Exhibit 10(a)
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 1st day of December, 2004,
(the "Agreement") between Georgia Boot LLC, a Delaware limited liability company
(the "Company"), and Xxxxxx X. Xxxxxxxx (the "Executive").
Recitals
WHEREAS, Executive is employee "at-will" of the Company, which is now a
wholly-owned subsidiary of SILLC Holdings LLC, a Delaware limited liability
company ("SILLC").
WHEREAS, the Company is proposed to be sold to and acquired by Rocky Shoes
& Boots, Inc., an Ohio corporation ("Rocky"), as a result of the consummation of
the sale of the Company and other subsidiaries of SILLC to Rocky (the
"Transaction"), as described in the Purchase and Sale of Equity Interests
Agreement, made and entered into as of December 6, 2004, by and among Rocky,
SILLC, and for limited purposes thereof, Strategic Industries LLC (the "Purchase
Agreement").
WHEREAS, as a material consideration and inducement for Rocky to enter into
and perform the Purchase Agreement, Executive has agreed to simultaneously enter
into a Confidentiality, Assignment and Non-Competition Agreement for Key
Personnel (the "Key Personnel Agreement") and this Agreement with the Company.
The Company desires to retain the services of Executive as an "at-will" employee
pursuant to the terms and conditions of this Agreement.
WHEREAS, the effectiveness of this Agreement is conditioned upon the
consummation of the Transaction, and this Agreement shall have no legally
binding effect upon the Company or the Executive if the Transaction is not
consummated pursuant to the Purchase Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual and dependent
promises hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT. Upon the consummation of the Transaction, the Company, as a
wholly-owned subsidiary of Rocky, shall employ Executive and Executive shall
accept such employment upon the terms and conditions hereinafter set forth.
2. DUTIES.
(a) Executive shall be employed to serve as President of the Company,
subject to the authority and direction of the President and the Board of
Directors of the Company. Executive shall also serve as an officer of Rocky if
and as elected by the Board of Directors of Rocky.
(b) Executive shall also perform such other duties and responsibilities and
exercise such other authority, perform such other or additional duties and
responsibilities and have such other or different title (or have no title) as
the Board of Directors of the Company or Rocky, as the case may be, may
prescribe from time to time.
(c) So long as Executive is employed under this Agreement, Executive shall
devote his full time and efforts exclusively on behalf of the Company and Rocky
and to competently, diligently and effectively discharge his duties hereunder.
Executive shall not be prohibited from engaging in such personal, charitable, or
other non-employment activities as do not interfere with his full time
employment hereunder and which do not violate the other provisions of this
Agreement. Executive further agrees to comply fully with all reasonable policies
of the Company as are from time to time in effect.
3. COMPENSATION.
(a) Base Salary. As compensation for all services rendered to the Company
pursuant to this Agreement, in whatever capacity rendered, the Company shall pay
to Executive a base salary at the rate of $193,000 per year for services
performed from the consummation of the Transaction through December 31, 2005
(the "Basic Salary"), payable monthly or in other more frequent installments
consistent with the regular payroll practices for payment of similar executives
as determined from time to time by the Company. Thereafter, the Basic Salary may
be increased, but not decreased, from time to time, by the Board of Directors of
the Company.
(b) Annual Cash Bonus Plan. The Executive shall also be included in an
annual cash bonus program in 2005 in a manner consistent with the plan to be
adopted by the Board of Directors of Rocky for 2005 for other similarly situated
officers of Rocky and its subsidiaries. For 2005, Executive will be eligible for
a bonus in the range of 16-35% (50% Georgia Boots/Durango/Xxxx Deere and 50%
Corporate) of Executive's Basic Salary; provided, if, during 2005, Executive is
terminated without cause by the Company, Executive shall be eligible for a pro
rata bonus based on the number of months Executive is employed by the Company
during 2005, such pro rata payment payable simultaneous with the payment of the
annual bonus payments, if any, payable to similarly situated officers of Rocky
and its subsidiaries under the cash bonus program for 2005. Subject to the
immediately preceding sentence, Executive must remain employed by the Company
through December 31, 2005 to earn the bonus, as the bonus plan will be based on
annual results. The cash bonus program is determined annually by the
Compensation Committee of the Board of Directors of Rocky and may change in 2006
and future years.
(c) Stock Options. At the consummation of the Transaction and the
effectiveness of this Agreement, Executive shall receive stock options under
Rocky's 2004 Stock Option Plan to purchase 20,000 shares of common stock
exercisable at fair market value per share at the date of grant, which options
shall vest based on the Executive continuing to be employed by the Company or by
Rocky or one of its subsidiaries at the rate of 25% of such option shares per
year of employment on each of the first, second, third and fourth anniversaries
of the date of grant. The options shall terminate on the earlier of the eighth
anniversary of the date of grant or until exercised in full or otherwise has
terminated in accordance with the terms of the 2004 Stock Option Plan.
4. BUSINESS EXPENSES; MOVING EXPENSES.
(a) The Company shall promptly pay directly, or reimburse Executive for,
all business expenses to the extent such expenses are paid or incurred by
Executive during the term of employment in accordance with Company policy in
effect from time to time
and to the extent such expenses are reasonable and necessary to the conduct
by Executive of the Company's business and properly substantiated.
(b) The Company shall pay directly to, or reimburse, Executive for
reasonable moving expenses associated with the Executive's relocation, if any,
to Rocky's Nelsonville, Ohio office, including the payment of any realtors'
commissions in an amount not to exceed 6% associated with the sale of
Executive's primary residence, the expense of Executive's temporary housing for
a period of time not to exceed 3 months, and the expenses associated with no
more than 2 visits by the Executive's spouse and/or family to the Nelsonville,
Ohio area to examine housing and schools.
5. BENEFITS. During the term of this Agreement and Executive's employment
hereunder, the Company shall provide to Executive such insurance, vacation, sick
leave and other like benefits as are provided from time to time to its other
executives holding equivalent executive positions with the Company or Rocky in
accordance with the policy of the Company or Rocky and as may be established
from time to time.
6. TERM; TERMINATION. Executive is employed by the Company "at will" and
Executive's employment may be terminated at any time as provided below. For
purposes of this paragraph, "Termination Date" shall mean the date on which any
notice period required under this paragraph expires or, if no notice period is
specified in this paragraph, the effective date of the termination referenced in
the notice.
(a) Executive may terminate his employment upon giving at least 14 days'
advance written notice to the Company and the Company will pay Executive the
earned but unpaid portion of Executive's Basic Salary through the Termination
Date. If Executive gives notice of termination hereunder, the Company shall have
the right to relieve Executive, in whole or in part, of his duties under this
Agreement and to advance the Termination Date from the date set by Executive's
notice to any earlier date within the notice period.
(b) The Company may terminate Executive's employment without cause upon
giving 14 days' advance written notice to Executive. If the Company gives notice
of termination under this paragraph, the Company shall have the right to relieve
Executive, in whole or in part, of his duties under this Agreement at any time
during the notice period. If Executive's employment is terminated without cause
under this paragraph, the Company will pay Executive the earned but unpaid
portion of Executive's Basic Salary through the Termination Date and will
continue to pay Executive his Basic Salary for six months following the
Termination Date (the "Severance Period"); provided, however, that the Company
may terminate payment of the Basic Salary during the Severance Period if
Executive accepts other employment or if Executive breaches any provision of the
Key Personnel Agreement.
(c) If the Company gives notice of termination under paragraph (b) above
during 2005, the Company shall be deemed to have waived the covenant set forth
in Section 2(a)(i) of the Confidentiality, Assignment and Non-Competition
Agreement for Key Personnel with respect to the Executive. In addition, if
during the term of this Agreement, the Company gives Executive notice of
termination relating to or arising from the Executive's refusal to relocate to
Rocky's Nelsonville, Ohio office, the Company will pay Executive the earned and
unpaid portion of Executive's Basic Salary
through the Termination Date and will continue to pay Executive his Basic
Salary during the Severance Period and the Company shall be deemed to have
waived the covenant set forth in Section 2(a)(i) of the Confidentiality,
Assignment and Non-Competition Agreement for Key Personnel with respect to the
Executive.
(d) The Company may terminate Executive's employment upon a determination
by the Company that "good cause" exists for Executive's termination and the
Company serves written notice of such termination upon the Executive. As used in
this Agreement, the term "good cause" shall refer only to any one or more of the
following grounds:
(i) commission of an act of dishonesty, including, but not limited to,
misappropriation of funds or any property of the Company;
(ii) engagement in activities or conduct clearly injurious to the
reputation of the Company or Rocky;
(iii) refusal to perform his assigned duties and responsibilities;
(iv) gross insubordination by the Executive;
(v) the violation of any of the material terms and conditions of this
Agreement or any written agreement or agreements the Executive may from time to
time have with the Company (following 30-days' written notice from the Company
specifying the violation and Executive's failure to cure such violation within
such 30-day period); or
(vi) commission of any misdemeanor involving an act of moral turpitude
or any felony.
In the event of a termination under this subparagraph (d), the Company will
pay Executive the earned but unpaid portion of Executive's Basic Salary through
the Termination Date.
A refusal by the Executive to relocate to Rocky's Nelsonville, Ohio office
will not constitute "good cause" for termination under this subparagraph (d).
(e) Executive's employment shall terminate upon the death or permanent
disability of Executive. For purposes hereof, "permanent disability," shall mean
the inability of the Executive, as determined by the Board of Directors of the
Company, by reason of physical or mental illness to perform the duties required
of him under this Agreement for more than 180 days in any one year period.
Successive periods of disability, illness or incapacity will be considered
separate periods unless the later period of disability, illness or incapacity is
due to the same or related cause and commences less than six months from the
ending of the previous period of disability. Upon a determination by the Board
of Directors of the Company that the Executive's employment shall be terminated
under this subparagraph (e), the Board of Directors shall give the Executive 30
days' prior written notice of the termination. If a determination of the Board
of Directors under this subparagraph (e) is disputed by the Executive, the
parties agree to abide by the decision of a panel of three physicians. The
Company will select a physician, the Executive will select a physician and the
physicians selected by the Company and the Executive will select a third
physician. The Executive agrees to make
himself available for and submit to examinations by such physicians as may be
directed by the Company. Failure to submit to any examination shall constitute
a breach of a material part of this Agreement.
7. NO CONFLICTS. Executive represents that the performance by Executive of all
the terms of this Agreement, as a continuing Executive of the Company, does not
and will not breach any agreement as to which Executive is or was a party and
which requires Executive to keep any information in confidence or in trust.
Executive has not entered into, and will not enter into, any agreement either
written or oral in conflict herewith.
8. JURISDICTION AND VENUE. The parties designate the Court of Common Pleas of
Athens County, Ohio, as the court of competent jurisdiction and venue of any
actions or proceedings relating to this Agreement and hereby irrevocably consent
to such designation, jurisdiction and venue. Such jurisdiction and venue is
exclusive. The parties further agree that the mailing by certified or registered
mail, return receipt requested, of any process 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.
9. WITHHOLDING. The Company may withhold from any payments to be made hereunder
such amounts as it may be required to withhold under applicable federal, state
or other law, and transmit such withheld amounts to the appropriate taxing
authority.
10. ASSIGNMENT. This Agreement is personal to the Executive, and Executive may
not assign or delegate any of his rights or obligations hereunder. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the respective parties hereto, their heirs, executors, administrators,
successors and assigns.
11. WAIVER. The waiver by either party hereto of any breach or violation of any
provision of this Agreement by the other party shall not operate as or be
construed to be a waiver of any subsequent breach by such waiving party.
12. NOTICES. Any and all notices required or permitted to be given under this
Agreement will be sufficient and deemed effective three (3) days following
deposit in the United States mail if furnished in writing and sent by certified
mail to Executive at the address for Executive appearing in the Company's
personnel records and to the Company at:
Georgia Boot LLC
c/o Rocky Shoes & Boots, Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: President of Rocky Shoes & Boots, Inc.
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
13. GOVERNING LAW. This Agreement shall be governed by and construed under the
laws of the State of Ohio without regard to its conflict of laws rules.
14. AMENDMENT. This Agreement may be amended in any and every respect by
agreement in writing executed by both parties hereto.
15. SECTION HEADINGS. Section headings contained in this Agreement are for
convenience only and shall not be considered in construing any provision hereof.
16. BINDING EFFECT; ENTIRE AGREEMENT.
(a) This Agreement is conditioned upon, and is effective only upon, the
consummation of the transactions contemplated by the Purchase Agreement,
including but not limited to, the sale by SILLC and the purchase by Rocky, of
the Company. In the event the transactions contemplated by the Purchase
Agreement are not consummated pursuant to the terms thereof, this Agreement is
null and void and without effect with respect to either the Company or
Executive.
(b) This Agreement when effective terminates, cancels and supersedes all
previous employment agreements or other agreements, including but not limited to
the EJ Footwear Management Incentive Plan Corporate Plan for Year Ending
September 30, 2005, relating to the employment of Executive and made by the
Executive with the Company or SILLC or their affiliates, written or oral, except
for the Key Personnel Agreement, and this Agreement contains the entire
understanding of the parties hereto with respect to the subject matter of this
Agreement.
(c) This Agreement was fully reviewed and negotiated on behalf of each
party and shall not be construed against the interest of either party as the
drafter of this Agreement. EXECUTIVE ACKNOWLEDGES THAT, BEFORE PLACING HIS
SIGNATURE HEREUNDER, HE HAS READ ALL OF THE PROVISIONS OF THIS EMPLOYMENT
AGREEMENT AND HAS THIS DAY RECEIVED A COPY HEREOF.
17. SEVERABILITY. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.
18. SURVIVAL. Section 8 of this Agreement and this Section 18 shall survive any
termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EXECUTIVE: GEORGIA BOOT LLC
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxx
-------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxx
Title: President and CEO
