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Exhibit 10.36
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of February 8, 2000 (the
"EFFECTIVE DATE") between ▇▇▇▇▇▇▇ Company, a Delaware corporation (the
"COMPANY"), and ▇▇▇▇▇ ▇▇▇▇▇ (the "EXECUTIVE").
WHEREAS, the Executive is possessed of certain experience and
expertise in management; and
WHEREAS, the Company wishes to employ the Executive as Executive Vice
President and Chief Operations Officer and the Executive wishes to accept such
employment.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT.
1.1. AGREEMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, in each case subject to the
terms and conditions set forth herein.
1.2. TERM. The employment of the Executive by the Company shall be for
the period commencing on the Effective Date and expiring on the date on which
termination of employment is effective pursuant to the provisions of Section 8
(the "TERMINATION DATE"). For all purposes of this Agreement, references to the
"term" of the Executive's employment hereunder shall mean the period commencing
on the Effective Date and ending on the Termination Date.
2. POSITION AND DUTIES. The Executive shall serve as Executive Vice President
and Chief Operations Officer of the Company, and shall be accountable to, and
shall have such powers, duties and responsibilities as shall be consistent
therewith as may from time to time be prescribed by the Board of Directors of
the Company (the "BOARD"). The Executive shall perform and discharge,
faithfully, diligently, competently and in good faith such duties and
responsibilities. The Executive (a) shall devote all of his business time and
attention and his best efforts and ability to the business and affairs of the
Company and its Subsidiaries and (b) shall not engage in other business
activities whether or not compensated during the term of this Agreement without
prior written consent of the Board. The services of the Executive shall be
performed at the offices of the Company in the Metropolitan Area; PROVIDED,
HOWEVER, that the Executive acknowledges that substantial travel will be
required in view of the fact that the Company conducts operations and maintain
facilities throughout the United States and elsewhere around the world.
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3. COMPENSATION. Subject to all of the terms and conditions hereof and to the
performance by the Executive of his duties and obligations to the Company:
3.1. SALARY. As compensation for services performed during the term of
his employment hereunder, the Company shall pay the Executive a base salary at
a rate of $325,000 per annum or such other amount as may be increased from time
to time by the Board (such annual rate of salary in effect from time to time
being referred to as the "SALARY"). The Salary shall be payable in accordance
with the payroll practices of the Company. Except as otherwise provided in this
Agreement, the Salary shall be prorated for any period less than a full year.
3.2. ANNUAL BONUS. As additional compensation for services hereunder,
the Executive shall be eligible for a bonus for each Bonus Year commencing on
the first day of each fiscal year and ending on or prior to the last day of the
term hereof. For the sole purpose of calculating Executive's annual bonus for
fiscal year 2000 pursuant to this Section 3.2, the Executive will be presumed
to have commenced employment with the Company as of the first day of fiscal
year 2000. The amount of any such bonus shall be determined based upon the
achievement of specified levels of operating performance by the Company for
such Bonus Year measured by the business plan approved by the Board for such
fiscal year (the "EBITDA PERFORMANCE"). The target bonus payable for any Bonus
Year with respect to the EBITDA Performance shall equal 60% of the Salary. The
actual bonus payable for any Bonus Year with respect to the EBITDA Performance
shall be computed as set forth on Exhibit A. Any bonus payable under this
Section 3.2 is referred to herein as an "ANNUAL BONUS".
3.3. STOCK OPTIONS. As soon as practicable after the date of
commencement of the Executive's employment hereunder, the Company shall grant
to the Executive under the Company's 1999 Stock Option Plan stock options (the
"STOCK OPTIONS") to purchase 500,000 shares of Common Stock of Holdings,
250,000 of which will be Regular Options (as defined in the stock option
certificate) and 250,000 of which will be Superincentive Options (as defined in
the stock option certificate). The Stock Options will have an exercise price of
$6.7315 per share of Common Stock. The Stock Options will be issued pursuant to
a stock option certificate in substantially the form of Exhibit B (the "STOCK
OPTION CERTIFICATE"). The Stock Options will vest on the schedule specified in,
and in accordance with the terms of, the Stock Option Certificate.
Notwithstanding the foregoing provisions of this Section 3.3, in the case of a
conflict between this Section 3.3 and the Stock Option Certificate, the Stock
Option Certificate shall govern.
3.4. BUSINESS EXPENSES. During the term of his employment hereunder,
the Executive shall be entitled to receive prompt reimbursement by the Company
for all reasonable business expenses incurred by him on behalf of the Company
or any of its Subsidiaries or Affiliates (in accordance with the policies and
procedures established by the Board from time to time for the Company's
executive officers) in performing services hereunder; PROVIDED, HOWEVER, that
the Executive shall properly account therefor in accordance with requirements
for federal income tax deductibility and the Company's policies and procedures.
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3.5. FRINGE BENEFITS. The Executive shall be entitled to participate
in or receive benefits under any life insurance, health and accident plans,
retirement plans and other similar fringe benefit arrangements made generally
available by the Company to its executives and key management employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Notwithstanding any other
arrangements that the Company may make available from time to time to its other
executives or key management employees, the Salary, the bonuses payable under
this Agreement and any stock options granted by the Company to the Executive in
accordance with the Agreement shall be in lieu of the Executive's participation
in any other bonus, equity incentive or equity-type incentive plans established
by the Company, except that the Executive shall be entitled to participate in
any supplemental executive retirement plans, "401(k) plans" and profit sharing
plans.
0.1. VACATIONS. During the term of his employment hereunder, the
Executive shall be entitled to 20 paid working days as vacation in each year
and shall also be entitled to all paid holidays given by the Company to its
employees. For the sole purpose of calculating paid vacation days pursuant to
this Section 3.6, the Executive will be presumed to have commenced employment
with the Company as of the first day of fiscal year 2000. The paid vacation
days shall be prorated for any period of service hereunder less than a full
year. The Executive shall not be entitled to cash compensation for any vacation
time not taken during the term hereof and shall not be entitled to accrue
unused vacation.
3.6. RELOCATION ASSISTANCE. The Company shall reimburse the Executive
for the reasonable costs associated with the closing of the sale of the
Executive's Westport, Connecticut home (including attorney's fees and brokers'
fees) and costs associated with the relocation of the Executive's personal
property from Westport, Connecticut to the Metropolitan Area; PROVIDED,
HOWEVER, that the Executive shall properly account therefor in accordance with
the requirements for federal income tax deductibility and the Company's
policies and procedures. If the Executive purchases a house or condominium in
the Metropolitan Area, then the Company shall reimburse the Executive for the
costs associated with the closing of such purchase (including loan organization
fees, attorney's fees and brokers' fees); PROVIDED, HOWEVER, that the Executive
shall properly account therefor in accordance with the requirements for federal
income tax deductibility and the Company's policies and procedures. In addition
to the foregoing, the reimbursement owed to the Executive under this Section
3.7 shall be increased by the aggregate amount, computed at the highest
applicable marginal tax rate, of federal, state and local income taxes for
which the Executive will be liable on account of such reimbursement to be made
under this Section 3.7.
3.7. TEMPORARY LIVING ALLOWANCE. During the term of his employment
hereunder, while the Executive is providing services to the Company in the
Metropolitan Area, the Company agrees to provide Executive a reasonable housing
and food allowance until the date on which the Executive relocates from
Westport, Connecticut to the Metropolitan Area.
3.8. TRAVEL EXPENSES. During the term of his employment hereunder,
until the date on which the Executive relocates from Westport, Connecticut to
the Metropolitan Area, the
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Executive shall be entitled to receive reimbursement by the Company for all
reasonable travel expenses incurred by him in connection with travel between
Westport, Connecticut and the Metropolitan Area, provided that appropriate
documentation evidencing such expenses is submitted to the Company; PROVIDED,
HOWEVER, that such reimbursement shall not exceed $2,000.00 per month.
3.10. AUTOMOBILE STIPEND. During the term of employment hereunder, the
Executive shall be entitled to a stipend of up to $750.00 each month to cover
expenses associated with leasing or owning an automobile; PROVIDED, HOWEVER,
that the Executive shall properly account therefor on his federal and
applicable state tax returns and related documentation in accordance with the
requirements for federal income tax deductibility and the Company's policies
and procedures.
4. OFFICES; SUBSIDIARIES AND AFFILIATES.
4.1. GENERALLY. The Executive agrees to serve during the term of his
employment hereunder, if elected or appointed thereto, in one or more positions
as an officer or director of the Company or any of its Subsidiaries or
Affiliates, or as an officer, trustee, director or other fiduciary of any
pension or other employee benefit plan of the Company or any of its
Subsidiaries or Affiliates. Service in such additional positions will be
without additional compensation except for reimbursement of reasonably related
business expenses on the same terms as provided elsewhere in this Agreement.
4.2. INDEMNIFICATION. The Company agrees that in connection with the
Executive's service in additional positions as provided under Section 4.1, the
Executive shall be entitled to the benefit of any indemnification provisions in
the charter and by-laws of the Company and any of its Subsidiaries and
Affiliates for which the Executive serves in such an additional position and
any director and officer liability insurance coverage carried by the Company
and any of its Subsidiaries and Affiliates for which the Executive serves as an
officer or director; PROVIDED, HOWEVER, that this Section 4.2 shall not impose
on the Company or any of its Subsidiaries or Affiliates any obligation to
include any such indemnification provisions in its charter or by-laws or to
maintain any such insurance coverage.
5. UNAUTHORIZED DISCLOSURE; INVENTIONS.
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5.1. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
Company and its Subsidiaries and Affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its Subsidiaries or Affiliates and that the Executive may learn of
Confidential Information during the course of employment. The Executive will
comply with the policies and procedures of the Company and its Subsidiaries and
Affiliates for protecting Confidential Information and agrees not to disclose
to any Person (except as required by applicable law or for the proper
performance of his duties and responsibilities to the Company and its
Subsidiaries and Affiliates), or use for his own benefit or gain, any
Confidential Information obtained by the Executive incident to his employment
or other association with the Company or any of its Subsidiaries or Affiliates.
The Executive understands that this restriction shall continue to apply after
his employment terminates, regardless of the reason for such termination.
5.2. PROTECTION OF DOCUMENTS. All documents, records, tapes and other
media of every kind and description relating to the business, present or
otherwise, of the Company or its Subsidiaries or Affiliates and any copies, in
whole or in part, thereof (the "DOCUMENTS"), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company or its
Subsidiaries or Affiliates. The Executive shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, or at
such earlier time or times as the Board or its designee may specify, all
Documents then in the Executive's possession or control.
5.3. PROPRIETARY RIGHTS. Any and all inventions, discoveries,
developments, methods, processes, compositions, works, supplier and customer
lists (including information relating to the generation and updating thereof),
concepts and ideas (whether or not patentable or copyrightable) conceived,
made, developed, created or reduced to practice by the Executive (whether at
the request or suggestion of the Company or otherwise, whether alone or in
conjunction with others, and whether during regular hours of work or otherwise)
during the term of his employment by the Company and for one year thereafter,
which may be directly or indirectly useful in, or related to, the business,
ventures or other activities of or products manufactured or sold by the Company
or any of its Subsidiaries or Affiliates or any business or products
contemplated by the Company or any of its Subsidiaries or Affiliates while the
Executive was or is an employee, officer or director of the Company
(collectively, "PROPRIETARY RIGHTS"), shall be promptly and fully disclosed by
the Executive to the Board and shall be the exclusive property of the Company
as against the Executive and his successors, heirs, devisees, legatees and
assigns, and the Executive hereby assigns to the Company his entire right,
title and interest therein and shall promptly deliver to the Company all
papers, drawings, models, data and other material relating to any of the
foregoing Proprietary Rights conceived, made, developed, created or reduced to
practice by him as aforesaid. All copyrightable Proprietary Rights shall be
considered "works made for hire." The Executive shall, upon the Company's
request and without any payment therefor, execute any documents necessary or
advisable in the opinion of the Company's counsel to assign, and confirm the
Company's title in, his entire right, title and interest in the foregoing
Proprietary Rights and to direct issuance of patents or copyrights to the
Company with respect to such Proprietary Rights as are the Company's exclusive
property as against the Executive and his successors, heirs, devisees, legatees
and assigns under this Section 5.3 or to vest in the Company title to such
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Proprietary Rights as against the Executive and his successors, heirs,
devisees, legatees and assigns, the expense of securing any such patent or
copyright, however, to be borne by the Company. In the event the Executive is
not employed by the Company at the time a request for the Executive's
assistance is made by the Company pursuant to this Section 5.3, (a) the Company
shall reimburse the Executive for reasonable expenses incurred by the Executive
in assisting the Company, provided that appropriate documentation evidencing
such expenses is submitted to the Company and (b) the Company shall use its
reasonable best efforts to schedule any such assistance so as not to interfere
with the Executive's employment at such time.
6. RESTRICTED ACTIVITIES. The Executive agrees that some restrictions on his
activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the
Company and its Subsidiaries and Affiliates:
6.1. NON-COMPETITION. While the Executive is employed by the Company
and for a period which is the earlier of (a) two years immediately following
termination of his employment and (b) after the first anniversary of the
Termination Date, the date on which the Executive elects not to receive
severance pursuant to Section 9.4(c) hereof (the "NON- COMPETITION PERIOD"),
the Executive shall not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, co-venturer or otherwise, compete with
the Company or any of its Subsidiaries or Affiliates within the United States
in any Competitive Business or undertake any planning for any Competitive
Business. Without limiting the generality of the foregoing, during the
Non-Competition Period, the Executive will not solicit or encourage any Person
who is or was a customer of the Company or any of its Subsidiaries or
Affiliates to terminate its relationship with any of them, or to conduct with
any other Person any business or activity which such customer conducted at the
termination of the Executive's employment or could conduct with the Company or
any of its Subsidiaries or Affiliates.
6.2. OUTSIDE ACTIVITIES. The Executive agrees that, during his
employment with the Company, he will not undertake any outside activity,
whether or not competitive with the business of the Company or any of its
Subsidiaries or Affiliates, that could reasonably give rise to a conflict of
interest or otherwise interfere with his duties and obligations to the Company
or any of its Subsidiaries or Affiliates; PROVIDED, HOWEVER, that the Executive
shall be permitted to spend a reasonable period, which period shall not exceed
sixty days from the Effective Date, assisting in the transition of his
employment from Paramount Headwear, Inc. to the Company.
6.3. NON-SOLICITATION OF EMPLOYEES. Acknowledging the strong interest
of the Company in an undisrupted workplace, the Executive further agrees that
while he is employed by the Company and for a period which is the earlier of
(a) two years immediately following termination of his employment and (b) after
the first anniversary of the Termination Date, the date on which the Executive
elects not to receive severance pursuant to Section 9.4(c) hereof, the
Executive will not (a) hire or attempt to hire any employee of the Company or
any of its Subsidiaries or Affiliates for employment by any other Person,
assist in such hiring by any Person or seek to persuade any employee of the
Company or any of its Subsidiaries or Affiliates to discontinue employment with
the Company or any of its Subsidiaries or Affiliates or (b) solicit or
encourage any independent contractor providing services to the Company or
any of its
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Subsidiaries or Affiliates to terminate or diminish its relationship with the
Company or any of its Subsidiaries or Affiliates.
6.4. OWNERSHIP OF SECURITIES. Notwithstanding the provisions of this
Sections 6, the Executive shall have the right to acquire as a passive investor
(with no involvement in the operations or management of the business) up to 1%
of any class of securities which is (a) issued by any Person engaged in a
Competitive Business and (b) publicly traded on a national securities exchange
or over-the-counter market.
7. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed upon him pursuant to Sections 5 and 6. The Executive
agrees that such restraints are necessary for the reasonable and proper
protection of the Company and its Subsidiaries and Affiliates and that each and
every one of the restraints is reasonable in respect to subject matter, length
of time and geographic area. The Executive further acknowledges that, were he
to breach any of the covenants contained in Section 5 or 6, the damage to the
Company would be irreparable. The Executive therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled to obtain
preliminary and permanent injunctive relief against any breach or threatened
breach by the Executive of any of such covenants, without having to post bond.
The parties further agree that, in the event that any provision of Section 5 or
6 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large
a geographic area or too great a range of activities, such provision shall be
deemed to be modified to permit its enforcement to the maximum extent permitted
by law.
8. TERMINATION.
8.1. DEATH. The Executive's employment hereunder shall terminate upon
his death.
8.2. INCAPACITY. If the Executive shall have been unable to perform
his duties hereunder by reason of any physical or mental illness, injury or
other incapacity (a) for any period of 60 consecutive days or (b) for a total
of 120 days in any period of 12 consecutive calendar months, in the reasonable
judgment of the Board, after consultation with such experts, if any, as the
Board may deem necessary or advisable, the Company may terminate the
Executive's employment hereunder by written notice to the Executive.
8.3. CAUSE. The Company may terminate the Executive's employment
hereunder for Cause at any time upon written notice to the Executive. For the
purposes of this Agreement, the Company shall have "CAUSE" to terminate the
Executive's employment hereunder upon: (a) the Executive's breach of any of his
obligations set forth in this Agreement, which breach is not cured within 15
days after receipt by the Executive from the Board of written notice of such
breach; (b) the Executive's breach of his fiduciary duties as an officer or
director of the Company or any of its Subsidiaries or Affiliates, or as an
officer, trustee, director or other fiduciary of any pension or employee
benefit plan of the Company or any of its Subsidiaries or Affiliates; (c) the
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Executive's commission of a felony involving fraud, personal dishonesty or
moral turpitude (whether or not in connection with his employment); or (d) the
Executive's failure to follow the reasonable instructions of the Board, which
failure does not cease within 15 days after receipt by the Executive from the
Board of written notice of such failure.
8.4. OTHER THAN FOR CAUSE. The Company may terminate the Executive's
employment hereunder other than for Cause at any time upon written notice to
the Executive.
8.5. GOOD REASON. The Executive may terminate the Executive's
employment hereunder for Good Reason at any time upon 60 days' prior written
notice to the Company. In the event of termination of the Executive pursuant to
this Section 8.5, the Board may elect to waive the period of notice or any
portion thereof. For the purposes of this Agreement, the Executive shall have
"GOOD REASON" to terminate the Executive's employment hereunder upon: (a)
material diminution in the nature or scope of Executive's responsibilities,
duties or authority, in each case except in the event of termination of the
Executive's employment pursuant to Section 8.1, 8.2, 8.3 or 8.6; PROVIDED,
HOWEVER, that the Company's failure to continue Executive's appointment or
election as a director or officer of any of its Affiliates and any diminution
of the business of the Company or any of its Affiliates, including without
limitation the sale or transfer of any or all of the assets of the Company or
any of its Affiliates, shall not constitute "Good Reason", or (b) material
failure of the Company to provide Executive the Salary and benefits in
accordance with the terms of Section 3 hereof.
8.6. OTHER THAN FOR GOOD REASON. The Executive may terminate his
employment hereunder at any time upon 60 days' prior written notice to the
Company. In the event of termination of the Executive pursuant to this Section
8.6, the Board may elect to waive the period of notice, or any portion thereof.
9. COMPENSATION UPON TERMINATION.
9.1. DEATH. In the event of the Executive's death during the term
hereof, the Company shall pay or transfer, as the case may be, to the
Executive's designated beneficiary or, if no beneficiary has been designated by
the Executive, to his estate, (a) his Salary that is earned and unpaid at the
date of death and (b) on the earlier of (i) the date of the release of the
audited financial statements of the Company for the Bonus Year during which
death occurs or (ii) the date which is 120 days after the end of such Bonus
Year, an amount equal to the product of (A) the Annual Bonus that the Executive
would otherwise have earned for such Bonus Year if death had not occurred
MULTIPLIED BY (B) a fraction, the numerator of which is the number of days from
the beginning of such Bonus Year until the date of death and the denominator of
which is 365.
9.2. INCAPACITY. If the Executive's employment shall be terminated by
reason of his incapacity pursuant to Section 8.2, the Company shall (a)
continue to pay the Executive his Salary through the Termination Date and (b)
pay the Executive on the earlier of (i) the date of the release of the audited
financial statements of the Company for the Bonus Year during which
termination pursuant to Section 8.2 occurs or (ii) the date which is 120 days
after the end of such Bonus
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Year, an amount equal to the product of (A) the Annual Bonus that the Executive
would otherwise have earned for such Bonus Year if termination pursuant to
Section 8.2 had not occurred MULTIPLIED BY (B) a fraction, the numerator of
which is the number of days from the beginning of such Bonus Year until the
date of termination pursuant to Section 8.2 and the denominator of which is
365.
9.3. CAUSE. If the Company shall terminate the Executive's employment
for Cause, the Company shall have no further obligations to the Executive under
this Agreement other than payment of his Salary through the Termination Date.
9.4. OTHER THAN FOR CAUSE; GOOD REASON. If the Company shall terminate
the Executive's employment pursuant to Section 8.4 or the Executive shall
terminate the Executive's employment pursuant to Section 8.5, then the Company
shall pay to the Executive:
(a) his Salary through the Termination Date;
(b) on the earlier of (i) the date of the release of the
audited financial statements of the Company for the Bonus Year during
which such termination occurs or (ii) the date which is 120 days after
the end of such Bonus Year, an amount equal to the product of (A) the
Annual Bonus that the Executive would otherwise have earned for such
Bonus Year if such termination had not occurred MULTIPLIED BY (B) a
fraction, the numerator of which is the number of days from the
beginning of such Bonus Year until the date of such termination and
the denominator of which is 365; and
(c) until the second anniversary of the Termination Date,
severance at a rate equal to 100% of his Salary in effect at the time
notice of termination is given, such severance to be paid on a monthly
basis (or such other increment as the Company and the Executive
mutually agree) for a period of 24 months after the termination of the
Executive's employment; PROVIDED, HOWEVER, that if after the first
anniversary of the Termination Date the Executive commences other
employment, the Executive shall be entitled to severance at a rate
equal to the difference between (i) 100% of his Salary in effect at
the time notice of termination is given and (ii) 100% of the annual
salary to be received by the Executive upon commencement of other
employment and PROVIDED, FURTHER, that the Executive may elect by
written notice to the Company after the first anniversary of the
Termination Date not to receive severance pursuant to this Section
9.4(c).
With respect to any termination of employment to which this Section 9.4
applies, until the earlier to occur of (1) the second anniversary of the
Termination Date, (2) the date on which the Executive commences other
employment in connection with which the Executive receives medical and dental
benefits substantially comparable to those made available by the Company
(including self-employment or engaging in an enterprise as a sole proprietor or
partner) or (3) the date the Executive elects pursuant to Section 9.4(c) not to
receive severance under such section (the "BENEFITS TERMINATION DATE"), the
Company shall continue to contribute to the cost of the Executive's
participation in such medical and dental insurance plans so long as the
Executive is
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entitled to continue such participation under applicable law and plan terms.
The obligations of the Company to the Executive under this Section 9.4 (other
than clause (a) of the first sentence of this Section 9.4) are conditioned upon
the Executive's signing a release of claims in the form of Exhibit C (the
"RELEASE") within 28 days of the date on which notice of termination is given
and upon such Release remaining in full force and effect thereafter. All
severance payments under this Section 9.4 will be in the form of salary
continuation, payable in accordance with the normal payroll practices of the
Company and will begin at the Company's next regular payroll period following
the effective date of the Release, but shall be retroactive to the Termination
Date.
9.5. OTHER THAN FOR GOOD REASON. If the Executive shall terminate his
employment pursuant to Section 8.6, the Company shall have no further
obligations to the Executive under this Agreement other than payment of his
Salary through the Termination Date (it being understood that if, in accordance
with Section 8.6, the Board elects to waive the period of notice, or any
portion thereof, the payment of Salary under this Section 9.5 shall continue
through the notice period or any portion thereof so waived).
9.6. POST-TERMINATION OBLIGATIONS GENERALLY. Except as expressly set
forth in this Section 9 and the Stock Option Certificate, the Company shall
have no further obligations to the Executive following expiration of the term
of the Executive's employment hereunder, and performance by the Company of any
obligation specifically provided in this Section 9 shall constitute full
settlement of any claim that the Executive may have on account of such
termination against the Company and its Subsidiaries and Affiliates and all of
their respective past and present officers, directors, stockholders,
controlling Persons, employees, agents, representatives, successors and assigns
and all other others connected with any of them, both individually and in their
official capacities.
10. CONFLICTING AGREEMENTS. Executive hereby represents and warrants that the
execution of this Agreement and the performance of Executive's obligations
hereunder will not breach or be in conflict with any other agreement to which
Executive is a party or is bound and that Executive is not now subject to any
covenants against competition, nonsolicitation or similar covenants that would
affect the performance of Executive's obligations hereunder or would restrict
the Company in its operations, including hiring any additional executives.
Executive has provided the Company with a true and correct copy of all
agreements between Executive and Executive's former employer or employers and
any similar agreements governing Executive's rights and obligations relating to
any former employer. Executive will not disclose to or use on behalf of the
Company any confidential or proprietary information of a third party without
such party's consent.
11. WITHHOLDING. All payments made by the Company under this Agreement shall be
net of any tax or other amounts required to be withheld by the Company under
any applicable law or legal requirement.
12. NOTICES. All notices, requests and demands to or upon the parties hereto to
be effective shall be in writing, by facsimile, by overnight courier or by
registered or certified
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mail, postage prepaid and return receipt requested, and shall be deemed to have
been duly given or made upon: (a) delivery by hand, (b) one business day after
being sent by nationally recognized overnight courier, or (c) in the case of
transmission by facsimile, when confirmation of receipt is obtained. Such
communications shall be addressed and directed to the parties as follows (or to
such other address as either party shall designate by giving like notice of
such change to the other party):
If to the Executive:
▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
▇▇▇▇▇▇▇ Company
c/o Fenway Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this Section
13. Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term "Section" refers
to sections of this Agreement, (b) the capitalized term "Exhibit" refers to
exhibits to this Agreement, (c) references to a particular Section include all
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subsections thereof, (d) the word "including" shall be construed as "including
without limitation" and (e) references to "$" mean United States dollars.
13.1. "AAA" is defined in Section 19.
13.2. "AFFILIATE" shall mean (a) any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company (or other specified Person), (b) any other Person which, together with
its Affiliates (as defined in clause (a) above), shall, directly or indirectly,
own beneficially or control the voting of at least 10% of the ownership
interest in the Company (or other specified Person) and (c) any other Person of
which the Company (or other specified Person) and its Affiliates (as defined in
clauses (a) and (b) above) shall, directly or indirectly, own beneficially or
control the voting of at least 10% of any class of outstanding capital stock or
other evidence of beneficial interest or of any interest as a general partner
or joint venturer.
13.3. "ANNUAL BONUS" is defined in Section 3.2.2.
13.4. "BENEFITS TERMINATION DATE" is defined in Section 9.4.
13.5. "BONUS YEAR" means fiscal year of the Company, PROVIDED,
HOWEVER, that in the event the fiscal year of the Company is changed, any
calculations made under Section 3.2 and Exhibit A shall be proportionately
adjusted as the Board, in its sole and absolute discretion, shall deem
appropriate.
13.6. "BOARD" is defined in Section 2.
13.7. "CAUSE" is defined in Section 8.3.
13.8. "COMMON STOCK" means the common stock, $.01 par value, of
Holdings.
13.9. "COMPANY" is defined in the preamble to this Agreement.
13.10. "COMPETITIVE BUSINESS" means any business conducted or proposed
to be conducted by the Company or any of its Subsidiaries during the term of
the Executive's employment with the Company.
13.11. "CONFIDENTIAL INFORMATION" means any and all information of the
Company and its Subsidiaries and Affiliates that is not generally known by
others with whom they compete or do business, or with whom they actively plan
to compete or do business, including such information relating to (a) the
development, research, testing, manufacturing, marketing and financial
activities of the Company and its subsidiaries, (b) the Products, (c) the
costs, sources of supply, financial performance and strategic plans of the
Company and its Subsidiaries and Affiliates, (d) the identity and special needs
of the customers of the Company and its Subsidiaries and Affiliates and (e) the
people and organizations with whom the Company and its Subsidiaries
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and Affiliates have business relationships and those relationships, but
excluding information which (i) is generally available to and known by the
public or (ii) is or becomes known on a non-confidential basis from a source
other than the Executive.
13.12. "DOCUMENTS" is defined in Section 5.2.
13.13. "EBITDA PERFORMANCE" is defined in Section 3.2.
13.14. "EFFECTIVE DATE" is defined in the preamble.
13.15. "EXECUTIVE" is defined in the preamble.
13.16. "FENWAY" means Fenway Capital Partners Fund, L.P., a Delaware
limited partnership, and Fenway Capital Partners Fund II, L.P., a Delaware
limited partnership.
13.17. "GOOD REASON" is defined in Section 8.5.
13.18. "HOLDINGS" means ▇▇▇▇▇▇▇ Holdings, Inc., a Delaware
corporation.
13.19. "METROPOLITAN AREA" means the Atlanta, Georgia metropolitan
area.
13.20. "NON-COMPETITION PERIOD" is defined in Section 6.1.
13.21. "PERSON" means any individual, partnership, corporation,
association, trust, joint venture, limited liability company, unincorporated
organization or entity, and any government, governmental department or agency
or political subdivision thereof.
13.22. "PRODUCTS" means all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or put
into use by the Company or any of its Subsidiaries or Affiliates, together with
all services provided or planned by the Company or any of its Subsidiaries or
Affiliates, during the Executive's employment.
13.23. "PROPRIETARY RIGHTS" is defined in Section 5.3.
13.24. "RELEASE" is defined in Section 9.4.
13.25. "SALARY" is defined in Section 3.1.
13.26. "STOCK OPTION CERTIFICATE" is defined in Section 3.3.
13.27. "STOCK OPTIONS" is defined in Section 3.3.
13.28. "SUBSIDIARY" means any Person of which the Company (or other
specified Person) shall, directly or indirectly, own beneficially or control
the voting of at least a majority of
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the outstanding capital stock (or other shares of beneficial interest) entitled
to vote generally or at least a majority of the partnership, joint venture or
similar interests, or in which the Company (or other specified Person) or a
Subsidiary thereof shall be a general partner or joint venturer without limited
liability.
13.29. "TERMINATION DATE" is defined in Section 1.2.
14. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is approved by the
Board and agreed to in writing by the Executive and such officer as may be
specifically authorized by the Board in connection with such approval. No
waiver by either party hereto at any time of compliance with or of any breach
by the other party hereto of 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. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement and the legal relations created
thereby shall be governed by the domestic substantive laws of the State of
Georgia without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction. The Executive acknowledges and agrees that, because the
Company's legal remedies may be inadequate in the event of a breach of, or
other failure to perform, any of the covenants and agreements set forth in
Section 5 or 6 by the Executive, the Company may, in addition to obtaining any
other remedy or relief available to it (including damages at law), enforce the
provisions of Sections 5 and 6 by injunction and other equitable relief.
15. SEVERABILITY. If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16. COUNTERPARTS. This Agreement may be executed in any one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement (together with the Stock Option
Certificate) constitutes the entire agreement between the parties hereto, and
supersedes any and all prior communications, agreements and understandings,
written or oral, with respect to the terms and conditions of the Executive's
employment with the Company.
18. ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
upon (a) the Executive, his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and (b)
the Company and its successors (including by means of
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reorganization, merger, consolidation or liquidation) and permitted assigns.
The Company may assign this Agreement to any of its Subsidiaries or to any
successor of the Company by reorganization, merger, consolidation or
liquidation and any transferee of all or substantially all of the business or
assets of the Company or of any division or line of business of the Company
with which the Executive is at any time associated. The Company requires the
personal services of the Executive hereunder and the Executive may not assign
this Agreement.
19. ARBITRATION. With the exception of Sections 5 and 6, any unresolved dispute
or controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration, conducted by a single arbitrator in New
York, New York in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect; PROVIDED, HOWEVER, that the parties may agree to use an arbitrator
other than those provided by the AAA. The arbitrator shall not have the
authority to add to, detract from, or modify, any provision hereof nor to award
punitive damages to any injured party. The arbitrator shall have the authority
to order back-pay, severance compensation, reimbursement of costs (including
those incurred to enforce this Agreement), together with interest thereon. A
decision by a the arbitrator shall be final and binding. Judgment may be
entered on the arbitrator's award in any court having competent jurisdiction.
Responsibility for bearing the cost of the arbitration shall be determined by
the arbitrator and shall be proportional to the arbitrator's decision on the
merits.
20. STOCKHOLDER APPROVAL OF CERTAIN PAYMENTS. The Executive hereby agrees that
any payments owed to the Executive pursuant to this Agreement or the Stock
Option Certificate that would be construed as "parachute payments" for purposes
of sec. 280G of the Internal Revenue Code are hereby conditioned on the receipt
by Holdings of a vote of persons who own more than 75% of the voting stock of
Holdings approving such payments.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seal, as of the date first above written.
THE COMPANY:
▇▇▇▇▇▇▇ COMPANY
By_________________________________
Name:
Title:
THE EXECUTIVE:
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