Exhibit 10.1
March 25, 2002
Xx. Xxxxxx X. Xxxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Dear Xxx:
On behalf of Xxxxxx A.S.L., Ltd. (the "Company"), a Delaware corporation, I am
pleased to confirm your employment with the Company on the terms set forth in
this letter agreement. If you agree with the following terms, please sign a copy
of this letter agreement and return it to me upon our receipt of which it will
become a binding contract.
1. DUTIES. You ("Executive") shall be employed as Executive Vice President,
Chief Financial Officer of the Company. Executive shall report directly to the
Chief Executive Officer of the Company. Executive's responsibilities will
include the management and supervision of all finance-related functions and
personnel of the Company and its affiliates worldwide, as well as the management
and supervision of the Company's information systems department and the
performance of such other duties and services as are commensurate with
Executive's position and are from time-to-time assigned to Executive by the
Chief Executive Officer of the Company. Executive shall devote Executive's full
working time and efforts to the Company's business and to the performance of
Executive's duties under this Agreement. Executive shall be available to travel
as the needs of the business require, which travel shall be in accordance with
the Company's travel policy applicable to similarly situated employees of the
Company and its affiliates.
2. TERM. The Company agrees to employ Executive and Executive agrees to serve,
on the terms and conditions of this Agreement, for a period commencing on March
25, 2002 (the "Effective Date") and ending on the third anniversary date of the
Effective Date, unless such employment is earlier terminated pursuant to the
terms hereof (the "Initial Employment Term"). The Initial Employment Term shall
be extended for successive one year terms (each, an "Additional Employment
Term") unless the Company or the Executive gives written notice of non-extension
at least one hundred and eighty (180) days prior to the end of the Initial
Employment Term or the then Additional Employment Term, unless such employment
earlier terminated pursuant to the terms hereof. The term Executive is employed
hereunder shall be referred to as the "Employment Term."
3. COMPENSATION.
(a) Base Salary. For Executive's services under this Agreement, the
Company shall pay Executive base salary at an annual rate of $400,000 payable in
accordance with the Company's customary payroll practices from time to time in
effect. Thereafter, the Company will review Executive's compensation annually
and may, in its sole discretion, increase Executive's base salary.
(b) Annual Cash Bonuses.
(i) During the Employment Term, Executive shall be entitled
to a cash bonus (the "Bonus") with a target of between 50% and 100%
of Executive's annual base salary, in accordance with the terms and
provisions of the Company's then existing executive bonus plan (the
"Bonus Plan"). The Bonus shall be determined annually at the same
time bonuses are determined for similarly situated employees of the
Company, in accordance with the Bonus Plan, and shall be payable at
the same time and in the same manner as bonuses are paid to other
similarly situated employees of the Company.
(ii) During the Employment Term, the targets and
performance goals, including but not limited to the extent to which
they will be based on corporate performance, divisional performance,
or other criteria consistent with the terms and provisions of the
Bonus Plan, shall be established annually by the Company in
accordance with the Bonus Plan.
(c) Equity Awards. Upon adoption by the Company of an Equity Award
program, Executive shall be eligible to receive stock options or restricted
stock in an amount of one percent (1%) of the Company's outstanding common
shares, determined on a fully diluted basis in accordance with the terms of such
Equity Award program.
(d) Participation in Benefit Plans and other Benefits. Executive also
shall be entitled to (i) participate in all other Executive benefit plans
generally available to similarly situated employees of the Company, subject to
Executive's eligibility therefor, (ii) four (4) weeks of paid vacation per
annum, and (iii) travel in accordance with the Company's travel policy generally
applicable to similarly situated employees of the Company.
(e) Successor Executive Compensation Programs. The Company hereby
reserves the right from time to time to amend, alter, or rescind the Bonus Plan
and Equity Award programs and the plans referred to in Section 3(d); provided,
however, that the Company agrees that during the Employment Term Executive shall
be entitled to participate in executive compensation programs of a similar type
and at a level generally applicable to similarly situated employees of the
Company, subject to the approval of such programs and plans by the applicable
compensation committee of the Board of Directors and legal limitations.
4. SEVERANCE PAYMENTS.
(a) Severance Payments. Either party may terminate Executive's
employment at any time with or without Cause or Good Reason (as defined below).
If during the Employment Term, (i) Executive's employment with the Company is
terminated by the Company without Cause (which right the Company shall have at
any time during the Employment Term) and other than as a result of death, notice
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of non-extension of Employment Term as provided in Section 2 of this Agreement
or as provided in Section 5 of this Agreement or (ii) Executive's employment
with the Company is terminated by Executive for "Good Reason" (as hereinafter
defined), then upon Executive's execution and effectiveness of a general release
of Claims (as hereinafter defined) which is reasonably acceptable in form and
substance to the Company, the Company shall pay to Executive an amount equal to
the aggregate of (1) Executive's then current annual base salary and (2) an
amount equal to the prior year's bonus (or, in the case of a termination
occurring before the end of the first bonus year, the target bonus, stated as
50% of Executive's salary) (the "Severance Amount"). The Severance Amount shall
be paid in equal installments over a 12-month period (the "Severance Period") in
accordance with the Company's customary payroll practices (but not as an
employee). Executive's acceptance of the Severance Amount, as may be reduced
below, shall be in full settlement of all Claims. The Severance Amount payable
to Executive under this Section 4(a) shall be reduced by any compensation
actually received, whether or not during the Severance Period, by Executive as a
result of Executive's employment or retention by another employer as an employee
or in a consulting capacity for services rendered during the period. Executive
shall advise the Company promptly of any such employment and/or consulting fees
received by Executive and rebate any amount due to the Company. No Severance
Amount shall be payable by reason of termination due to the death or disability
of the Executive, termination for Cause, or non-extension of the Employment Term
in accordance with Section 2 of this Agreement, provided that upon any
termination of employment Executive shall be entitled to (x) all compensation
and benefits accrued to the date of such termination, (y) any bonus earned but
not yet paid for any prior year and (z) any rights applicable under the terms of
any applicable plan or program. As used in this paragraph, "Claims" shall mean
all claims arising hereunder or with respect to the termination of Executive's
employment and, prior to the date of the general release, against the Company
and its affiliates and their respective officers, directors, agents, executives
and employees in such capacities, other than claims for vested accrued benefits
or vested stock options under the terms of their respective plans and claims for
unreimbursed authorized business expenses.
(b) Termination of Severance Payment. Notwithstanding Section 4(a)
above, if Executive violates the provisions of Section 6 of this Agreement after
Executive's termination of employment by the Company, Executive shall have no
further right to the payment of any Severance Amount payable thereafter under
this Agreement.
(c) "Cause". As used in this Agreement, "Cause" shall mean (i) a
continuous or substantial dereliction of duties which continues after written
notice by the Company, (ii) material failure to promptly follow the written
direction of the Chief Executive Officer, (iii) fraud or knowing breach of
fiduciary duty with respect to the Company or Executive's duties, (iv) gross
negligence in the performance of Executive's duties, (v) willful material
misconduct with regard to the Company, its business, assets or employees, (vi)
conviction of, or pleading nolo contendre to, a felony or any other crime
involving fraud, dishonesty or moral turpitude, or (vii) any other material
breach of the terms of this Agreement or the Company's policies as in effect
from time to time; provided that the act or omission constituting Cause
continues more than 30 days after written notice from the Company to the
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Executive setting forth the conduct and the provisions of this Agreement or
policies alleged to have been breached. For purposes of this Section 4(c),
"Company" shall include affiliates and licensees of the Company.
(d) Salary and Accrued Benefits. If Executive's employment with the
Company is terminated for any reason, including death, the Company shall pay to
Executive (or his estate) any unpaid base salary and other accrued benefits to
which Executive is entitled on the date of termination under the terms of the
Company's compensation plans.
(e) Good Reason. As used in this Agreement, "Good Reason" shall mean
(i) the Company reduces Executive's title, or materially reduces Executive's
authority (including an adverse change in Executive's reporting relationship),
in either case without Executive's consent; or (ii) the Company otherwise
materially breaches this Agreement resulting in any material harm to Executive,
and in either case the Company has not corrected same following written notice
to the Company giving the Company 30 days to correct.
5. DISABILITY, ILLNESS, ETC. If by reason of Executive's physical or mental
incapacity Executive is unable to perform Executive's material duties for a
period of more than 90 consecutive days, or 120 days whether or not consecutive,
in any 365-day period, the compensation otherwise payable to Executive during
such period shall be discontinued for any portion of such period in excess of 90
days, and the Company, at its option, may at any time after such 90-day period
while Executive is incapacitated terminate this Agreement upon written notice to
Executive. In the event of such termination, Executive will not be entitled to
any Severance Amount. If the Company establishes a long-term disability plan
covering Executive, then in lieu of the criteria set forth above, the Company's
ability to discontinue Executive's compensation shall be contingent upon
Executive's entitlement to long-term disability benefits under the terms of that
plan.
6. ADDITIONAL PROVISIONS.
(a) Confidential Information. All confidential information relating
to the business of Company or its affiliates or their respective officers,
directors, executives or employees, or of any customer, supplier, or licensee of
the Company or its affiliates ("Confidential Information") which Executive now
or hereafter possesses as a result of his employment by the Company or its
affiliates shall not be used by Executive or furnished, published, disclosed, or
made accessible by Executive to any other person, firm, or corporation either
during or after the termination of Executive's employment except in the good
faith performance of his duties hereunder, in each case without the prior
written permission of the Company. Executive shall return all tangible evidence
of such confidential information to the Company prior to or on the date of
termination of Executive's employment. As used in this Section 6(a),
"Confidential Information" shall exclude that information which is or comes into
the public domain through no fault of Executive or which Executive obtains from
a third party who to the knowledge of Executive has the right to disclose such
information. The foregoing shall not prohibit compliance with legal process
provided that Executive gives the Company prompt written notice thereof and
cooperates with the Company in its efforts to obtain a protective order for the
Confidential Information.
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(b) Non-Competition and Non-Solicitation.
(i) In view of the unique and valuable services it is
expected Executive has rendered and will continue to render to the
Company and its affiliates, the relationship Executive has and will
have with the customers of the Company and its affiliates,
Executive's knowledge of the customers, trade secrets, and other
proprietary information relating to the business of the Company and
its affiliates and their customers, suppliers and licensees and
similar knowledge regarding the Company and its affiliates which
Executive has obtained and will continue to obtain, and in
consideration of the rights granted to Executive under this
Agreement, Executive agrees that Executive will not during the period
Executive is employed by the Company or any of its affiliates
Participate In (as herein defined) any other business or
organization, whether or not such business or organization now is or
shall then be competing with or of a nature similar to the business
of the Company or any of its affiliates or their licensees. Nothing
herein shall prevent Executive from owning publicly traded securities
representing less than 1 % of the equity of a publicly traded
company.
(ii) Executive further agrees that while Executive is
employed by the Company or any of its affiliates and thereafter
(notwithstanding the reason or basis for the termination of
Executive's employment with the Company or its affiliates) for a
period of 24 months, Executive shall not, directly or indirectly,
hire, engage or retain, or aid or assist any other person or entity
to hire, engage, or retain (A) (x) any designers of the Company or
its affiliates, (y) any person who held the position of Director or
any equivalent or more senior position at the Company or any of its
affiliates, or (z) any licensee of Company or any person who acted as
one of the Company's or its affiliates' outside consultants, in each
instance at the time of termination of Executive's employment or
within the six-month period prior thereto, (B) any person employed by
a licensee of the Company or its affiliates who worked on the
Company's brands at the time of termination of Executive's employment
or within the six-month period prior thereto, or (C) any person or
entity that supplied piece goods or designs to, or that manufactured
or sold apparel to, the Company or any of its affiliates during the
six-month period prior to such termination.
(c) "Participate In." For purposes of this Section 6, the term
"Participate In" shall mean: directly or indirectly, for Executive's own benefit
or for, with, or through any other person, firm, or corporation, own, manage,
operate, control, loan money to, or participate in the ownership, management,
operation, or control of, or be connected as a director, officer, executive,
partner, consultant, agent, independent contractor, or otherwise with, or
acquiesce in the use of Executive's name in.
(d) Non- Disparagement. During the Employment Term and thereafter,
the Executive agrees that he shall not disparage the Company or its affiliates
or their respective officers, directors, executives or licensees and shall not
publish or make any such statement which is reasonably foreseeable to become
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public with respect to the Company or its affiliates, or any of their respective
directors, officers, executives or licensees.
(e) Copyrights, Inventions, etc. Any interest in patents, patent
applications, inventions, technological innovations, copyrights, copyrightable
works, developments, discoveries, designs, concepts, ideas and processes ("Such
Inventions") which Executive now or hereafter during the period he is employed
by the Company or any of its affiliates under this Agreement or otherwise may
own or develop either individually or with others relating to the fields in
which any of the Company or its affiliates may then be engaged or contemplates
being engaged shall belong to the Company or any of its affiliates and forthwith
upon request of the Company, Executive shall execute all such assignments and
other documents (including applications for patents, copyrights, trademarks and
assignments thereof) and take all such other action as the Company may
reasonably request in order to assign to and vest in the Company or its
affiliates all Executive's right, title, and interest (including, but not
limited to, waivers to any moral rights) in and to Such Inventions throughout
the world, free and clear of liens, mortgages, security interests, pledges,
charges and encumbrances. Executive acknowledges that all copyrightable works
created by the Executive as an employee will be "works made for hire" on behalf
of the Company and its affiliates and that the Company and its affiliates shall
have all rights therein in perpetuity throughout the world. The Executive hereby
appoints any officer of the Company as the Executive's duly authorized
attorney-in-fact to execute, file, prosecute and protect Such Inventions before
any government agency, court or authority. If for any reason the Company does
not own any Such Invention, the Company and its affiliates shall have the
exclusive and royalty free right to use in their businesses, and to make
products therefrom, Such Invention as well as any improvements or know-how
related thereto.
(f) Equitable Remedies; Survival. Executive acknowledges that a
breach or threatened breach of any of the provisions of this Section 6 will
cause irreparable harm and that any remedy at law may be inadequate and that
accordingly the Company, in addition to its remedies at law, shall be entitled
to an injunction or specific performance or any other mode of equitable relief
without the necessity of showing any actual damage, posting a bond or furnishing
other security. The provisions of this Section 6 shall survive the termination
of this Agreement.
7. EXPENSES. Executive shall be entitled to reimbursement for all reasonable
out-of-pocket expenses incurred in accordance with the Company's then existing
policies, upon timely submission and approval of written statements and bills in
accordance with the Company's applicable expense reimbursement and related
policies and procedures as in effect from time to time. Notwithstanding the
foregoing, after notice of termination of employment by the Company or
Executive, Executive shall be entitled to reimbursement of such expenses
incurred after the date of such notice of termination only if approved in
advance by the Chief Executive Officer of the Company. The Company shall at all
times indemnify Executive to the fullest extent permitted by applicable law.
8. ARBITRATION. Any dispute arising out of, or in any manner relating to, this
Agreement or the termination of Executive's employment with the Company, other
than injunctive relief pursuant to Section 6(f), shall be resolved in
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arbitration before a panel of three arbitrators before the American Arbitration
Association in the City of New York according to its then existing commercial
rules and regulations. The parties agree that in any such arbitration, the
arbitrators shall not have the power to reform or modify this Agreement in any
way and to that extent their powers are so limited. The parties also agree that
in any such arbitration, the arbitrators may not award punitive damages to any
party, and, in the absence of an arbitrators' award, the costs of such
arbitration shall be borne equally by the parties. The arbitration award shall
state the reasons therefor and the determination of the arbitrators shall be
final and binding on the parties hereto and judgment thereon may be entered in
any court of competent jurisdiction. Except as required by law, neither the
Company nor Executive shall issue any press release or make any statement which
is reasonably foreseeable to become public with respect to any arbitration or
any proceedings in connection therewith without receiving the prior written
consent of the other party to the content of such press release or statement.
9. ENTIRE AGREEMENT. This Agreement represents the entire understanding among
the parties relating to the subject matter hereof, supersedes all prior oral or
written understandings and agreements relating hereto, and may not be amended,
terminated or discharged except in writing signed by all of the parties hereto.
10. ASSIGNMENT; BINDING EFFECT. Executive shall not assign or otherwise transfer
its rights or obligations hereunder and such rights shall not be subject to
commutation, encumbrance, or the claims of creditors, and any attempt by
Executive to do any of the foregoing shall be void and of no force or effect.
The provisions of this Agreement shall be binding upon and inure to the benefit
of Executive and Executive's heirs and personal representatives, and shall be
binding upon and inure to the benefit of the Company and its successors and
assigns. The Company may not assign this Agreement except to a successor in the
interest to all or substantially all of the business of the Company, and only
upon the written assumption by such successor of all of the Company's
obligations hereunder.
11. NOTICE. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered by courier, by hand or by telecopy against
receipt to the party to whom it is to be given at the address of such party set
forth in this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 11) and
with a copy, in the case of the Company, to the General Counsel at the address
set forth in this Agreement. Notice to Executive's estate shall be sufficient if
addressed to Executive as provided in this Section 11. Any notice or other
communication shall be deemed given at the time of receipt thereof.
12. GOVERNING LAW. This Agreement shall be deemed entered into in the State of
New York and shall be governed in all respects by the laws of New York
applicable to agreements made and to be performed therein, without giving effect
to conflicts of law principles. For purposes of Section 6(f) and except as
specifically provided in Section 8, the Executive and the Company both consent
to the jurisdiction of the state courts of the State of New York and the Federal
courts whose districts encompass any part of New York in connection with any
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dispute arising under this Agreement and hereby waive, to the maximum extent
permitted by law, any objection based on forum non conveniens, to the conducting
of any such proceeding in such jurisdiction. The Executive and the Company each
consents to service of process in any action brought in such courts by
registered or certified mail sent to the address indicated on the first page
hereof and, in the case of Executive, to Xxxxxxx X. Xxxxxxxxx, Esq., 00 Xxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000. The Executive and the Company both waive
trial by jury in connection with the trial of any action or dispute in
connection with-this Agreement or matters of a similar nature.
13. WAIVER. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing,
signed by the party giving the waiver.
14. SEPARABILITY. If any provision of this Agreement shall be deemed to be
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the parties agree that the
arbitration panel making such determination shall reduce such extent, duration,
geographical scope, or other provisions hereof to the extent required to render
them valid, legal, and enforceable, and in its reduced form such restriction
shall then be enforceable in the manner contemplated hereby.
15. REPRESENTATIONS. Executive represents and warrants that the entering into
and performance of this Agreement will not be in violation of any other
agreement to which Executive is a party and no activities of Executive currently
conflict with the non-competition provisions provided herein.
If the foregoing is correct, please sign and return to us a copy of this letter
agreement, which when signed shall constitute a binding agreement.
Xxxxxx A.S.L., Ltd.
By: /s/ Xxxx X. Idol
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Xxxx X. Idol, Chief Executive Officer
Agreed to:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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