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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 31st day of March, 1994, between ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Corporation, a New York corporation (the "Company"), and ▇▇▇▇ ▇. Idol
(the "Executive").
The Executive is presently employed by the Company as the President of its
▇▇▇▇▇ ▇▇▇▇▇▇ Home Collection division.
The Board of Directors of the Company (the "Board") recognizes that the
Executive's contribution to the growth and success of the Company will be
substantial. The Board desires to provide for the continued employment of the
Executive and to make employment arrangements with the Company which the Board
has determined will reinforce and encourage the attention and dedication to the
Company of the Executive as a member of the Company's management, in the best
interest of the Company. The Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided.
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to serve the Company, on the terms and conditions set
forth herein.
2. Term. The employment of the Executive by the Company as provided in
Section 1 pursuant to this Agreement will be effective on the date hereof.
Executive will serve at the direction and pleasure of the Board.
3. Position and Duties. The Executive shall serve in the capacity
described above and shall have such responsibilities, duties and authority as he
may have as of the date hereof (or which arise from any comparable position as a
key executive officer to which he may be appointed after the date hereof) and as
may from time to time be assigned to the Executive by the Board that are
consistent with such responsibilities, duties and authority. The Executive shall
devote substantially all his working time and efforts to the business and
affairs of the Company.
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4. Compensation and Related Matters.
(a) Salary. During the period of the Executive's employment hereunder, the
Company shall pay to the Executive an annual salary determined by the Board.
Such salary shall be paid in substantially equal installments on a basis
consistent with the Company's payroll practices. This salary shall be subject to
annual review by the Board.
(b) Incentive Compensation. The Board may in its discretion include as
part of Executive's compensation in any fiscal year a bonus or incentive
compensation program.
(c) Expenses. During the term of the Executive's employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
and customary expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living expenses while away from
home on business or at the request of and in the service of the Company,
provided that such expenses are incurred and accounted for in accordance with
the policies and procedures established by the Company.
(d) Other Benefits. During the term of Executive's employment hereunder,
Executive shall be entitled to participate in or receive benefits under any
medical, pension, profit sharing or other employee benefit plan or arrangement
generally made available by the Company now or in the future to its executives
and key management employees (or to their family members), subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Executive pursuant to paragraph (a)
of this Section.
(e) Vacations. The Executive shall be entitled to reasonable vacations
consistent with past practice.
5. Termination.
(a) Termination by Company. The Executive's employment hereunder may be
terminated by the Board at any time with or without cause.
(b) Termination by the Executive. The Executive may terminate his
employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (A) the assignment to the Executive of a title or duties
inconsistent with those of a senior executive of the Company; (B) a reduction by
the Board of the Executive's salary and/or a termination or substantial
reduction of an incentive or bonus program in effect for Executive which
termination or reduction eliminates any
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meaningful opportunity for Executive to earn the combined salary and target
minimum bonus for the prior year; (C) the permanent and involuntary relocation
of Executive's office to a site outside the New York City metropolitan area; or
(D) a failure by the Company to comply with any material provision of this
Agreement which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company. Any exercise of
rights pursuant to clauses (A), (B) or (C) of this paragraph 5(b) shall be
exercised within sixty (60) days of the date Executive becomes aware of the
action giving rise to such rights.
(c) Any termination of the Executive's employment by the Company or by the
Executive (other than termination pursuant to Section 6(d)(i) hereof) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 11 hereof. If termination is pursuant to Sections
6(d)(ii)-(iii) or 5(b) hereof, the "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
6. Compensation Upon Termination.
(a) If Company shall terminate Executive's employment for any reason other
than an Enumerated Reason as set forth in Section 6(d) hereof or if Executive
resigns for Good Reason pursuant to Section 5(b) hereof, then so long as
Executive complies with Section 8 hereof Executive shall be entitled to the
following:
(i) Continued salary payments (less applicable withholdings) for a
period of thirty-six (36) months from the date of termination at the rate
and in the manner in effect on such date;
(ii) Payment (less applicable withholdings), in the manner then in
effect and through the end of the current fiscal year, of any incentive or
bonus program in effect for Executive on the date of termination and,
thereafter, through the end of the thirty-six month period following the
date of termination a monthly payment equal to one-twelfth (1/12) of the
incentive or bonus compensation earned in such current fiscal year. If
employment is terminated by Executive for Good Reason pursuant to Section
5(b) hereof as a result of a salary reduction and/or termination or
reduction of an incentive or bonus program then salary payments and
incentive or bonus payments pursuant to subsections (i) and (ii) shall be
made at the level earned in the fiscal year prior to such reduction;
(iii) Continued participation in the Company's health benefit plans
during the severance period, provided if Executive is provided with
similar
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coverage by a successor employer, any such coverage by the Company shall
cease;
(iv) Continued use of Company automobile until the then existing
auto lease term expires; and
(v) Waiver of collateral interest securing return to Company of the
portion of the premium paid by Company for Executive's existing Split
Dollar Life Insurance Policy.
If a Change of Control shall have occurred prior to the date of
termination, Executive shall be entitled at his option, exercisable in writing
within fifteen (15) days of the date of termination, to receive the equivalent
of the thirty-six (36) months' salary continuation and the incentive or bonus
payments pursuant to subsections (i) and (ii) above in two substantially equal
lump sum installments, the first payable within thirty (30) days of the date of
termination and the second on the first anniversary of the date of termination.
As used herein, the term "Change of Control" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇ or members
of his family (or trusts created for their benefit) no longer control 50% or
more of the voting power of the then outstanding securities of the Company
entitled to vote for the election of the Company's Directors.
(b) If the Executive's employment is terminated by his death, the Company
shall pay any amounts due to the Executive through the date of his death.
(c) If the Executive's employment shall be terminated by the Company
pursuant to Section 6(d)(ii) or (iii) for an Enumerated Reason or by the
Executive for other than Good Reason, the Company shall pay the Executive his
full salary through the date of termination at the rate in effect at the time
Notice of Termination is given and the Company shall have no further obligations
to the Executive under this Agreement but Executive shall be bound by Section 8
hereof.
(d) The term "Enumerated Reason" with respect to termination by the
Company of Executive's employment shall mean any one of the following reasons:
(i) Death. The Executive's employment hereunder shall terminate upon
his death.
(ii) Disability. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent from
his duties hereunder on a full-time basis for the entire period of twelve
consecutive months, and within thirty (30) days after written Notice of
Termination is given (which may occur before or after the end of such
twelve month period) shall not have returned to the performance of his
duties hereunder on a full-time basis, the Company may terminate the
Executive's employment hereunder.
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(iii) Cause. The Company shall have "Cause" to terminate the
Executive's employment hereunder upon (1) the willful and continued
failure by the Executive to substantially perform his duties hereunder
after demand for substantial performance is delivered by the Company that
specifically identifies the manner in which the Company believes the
Executive has not substantially performed his duties, or (2) Executive's
conviction of any crime (whether or not involving the Company)
constituting a felony or (3) the willful engaging by the Executive in
misconduct which is materially injurious to the Company, monetarily or
otherwise (including, but not limited to, conduct that constitutes
competitive activity, as defined in Section 8). For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission was
in the best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause without
(x) reasonable written notice to the Executive setting forth the reasons
for the Company's intention to terminate for Cause, (y) an opportunity for
the Executive, together with his counsel, to be heard before the Board,
and (z) delivery to the Executive of a Notice of Termination, as defined
in Section 5(c) hereof, from the Board finding that in the good faith
opinion of the Board the Executive was guilty of conduct set forth above
in clauses (1)-(3) hereof, and specifying the particulars thereof in
detail.
7. Mitigation. Executive shall have no duty to mitigate the payments
provided for in Section 6(a) by seeking other employment or otherwise and such
payment shall not be subject to reduction for any compensation received by
Executive from employment in any capacity following the termination of
Executive's employment with the Company.
8. Noncompetition.
(a) Executive agrees that for the duration of his employment and for a
period three (3) years from the date of termination thereof, he will not, on his
own behalf or on behalf of any other person or entity, hire, solicit, or
encourage to leave the employ of the Company or its subsidiaries or affiliates
any person who is an employee of any of such companies.
(b) Executive agrees that for the duration of his employment and for a
period of three (3) years from the date of termination thereof, Executive will
take no action which is intended, or would reasonably be expected, to harm (e.g.
making public derogatory statements or misusing confidential Company
information, it being acknowledged that Executive's employment with a competitor
in and of itself shall not be deemed to be harmful to the Company) the Company
or any of its subsidiaries or affiliates or their reputation.
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9. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as herein before defined and any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 9 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts are payable
to him hereunder all such amounts unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
10. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered with receipt
acknowledged or five business days after having been mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
▇▇. ▇▇▇▇ ▇. Idol
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to the Company:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
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11. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York without regard to its conflicts of law principles.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in the City of
New York before a single arbitrator in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Company shall be entitled to seek a restraining order or injunction in any court
of competent jurisdiction to prevent any continuation of any violation of the
provisions of Section 8 of this Agreement and the Executive hereby consents that
such restraining order or injunction may be granted without the necessity of the
Company's posting any bond, and provided further that the Executive shall be
entitled to seek specific performance of his right to be paid until the date of
termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement. Fees and expenses payable to the American
Arbitration Association and the arbitrator shall be shared equally by the
Company and by the Executive, but the parties shall otherwise bear their own
costs in connection with the arbitration; provided that the arbitrator shall be
entitled to include as part of the award to the prevailing party the reasonable
legal fees and expenses incurred by such party in an amount not to exceed
$25,000.
15. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, effective as of the 31st
day of March, 1994.
▇▇▇▇ ▇▇▇▇▇ LAUREN CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------------
/s/ ▇▇▇▇ ▇. Idol
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Executive: ▇▇▇▇ ▇. Idol
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LOGO
November 1, 1995
▇▇. ▇▇▇▇ ▇. Idol
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
In conjunction with your promotion to the position of Group
President and COO with responsibility for Polo domestic licensing, ▇▇▇▇▇ Lauren
Home Collection and The ▇▇▇▇▇ ▇▇▇▇▇▇ Catalog Company, Inc., I am pleased to
confirm that effective September 11, 1995 the annual rate of your base salary
was increased by $100,000 (to $540,000). The calculation of your incentive bonus
remains unchanged.
Sincerely,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice Chairman
Agreed:
/s/ ▇▇▇▇ ▇. Idol
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▇▇▇▇ ▇. Idol
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AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
Agreement dated as of October 31, 1994 between ▇▇▇▇▇ Lauren Corporation
("Polo"), ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, L.P. (the "Partnership") and ▇▇▇▇ ▇. Idol
("Executive").
Polo and Executive are parties to a certain Employment Agreement dated as
of the 31st day of March, 1994 (the "Agreement") and to a certain letter
agreement dated as of March 31, 1994 (the "Letter Agreement").
Polo has transferred substantially all of its assets and liabilities and
its business to the Partnership as of the date first written above.
Pursuant to Section 9(a) of the Agreement the parties wish to confirm and
acknowledge that Polo has assigned to the Partnership and the Partnership has
assumed, all rights, duties and obligations of Polo under the Agreement and the
Letter Agreement.
NOW THEREFORE, intending to be bound the parties hereby agree as follows
with effect from the first date written above.
1. All references to the Company under the Agreement shall refer to ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, L.P., a Delaware limited partnership, and all notices shall be
addressed to that entity. The Partnership hereby agrees to fulfill all the
duties and
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obligations of the Company under the Agreement and the Letter Agreement and to
be bound by the terms thereof.
2. Except where the context requires otherwise, references in the
Agreement to the "Board of Directors" of the Company or its "Board" or its
"Directors" shall mean the executive or managing board of the Company which is
vested with the authority to hire and dismiss the executive officers of the
Company and if that power is vested in a general partner of the Company then
such reference shall be to the Board of Directors or the executive or managing
board, as the case may be, of such general partner.
3. The Agreement remains in full force and effect and unmodified except as
herein provided.
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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as
of the date first written above.
▇▇▇▇ ▇▇▇▇▇ LAUREN CORPORATION, a
New York corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇ LAUREN, L.P., a
Delaware limited partnership
By: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
CORPORATION, General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXECUTIVE:
/s/ ▇▇▇▇ ▇. Idol
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