EXHIBIT 10.33
EXECUTIVE
EMPLOYMENT AGREEMENT
R. CUNY
This Employment Agreement, is made and entered into as of October
22, 2002, between ▇▇▇▇▇ & WESSON HOLDING CORPORATION, a Nevada corporation (the
"Company"), and ▇▇▇ ▇▇▇▇, an individual ("Employee").
In consideration of the covenants and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated:
1.1 Company means ▇▇▇▇▇ & Wesson Holding Corporation or any
successor entity.
1.2 Company Board means the Company Board of Directors or the
Board of Directors of any successor entity of Company.
1.3 Effective Date means the date first set forth above.
1.4 Termination for Cause means the termination of employment
of Employee by the Company's Chief Operating Officer and/or Chief
Executive Officer because of Employee's personal dishonesty, substantial
and intentional failure to perform reasonably designated duties, willful
misconduct, material breach of fiduciary duty involving personal profit,
willful violation of any material law, rule or regulation resulting in a
detriment to the Company or reflecting upon the Company's integrity (other
than minor traffic infractions or similar minor offenses) or a material
breach by Employee of any term of this Agreement. With respect to all such
grounds except for those involving personal dishonesty or violation of
criminal or securities law, Employee shall be provided ten (10) days
written notice thereof and a reasonable opportunity to cure such breach.
Only upon the failure to cure such breach within ten (10) days after
receipt of such written notice from the Company specifying the nature of
such breach, or the failure to pay compensation to the Company deemed
reasonable by the Company if the breach cannot be cured, may Employee be
terminated for cause.
1.5 Total and Permanent Disability means an injury or illness
of Employee that prevents him from performing his customary duties and
which is expected to be of long continued and indefinite duration and that
has caused Employee's absence from service for at least sixty (60) days.
2. EMPLOYMENT. The Company hereby employs Employee and Employee
accepts employment on the terms and conditions set forth herein.
2.1 Term. The term of this Agreement shall commence on the
date hereof and shall end on the Expiration Date unless terminated in
accordance with the provisions of Section 3 hereof. The "Expiration Date"
shall initially be the first anniversary of the Effective Date, provided
that unless either the Company or Employee elects otherwise at least
ninety (90) days prior to any applicable Expiration Date, the Expiration
Date shall be extended automatically for an additional two (2) years.
2.2 Duties and Responsibilities. Employee shall initially
serve as the Vice President of Operations of the Company and be
responsible for such duties as may be prescribed to him from time to time
by the Company Board, the Chief Executive Officer of the Company and/or
the Chief Operating Officer of the Company. Such duties may include,
without limitation, overseeing the Company's subsidiary ▇▇▇▇▇ & Wesson
Corp. ("S&W"), maximizing the efficiency of its operations, reviewing the
performance and compensation of all its personnel, and attending meetings
from time to time at the headquarters of the Company as may be called by
its officers and the Company Board. Employee shall initially be located at
the principal place of business of S&W in Springfield, Massachusetts.
Employee shall have such title with at least as much status, authority and
responsibility as his initial position as may be designated by the Company
Board from time to time.
2.3 Compensation. During the term of this Agreement and so
long as Employee's employment has not been subject to Termination for
Cause, he shall be entitled to the salary and other employment benefits
provided in this Section 2.3. Employee shall be entitled to an annual
salary of $200,000.00 payable pursuant to the Company's employment
compensation policy as may exist from time to time. Employee shall be
entitled to prompt reimbursement for business expenses on such basis as
may be in effect from time to time. Employee shall also be entitled to
such fringe benefits and receive such performance bonus(es) as may be
agreed to from time to time in writing by Employee and the Company.
2.4 Additional Consideration. Upon the execution of this
Agreement, Employee shall be entitled to receive stock options pursuant to
the Company's Stock Option Plan to purchase 300,000 shares of Common Stock
of the Company, which options shall have an exercise price equal to the
market price as of the Effective Date and vest in three equal annual
installments beginning on the first anniversary of the Effective Date.
3. TERMINATION. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
3.1 Total and Permanent Disability. In the event that Employee
suffers Total and Permanent Disability, the Company may terminate
Employee's
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employment, but shall be obligated to continue Employee's then regular
salary and continue his benefits hereunder for six months. Employee
agrees, in the event of any dispute under this Section, to submit to a
physical examination by a licensed physician selected by the Company, the
cost of such examination to be paid by the Company, and the decision as to
Employee's disability shall be conclusive and binding upon the Company and
Employee. Nothing contained herein shall be construed to affect Employee's
rights under any disability insurance or similar policy, whether
maintained by the Company, Employee or another party.
3.2 Death. This Agreement shall terminate upon the death of
the Employee and no further liability to Employee or to Employee's estate
hereunder shall remain. Nothing contained herein shall be construed to
affect Employee's rights under any life insurance or similar policy,
whether maintained by the Company, or another party.
3.3 Termination for Cause. The Company may terminate
Employee's employment for cause. The Company shall have no further
obligation to pay salary or benefits hereunder after the date of any
Termination for Cause.
3.4 Termination Without Cause. In the event the Company
terminates Employee's employment "without cause", the Company shall
continue to be liable to compensate Employee as set forth in this Section
3.4 for the twelve month period following such termination. Such
compensation shall consist solely of (a) salary in an amount equal to
Employee's then-existing base salary multiplied by 1.5, plus (b) such
fringe benefits as are in place at the time of termination. Employee shall
receive no bonus compensation during such twelve month period except for
such bonus(es) which pertain to a period prior to such termination and
have been accrued but are not due and payable until after such date.
3.5 Good Reason Termination by Employee. The Employee may
terminate employment hereunder for "Good Reason" by delivering to the
Company (1) a Preliminary Notice of Good Reason (as defined below), and
(2) not earlier than thirty (30) days from the delivery of such
Preliminary Notice, a Notice of Termination. For purposes of this
Agreement, "Good Reason" means (i) the failure to continue the Employee as
Vice President of Operations of the Company or in another capacity
contemplated by Section 2 hereof; (ii) the assignment to the Employee of
any duties materially inconsistent with the Employee's positions, duties,
authority, and responsibilities as set forth in Section 2 hereof; (iii) a
reduction in or a material delay in payment of the Employee's total cash
compensation and benefits from those required to be provided in accordance
with the provisions of this Agreement; (iv) the Company, the Board or any
person controlling the Company requires the Employee to be based outside
of the United States, other than on travel reasonably required to carry
out the Employee's obligations under the Agreement; or (v) the failure of
the Company to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Company within 15 days after a merger,
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consolidation, sale or similar transaction; provided, however, that "Good
Reason" shall not include (1) acts not taken in bad faith which are cured
by the Company in all respects not later than thirty (30) days from the
date of receipt by the Company of a written notice from the Employee
identifying in reasonable detail the act or acts constituting "Good
Reason" (a "Preliminary Notice of Good Reason") or (2) acts taken by the
Company by reason of the Employee's physical or mental infirmity which
impairs the Employee's ability to substantially perform his duties under
this Agreement. Notwithstanding the foregoing, in no event shall any new
bonus arrangement be deemed to be a Good Reason. A Preliminary Notice of
Good Reason shall not, by itself, constitute a Notice of Termination.
4. COVENANT NOT TO COMPETE AND CONFIDENTIALITY.
4.1 Covenant Not to Compete. Employee shall not engage in any
business or perform any service, directly or indirectly, or have any
interest, whether as a proprietor, partner, employee, investor, principal,
agent, consultant, director or officer, in any enterprise which
manufactures guns or gun accessories for commercial purposes in the United
States or which is in substantial competition with the business of the
Company (i) during the term of his employment, and (ii) for twenty-four
months after the termination of this Agreement. Nothing in this Section 4
shall be deemed to prohibit Employee from purchasing less than one percent
(1%) of the outstanding shares of any corporation whose shares are traded
on a national exchange and which, at the time of purchase, is not engaged
in competition with the Company. If any court shall determine that the
duration or geographical limit of the foregoing restriction is
unenforceable, it is the intention of the parties that the foregoing
restriction shall not be terminated but shall be deemed amended to the
extent required to render it valid and enforceable, such amendment to
apply only with respect to the operation of this Section 4 in the
jurisdiction of the court that has made the adjudication.
4.2 Confidential Information. Employee acknowledges that he
has and will have access to trade secrets and confidential business
information of the Company throughout the term of this Agreement and that
any such trade secret or confidential information, regardless of whether
Employee alone or with others developed any such trade secret or
confidential information, shall be and shall remain the property of the
Company. During the term of this Agreement and after termination of
employment, Employee shall not, either voluntarily or involuntarily, on
either his own account, as a member of a firm, or on behalf of another
employer or otherwise, directly or indirectly use or reveal to any person,
partnership, corporation or association any trade secret or confidential
information of the Company, its subsidiaries, or their affiliates. Such
trade secrets shall include, but shall not be limited to, business plans,
marketing plans or programs, financial information, forecasts,
compensation arrangements, contracts (whether leases, financing
arrangements, or other contracts) customer lists, and business
opportunities. The term "trade secrets" shall not include information
generally available to the public or a governmental agency except such
term "trade secrets" shall include information provided to the Securities
and Exchange Commission or other governmental
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agency on a confidential basis. Employee will not make available to any
person, partnership, limited liability company, corporation or
association, or retain after termination of employment, any Company or S&W
policy manuals, contracts or other written materials.
4.3 Noninterference with Employees. During the term of
Employee's employment, and for a period of twelve (12) months thereafter,
Employee shall not, in any manner, directly or indirectly, solicit or
assist others to solicit, or employ, hire or otherwise engage or
collaborate with persons who are then-employees of the Company or its
subsidiaries who were employees at any time during the then-prior three
(3) month period, save and except such employees, if any, with whom
Employee had a pre-existing business relationship as of the Effective
Date. Without limitation as to duration, Employee shall not interfere with
the employment relationships between the Company, its subsidiaries and
their respective employees and shall not use or disclose employee lists or
data in violation of Section 4.2 above.
4.4 Noninterference with Customers. During the term of
Employee's employment, and for a period of twelve (12) months thereafter,
Employee agrees not to solicit or assist others to solicit, in any manner,
directly or indirectly (as defined below), for the purpose of providing
products or services similar or related to those provided by the Company,
persons who are current or prospective customers of the Company. Without
limitation as to duration, Employee shall not interfere with any present
or prospective business relationships between the Company and current or
prospective customers.
4.5 Reasonableness of Limitations. EMPLOYEE ACKNOWLEDGES
HAVING CAREFULLY READ AND CONSIDERED THE PROVISIONS OF THIS AGREEMENT AND
AGREES THAT THE RESTRICTIONS AND OTHER OBLIGATIONS SET FORTH IN THIS
AGREEMENT, INCLUDING THE DURATION AND SCOPE OF THE RESTRICTIONS ON
COMPETITION, ARE FAIR AND REASONABLE. Employee acknowledges that the
Company offers unique and specialized products and services that have been
developed as a result of a substantial investment of time and money, that
Employee will be an important employee with access to highly confidential
and valuable proprietary information and materials, and that the
restrictions and other obligations set forth in this Agreement are
reasonable and necessary to protect the good will, proprietary rights,
confidential information and other legitimate business interests of the
Company. Employee acknowledges that this Agreement will not preclude or
unreasonably impair Employee's ability to obtain other employment or
otherwise earn a living after termination of employment with the Company,
and understands that it may be necessary to relocate temporarily if
Employee desires to continue to exercise, during the restricted period,
the same skills provided to the Company. Employee acknowledges and agrees
that the employment and compensation and other consideration that Employee
will receive while employed pursuant to this Agreement is appropriate and
sufficient consideration for Employee to agree to the restrictions and
other obligations set forth in this Agreement. Employee acknowledges
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and agrees that the restrictions and other obligations, including the
acknowledgments and agreements set forth in this section, are material to
the Company and that the consideration given by the Company and received
by Employee under this Agreement is given by the Company in reliance on
the full enforceability of this Agreement.
4.6 Nondisparagement. During the term of Employee's employment
and after termination of Employee's employment, Employee and Company agree
to refrain from making any disparaging statements about each other.
4.7 Injunctive Relief. Employee acknowledges that the
restrictions contained in this Section 4 are a reasonable and necessary
protection of the immediate interests of the Company and that any
violation of these restrictions would cause substantial injury to the
Company. In the event of a breach or threatened breach by Employee of
these restrictions, each of the Company shall be entitled to apply to any
court of competent jurisdiction for an injunction restraining Employee
from such breach or threatened breach; provided, however, that the right
to apply for an injunction shall not be construed as prohibiting either
the Company from pursuing any other available remedies for such breach or
threatened breach.
4.8 Definition of the Company. For purposes of this Section 4
only, "Company" shall mean the Company, S&W and their respective
subsidiaries and affiliates.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of Employee, the Company and their respective heirs,
executors, administrators, successors and assigns; provided, however, that
Employee may not assign his rights hereunder without the prior written consent
of the Company and may not assign his obligations hereunder. The Company may
assign either its rights or obligations hereunder to any of its subsidiaries or
affiliated corporation or to any successor to substantially all of the assets or
business of the Company.
6. AMENDMENTS. This Agreement may not be amended, modified or
supplemented in any respect except by a subsequent written agreement executed by
the Company and Employee.
7. MISCELLANEOUS.
7.1 Entire Agreement. This Agreement rescinds and supersedes
any other agreement, whether oral or written, relating to Employee's
employment by the Company and contains the entire understanding between
the parties relative to the employment of Employee, there being no terms,
conditions, warranties, or representations other than those contained or
referred to herein, and no amendment hereto shall be valid unless made in
writing and signed by both of the parties hereto.
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7.2 Governing Law; Venue. This Agreement shall be interpreted
and construed in accordance with the laws of the State of Arizona as
applied to residents of Arizona without regard to conflicts of law
principles. Any suit, action or other proceeding brought by Employee which
stems from or relates to the subject matter of this Agreement shall be
limited solely to an action brought in either U.S. District Court in
Phoenix, Arizona or Maricopa County (Arizona) Superior Court.
7.3 Severability. In the event that any provisions herein
shall be legally unenforceable, the remaining provisions nevertheless
shall be carried into effect.
7.4 Attorneys' Fees. In the event of any litigation between
the parties hereto arising out of the terms, conditions and obligations
expressed in this Agreement, the prevailing party in such litigation shall
be entitled to recover reasonable attorneys' fees incurred in connection
therewith.
7.5 Notices. All notices required or permitted to be given
hereunder shall be deemed given if in writing and delivered personally or
sent by telex, telegram, telecopy, or forwarded by prepaid registered or
certified mail (return receipt requested) to the party or parties at the
following addresses (or at such other addresses as shall be specified by
like notices), and any notice, however given, shall be effective when
received:
To Employee:
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Company:
▇▇▇▇▇ & Wesson Holding Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7.6 Waiver. The waiver by any party of a breach of any
provision of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision of this Agreement.
7.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
7.8 Headings. The subject headings to the sections in this
Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
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7.9 Construction. Each party has had the opportunity to set
forth in this Agreement all matters related to the subject hereof. The
Company and Employee acknowledge the binding legal effect of this
Agreement, that this Agreement has been negotiated by the parties hereto
and that each party has, to the extent desired, sought legal counsel
related to the terms, conditions and effect of this Agreement.
7.10 Assistance in Litigation. Employee shall upon reasonable
notice, furnish such information and reasonable assistance to the Company
as it may reasonably require in connection with any litigation in which it
is, or may become, a party either during or after employment. Employee
will be entitled to, and will receive, reasonable compensation for his
time and expenses, including attorneys' fees, for such assistance if no
longer employed by Company when providing such assistance.
7.11 Limited Effect of Waiver. Should the Company or Employee
waive breach of any provision of this Agreement by the other, that waiver
will not operate or be construed as a waiver of further breach by such
party.
7.12 No Contrary Binding Obligations. Employee represents and
warrants to the Company that he is not bound by any contract, obligation
or other agreement that will adversely affect his ability to perform his
duties hereunder. Employee shall indemnify and hold harmless the Company
and its affiliates from any breach of such representation and warranty.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first hereinabove written.
COMPANY:
▇▇▇▇▇ & WESSON HOLDING CORPORATION,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------
EMPLOYEE:
/s/ ▇▇▇ ▇▇▇▇
-------------------------------------
▇▇▇ ▇▇▇▇
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