Exhibit 10(gg)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 10th
day of February, 2003, between Enesco Group, Inc., a Massachusetts corporation
("Employer"), and Xxxxxx XxxxxXxxxx ("Employee").
WITNESSETH:
WHEREAS, Employee and Employer desire to enter into this Agreement
pertaining to the terms of the employment of the Employee by Employer;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Employment. Employer hereby agrees to continue to employ Employee,
and Employee hereby accepts such continued employment by Employer, upon the
terms and conditions herein set forth. Employee shall serve as President and
Chief Executive Officer of Employer. Although it is contemplated that Employee
will undertake some travel as part of his duties, the primary place of
employment shall be at Employer's principal offices, located at Itasca,
Illinois. Employee also shall continue to be elected to the Executive Committee
of the Board of Directors as long as he is a member of the Board.
2. Term. The term of the Agreement shall commence on April 1, 2003, and
shall expire on March 31, 2006 unless sooner terminated as hereinafter provided.
After expiration of the term, and subject to the termination provisions
hereinafter contained, the Agreement may be renewed for additional one to five
year periods by mutual written agreement of the parties. If the Board chooses
not to renew the Employee's contract, the Employee will be entitled to severance
as defined in the Section 6 below.
3. Duties. Employee will, during the term hereof (a) faithfully and
diligently do and perform all such acts and duties and furnish such services as
the Board of Directors of Employer shall direct, (b) do and perform all acts in
the ordinary course of Employer's business (with such limits as the Board of
Directors of Employer may prescribe) necessary and conducive to Employer's best
interests, (c) execute all duties attendant to his office, and (d) devote his
full time, energy, and skill to the business of Employer and to the promotion of
Employer's best interests, except for vacations, holidays and absences made
necessary because of illness and except that Employee may participate in the
affairs of any governmental, educational or charitable institution, and serve as
a member of the board of directors of other companies so long as the Board of
Directors of Employer does not determine that such activities interfere with the
business of Employer or diminish Employee's obligations under the Agreement.
Employee's performance under this Agreement will be reviewed annually by the
Board of Directors.
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4. Compensation. Employer shall pay to Employee for all services to be
performed by Employee during the term of the Agreement:
(a) A base annual salary at the rate of $480,000 (Base Salary), payable
in substantially equal periodic semi-monthly installments less applicable
deductions in accordance with Employer's practices for other executives, as such
practices may be determined from time to time. During March of each year, the
Employee's compensation shall be considered for an annual review by the Board of
Directors and Compensation Committee.
(b) Employee shall be eligible for a bonus for each fiscal year of
employment pursuant to his written objectives under the Return on Assets
Incentive Bonus Plan (ROA Bonus Plan) for Employer's senior management, which is
adopted annually by Employer's Board of Directors.
(c) Any additional or special compensation, such as incentive pay or
bonuses, based upon Employee's performance, as the Board of Directors of
Employer, in its discretion, may from time to time determine.
5. Fringe Benefits.
(a) Employee shall be eligible to participate in any incentive plans or
arrangements ("Incentive Plans") that Employer may establish or practices it may
follow for the benefit of its executives as in effect from time to time, and
shall be entitled to receive any other bonus or discretionary compensation
payments as Employer may determine from time to time.
(b) Employee shall be entitled to paid vacations in accordance with
Employer's customary vacation policy. Employee shall also be entitled to all
paid holidays given by Employer to its other senior executives.
(c) Employee and his dependents shall be entitled to participate in and
receive benefits under any qualified or supplemental defined contribution
retirement plan, health and dental plan, disability plan, survivor income plan,
and life insurance plan or arrangement ("Benefits Plans"), and any additional or
substitute Benefit Plans Employer may make available in the future to its senior
executives, subject to and on a basis consistent with the terms, conditions, and
overall administration of such Benefit Plans.
(d) Employee shall be entitled to the use of a company-leased
automobile, with regular maintenance, insurance and appropriate business
expenses related thereto reimbursed, subject to Employer's receipt of the
original receipts therefor.
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6. Termination.
(a) Employee shall have the right at any time during the term of this
Agreement to terminate his employment with the Employer upon giving ninety (90)
days written notice of said termination to Employer. In the event of termination
of his employment by Employee for any reason, Employer shall have no further
liability hereunder from and after the date of termination other than the
payment of all compensation (base salary and bonus, if any, payable in
accordance with the terms of the ROA Bonus Plan) to Employee or his heirs or his
personal representatives for all periods prior to such termination.
(b) Employer shall have the right at any time during the term of this
Agreement to terminate the employment of Employee with Employer upon giving
notice to Employee. In the event of termination of his employment by Employer
for any reason other than "good cause," Employer shall continue to pay Employee
an amount equal to his Base Salary for twenty-four (24) months, plus two bonus
payments under the ROA Bonus Plan each of an amount equal to the average bonus
payout, if any, paid to Employee for the last two years (payable at the normal
times that bonuses are paid under the ROA Bonus Plan), subject to Employee's
execution of Employer's standard form of Release, and Employer shall have no
further liability to Employee. The Employee may choose to receive his severance
of twenty-four (24) months of base pay and two bonus payments in one lump sum.
In addition, the Employee may exercise any stock options that have vested in
accordance with the terms of the Stock Option Grant. For purposes of the
preceding sentence, "good cause" shall be deemed to exist if, and only if:
(i) Employee shall engage, during the performance of his duties
hereunder in acts or omissions constituting dishonesty,
intentional breach of fiduciary obligation, moral turpitude,
willful misconduct, intentional wrongdoing or malfeasance;
(ii) Employee shall be convicted of a criminal violation
involving fraud, dishonesty or moral turpitude; or
(iii) Employee shall materially breach the Agreement other than
by engaging in acts or omissions enumerated in clauses (i)
and (ii) above), and such breach by its nature, is incapable
of being cured, or such breach remains uncured for more than
ten (10) days following receipt by Employee of written
notice from Employer specifying the nature of the breach and
demanding the cure thereof.
7. Death. If Employee dies during the term of the Agreement,
Employer agrees to pay to a beneficiary designated in writing by Employee, an
amount equal to Employee's aggregate Base Salary (at the rate then in effect)
for a period of twelve (12) months from the date of death and an amount equal to
the annual average of Employee's bonus payments for the two calendar years
preceding the year of death. Such
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payments shall be made at the same times, as they would have been made to
Employee if he were alive and employed by Employer. Any death benefits payable
under this Paragraph 7 are in addition to any other benefits due to Employee or
his beneficiaries or dependents from Employer.
8. Disability. If during the term of this Agreement Employee incurs a
Disability, Employee's obligation to perform his services hereunder will
terminate and in such event Employer agrees:
(a) to continue to pay Employee his Base Salary (at the rate then in
effect) during a period equal to the lesser of twelve (12) months from the date
of onset of such Disability or the balance of the term of this Agreement (the
"Disability Period");
(b) to pay to Employee during the Disability Period the bonus provided
pursuant to Paragraph 4(b) of this Agreement; and
(c) during the Disability Period to continue to cover Employee and his
dependents under all health, dental, disability, accident and life insurance
plans or arrangements made available by Employer in which Employee or his
dependents were participating immediately prior to the date of onset of such
Disability as if Employee continued to be an employee of Employer; provided
that, if participation in any one or more of such plans and arrangements is not
possible under the terms thereunder, Employer will provide substantially
identical benefits.
Notwithstanding the foregoing, any payments to Employee pursuant to
subparagraphs (a) and (b) above shall be reduced by the amount of any disability
benefits otherwise payable to Employee under any disability program(s)
maintained by Employer. If Employee is receiving benefits hereunder and his
Disability ceases, his benefits under this Paragraph 8 shall terminate. For
purposes of the Agreement, the term "Disability" will have the same meaning as
in Employer's long-term disability plan, or if no such plan exists shall mean a
physical or mental disability, as determined by an independent physician
selected with the approval of both Employer and Employee, which will render
Employee incapable of performing his duties under the Agreement for 60 days or
more within any 365-day period.
9. Noncompetition. In consideration of Employee's employment hereunder,
Employee hereby agrees that during the initial or any renewal term of the
Agreement and for a period of two years thereafter, he will not, singly,
jointly, or as a member, employee, or agent of any partnership or as an officer,
agent, employee, director or stockholder, or inventor of any other corporation
or entity, or in any other capacity, directly or indirectly:
(a) own, manage, operate, participate in, perform services for or
otherwise carry on, assist or be connected with a Competing Business doing
business anywhere within the respective territories in which Employer's business
is then carried on (provided that the foregoing shall not apply to any
corporation, partnership or other entity
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in which Employee (and/or his spouse and/or children) only owns an ownership
interest of one percent (1%) or less and exercises not more than one percent
(1%) of the voting control);
(b) solicit or contact (or assist in any solicitation or contact of)
any customer of Employer with a view toward inducing the purchase of a Competing
Product or otherwise diverting business from Employer;
(c) induce or attempt to persuade any employee or agent of Employer to
terminate such employment or agency relationship or violate the terms of any
agreement with Employer; or
(d) induce or attempt to persuade any customer or supplier of Employer
to terminate or materially change such relationship;
For purposes of this Agreement.
"Competing Products" means products, processes or services of any
person or organization other than Employer, in existence or under development,
which are substantially the same as or which perform the same function or
otherwise compete with any products, processes, or services developed,
manufactured or sold by Employer during the time of the Employee's employment
with the Employer or about which Employee acquires Confidential Information
through his relationship with Employer, including, but not limited to, the
creation, manufacturing, marketing and distribution of giftware, collectibles
and home decor product.
"Competing Business" means any person or organization engaged in, or
planning to become engaged in, research, development, production, distribution,
marketing, providing or selling of a Competing Product.
10. Confidentiality. Employee acknowledges that preservation of a
continuing business relationship between Employer and its subsidiaries and its
respective customers, representatives and employees is of critical importance to
the continued business success of Employer, that it is the policy of Employer
and its subsidiaries to guard as confidential the Confidential Information
defined below, and that as Chief Executive Officer Employee will acquire
Confidential Information and personal relationships with customers and
prospective customers, which relationships may constitute Employer's primary
relationships with such customers and prospective customers. In view of the
foregoing, Employee agrees that, except as required for the performance of his
duties under this Agreement, he will not during the initial or any renewal term
of the Agreement and thereafter, without the prior written consent of Employer,
use for the benefit of himself or any third party or disclose to any third party
any Confidential Information. Employee further agrees that if his employment by
Employer is terminated for any reason, he will not take with him but will leave
with Employer all records and papers and all matter of whatever nature which
contains Confidential Information. For purposes of this Agreement, "Confidential
Information" means any information, including any plan,
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drawing, specification, pattern, procedure, design, device, list or compilation,
which relates to the present or planned business of Employer which has not been
disclosed publicly by authorized representatives of Employer. Confidential
Information may include, for example, inventions, marketing and sales plans or
programs; customer and supplier information and lists; financial data;
purchasing and pricing information; product engineering information;
technological know-how; designs, plans or specifications regarding products and
materials; manufacturing processes and techniques; regulatory approval
strategies; computer programs, data, formulae and compositions; service
techniques and protocols; and new product strategies, plans and designs.
Confidential Information also includes all information received by Employer
under an obligation of confidentiality to a third party.
11. Patent and Trade Secret Agreement.
(a) Employee will promptly report to Employer all discoveries,
inventions or improvements of whatsoever nature conceived or made by him at any
time he was employed by Employer. All such discoveries, inventions and
improvements which are applicable in any way to Employer's business shall be the
sole and exclusive property of Employer.
(b) Whenever requested by Employer, whether during or subsequent to his
employment by Employer, Employee agrees to execute any papers Employer may deem
necessary for the protection of its interest in said discoveries, inventions,
and improvements, trade secrets and confidential information, including written
assignments of inventions to Employer.
(c) The covenants set forth in this Paragraph 11 are made by Employee
in consideration of the employment, or continuing employment of, and the
compensation paid to, Employee during his employment by Employer.
12. Remedies. Employee acknowledges that the services to be rendered by
him hereunder are of a special, unique and extraordinary character, that it
would be likely to be highly injurious to Employer or its successors in interest
with respect to the resulting disruption in their management, and by reason of
the foregoing Employee consents and agrees that if, during the term of the
Agreement he violates any provisions of the Agreement, Employer or its
successors in interest shall be entitled, in addition to any other remedies that
they may have, including money damages, to an injunction to be issued by a court
of competent jurisdiction, restraining him from committing or continuing any
violation of the Agreement. If, at any time, Employee violates, to any material
extent, any of the covenants or agreements set forth in Paragraphs 9, 10 and 11
of this Agreement, Employer shall have the right to immediately terminate all of
its obligations to make any further payments under the Agreement.
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13. Assignment. Neither Employee nor Employer may assign the Agreement,
except that Employer's obligations hereunder shall be binding legal obligations
of any successor to all or substantially all of Employer's business by purchase,
merger, consolidation, or otherwise.
14. Employee Assignment. No interest of Employee or his spouse or any
other beneficiary under the Agreement, or any right to receive any payment or
distribution hereunder, shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation or encumbrance
of any kind, nor may such interest or right to receive a payment or distribution
be taken, voluntarily or involuntarily, for the satisfaction of the obligations
or debts of, or other claims against, Employee or his spouse or other
beneficiary, including claims for alimony, support, separate maintenance, and
claims in bankruptcy proceedings.
15. Benefits Unfunded. All rights of Employee and his spouse or other
beneficiary under the Agreement shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
Employer for payment of any amounts due hereunder. Neither Employee nor his
spouse or other beneficiary shall have any interest in or rights against any
specific assets of Employer, and Employee and his spouse or other beneficiary
shall have only the rights of a general unsecured creditor of Employer.
16. Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of the Agreement
to be performed by the other party shall be deemed a waiver of any other
provisions or conditions at the same time or at any prior or subsequent time.
17. Applicable Law. The Agreement shall be construed and interpreted in
all respects pursuant to the laws of the State of Illinois (without regard to
principles of conflicts of laws) applicable to contracts made and to be
performed within such State.
18. Entire Agreement. The Agreement contains the entire Agreement
between Employer and Employee and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof. No
amendment or modification of the terms of the Agreement shall be binding upon
either of the parties hereto unless reduced to writing and signed by each of the
parties hereto.
19. Counterparts. The Agreement may be executed in counterparts, each
of which shall be deemed an original.
20. Severability. In the event any provision of the Agreement is held
illegal or invalid, the remaining provisions of the Agreement shall not be
affected thereby.
21. Successors. The Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives and
successors.
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22. Notices. Notices required under the Agreement shall be in writing
and shall be deemed duly given on the first business day after the day of
sending by national next-day courier service, upon confirmation of delivery by
telecopy or five business days after mailing by registered mail, return receipt
requested, to the following addresses or phone numbers or to such other address
or phone number as the party being notified may have previously furnished to the
others by written notice:
If to Employer: Xxxx-Xxx Xxxxxxxx, Chairman of the Board
Enesco Group Inc.
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
000-000-0000
With a copy to: General Counsel
Enesco Group, Inc.
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
000-000-0000
000-000-0000 (telecopy)
If to Employee: Xx. Xxxxxx XxxxxXxxxx
Chief Executive Officer
Enesco Group Inc.
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
000-000-0000
With a copy to: Xxx Xxxxxxx
Xxxxx Xxxxxxxx & Associates
000 X. Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
000-000-0000
23. Arbitration. Except as to any matters in respect to which Employer
elects to proceed in accordance with the provisions of Paragraph 12 hereof, any
controversy or claim arising out of the Agreement, or breach hereof, shall be
settled by arbitration in the City of Chicago pursuant to the rules and
procedures of J.A.M.S. Endispute before a single arbitrator. The arbitrator's
determination shall be final and binding upon all parties and judgement upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
24. Board Approval. The right and obligations of Employer under the
Agreement are contingent upon the approval or ratification by its Board of
Directors of the execution of the Agreement on its behalf.
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25. Withholding. Employer may withhold from any payment that it is
required to make under this Agreement amounts sufficient to satisfy applicable
withholding requirements under any federal, state or local law.
26. Headings. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of any
provision of the Agreement.
IN WITNESS WHEREOF, Employer and Employee have executed this Agreement
as of the day and year first above written.
Enesco Group, Inc.
By: /s/ Xxxx-Xxx Xxxxxxxx
-------------------------------
Xxxx-Xxx Xxxxxxxx
Chairman of the Board
Employee:
/s/ Xxxxxx XxxxxXxxxx
-----------------------------------
Xxxxxx XxxxxXxxxx
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