EXHIBIT (D)(5)
EMPLOYMENT AGREEMENT
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AGREEMENT, dated this 10th day of September, 2000 (the "Agreement"),
between Mikasa, Inc., a Delaware corporation, and any successor thereto (the
"Employer") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Employee").
WHEREAS, the Employer, ▇.▇. ▇▇▇▇▇▇ Industries, S.A. ("JGD"), the
Employee, Mountain Acquisition CORP., ("Merger Sub") and certain other parties,
have entered into an Agreement and Plan of Merger, dated the date hereof (the
"Merger Agreement"), providing for the merger of Merger Sub with and into the
Employer, with the Employer as the surviving corporation (the "Merger");
WHEREAS, this Agreement is made in connection with the Merger
Agreement, pursuant to which the Employee will receive significant benefits;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Employment, Duties and Agreements.
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(a) Subject to the terms and conditions set forth herein, the Employer
hereby agrees to employ the Employee as Chief Executive Officer, President and
Chief Operating Officer of the Employer and the Employee hereby accepts the
employment of, and agrees to serve, the Employer in such capacity during the
employment period as determined pursuant to Section 3 hereof (the "Employment
Period"). The Employee's authority, duties and responsibilities shall be such
authority, duties and responsibilities as the Employer (acting through its Board
of Directors (the "Board of Directors") or other authorized person) may
reasonably determine from time to time as are generally consistent with the
above job title as they exist as of the Closing (as such term is defined in the
Merger Agreement) or as may be otherwise agreed between the Employer and the
Employee. The Employee shall report to the Board of Directors. In rendering his
employment hereunder, the Employee shall be subject to, and shall act in
accordance with, all reasonable instructions and directions of the Employer and
all applicable policies and rules of the Employer.
(b) During the Employment Period, the Board of Directors may request
that the Employee serve as a member of the Board of Directors or as a member of
any management committee or board of directors of any subsidiary of the
Employer, and, if so requested, the Employee agrees to serve as a member of the
Board of Directors or as a member of any other such management committee or
board of directors. The Employer agrees to indemnify the Employee against all
liabilities, costs, charges and expenses whatsoever incurred by the Employee in
connection with any threatened, pending or completed action, suit or proceeding
to which the Employee may be made a party or may be threatened to be made a
party by reason of the Employee's having served on the Board of Directors or as
a member of any management committee or board of directors of any subsidiary of
the Employer to the fullest extent permitted by applicable law and by the
by-laws and certificate of incorporation of the Employer.
(c) During the Employment Period and as long as the Employer shall not
be in default of a material obligation hereunder or under the Stockholders'
Agreement between the Employee, the Employer, JGD and certain other parties
named therein, dated the date hereof (the "Stockholders' Agreement"), the
Employee shall devote his full business time and energy, attention, skills and
ability to the performance of his obligations hereunder on an exclusive basis,
shall faithfully and diligently endeavor to promote the business and best
interests of the Employer, and shall make available to the Employer all
knowledge possessed by him relating to any aspect of his duties and
responsibilities hereunder.
(d) During the Employment Period and so long as the Employer shall not
be in default of a material obligation hereunder or under the Stockholders'
Agreement, the Employee may not, except as provided in this Agreement, without
the prior written consent of the Employer operate, participate in the
management, operations or control of, or act as an employee, officer or director
of, any type of business or service (other than as an employee of the Employer);
provided that (i) the Employee may invest in any publicly traded companies where
the Employee's investment is less than 5% of the outstanding stock of such
company, (ii) the Employee may not serve on the Board of Directors of any
Competitor (as defined below) and may serve on the board of directors of any
other company with the prior written consent of the Board of Directors (which
consent shall not be unreasonably withheld) and (iii) the Employee may engage on
behalf of the Employer in industry activities relating to the business of the
Employer such as industry trade groups.
2. Compensation.
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(a) As compensation for the agreements made by the Employee herein and
the performance by the Employee of his obligations hereunder, during the
Employment Period, the Employer shall pay the Employee, not less than once a
month, an annual base salary at the rate of US$350,000 per annum ("Annual Base
Salary"). The Employee's Annual Base Salary shall be reviewed each year by the
Board of Directors on the first day of each January during the Employment
Period; provided that the Annual Base Salary may not be reduced.
(b) In addition to the Annual Base Salary, the Employee shall be
entitled to annual cash bonus compensation ("Annual Bonus") during the
Employment Period in the discretion of the Board of Directors; provided that the
Annual Bonus with respect to any fiscal year shall be no less than the annual
cash bonus compensation received by the Employee from the Employer with respect
to fiscal year 1999 so long as Net Income (as defined below) for such fiscal
year is at least equal to Net Income recorded in the Employer's financial
statements for fiscal year 1999, subject to reasonable adjustment as mutually
agreed by the Employer and the Employee in the event any transaction or
corporate event occurs which affects the Employer's capitalization or any other
transaction or corporate event (other than the Merger), including without
limitation any other transactions with JGD or any of its affiliates, outside of
the ordinary course of business occurs which could reasonably be expected to
have a substantial impact on the Employer's Net Income; and provided, further
that, during the Employment Period, the Employee shall not be entitled to
receive any annual cash bonus compensation pursuant to any plan, program or
arrangement of the Employer other than this Agreement and the Incentive
Compensation Plan (as defined below). Any Annual Bonus shall be paid as soon as
reasonably determinable but no later than March 15th of the fiscal year
following the fiscal year to which such Annual Bonus relates. For purposes of
this Agreement, "Net Income" means, with respect to any fiscal year of the
Employer, the net after-tax income of the Employer (excluding (i) the
amortization of any pushed-down goodwill resulting from the Merger, (ii) any
ongoing financing or interest charges (including any fees associated therewith)
incurred as a result of a change in the Employer's pre-Merger capital structure
resulting from the Merger and any one time or extraordinary charges resulting
from the Merger, (iii) any one time or extraordinary charges resulting from any
acquisition or disposition of a business, Person (as defined in the Merger
Agreement) or assets by the Employer or any of its subsidiaries or any merger,
consolidation or other business combination involving the Employer after the
Effective Time (as defined in the Merger Agreement) other than acquisition or
disposition of assets in the ordinary course of business consistent with past
practice, (iv) the impact of any change in the Employer's accounting policies or
procedures and (v) any expense related to the Incentive Compensation Plan).
(c) The Employee shall be entitled to participate in the Mikasa, Inc.
Incentive Compensation Plan, as adopted on the date hereof (the "Incentive
Compensation Plan").
(d) During the Employment Period, the Employee shall be entitled to
receive benefits and perquisites from the Employer, including without
limitation, reimbursement of customary business expenses, reasonable
reimbursement for gasoline expenses incurred for business purposes, vacation,
life, short-term disability and long-term disability insurance, medical and
dental insurance, 401(k) and pension benefits, which are no less favorable in
the aggregate than those benefits and perquisites received by the Employee prior
to the Closing (the "Benefits").
(e) The Employee's principal work location shall be at the offices of
the Employer in Secaucus, New Jersey, but the Employee will undertake such
reasonable travel as may from time to time be required in connection with the
performance of his obligations hereunder.
3. Employment Period.
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The Employment Period shall commence on the date of the Closing and
shall terminate on December 31, 2002 (the "Scheduled Termination Date");
provided, however, that the Employment Period shall terminate prior to the
Scheduled Termination Date upon the earliest to occur of the following events:
(a) The Employee's death, in which event the Employment Period shall
terminate as of the date his death occurs. In the event of the termination of
the Employment Period pursuant to this Section 3(a), the Employer shall promptly
pay to the Employee's estate a lump sum in cash equal to the sum of (i) any
earned but unpaid Annual Base Salary; (ii) any earned but unpaid Annual Bonus to
which the Employee is entitled for a fiscal year completed prior to such
termination (the amounts in clauses (i) and (ii), collectively, the "Accrued
Obligations"); and (iii) the amount equal to the product of (x) his Annual Base
Salary at the time of such termination and (y) a fraction, the numerator of
which is the number of days from the date of termination to and including the
Scheduled Termination Date and the denominator of which is 365 (the amount in
clause (iii), the "Termination Payment").
(b) The physical disability or mental incapacity of the Employee which
entitles him to benefits under a long-term disability plan of the Employer or
which would entitle the Employee to benefits if he were a participant in such
plan or which would otherwise qualify the Employee for social security
disability insurance benefits, in which event the Employment Period shall
terminate as of the first date that the Employee would be able to receive
benefits under such plan or receive such social security disability insurance
benefits. In the event of the termination of the Employment Period pursuant to
this Section 3(b), the Employer shall promptly pay to the Employee a lump sum in
cash equal to the sum of (i) the Accrued Obligations; and (ii) the Termination
Payment.
(c) Termination by the Employer of the Employment Period for Cause (as
defined below), in which event the Employment Period shall terminate as of his
last day of employment. In the event of the termination of the Employment Period
pursuant to this Section 3(c), the Employer shall promptly pay to the Employee a
lump sum in cash equal to the Accrued Obligations. For purposes of this
Agreement, "Cause" means (i) any willful violation by the Employee of this
Agreement or the Stockholders' Agreement that has a material adverse effect on
the Employer or its affiliates; (ii) any willful engaging by the Employee, in
the Employee's capacity as an employee of the Employer, in gross misconduct that
has, or is intended to have, a material adverse effect on the Employer or its
affiliates; or (iii) any conviction of the Employee of a felony or other serious
crime involving moral turpitude; provided that any act or failure to act of the
Employee shall not be considered "willful" unless done or omitted to be done by
the Employee not in good faith and without reasonable belief that the Employee's
action or omission was in the best interest of the Employer.
(d) Termination by the Employer of the Employment Period without Cause,
in which event the Employment Period shall terminate as of his last day of
employment. In the event of the termination of the Employment Period pursuant to
this Section 3(d), the Employer shall promptly pay to the Employee a lump sum in
cash equal to the sum of (i) the Accrued Obligations; and (ii) the Termination
Payment.
(e) Termination by the Employee of the Employment Period for Good
Reason (as defined below), in which event the Employment Period shall terminate
as of his last day of employment. In the event of the termination of the
Employment Period pursuant to this Section 3(e), the Employer shall promptly pay
to the Employee a lump sum in cash equal to the sum of (i) the Accrued
Obligations; and (ii) the Termination Payment. For purposes of the Incentive
Compensation Plan, the termination by the Employee of the Employment Period for
Good Reason pursuant to this Section 3(e) shall be treated under the Incentive
Compensation Plan as a termination of employment by the Employer without Cause.
For purposes of this Agreement, "Good Reason" means (w) the assignment to the
Employer of any duties or responsibilities which are materially inconsistent
with the Employer's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated hereby, or
any other action by the Employer which results in a material diminution in such
position, authority, duties or responsibilities; (x) a significant reduction by
the Employer in the compensation (including salary and bonuses) and/or benefits
provided to the Employee hereunder; (y) any material breach or violation of any
material provision of this Agreement or the Stockholders' Agreement by the
Employer or JGD which is not cured promptly after receipt by the Employer or JGD
of written notice from the Employee setting forth the specific breach or
violation; or (z) the Employer's requiring the Employee to be based at any
office or location outside of northern New Jersey.
(f) Termination by the Employee of the Employment Period without Good
Reason, in which event the Employment Period shall terminate as of his last day
of employment. In the event of the termination of the Employment Period pursuant
to this Section 3(f), the Employer shall promptly pay to the Employee a lump sum
in cash equal to the Accrued Obligations.
(g) Following any termination of the Employment Period pursuant to
Section 3(a), 3(b), 3(d) or 3(e) of this Agreement, the Employer shall continue
to provide the Benefits to the Employee and his eligible dependents until the
Scheduled Termination Date as if his employment had not terminated; provided
that the Employee's or his eligible dependent's continued participation in the
plans, programs and arrangements pursuant to which the Benefits are provided is
possible under the general terms and provisions of such plans, programs and
arrangements. In the event that the Employee's participation in any such plan,
program or arrangement is prohibited, the Employer shall arrange to provide the
Employee and his eligible dependents with benefits substantially similar to
those which the Employee and his eligible dependents are entitled to receive
under such plans, programs or arrangements for such period.
(h) Following the termination of his employment with the Employer at
any time for any reason, the Employee and his spouse will each continue to
receive until he or she, respectively, reaches age 65 or dies at the Employer's
expense medical and dental insurance benefits substantially similar to those
benefits received during the Employment Period.
(i) The Employee shall not be obligated to seek or accept any future
employment or in any way mitigate damages as a condition to the receipt of any
payments required to be made to the Employee hereunder and the Employer shall
not be entitled to offset any amounts against any such payments.
(j) Nothing in this Agreement shall impair the rights of the Employee
to any benefits to which he may be or become entitled pursuant to the terms of
any employee benefit plan, program or arrangement of the Employer.
4. Restrictive Covenants.
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(a) During the 18-month period following the termination of his
employment with the Employer at any time for any reason (whether during or after
the Employment Period), and so long as the Employer is not in default of a
material obligation hereunder or under the Stockholders' Agreement, the Employee
agrees not to engage in any aspect of the Company Business (as hereinafter
defined) in the United States. The Employee shall be deemed to be engaging in
Company Business if he directly or indirectly, whether or not for compensation,
participates in the ownership, management, operation or control of any
Competitor (as hereinafter defined) or is employed by or performs consulting
services for any Competitor; provided, however, that if such Competitor renders
substantial services other than Company Business, the Employee shall not be
prohibited from engaging in any such activities solely in connection with such
other services; and provided, further, that the Employee may make passive
investments in publicly traded companies that engage in Company Business in the
United States where Employee's investment is less than 5% of the outstanding
stock of such company.
(b) During the 18-month period following the termination of his
employment with the Employer at any time for any reason (whether during or after
the Employment Period), and so long as the Employer is not in default of a
material obligation hereunder or under the Stockholders' Agreement, the Employee
agrees not to solicit any existing employee of the Employer or its affiliates to
be employed by a Competitor in the United States.
(c) For purposes of Section 4:
(i) The "Company Business" is the manufacture and sale of
ceramic dinnerware, crystal and glassware products.
(ii) A "Competitor" is any corporation, firm, partnership,
proprietorship or other entity which engages in any Company Business
and which is a competitor of the Employer with respect to such Company
Business.
(d) The Employee hereby agrees that:
(i) Each of the covenants contained in Sections 4(a) and 4(b)
hereof shall be construed as a separate covenant.
(ii) If, in any judicial proceeding, a court shall refuse to
enforce any of the separate covenants of Section 4(a) or 4(b) hereof,
then such unenforceable covenant shall be deemed limited under this
Agreement to the smallest extent permissible under applicable law for
the purpose of such proceeding or any other judicial proceeding to the
extent necessary to permit the provisions of Sections 4(a) and 4(b)
hereof to be enforced to the fullest extent permissible under
applicable law.
(e) The Employee agrees to deliver promptly to the Employer upon the
termination of his employment hereunder for any reason, or at any other time
that the Employer may so request, all proprietary or confidential documents (and
all copies thereof) relating to the Company Business and all other property
associated therewith, which he may then possess or have under his control.
(f) The parties hereto hereby declare that it is impossible to measure
in money the damages which will accrue to the Employer by reason of a failure by
the Employee to perform any of his obligations under this Agreement and, in
particular, under this Section 4. Accordingly, if the Employer institutes any
action or proceeding to enforce the provisions hereof, to the extent permitted
by applicable law, the Employee hereby waives the claim or defense that the
Employer has an adequate remedy at law, and the Employee shall not urge in any
such action or proceeding the claim or defense that any such remedy at law
exists.
(g) The restrictions in this Section 4 shall be in addition to any
restrictions imposed on the Employee by statute or at common law.
5. Attorneys' Fees.
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If the Employee prevails in any litigation or arbitration commenced
(including any proceedings in a bankruptcy court) between the parties hereto
concerning any provision of this Agreement or the rights and duties of any party
hereunder, in addition to such other relief as may be granted, the Employer
shall reimburse the Employee for his attorneys' fees and court costs incurred by
reason of such litigation or arbitration.
6. Miscellaneous.
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(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to the Employer:
Mikasa, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
General Counsel
If to the Employee:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Mikasa, Inc.
One Mikasa Drive
Secaucus, NJ 07096-1549
Copy to:
▇.▇. ▇▇▇▇▇▇ Industries, S.A.
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
or to such other address as any party hereto may designate by notice to the
others, and shall be deemed to have been given upon receipt.
(b) This Agreement constitutes the entire agreement among the parties
hereto with respect to the matters addressed herein, and supersedes and is in
full substitution for any and all prior understandings or agreements with
respect to the subject matter hereof.
(c) This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party against whom or which enforcement of
such waiver is sought. The failure of any party hereto at any time to require
the performance by any other party hereto of any provision hereof shall in no
way affect the full right to require such performance at any time thereafter,
nor shall the waiver by any party hereto of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself or a waiver of any other provision of this
Agreement.
(d) This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Employer or by the Employee.
(e) If any provision of this Agreement or portion thereof is so broad,
in scope or duration, so as to be unenforceable, such provision or portion
thereof shall be interpreted to be only so broad as is enforceable.
(f) The Employer may withhold from any amounts payable to the Employee
hereunder all federal, state, city or other taxes that the Employer may
reasonably determine are required to be withheld pursuant to any applicable law
or regulation.
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey, without reference to its principles of
conflicts of law.
(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
(i) The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof.
(j) Other than this Section 6(j), which shall be effective upon
execution of this Agreement, the other provisions of this Agreement shall become
effective immediately following the Effective Time and shall not be in full
force or effect prior thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MIKASA, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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