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Exhibit 10.21
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of April, 1997, between ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, L.P., a Delaware limited partnership (the "Company"), and ▇▇▇▇▇ ▇.
▇▇▇▇ (the "Executive").
The Executive is presently employed as President of Polo
Retail Corporation ("PRC"), a Delaware corporation, in which the Company's
subsidiary presently owns a 50% interest.
The Company or its successor will assume ownership of the
remaining 50% interest in PRC as a result of a series of related transactions
including among them, those referred to in those certain Stock Purchase
Agreements, dated as of March 21, 1997, by and between ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Retail
Corp. and ▇▇▇▇ ▇▇▇▇▇ Lauren Retail Corporation on the one hand and Executive on
the other.
The Company wishes to retain the services of Executive in
connection with its Retail Group and the Company recognizes that the Executive's
contribution to the growth and success of the Company will be substantial. The
Company desires to provide for the continued employment of the Executive and to
make employment arrangements which 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.
In order to effect the foregoing, the Company and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below. Accordingly, 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 of
directors of the Company's General Partner (such board or such other managing
board or committee as is vested with authority to hire and/or discharge
executive officers of the Company hereinafter referred to as the "Board").
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3. Position; Place of Business.
(a) Title and Duties. The Executive shall serve as
President and Chief Operating Officer of PRC and shall have responsibilities as
Group President of the Company's domestic free-standing ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and
Polo Sport Stores and such other responsibilities as may from time to time be
assigned to the Executive by the Board or the Chairman or Vice Chairman that are
consistent with the responsibilities, duties and authority of the Group
President. All employees in the Group will directly or indirectly report to
Executive; provided that Executive acknowledges that certain individuals in the
creative area or others with dual corporate functions may have additional
reporting responsibilities outside the Group. The Executive shall devote
substantially all his working time and efforts to the business of the Company.
(b) Place of Business. The Executive shall, within a
reasonable time period, relocate to and be based in the metropolitan New York
City area and his offices shall be located in New York City unless Executive
otherwise agrees. Company shall reimburse the Executive for his relocation
expenses from Denver, Colorado as provided in Schedule I attached hereto.
Executive shall travel as required from time to time in performance of his
employment.
4. Compensation and Related Matters.
(a) Base Salary. During the period of the Executive's
employment hereunder, the Company shall pay to the Executive an annual base
salary ("Base Salary") of $750,000. Such salary shall be paid in substantially
equal installments on a basis consistent with the Company's payroll practices
and shall be subject to review by the Board in accordance with the Company's
policies for executive officers.
(b) Incentive Compensation. Executive shall
participate as a Group President in the Company's Executive Incentive Plan as in
effect from time to time and any plan substituted therefor.
(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 at the level of a Group President under any medical, pension, profit
sharing or other
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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. Executive
acknowledges that unless directed by the Board or made available pursuant to a
future plan which specifically applies to Executive by naming him individually
or which specifically applies to a class of officer or employee which includes
Executive, his benefits do not include the supplemental deferred compensation
arrangements which the Company makes available to certain other key executives
currently. 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
Base Salary payable to the Executive pursuant to paragraph (a) of this Section .
(e) Vacations. The Executive shall be entitled to
vacations and holidays on a basis consistent with that offered to executive
officers of the Company.
(f) Automobile. Company shall provide Executive with
use of a leased automobile and the cost of repairs and insurance therefor in
accordance with its automobile policy for executive officers. The lease rate for
such automobile initially shall not exceed $1,250 per month. Executive may elect
to receive $1,250 monthly in lieu of the foregoing.
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 at any time for Good Reason or otherwise. For
purposes of this Agreement, "Good Reason" shall mean (A) a diminution of
Executive's title or duties such that they become inconsistent with those of the
senior operating officer of the Company's domestic ▇▇▇▇ ▇▇▇▇▇ Lauren and Polo
Sport free-standing store group; (B) a reduction by the Board of the Executive's
Base Salary; (C) Executive shall no longer report to the Company's Chairman or
Vice Chairman or the person (irrespective of title) who succeeds to the
principal responsibilities currently assumed by the Vice Chairman and to whom
the Company's Group Presidents report; or (D) a failure by the Company to comply
with any material provision of this Agreement which has not been cured within
fifteen (15) days after notice of such noncompliance has been given by the
Executive to the Company. A Group President under the Company's current
structure is the senior operating officer of a significant business unit who
reports to the Company's chief operating officer. Any exercise of rights
pursuant to clauses (A), (B), (C) or (D) of this paragraph 5(b) shall be
exercised within one hundred eighty (180) days of the date Executive becomes
aware of the action giving rise to such rights.
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(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 Sections 8(b) and (c) hereof Executive
shall be entitled to the following:
(i) Continued Base Salary payments through
March 31, 2002 (less applicable withholdings) or for a period of
twenty-four (24) months from the date of termination, whichever is
later (the "Severance Period"), at the rate and in the manner in effect
on the date of termination (provided, if Executive terminates his
employment for Good Reason because of a reduction in his Base Salary,
then the rate payable shall be that in effect prior to the reduction);
(ii) Payment (less applicable withholdings),
in the manner then in effect and through the end of the then current
fiscal year, of any incentive or bonus program in effect for Executive
on the date of termination notwithstanding any contrary provisions
within any such plan or program;
(iii) Continued participation in the Company's
health benefit plans, during the Severance Period, if permitted under
the terms of such plans provided if Executive is provided with similar
coverage by a successor employer, any such coverage by the Company
shall cease;
(iv) Continued use of his Company automobile
until the then existing auto lease term expires; and
(v) Waiver of the collateral interest securing
return to the Company of premiums for Executive's existing Split Dollar
Life Insurance Policy.
(b) If the Executive's employment is terminated by
his death, the Company shall pay Base Salary due to the Executive through the
date of
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his death plus any incentive or bonus payment payable upon death pursuant to the
provisions of the plan or program therefor.
(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 Base 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 Sections 8(b) and (c) hereof. Notwithstanding the foregoing, at any time
prior to March 31, 1998, Executive may resign for any reason (other than in
connection with the events described in clause (2) of Sections 6(d)(iii) hereof)
and Executive shall be entitled to receive continued base salary payments for a
period of twenty-four (24) months from the date of termination. Except as
provided in Sections 6(a), (b) and (c), Executive shall have no further rights
to compensation or benefits upon termination.
(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 six consecutive months, and within thirty (30) days
after written Notice of Termination is given (which may occur before or
after the end of such six 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.
(iii) Cause. The Company shall have "Cause" to
terminate the Executive's employment hereunder upon (1) the willful and
continued failure by the Executive for ten (10) consecutive days 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 willfully
not substantially performed his duties, or (2) Executive's conviction
of, or plea of guilty or nolo contendere to, 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
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good faith and without reasonable belief that his action or omission
was in or not opposed to 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 any of the conduct set forth above in
clauses (1)-(3) hereof, and specifying the particulars thereof in
detail.
7. Mitigation. Except as provided in Section 6(a)(iii),
Executive shall have no duty to mitigate the payments provided for in Section 6
by seeking other employment or otherwise and such payments 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 not to accept other employment
prior to the termination of Executive's employment with the Company without the
written approval of the Board.
(b) Executive agrees that for the duration of his
employment and for a period of twenty-four (24) months from the date of
termination thereof and any additional period while Executive is receiving
payments hereunder, 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.
(c) Executive agrees that for the duration of his
employment and for a period of twenty-four (24) months from the date of
termination thereof and any additional period while Executive is receiving
payments hereunder, Executive will take no action which is intended, or would
reasonably be expected, to harm, the Company or any of its subsidiaries or
affiliates or their reputation or which would reasonably be expected to lead to
disparaging publicity to the Company or any of its subsidiaries or affiliates.
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
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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, and faxed on the same day it is
mailed return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Haligman and Lottner
First Interstate Tower North
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Company:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
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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.
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 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 pursuant to Section 6 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 arbiter 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
an amount not to exceed $25,000.
15. Prior Agreement; Entire Agreement. Payments under the
Employment Agreement, dated as of February 1, 1993 between PRC and Executive
(the "Prior Agreement") shall continue to accrue through and including March 31,
1997; provided, that in lieu of incentive compensation for the period beginning
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February 1 through March 31, 1997 pursuant to Section 5(b) of such agreement,
Executive shall be entitled to 1/6 the incentive compensation earned by him
thereunder for the fiscal year ended January 1, 1997. Other than with respect to
payments earned prior thereto, which shall be paid by PRC when payable,
beginning April 1, 1997 the Prior Agreement shall be terminated and all matters
between the Company and PRC, on the one hand, and the Executive, on the other,
shall be governed by this 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.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and the Executive has hereunto set his hand, as of the ____
day of March, 1997.
▇▇▇▇ ▇▇▇▇▇ LAUREN, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Executive: ▇▇▇▇▇ ▇. ▇▇▇▇
Agreed:
Polo Retail Corporation
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Schedule I
Relocation Expenses to be Reimbursed
Reasonable and necessary costs of relocation as follows:
1. Sale of Home
- Realtor/broker commission
- Attorney's fees
- Recording fees, if any
- transfer taxes, if any
- other customary closing costs of Seller, if any
2. Moving costs - Company will arrange and pay for the costs of
moving household belongings, automobiles and pets.
3. Purchase of home
- reasonable actual costs of home search and relocation
including travel expenses for family
- inspection fee
- survey, appraisal, credit report
- attorney's fees
- title insurance
Company will select and pay for up to two appraisers acceptable to
Executive to appraise the value of his Denver home. Executive will thereafter
keep Company fully apprised of the progress and details of the sale of his home
(and Company may at its option assume responsibility for the sale) and Company
will reimburse Executive for any shortfall upon sale from the appraised value of
home (or, if more than one appraisal, the average of two appraisals). If
Executive is prepared to close on the purchase of a new home prior to the sale
of the Denver home, Company will provide temporary financing (up to the
appraised value of the Denver home less outstanding mortgage) to assist in the
purchase. Company will also reimburse Executive for the Denver home costs of
interest, real estate taxes and home insurance pending sale.
