Exhibit 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT entered into as of ___________
__, 1997, by and between Pivot Rules, Inc., a New York corporation (the
"Company") and E. Xxxxxxx Xxxxx ("Xxxxx").
RECITALS
1. The Company desires to retain the services of Xxxxx as the Chief
Executive Officer and Chairman of the Board of Directors of the Company in
accordance with the terms and conditions of this Agreement.
2. Xxxxx will serve the Company as its Chief Executive Officer and
Chairman of the Board of Directors in accordance with the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Xxxxx agree as
follows:
1. TERM
The Company hereby agrees to employ Xxxxx as the Chief Executive Officer
and Chairman of the Board of Directors of the Company, and Xxxxx hereby agrees
to serve in such capacity, for a term commencing as of August 1, 1991, and
ending January 1, 2000, upon the terms and subject to the conditions contained
in this Agreement. The terms of this Agreement may, at the option of the
Company and with the approval of Xxxxx, be extended from time to time in a
written memorandum signed by the Company and Xxxxx, after approval by the Board
of Directors.
2. DUTIES
As Chief Executive Officer and Chairman of the Board of Directors of the
Company, Xxxxx shall perform the following duties: negotiate and purchase
finished goods and raw materials; negotiate and sign leases; negotiate and sign
trade credit, factor credit, and other debt instruments as necessary; hire and
fire employees, including negotiating salaries, bonuses, insurance benefits and
any other reasonable and appropriate perquisites; develop and implement
marketing and advertising plans; hire consultants, advisers and agents as
necessary; negotiate contracts on behalf of the Company; negotiate and sign
insurance policies including corporate, life, health, medical, dental,
hospitalization and disability policies; and any other day to day
responsibilities commensurate with Xxxxx'x position as Chief Executive Officer
and Chairman of the Board of Directors of the Company.
The principal location of Xxxxx'x employment shall be in New York City,
although Xxxxx understands and agrees that he may be required to travel from
time to time for business reasons. Xxxxx shall devote his full business time to
his duties as the Chief Executive Officer and Chairman of the Board of
Directors of the Company during the term of this Agreement. Xxxxx shall not,
directly or indirectly, render services to any other person or entity, without
the consent of the Board of Directors, which would interfere significantly with
the faithful performance of his duties under this Agreement.
3. COMPENSATION
For services rendered by Xxxxx to the Company during the term of this
Agreement, the Company shall pay him a base salary of $165,000 per year,
payable in accordance with the standard payroll practices of the Company,
subject to annual increases at the discretion of the Company's Board of
Directors, taking into account merit, corporate and individual performance and
general business conditions, including changes in the cost of living index."
4. BONUS
For each fiscal year during the term of this Agreement, Xxxxx shall
be eligible to receive a bonus set by the Board of Directors at its discretion,
based on the operating performance of the Company as compared to the
projections presented to the Board at the beginning of such fiscal year and
such other factors as the Board deems appropriate; provided that such bonus
shall not exceed 100% of Xxxxx'x base salary for such fiscal year. At the
discretion of the Board of Directors, all or part of such bonus may be paid
through the issuance to Xxxxx of capital stock of the Company or stock options
under the Company's 1997 Stock Option Plan, the fair market value of which is
equal to the cash payment that Xxxxx would otherwise be entitled to receive as
all or part of such bonus; provided, that Xxxxx shall be entitled to demand
that an amount of such bonus sufficient to pay any income taxes arising from
such bonus be paid in cash rather than in capital stock of the Company. All
bonuses to be paid to Xxxxx pursuant to this paragraph 4 shall be paid within
30 days following completion of the audit of the annual financial statements of
the Company for the fiscal year in question.
5. EXPENSE, REIMBURSEMENT AND PERQUISITES
a. During the term of this Agreement, Xxxxx shall be entitled to
reimbursement of all reasonable and actual out-of-pocket expenses incurred by
him in the performance of his services to the Company, provided that the
expenses are properly accounted for.
b. During each calendar year of the term of this Agreement, Xxxxx
shall be entitled to reasonable vacation with full pay; provided, however, that
Xxxxx shall schedule such vacations in the interest of the Company.
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c. The Company shall provide a life insurance policy on the life of
Xxxxx, for the benefit of Xxxxx'x beneficiaries, in the amount of at least
$1,000,000. All premiums on such policy shall be paid by the Company.
x. Xxxxx shall be entitled to participate in all medical and dental
insurance and disability and hospitalization plans and other employee benefit
plans instituted by the Company from time to time on the same terms and
conditions as other employees of the Company, to the extent permitted by law.
6. NON-COMPETITION; NON-SOLICITATION
a. During the Non-Competition Period (as defined in paragraph 6(c)
below), Xxxxx, without the prior written permission of the Company, shall not,
anywhere in the world, directly or indirectly, (i) enter into the employ of or
render any services to any person, firm or corporation engaged in any business
which is directly or indirectly in competition with the Company ("Competitive
Business"); (ii) engage in any Competitive Business for his own account; (iii)
become associated with or interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, trustee, consultant, advisor or in any other relationship or
capacity; (iv) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by the Company while
Xxxxx was employed by the Company (other than Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxx
Xxxxxxx and Xxxxxx Xxxxxxx); or (v) solicit, interfere with, or endeavor to
entice away from the Company, for the benefit of a Competitive Business, any of
its customers or other persons with whom the Company has a contractual
relationship. However, nothing in this Agreement shall preclude Xxxxx from
investing his personal assets in the securities of any corporation or other
business entity which is engaged in a Competitive Business if such securities
are traded on a national stock exchange or in the over-the-counter market and
if such investment does not result in his beneficially owning, at any time,
more than three percent (3%) of the publicly-traded equity securities of such
Competitive Business.
x. Xxxxx and the Company agree that the covenants of non-competition
and non-solicitation contained in this paragraph 6 are reasonable covenants
under the circumstances, and further agree that if, in the opinion of any court
of competent jurisdiction, such covenants are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear not
reasonable and to enforce the remainder of these covenants as so amended. Xxxxx
agrees that any breach of the covenants contained in this paragraph 6 would
irreparably injure the Company. Accordingly, Xxxxx agrees that the Company, in
addition to pursuing any other remedies it may have in law or in equity, may
obtain an injunction against Xxxxx from any court having jurisdiction over the
matter, restraining any further violation of this paragraph 6.
c. The "Non-Competition Period" shall extend for the Term of this
Agreement and for a period of two (2) years following the end of the Term;
provided that, in the
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event that the Agreement is terminated during the Term of this Agreement by the
Company without cause, or by Xxxxx pursuant to a Constructive Termination, the
Non-Competition Period shall expire at the end of the Term.
7. TERMINATION
a. This Agreement, the employment of Xxxxx, and Xxxxx'x position as
an officer and director of the Company shall terminate upon the first to occur
of:
(i) his death;
(ii) his "permanent disability", as defined in Section 7.1 of the
Shareholders' Agreement;
(iii) a "Constructive Termination" by the Company, which, for
purposes of this Agreement, shall be deemed to have occurred
upon (A) the removal of Xxxxx from his position as Chief
Executive Officer of the Company and Chairman of its Board of
Directors, (B) any material diminution in the nature or scope of
the authorities, powers, functions, duties or responsibilities
attached to such positions, or (C) the material breach by the
Company of this Agreement; provided that no such removal,
diminution or breach shall be considered a Constructive
Termination unless Xxxxx has provided the Company with at least
sixty (60) days' prior written notice of such removal,
diminution or breach and the Company has failed to cure such
removal, diminution or breach within such sixty (60) day period;
(iv) the termination of this Agreement without cause by the Company,
which shall occur not less than 60 days after the Company has
provided Xxxxx prior written notice of such termination. In no
event shall termination without cause by the Company take place
prior to November 1, 1993;
(v) non-renewal of this Agreement by the Company and/or the Board of
Directors; or
(vi) the termination of this Agreement for cause, which, for purposes
of this Agreement, shall mean that (1) Xxxxx has been convicted
of a felony or any serious crime involving moral turpitude, or
engaged in materially fraudulent or materially dishonest actions
in connection with the performance of his duties hereunder, (2)
Xxxxx has willfully and materially failed to perform his duties
hereunder, or (3) the Company has suffered a substantial and
material operating loss for any two consecutive fiscal years
and, for each such fiscal year, has provided Xxxxx with written
notice that it considers a loss to be a substantial and material
operating loss for purposes of this
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paragraph 7(a)(vi) within thirty (30) days of the issuance of
its audited financial statements for such fiscal year; provided
that, prior to a termination for cause pursuant to subparagraphs
(1) or (2) hereof, the Company shall provide Xxxxx with at least
thirty (30) days' prior written notice of such cause and shall
not terminate the Agreement under this paragraph 7(a)(vi) if
Xxxxx cures such cause within such thirty (30) day period;
b. In the event that this Agreement is terminated without cause by
the Company pursuant to paragraph 7(a)(iv) or through a Constructive
Termination pursuant to paragraph 7(a)(iii), the Company shall pay Xxxxx
severance payments (the "Severance Payments") equal to the total base salary
that would be due to Xxxxx over the entire remaining term of the Agreement if
he were to have remained employed by the Company for such term, multiplied by
the number of full or partial fiscal years remaining at the time of such
termination; provided that the total amount of the Severance Payments shall in
no event be less than Xxxxx'x base salary for the fiscal year in which such
termination occurs. The Severance Payments shall be payable in periodic
installments in accordance with the Company's standard payroll practices.
8. CONFIDENTIALITY
x. Xxxxx recognizes that the services to be performed by him are
special, unique and extraordinary in that, by reason of his employment under
this Agreement, he may acquire or has acquired confidential information and
trade secrets concerning the operation of the Company, its predecessors, and/or
its affiliates, the use or disclosure of which could cause the Company, or its
affiliates substantial loss and damages which could not be readily calculated
and for which no remedy at law would be adequate. Accordingly, Xxxxx covenants
and agrees with the Company that he will not at any time during the Term of
this Agreement or thereafter, except in the performance of his obligations to
the Company or with the prior written consent of the Board of Directors or as
otherwise required by court order, subpoena or other government process,
directly or indirectly disclose any secret or confidential information that he
may learn or has learned by reason of his association with the Company, or any
predecessor. If Xxxxx shall be required to make such disclosure pursuant to
court order, subpoena or other government process, he shall notify the Company
of the same, by personal delivery or electronic means, confirmed by mail,
within twenty-four (24) hours of learning of such court order, subpoena or
other government process and, at the Company's expense, shall (i) take all
reasonably necessary and lawful steps required by the Company to defend against
the enforcement of such subpoena, court order or government process, and (ii)
permit the Company to intervene and participate with counsel of its choice in
any proceeding relating to the enforcement thereof. The term "confidential
information" includes, without limitation, information not in the public domain
and not previously disclosed to the public or to the trade by the Company's
management with respect to the Company's or its affiliates' facilities and
methods, trade secrets and other intellectual property, designs, manuals,
confidential reports, customer names, financial information or
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business plans. Xxxxx understands and agrees that the rights and obligations
set forth in this paragraph 8(a) shall survive the termination or expiration of
this Agreement.
x. Xxxxx confirms that all confidential information is and shall
remain the exclusive property of the Company. All business records, papers and
documents kept or made by Xxxxx relating to the business of the Company shall
be and will remain the property of the Company. Upon the termination of his
employment with the Company, Xxxxx shall promptly deliver to the Company, and
shall not, without the consent of the Company, which shall not be unreasonably
withheld, retain copies of any written materials prepared by or for the Company
not previously made available to the public or records and documents made by
Xxxxx or coming into his possession and not in the public domain concerning the
business or affairs of the Company or any predecessors to its business, or any
of its affiliates or subsidiaries. Xxxxx understands and agrees that the rights
and obligations set forth in this paragraph 8(b) shall survive the termination
or expiration of this Agreement.
9. ACKNOWLEDGMENT, WAIVER
The Company acknowledges that for purposes of this Agreement, Scoppetta &
Xxxxx represented Xxxxx and did not provide legal representation or advice with
respect to this Agreement to the Company. In addition, the Company acknowledges
that it has been advised that prior to signing this Agreement it should seek
the advice of counsel, other than Scoppetta & Xxxxx, with respect to this
Agreement. The Company waives any objection it might have to Scoppetta &
Xxxxx'x representation of Xxxxx and not the Company with respect to this
Agreement while representing Xxxxx and the Company with respect to the
Shareholders Agreement entered into as of August 1, 1991, on the grounds of
possible conflict of interest or for any other reason.
10. GOVERNING LAW
This Agreement shall be deemed a contract made under, and for all purposes
shall be construed in accordance with the laws of the State of New York.
11. ENTIRE AGREEMENT
This Agreement contains all of the understandings between Xxxxx and the
Company pertaining to Xxxxx'x employment with the Company, and it supersedes
all undertakings and agreements, whether oral or in writing, previously entered
into between them.
12. AMENDMENT OR MODIFICATION; WAIVER
No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Xxxxx and by an
officer of the Company duly authorized to do so. Except as otherwise
specifically provided in this Agreement, no waiver by either party of any
breach by the other party of any condition or provision of this Agreement to be
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performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior or subsequent time.
13. NOTICES
Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or
to such other address as such party may subsequently designate by like notice:
If to the Company, to:
Pivot Rules, Inc.
00 Xxxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx
With a copy to:
Scoppetta & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx., Esq.
and
Shereff, Friedman, Xxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
If to Xxxxx, to:
E. Xxxxxxx Xxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
14. SEVERABILITY
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
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15. TITLES
Titles of the Sections of this Agreement are intended solely for
convenience of reference and no provision of this Agreement is to be construed
by reference to the title of any Section.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
PIVOT RULES, INC.
-----------------------------
By:
Title:
-----------------------------
E. Xxxxxxx Xxxxx
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