Exhibit 10.8
EMPLOYMENT AGREEMENT
Employment Agreement (this "Agreement"), dated as of April 1, 2004 by and
between TWEETER HOME ENTERTAINMENT GROUP, INC., a Delaware corporation, whose
principal place of business is 00 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxxxxx 00000
("Employer" or "Tweeter"), and Xxxx Xxxx, whose address is 00 Xxxxxx Xxxxx,
Xxxxxxx Xxxxx, XX 00000 ("Employee).
ARTICLE 1.
TERM OF EMPLOYMENT; DUTIES; NON-COMPETITION,
NON-SOLICITATION AND NON-DISCLOSURE
1.01. TERM OF EMPLOYMENT. Employer hereby employs Employee and Employee
hereby accepts employment with Employer beginning on April 5th, 2004. As used
herein, the phrase "employment term" refers to the entire period of employment
of Employee by Employer or by an affiliate of Employer until such employment is
terminated in accordance with the terms of this Agreement.
1.02. GENERAL DUTIES. Employee shall serve as Senior Vice President Retail
of Tweeter. In such capacities, Employee shall report to Employer's President,
and shall do and perform all services, acts, or things as directed by Employer's
President.
1.03. NONCOMPETITION, NONDISCLOSURE AND NONSOLICITATION. Employer and
Employee are simultaneously herewith executing and delivering a Noncompetition,
Nondisclosure and Nonsolicitation Agreement, in the form attached hereto as
Exhibit A. Employee acknowledges that Employer would not enter into this
Agreement but for such execution and delivery of such Noncompetition,
Nondisclosure and Nonsolicitation Agreement.
ARTICLE 2.
COMPENSATION OF EMPLOYEE
2.01. ANNUAL SALARY. As compensation for the services to be performed
hereunder, Employee shall receive a salary at the rate of three hundred
thirty-five thousand dollars ($335,000.00) per annum ("Base Pay"), payable in
equal installments on a monthly basis. Employee's salary shall be payable in
accordance with Employer's payroll payment policies during her employment term.
Employee shall also receive a monthly car allowance in the amount of $850.00.
2.02. BONUSES.
(a) Commencement Bonus. Employee shall be entitled to a bonus of
sixty-five thousand dollars ($65,000.00), which shall be
payable on November 1, 2004 or at the date of termination
Employee's employment with Employer if it occurs prior to
November 1, 2004.
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(b) Annual Performance Bonuses. Employee shall be eligible to earn
a performance bonus of 40% of Base Pay for the period October
1, 2004 - September 30, 2005, which shall be payable, to the
extent earned, in the first week of December, 2005.
Eligibility for the bonus shall be based on performance
criteria to be established from time to time by the
Compensation Committee of Employer's Board of Directors (the
"Compensation Committee"). Partial bonus payments based upon
partial attainment of performance criteria may be made at the
discretion of the Compensation Committee.
2.03. BENEFITS. Employee shall be eligible to receive such benefits, and
to participate in such bonus or incentive plans, as are generally made available
to other senior executives of Employer or as may be specifically provided to
Employee as determined by Employer or the Compensation Committee from time to
time. Employee shall be entitled to participate in Employer's executive deferred
compensation plan in accordance with the rules and policies of such plan.
2.04. EQUITY INCENTIVES.
(a) Stock Options.
(i) Initial Grant. Effective upon the commencement of
Employee's employment by Employer, Employer will grant to Employee (a) an
option, fully vested upon the grant date and exercisable for five years after
the grant date, to purchase such number of shares of Employer common stock, at
such exercise price, as is determined using the formula set forth in the offer
letter to Employee from Employer dated January 31, 2004, and (b) an option to
purchase up to one hundred thousand (100,000) shares of Employer's common stock
with an exercise price per share equal to the fair market value of Employer's
common stock on the date of grant. Such option will be issued pursuant to, and
subject to the terms and conditions contained in, Employer's 2004 Stock Option
and Incentive Plan and Employer's standard form stock option agreement. Such
option will be vested with respect to twenty-five percent (25%) of the shares
subject to the option on the grant date and an additional twenty-five percent
(25%) on each of the first three anniversaries of the commencement of Employee's
employment. [Such option will be intended to be an "incentive stock option"
under Section 422 of the Internal Revenue Code of 1986, as amended.]
(iii) Acceleration Events. Notwithstanding anything to the
contrary herein or in the agreement(s) evidencing the aforementioned stock
options,
(A) If Employee's employment is terminated by Employer
without Cause or by Employee for Good Reason (in each case as defined in Article
3 below) prior to the second anniversary of the commencement of Employee's
employment, the vesting of such stock options as have then been granted shall
accelerate so that the next annual vesting installment of the shares subject to
the option shall become immediately vested on the date of termination, and
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(B) If a Change of Control (as defined below) occurs
while Employee is employed by Employer, all of the shares of stock subject to
the aforementioned options shall become completely vested immediately prior to
the consummation of the Change of Control.
(C) A "Change of Control" shall mean, and shall be
deemed to occur if, the Incumbent Directors (as hereinafter defined) cease for
any reason, including without limitation as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority of
Employer's Board of Directors, provided, however, that any person becoming a
Director of Employer whose election is (or was) approved by a vote of at least
two-thirds of the Incumbent Directors or whose nomination for election is (or
was) approved by a nominating committee composed of Incumbent Directors shall be
deemed an Incumbent Director. The "Incumbent Directors" shall mean persons who
constituted Employer's entire Board of Directors as of April 21, 2003 and those
persons deemed Incumbent Directors pursuant to the preceding sentence.
ARTICLE 3.
TERMINATION OF EMPLOYMENT
3.01. TERMINATION EVENTS.
(a) Termination upon Death or Disability. Employee's death shall
terminate her employment by Employer. In addition, if Employee becomes
physically or mentally incapacitated or is injured so that she is unable to
perform the services required of her under this Agreement and such inability to
perform continues for a period in excess of one hundred twenty (120) days during
any twelve month period (whether such disability is continuous or discontinuous
during such twelve month period), Employer may terminate Employee's employment
under this Agreement at any time thereafter, provided, however, that such
disability is continuing at the time of such termination notice.
(b) Termination For "Cause" or With or Without "Good Reason".
(i) Cause. Employer may terminate Employee's employment at any
time for Cause immediately upon written notice to Employee. The term "Cause"
shall mean the Employee does one or more of the following (1) commits any
material act of dishonesty or fraud against Tweeter or its employees or
affiliates; (2) is guilty of gross negligence or misconduct in the performance
of her duties; (3) unjustifiably neglects her material duties under this
Agreement (other than by reason of physical or mental illness) and failure to
remedy said neglect within thirty (30) days of written notice thereof; (4) acts
in a way that has a direct, substantial, or adverse effect on Employer's
reputation; (5) breeches her obligations under the Noncompetition, Nondisclosure
and Nonsolicitation Agreement referred to above; (6) is convicted of or pleads
nolo contendere to a felony. In the event of employment termination under this
subparagraph, at the time of termination Employer shall provide Employee in
writing the specific grounds(s) for termination, referring to the facts
supporting the same.
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(ii) Termination with Good Reason. Employee may terminate her
employment under this Agreement with Good Reason upon at least thirty (30) days
written notice to the President of Employer. Employee shall have "Good Reason"
upon, and the term "Good Reason" shall mean, the occurrence of any of the
following: (i) an attempted or actual relocation by Employer of Employee outside
the greater Boston area without Employee's consent; (ii) breach by Employer of
any of its material obligations under this Agreement or accompanying Agreements
and failure to remedy said breech within thirty (30) days of written notice
thereof; (iii) violation by Employer of State or Federal laws affecting the
rights of Employee, including but not necessarily limited to discrimination,
salary and benefits, medical leave, family leave, worker's compensation and the
like and failure to cure said violation(s) within thirty (30) days of written
notice thereof; or (iv) Employee's refusal to act contrary to law or business
ethics, after having been directed by Employer, its directors, officers, agents,
or employees to so act.
(iii) Termination Without Good Reason. Employee may terminate
her obligations under this Agreement without Good Reason by giving Employer at
least three (3) months advance written notice.
3.02 OBLIGATIONS OF EMPLOYER FOLLOWING TERMINATION.
(a) Termination by Death or Disability. In the event of termination
of employment by reason of Employee's death or disability as described in
Section 3.01(a) above, the Employee, or her estate or other successors in
interest, shall be entitled to receive any salary, bonuses, and benefits earned
by or accrued to Employee and unpaid at the date of her death, but shall not
receive any further salary or other compensation hereunder.
(b) Termination for "Cause". In the event of termination of
employment for Cause, the Employee shall be entitled to receive her Base Pay
then in effect (including accrued vacation pay) and benefits due or to become
due to her up to the date of termination of employment, and, in the case of
benefits, as may be mandated by law following termination of employment, but
Employee shall not be entitled to any other or further salary or other
compensation, bonuses or other benefits.
(c) Termination by Employer without Cause or by Employee With Good
Reason. Upon termination of Employee's employment by Employee for Good Reason,
or by Employer for any reason other than for Cause, death or disability,
Employee shall be entitled to receive severance pay equal to twelve months of
Employee's salary (exclusive of any bonus), to be paid in equal monthly
installments over a twelve-month period. Such severance pay shall be payable as
salary continuation, payable over time in the same manner as Employee's salary.
(d) Termination by Employee without Good Reason. In the event of a
termination of employment by Employee without Good Reason, the Employee shall be
entitled to receive any salary or bonuses earned by or accrued to the Employee
and unpaid at the date of her departure (including accrued vacation pay), but
shall not receive any further salary or other
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compensation hereunder, and without limiting the foregoing, in such event, (i)
the Employee shall receive no severance pay, (ii) vesting of all stock options
and restricted stock shall cease upon termination of employment, and (iii) the
Employee shall receive no payments in respect of unvested accrued benefits under
any long or short-term incentive plan or retirement plan.
ARTICLE 4.
GENERAL PROVISIONS
4.01. NOTICES. Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
certified mail, postage prepaid with return receipt requested, to such other
party at the address first set forth above.
4.02. ENTIRE AGREEMENT. This Agreement, together with its exhibits,
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Employee by Employer and
contains all of the covenants and agreements between the parties with respect to
that employment in any manner whatsoever.
4.03. LAW GOVERNING AGREEMENT; CONSENT TO JURISDICTION. This Agreement and
the legal relations among the parties hereto shall be governed and construed in
accordance with the substantive laws of the Commonwealth of Massachusetts,
without giving effect to the principles of conflict of laws thereof. Each of the
Employer and the Employee hereby irrevocably consents that any legal action or
proceeding under, arising out of, or in any manner relating to this Agreement or
any other agreement, document or instrument arising out of or executed in
connection with this Agreement shall be brought solely in any state or federal
court in the Commonwealth of Massachusetts of competent jurisdiction. Each
party, by the execution and delivery of this Agreement, expressly and
irrevocably consents and submits to the personal jurisdiction of any of such
courts in any such action or proceeding. Each party hereby further irrevocably
consents to the service of any complaint, summons, notice or other process
relating to any such action or proceeding by delivery thereof to it or her by
hand, by mail or by overnight express delivery service in the manner provided
for in Section 4.01 or by serving a copy thereof on any registered agent for
such party in such jurisdiction. Each party hereby expressly and irrevocably
waives any claim or defense in any action or proceeding based on any alleged
lack of personal jurisdiction, improper venue, forum non conveniens, or any
similar basis.
4.04. ASSIGNMENT. The rights and obligations of Employer under this
Agreement may be assigned by Employer but Employee may not assign its rights or
its obligations under this Agreement.
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IN WITNESS WHEREOF, this Severance Agreement is entered into as an
instrument under seal as of the date and year first above written.
TWEETER HOME ENTERTAINMENT GROUP, INC.
By: _________________________
Name: ________________________
Title: _______________________
EMPLOYEE
______________________________
Xxxx Xxxx
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Exhibit A
NONCOMPETITION, NONDISCLOSURE
AND NONSOLICITATION AGREEMENT
This Noncompetition, Nondisclosure and Nonsolicitation Agreement (the
"Agreement") is made as of April 1, 2004 between Xxxx Xxxx (the "Employee") and
Tweeter Home Entertainment Group, Inc., a Delaware corporation with a mailing
address at 00 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Employer").
I. BACKGROUND AND ACKNOWLEDGMENTS.
The Employer has entered into an Employment Agreement (the "Employment
Agreement") with the Employee contemporaneously with the execution and delivery
of this Agreement, in consideration for and in reliance upon the Employee's
executing and delivering to Employer this Agreement.
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties do hereby agree and covenant as follows:
II. NONCOMPETITION COVENANT.
The Employee shall not, for a period of two (2) years after the date the
Employee ceases to be an employee or otherwise engaged by the Employer or any
affiliate of the Employer: (1) directly or indirectly, own, manage, operate,
finance, join, or control, or participate in the ownership, management,
operation, financing or control of, or be associated as an director, officer,
employee, consultant, partner, lender, investor or representative in connection
with, any profit or not-for-profit business or enterprise that primarily (a)
distributes, sells or services consumer electronic or entertainment products to
retail customers; or (b) otherwise competes with the business of the Employer as
it exists, or as it is proposed, on the date hereof or on the date the
Employee's employment is terminated; or (2) directly or indirectly solicit,
induce or attempt to induce any person employed by the Employer or its
affiliates to enter the employ of the Employee or any other person or entity.
Notwithstanding the foregoing, neither of the following shall alone be a
violation of this Agreement: (1) the performance by the Employee of her
obligations to the Employer as and while an employee of the Employer, and (2)
the ownership by the Employee of 2% or less of the outstanding publicly traded
capital stock of any entity.
III. NONDISCLOSURE COVENANT.
A. The Employee shall not at any time reveal to any person or entity any
Proprietary Information (as defined below) or information belonging to any third
party which the Employer is under an obligation to keep confidential, and shall
keep secret all Proprietary Information
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which is possessed by or may be entrusted to her and shall not use or attempt to
use any Proprietary Information (or such information belonging to a third party)
for her own benefit, or for the benefit of any third party or in any manner
which may injure or cause loss or may be calculated to injure or cause loss
(whether directly or indirectly) to the Employer. The Employee shall take or
omit to take such actions as the Employer may reasonably request to preserve all
Proprietary Information as the sole and exclusive property of the Employer.
B. Anything to the contrary herein notwithstanding, the Employee shall not
at any time publish any Proprietary Information or any information derived
therefrom, without the prior express written permission of the Employer.
C. Upon request of the Employer, the Employee shall immediately deliver to
the Employer all notes, memoranda, drawings, specifications, programs, data or
other materials in her possession constituting Proprietary Information and all
copies of any of the foregoing.
D. As used herein, the term "Proprietary Information" shall mean all
client and customer lists, pricing information and trade secrets owned or used
by the Employer, or which otherwise constitute assets of the Employer or relate
to the Employer's business; and any other data, information, documents or forms
pertaining to the financial condition, business affairs or prospects of the
Employer, including, without limitation, any such information relative to
customers or suppliers, samples, sketches, bulletins, memoranda, correspondence,
forms and records (including financial statements), information concerning
sources of supply, costs of manufacture and sale and specifications of
equipment; whether or not any of the foregoing is published or unpublished,
protected or susceptible to protection under patent, trademark, copyright or
similar laws and whether or not any party has elected to secure or attempted to
secure such protection.
Notwithstanding the foregoing, the term "Proprietary Information" shall
not include any of the foregoing information or materials to the extent (i)
generally known to the public through no wrongful act of the Employee or (ii)
lawfully received by the Employee from a third party without restriction on
disclosure and without a breach by the third party of any obligation of
confidentiality.
IV. GENERAL PROVISIONS.
A. Notices. Any notice, request, instruction or other document to be given
under this Agreement by any party hereto to any other party shall be in writing
and delivered personally or sent by a nationally recognized overnight courier
service or by certified mail, postage prepaid:
Xx. Xxxx Xxxx
00 Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
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If to the Employer, to:
Tweeter Home Entertainment Group, Inc.
00 Xxxxxx Xxx
Xxxxxx, XX 00000
Attn.: Mr. Xxxxxxx Xxxxx
with a copy to:
Goulston & Storrs, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn.: Xxxx Xxxxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally in the manner provided herein shall be
deemed to have been duly given to the person or entity to which it is directed
upon actual receipt by such party (or its agent for notices hereunder). Any
notice that is addressed as provided herein and mailed by certified mail shall
be conclusively presumed to have been duly given to the person or entity to
which it is addressed at the close of business, local time of such party, on the
fifth calendar day after the day it is so placed in the mail. Any notice that is
addressed as provided herein and sent by a nationally recognized overnight
courier service shall be conclusively presumed to have been duly given to the
person or entity to which it is addressed at the close of business, local time
of such person or entity, on the next business day following its deposit with
such courier service for next day delivery.
B. Remedies Upon Breach. It is acknowledged that any breach of this
Agreement by the Employee would cause the Employer irreparable damage and that
in the event of such breach the Employer shall have, in addition to any and all
remedies at law, the right to an injunction, specific performance or other
equitable relief to prevent the violation of any obligations of the Employee
hereunder.
C. No Waiver. Any waiver of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other provision of this
Agreement or any subsequent breach hereof.
D. Severability. The parties hereby agree that each provision hereof shall
be treated as a separate and independent provision, and the unenforceability of
any one provision shall in no way impair the enforceability of any other
provision hereof. Moreover, if one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to scope,
activity or subject so as to be unenforceable, such provision or provisions
shall be construed by the appropriate judicial body by limiting or reducing it
or them, so as to be enforceable to the maximum extent permitted by applicable
law.
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E. Governing Law; Consent To Jurisdiction. This Agreement and the legal
relations among the parties hereto shall be governed and construed in accordance
with the substantive laws of the Commonwealth of Massachusetts, without giving
effect to the principles of conflict of laws thereof. Each of the Employer and
the Employee hereby irrevocably consents that any legal action or proceeding
under, arising out of, or in any manner relating to this Agreement or any other
agreement, document or instrument arising out of or executed in connection with
this Agreement shall be brought solely in any state or federal court in the
Commonwealth of Massachusetts of competent jurisdiction. Each party, by the
execution and delivery of this Agreement, expressly and irrevocably consents and
submits to the personal jurisdiction of any of such courts in any such action or
proceeding. Each party hereby further irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it or her by hand, by mail or by overnight
express delivery service in the manner provided for in Section IV(A) or by
serving a copy thereof on any registered agent for such party in such
jurisdiction. Each party hereby expressly and irrevocably waives any claim or
defense in any action or proceeding based on any alleged lack of personal
jurisdiction, improper venue, forum non conveniens, or any similar basis.
F. Assignment by Employer. The Employer shall have the right to assign
this Agreement to its successors and assigns, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by Employer's
successors or assigns. Neither this Agreement nor the respective obligations
hereunder may be assigned or delegated by the Employee to any other person or
entity.
G. Reasonableness of Provisions. The Employee acknowledges and agrees that
the enforcement of this Agreement is necessary to ensure the preservation,
protection and continuity of the business, trade secrets, goodwill and other
assets of the Employer and further acknowledges and agrees that the restrictions
set forth in this Agreement are reasonable as to time and scope.
H. Miscellaneous. This Agreement constitutes the entire agreement of the
Employee and the Employer with respect to the matters set forth herein. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement. Captions are for the ease of
reference only and shall not affect the meaning of the relevant provisions. The
meanings of all defined terms used in this Agreement shall be equally applicable
to the singular and plural forms of the terms defined. No amendment or waiver of
any provision of this Agreement nor consent to any departure by the Employee
therefrom shall be effective unless the same shall be in writing and signed by
the Employer and the Employee.
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IN WITNESS WHEREOF, this Noncompetition, Nondisclosure and Nonsolicitation
Agreement is entered into as an instrument under seal as of the date and year
first above written.
TWEETER HOME ENTERTAINMENT GROUP, INC.
By: _________________________
Name: ________________________
Title: _______________________
EMPLOYEE
______________________________
Xxxx Xxxx
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