by certified or
registered mail, return receipt requested, postage prepaid to the recipient at
the address below indicated:
To the Company:
Biscayne Apparel, Inc.
c/o Trivest, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
To the Executive:
Xxxxx Xxxxxxxxxx, Xx.
c/o Biscayne Apparel, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx, Xx., President, COO and CFO
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
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8. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
9. COMPLETE AGREEMENT. This Agreement embodies the complete agreement
and understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
10. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. Any telecopied signature shall
be deemed a manually executed and delivered original.
11. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by the Executive and the Company,
the Company's successors and assigns and, in the case of the Executive, his
heirs and personal representatives.
12. REMEDIES. The Company and the Executive shall be entitled to
enforce its or his rights under this Agreement specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that the Company or the Executive may in
their sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
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13. DAMAGES. Nothing contained herein shall be construed to prevent
any party hereto from seeking and recovering from the other damages sustained
by either or both of them as a result of its or his breach of any term or
provision of this Agreement. In the event that either party hereto brings suit
for the collection of any damages resulting from, or for the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable costs,
fees (including reasonable attorneys' fees) and expenses of the other party.
14. CHOICE OF LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida without regard to conflicts of
laws, principles thereof and all questions concerning the validity and
construction hereof shall be determined in accordance with the laws of said
state. Each party hereby irrevocably submits to the exclusive jurisdiction of
any state or federal court sitting in the County of Bergen, New Jersey, in any
action or proceeding arising out of or relating to this Agreement and hereby
irrevocably agrees, on behalf of himself or itself and on behalf of such
party's successor's and assigns, that all claims in respect of such action or
proceeding may be heard and determined in any such court and irrevocably waives
any objection such person may now or hereafter have as to the venue of any such
suit, action or proceeding brought in such a court or that such court is an
inconvenient forum. The parties further agree that the mailing by certified or
registered mail, return receipt requested, to the addresses specified for
notice in this Agreement, of any process or summons 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.
In the event that an action or proceeding arising out of or relating to this
Agreement shall be commenced in a court described in the second sentence of
this Section 14 and such court, by a final and nonappealable order, shall
refuse to exercise IN PERSONAM jurisdiction over the Company or the Executive,
as the case may be, then the parties hereto shall not be precluded from
litigating such action or proceeding in any other court of competent
jurisdiction.
15. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT, THE RELATED DOCUMENTS OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.
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16. AMENDMENTS AND WAIVERS. No provision of this Agreement may be
amended or waived without the prior written consent of the parties hereto.
17. BUSINESS DAYS. Whenever the terms of Agreement call for the
performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.
18. NO THIRD PARTY BENEFICIARY. Except for the parties to this
Agreement, the Company's successors and assigns, and in the case of the
Executive, his heirs and personal representatives, nothing expressed or implied
in this Agreement is intended, or will be construed, to confer upon or give any
person any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
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Xxxxx Xxxxxxxxxx, Xx.
BISCAYNE APPAREL, INC.
By:
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Xxxx X. Xxxxxx
Chairman and CEO
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