EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, dated as of May 1, 1997
amends and restates in its entirety that certain Amended and Restated Agreement
made and entered into as of the 1st day of September, 1994 by and between
Concord Camera Corp., a New Jersey corporation (together with its successors and
assigns permitted under this Agreement, the "Company"), and Xxx X. Xxxxxxx (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to continue the employ of the
Executive pursuant to the terms of this Amended and Restated Agreement (this
"Agreement") and the Executive has agreed to such continuation, subject to the
terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt of which is mutually acknowledged, the Company and the Executive
(individually a "Party" and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a person or other entity shall
mean a person or other entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other entity
specified.
(b) "Base Salary" shall mean the salary provided
for in Section 4 below.
(c) "Board" shall mean the Board of Directors of
the Company.
(d) "Cause" shall mean:
(i) the Executive is convicted of a crime
involving moral turpitude (excluding offenses such as driving
while intoxicated); or
(ii) the Executive (A) perpetrates a fraud
upon the Company or (B) materially breaches this Agreement which causes, in the
case of clause (B), material economic harm to the Company.
(e) A "Change in Control" shall mean the
occurrence of any one of the following events:
1
(i) any "person," as such term is used in
Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934 (other than
Executive), becomes a "beneficial owner," as such term is used in Rule 13d-3
promulgated under that act, of 25% or more of the Voting Stock of the Company;
(ii) the majority of the Board consists of
individuals other than Incumbent Directors, which term means the members of the
Board on the date of this Agreement; provided that any person becoming a
director subsequent to such date whose election or nomination for election was
supported by two-thirds of the directors who then comprised the Incumbent
Directors shall be considered to be an Incumbent Director;
(iii) the Company adopts any plan of
liquidation providing for the distribution of all or
substantially all of its assets;
(iv) all or substantially all of the assets
or business of the Company is disposed of pursuant to a merger, consolidation or
other transaction (unless the shareholders of the Company immediately prior to
such merger, consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the Voting Stock
of the Company, the Voting Stock or other ownership interests of the entity or
entities, if any, that succeed to the business of the Company); or
(v) the Company combines with another
company and is the surviving corporation but, immediately after the combination,
the shareholders of the Company immediately prior to the combination hold,
directly or indirectly, 50% or less of the Voting Stock of the combined company
(there being excluded from the number of shares held by such shareholders, but
not from the Voting Stock of the combined company, any shares received by
Affiliates of such other company in exchange for stock of such other company).
(f) "Compensation Committee" shall mean the
Compensation Committee of the Board.
(g) "Confidential Information" shall mean all
information that is not known or available to the public concerning the business
of the Company or any Subsidiary of the Company relating to its products,
product development, trade secrets, customers, suppliers, finances, and business
plans and strategies. For this purpose, information known or available generally
within the trade or industry of the Company or any Subsidiary of the Company
shall be deemed to be known or available to the public. Confidential Information
shall include information that is, or becomes, known to the public as a result
2
of a breach by the Executive of the provisions of Section 13
below.
(h) "Constructive Termination Without Cause"
shall mean a termination of the Executive's employment at his initiative as
provided in Section 10(d) below following the occurrence, without the
Executive's prior written consent, of one or more of the following events
(except in consequence of a prior termination):
(i) a reduction in or elimination of (A) the
Executive's then current Base Salary, (B) his bonus opportunity for which he is
eligible under Section 5 below, or (C) his opportunity for any long-term
incentive award for which he is eligible under Section 6(A) below or the
termination or material reduction of any employee benefit or perquisite enjoyed
by him;
(ii) the failure to elect or reelect the
Executive to any of the positions described in Section 3 below or his removal,
without Cause, from any such position;
(iii) a material diminution in the Executive's
duties as Chairman and Chief Executive Officer of the Company, as provided in
Section 3(a) below, or the assignment to the Executive of duties which are
materially inconsistent with such duties or which materially impair the
Executive's ability to function as Chairman and Chief Executive Officer of the
Company;
(iv) the failure to continue the Executive's
participation in any incentive compensation plan for which he is
eligible unless a plan providing a substantially similar
opportunity is substituted;
(v) the relocation of the Company's
principal office, or the Executive's own office location as assigned to him by
the Company, to a location more than 50 miles from Avenel, New Jersey, provided
that such a relocation to a location within 50 miles from Avenel, New Jersey,
shall constitute grounds for a Constructive Termination Without Cause if such
location is more than 100 miles from the Executive's residence on the date of
this Agreement; or
(vi) 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 45
days after the merger, consolidation, sale or similar transaction resulting in
such succession provided that Executive may not treat such failure as a
Constructive Termination Without Cause unless such failure is not cured within
10 days of receipt of notice thereof by such successor from Executive.
3
(i) "Disability shall mean the Executive's
inability, due to physical or mental incapacity, to substantially perform his
duties and responsibilities under this Agreement for a period of 180 consecutive
days or for 180 days in a 365-day period.
(j) "Non-Extension Event" shall mean any
termination of the Term of Employment resulting from an election by the Company
not to extend the Term of Employment, provided that Executive has delivered to
the Company, within 30 days of receipt by Executive of written notice from the
Company to the effect that the Company intends to allow the Term of Employment
to expire, a notice to the effect that Executive is willing to have the Term of
Employment extended on the terms set forth in this Agreement as then in effect.
(k) "Stock shall mean the Common Stock of the
Company.
(l) "Subsidiary" shall mean any corporation or
other entity of which the Company owns, directly or indirectly, more than 50% of
the Voting Stock or, in the case of an entity other than a corporation, more
than 50% of the equity interest.
(m) "Term of Employment" shall mean the period or
periods specified in Section 2 below.
(n) "Voting Stock" shall mean capital stock of
any class or classes having general voting power under ordinary circumstances,
in the absence of contingencies, to elect the directors of a corporation.
2. Term of Employment.
(a) The Company hereby employs the Executive, and
the Executive hereby accepts such employment, for the Term of Employment
commencing May 1, 1997 and ending at the close of business on April 30, 2001,
subject to earlier termination of the Term of Employment in accordance with the
terms of this Agreement and subject to extension of the Term of Employment in
accordance with the terms of Section 2(b) below.
(b) The Term of Employment shall automatically be
extended for one additional day (subject to earlier termination in accordance
with the terms of this Agreement) for each day of the Term of Employment that
elapses in the event that neither Party notifies the other Party in writing in
accordance with Section 27 below at any time during the Term of Employment that
either the Company or the Executive does not want the Term of Employment
extended thereafter.
4
3. Position, Duties and Responsibilities.
(a) During the Term of Employment, the Executive
shall be employed as Chairman and Chief Executive Officer of the Company and be
responsible, subject to the control of the Board, for the establishment and
implementation of corporate policy and general management of the Company. In
that capacity the Executive shall have the duties and responsibilities normally
associated with the positions of Chairman and Chief Executive Officer. It is the
intention of the Parties that the Executive serve as a member of the Board and
as a member of the Executive Committee during the Term of Employment. The
Executive, in carrying out his duties under this Agreement, shall report to, and
be subject to the supervision of, the Board. At any time that the Company does
not have another person acting as the President and Chief Operating Officer of
the Company, Executive shall also have such titles and serve in such capacities,
it being understood that the relinquishment of such titles by Executive upon
employment of a President and Chief Operating Officer by the Company shall not
constitute a breach by the Company of its obligations under this Agreement.
(b) Anything herein to the contrary
notwithstanding, nothing shall preclude the Executive from (i) serving on the
boards of directors of a reasonable number of other corporations not engaged in
competition with the Company or the boards of a reasonable number of trade
associations and/or charitable organizations, (ii) engaging in charitable
activities and community affairs, (iii) managing his personal investments and
affairs and (iv) being involved in other business transactions, provided that
such activities do not materially interfere with the proper performance of his
duties and responsibilities as the Company's Chairman and Chief Executive
Officer.
4. Base Salary.
The Executive shall be paid a Base Salary at the
annualized rate of $500,000, payable in accordance with the regular payroll
practices of the Company, but in no event shall he be paid less frequently than
monthly. Executive's Base Salary shall be subject to review by the Board of
Directors on an annual basis, and may be adjusted from time to time only upward
by the Board of Directors acting in its discretion.
5. Annual Bonus.
The Executive shall be entitled to be considered
for receipt of an annual bonus, the calculation of which is to be determined in
accordance with an incentive plan established from time to time by the Board of
the Company. In the event that the Company does not have an established
incentive plan for any
5
fiscal year, the Executive shall be entitled to be considered for receipt of an
annual bonus, based upon pre-tax income of the Company, payable promptly after
the close of such fiscal year, the amount, if any, of which shall be determined
by the Board in its sole discretion.
6. Long-Term Incentive Programs.
General. The Executive shall be eligible to
participate in the long-term incentive programs of the Company on the same basis
as other senior level executives of the Company.
7. Employee Benefit Programs and Vacation.
(a) During the Term of Employment, except to the
extent greater benefits are provided pursuant to Section 8 hereof, the Executive
shall be entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level executives or to
its employees generally, as such plans or programs may be in effect from time to
time, including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, travel accident insurance, and any other pension or
retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company from time to time, including any
plans that supplement the above- listed types of plans or programs, whether
funded or unfunded.
(b) The Company agrees to adopt a supplemental
executive retirement plan (the "SERP") for the benefit of the Executive. The
SERP shall provide the Executive with an annual retirement benefit commencing at
his normal retirement date equal to the excess of (i) 60% of the Executive's
average base salary for his last three years of employment with the Company over
(ii) the sum of (A) the Executive's annual benefits from the Company sponsored
tax-qualified retirement plans (but only to the extent that such benefits are
attributable to the Company's contributions to such plans) and (B) the
Executive's annual Social Security benefit which he is entitled to receive, or
would be entitled to receive at his normal retirement date. The Executive's
benefit under the SERP shall always be 100% vested (i.e., not forfeitable). The
Company shall establish a rabbi trust and agrees to annually contribute to such
trust an amount actuarially determined to be sufficient to fund the SERP
benefits, Normal retirement date for purposes of the SERP shall be consistent
with the normal retirement date for purposes of the Company's retirement plans,
except that if the Company does not maintain any such plans, normal retirement
date shall be 65.
6
(c) The Executive shall be entitled to one month
vacation per year. Vacation not taken within one year of the end of the fiscal
year of the Company in which it accrued shall lapse, without payment of
additional compensation.
8. Additional Life Insurance and Disability
Insurance.
(a) In addition to any life insurance provided
pursuant to Section 7(a) above, the Company shall provide the Executive with
term life insurance coverage the beneficiary of which shall be designated by the
Executive in the amount of $___ million face value. In addition, the Company
shall provide the Executive with long-term disability coverage with an annual
benefit of $232,500. Both life insurance and long-term disability coverages
shall be provided to the Executive at the Company's expense.
(b) In the event the Parties agree, the Company
shall satisfy its obligations under Section 8(a) above by (i) paying the
premiums when due on the Executive's existing life and disability insurance
policies or (ii) reimbursing the Executive for his payment of such premiums on
his existing life and disability insurance policies to the extent of the portion
of such premiums providing the insurance coverages stated in Section 8(a) above.
(c) The Company may purchase, maintain and be the
beneficiary of a key-man life insurance policy on the Executive's life, the
purpose of which may be, among other things, to guarantee payment of the
Company's obligation under Section 10(a)(i) below. Executive agrees to submit to
such physical examinations as the Company shall reasonably request for the
purpose of obtaining the life insurance policies contemplated by this Section 8.
9. Reimbursement of Business and Other Expenses and
Perquisites.
(a) The Executive is authorized to incur expenses
in carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all such expenses subject to
documentation in accordance with the Company's policy.
(b) The Company shall promptly reimburse the
Executive for all reasonable expenses he incurs in moving his residence to a
location closer to the Company's principal office in Avenel, New Jersey,
whenever such move occurs during the Term of Employment, with such reimbursement
estimated at $10,000.
7
(c) The Company shall provide to Executive a car
allowance equal to $2,500 per month. The Company shall also promptly reimburse
Executive for all expenses, including, without limitation, parking and
commutation expenses, incurred in the Executive's use and operation of such
automobile in connection with the performance of his duties under this
Agreement.
(d) The Company shall promptly reimburse the
Executive for the costs and expenses associated with acquiring and maintaining a
telephone, facsimile, duplicating and other office equipment and supplies at the
home of the Executive.
(e) The Company shall maintain at Company expense
in New York, New York a corporate apartment for Executive's use provided that
Executive shall bear the cost of one-third of the rental expense to provide for
any personal use of Executive (whether by reimbursement to the Company or direct
payment by Executive) and provided, further that the maximum net rental
obligation of the Company pursuant to the provisions of this Section 9(e) shall
not exceed $4,000 per month. Said apartment shall be reasonably satisfactory to
Executive.
(f) It is the intention of the Company that the
Executive shall, after taking into account any taxes on such reimbursements,
expenses and perquisites be kept whole in respect of the reimbursements,
expenses and perquisites referred to in Section 8 and Sections 9(a) through 9(e)
above. Accordingly, to the extent the Executive is taxable on any such
reimbursements, expenses and perquisites the Company shall pay the Executive in
connection therewith an amount which after all taxes incurred by the Executive
on such amount shall equal the amount of the reimbursements, expenses and
perquisites being provided.
(g) In addition to the foregoing, the Executive
shall be eligible to participate in all perquisites made available by the
Company to its senior level executives.
10. Termination of Employment.
(a) Termination Due to Death. In the event the
Executive's employment is terminated due to his death, his estate or his
beneficiaries, as the case may be, shall be entitled to:
(i) a lump sum payment of Base Salary for
the period of the Term of Employment remaining until its
expiration as scheduled immediately prior to his death;
(ii) a pro rata bonus for the year in which
the Executive's death occurs based on the target bonus
8
opportunity for such year, payable in a lump sum promptly
after his death;
(iii) the balance of any bonus earned (but not
yet paid);
(iv) any amounts earned, accrued or owing but
not yet paid under Section 6, 7 or 9 above; and
(v) any other or additional benefits
provided for in accordance with applicable plans and
programs of the Company.
(b) Termination Due to Disability. In the event
the Executive's employment is terminated due to his Disability,
he shall be entitled to:
(i) Base Salary for the period of the Term
of Employment remaining until its expiration as scheduled immediately
prior to termination due to Disability, less the amount of any
disability benefits provided to the Executive by the Company or under
any disability insurance paid for or for which premiums paid by the
Executive were reimbursed by the Company;
(ii) a pro rata bonus for the year in which
termination due to Disability occurs based on the target bonus
opportunity for such year, payable in a lump sum promptly following
termination due to Disability;
(iii) the balance of any bonus earned (but not
yet paid);
(iv) any amounts earned, accrued or owing but
not yet paid under Section 6, 7 or 9 above;
(v) any other or additional benefits
provided for in accordance with applicable plans and
programs of the Company.
In no event shall a termination of the Executive's employment
for Disability occur unless the Party terminating his employment gives written
notice to the other Party in accordance with Section 27 below.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take
effect unless the provisions of this paragraph (i), to the
extent applicable, are complied with. The Executive shall
be given written notice by the Board of the intention to
9
terminate him for Cause, such notice (A) to state in detail the
particular act or acts or failure or failures to act that constitute
the grounds on which the proposed termination for Cause is based and
(B) to be given within six months of the Board's learning of such act
or acts or failure or failures to act. If the ground stated for Cause
is stated in Section 1(d)(i) or Section 1(d)(ii)(A), the Executive
shall be terminated for Cause upon receipt of such notice. If the
ground stated for Cause is stated in Section 1(d)(ii)(B), the Executive
shall have 30 days after the date such written notice has been given to
the Executive in which to cure such conduct, to the extent such cure is
possible. If he fails to cure such conduct, the Executive shall then be
entitled to a hearing before the Board. Such hearing shall be held
within 15 days of such notice to the Executive, provided he requests
such hearing within 10 days of the written notice from the Board of the
intention to terminate him for Cause. If, within five days following
such hearing, the Executive is furnished written notice by the Board
confirming that, in its judgment, grounds for Cause on the basis of the
original notice exist, he shall thereupon be terminated for Cause.
(ii) In the event the Company terminates the
Executive's employment for Cause, he shall be entitled to:
(A) Base Salary through the date of the
termination of his employment for Cause;
(B) any bonus earned (but not yet
paid);
(C) any amounts earned, accrued or
owing but not yet paid under Section 6, 7 or 9
above; and
(D) any other or additional benefits
provided for in accordance with applicable plans
or programs of the Company.
(iii) Anything herein to the contrary
notwithstanding, if following a termination of the Executive's
employment by the Company for Cause based upon the conviction of the
Executive for a crime involving moral turpitude related to the
Company's business or performance of Executive's duties for the
Company, such conviction is overturned in a final determination on
appeal, the Executive shall be entitled to the payments and the
economic equivalent of the benefits the Executive would have received
if his employment had been terminated by the Company without Cause. Any
amounts earned by Executive during the period in respect of which
payments are required to be made to him by
10
the Company pursuant to this subparagraph shall be offset against the
Company's payment obligation.
(d) Termination Without Cause or Constructive
Termination Without Cause. In the event the Executive's employment is terminated
without Cause, other than due to Disability or death, or in the event there is a
Constructive Termination Without Cause, the Executive shall be entitled to:
(i) Base Salary through the date of
termination of the Executive's employment;
(ii) Base Salary, at the annualized rate in
effect on the date of termination of the Executive's employment (or in
the event a reduction in Base Salary is the basis for a Constructive
Termination Without Cause, then the Base Salary in effect immediately
prior to such reduction), payable in installments as provided in
Section 4 hereof plus the amounts provided for in Sections 8(a) and (b)
and Sections 9(c), (d), (e), (f) and (g), for the period remaining
until the expiration of the Term of Employment as scheduled immediately
prior to the termination of the Executive's employment, plus 12 months;
(iii) a pro rata bonus for the year in which
termination occurs based on the target bonus opportunity for
such year, payable in a lump sum promptly following
termination;
(iv) the balance of any bonus earned (but not
yet paid);
(v) any amounts earned, accrued or owing but
not yet paid under Section 6, 7 or 9 above;
(vi) continued participation in all medical,
dental, hospitalization and life insurance coverage and in other
employee benefit plans or programs in which he was participating on the
date of the termination of his employment until the earlier of:
(A) the end of the period during which
he is receiving salary continuation payments and
(B) the date, or dates he receives
coverage and benefits under employee benefit plans and
programs of a subsequent employer;
provided that (1) if the Executive is precluded from continuing his
participation in any employee benefit plan or program as provided in
this clause (vii) of this Section 10(d), he shall be provided with the
after-tax economic
11
equivalent of the benefits provided under the plan or program in which
he is unable to participate for the period specified in this clause
(vii), (2) the economic equivalent of any benefit foregone shall be
deemed to be the lowest cost that would be incurred by the Executive in
obtaining such benefit himself on an individual basis and (3) payment
of such after-tax economic equivalent shall be made quarterly in
advance; and
(vii) any other or additional benefits
provided for in accordance with applicable plans and
programs of the Company.
(e) Termination of Employment and Acceleration of
Entitlements Following a Change in Control. If, following a Change in Control,
the Executive's employment is terminated without Cause, other than due to
Disability or death, or there is a Constructive Termination Without Cause, the
Executive shall be entitled to the payments and benefits provided in Section
10(d) above, and the salary continuation payments shall be paid in a lump sum
without any discount. Also, immediately following a Change in Control, all
amounts, entitlements or benefits in which he is not yet vested shall become
fully vested except to the extent such vesting would be inconsistent with the
terms of the relevant plan and he shall become entitled to exercise any stock
option in full for the remainder of its term regardless of whether he continues
in employment or the circumstances of his termination of employment. In
connection with the occurrence of a Change in Control, Executive and the Company
agree to negotiate in good faith, payment arrangements and covenant changes
(without reducing the total amount payable pursuant to this Section 10(e))
designed to preserve to the Company the deductibility for federal income tax
purposes of, and eliminate any Excise Tax (as defined in Section 10(h)) payable
in respect of, amounts paid pursuant to this Section 10(e).
(f) Voluntary Termination. In the event of a
termination of employment by the Executive on his own initiative other than a
termination due to death or Disability or a Constructive Termination without
Cause, the Executive shall have the same entitlements as provided in Section
10(c)(ii) above for a termination for Cause and such termination shall not be
deemed a breach of this Agreement.
(g) Termination Because of Non-Renewal Event. In
the event Executive's employment is terminated at the end of the then scheduled
Term of Employment by reason of the occurrence of a Non-Extension Event, the
Executive shall be entitled to
(i) Base Salary through the date of
termination of Executive's employment;
12
(ii) Base Salary, at the annualized rate in
effect on the date of termination of the Executive's employment,
payable in installments as provided in Section 4 hereof plus the
amounts provided for in Sections 8(a) and (b) and Sections 9(c), (d),
(e), (f) and (g), for a period of 12 months following such termination;
(iii) a pro rata bonus for the year in which
termination occurs based on the target bonus opportunity for
such year, payable in a lump sum promptly following
termination;
(iv) the balance of any bonus earned (but not
yet paid);
(v) any amounts earned, accrued or owing but
not yet paid under Section 6, 7 or 9 above;
(vi) continued participation in all medical,
dental, hospitalization and life insurance coverage and in other
employee benefit plans or programs in which he was participating on the
date of the termination of his employment until the earlier of:
(A) the end of the period during which
he is receiving salary continuation payments and
(B) the date, or dates he receives
coverage and benefits under employee benefit plans and
programs of a subsequent employer;
provided that (1) if the Executive is precluded from continuing his
participation in any employee benefit plan or program as provided in
this clause (vii) of this Section 10(g), he shall be provided with the
after-tax economic equivalent of the benefits provided under the plan
or program in which he is unable to participate for the period
specified in this clause (vii), (2) the economic equivalent of any
benefit foregone shall be deemed to be the lowest cost that would be
incurred by the Executive in obtaining such benefit himself on an
individual basis and (3) payment of such after-tax economic equivalent
shall be made quarterly in advance; and
(vii) any other or additional benefits
provided for in accordance with applicable plans and
programs of the Company.
(h) Limitation Following a Change in Control. In
the event that the termination of the Executive's employment is for one of the
reasons set forth in Section 10(e) above and the aggregate of all payments or
benefits made or provided to the
13
Executive under Section 10(e) above and under all other plans and programs of
the Company (the "Aggregate Payment") is determined to constitute a Parachute
Payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall pay to the Executive,
prior to the time any excise tax imposed by Section 4999 of the Code ("Excise
Tax") is payable with respect to such Aggregate Payment, an additional amount
which, after the imposition of all income and excise taxes thereon, is equal to
the Excise Tax on the Aggregate Payment. The determination of whether the
Aggregate Payment constitutes a Parachute Payment and, if so, the amount to be
paid to the Executive and the time of payment pursuant to this Section 10(h)
shall be made by an independent auditor (the "Auditor") jointly selected by the
Company and the Executive and paid by the Company. The Auditor shall be a
nationally recognized United States public accounting firm which has not, during
the two years preceding the date of its selection, acted in any way on behalf of
the Company or any Subsidiary or Affiliate thereof. If the Executive and the
Company cannot agree on the firm to serve as the Auditor, then the Executive and
the Company shall each select one accounting firm and those two firms shall
jointly select the accounting firm to serve as the Auditor.
(i) No Mitigation; No Offset. In the event of
any termination of employment under this Section 10, the Executive shall be
under no obligation to seek other employment and there shall be no offset
against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain except
as specifically provided in this Section 10.
(j) Nature of Payments. Any amounts due under
this Section 10 are in the nature of severance payments considered to be
reasonable by the Company and are not in the nature of a penalty.
11. Indemnification.
(a) The Company agrees that if the Executive is
made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director, officer or
employee of the Company or is or was serving at the request of the Company as a
director, officer, member, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is the Executive's alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Executive shall be indemnified
and held harmless by the Company to the fullest extent permitted or authorized
by the
14
Company's certificate of incorporation or bylaws or, if greater, by the laws of
the State of New Jersey, against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a
director, member, employee or agent of the Company or other entity and shall
inure to the benefit of the Executive's heirs, executors and administrators. The
Company shall advance to the Executive to the extent permitted by law all
reasonable costs and expenses incurred by him in connection with a Proceeding
within 20 days after receipt by the Company of a written request, with
appropriate documentation, for such advance. Such request shall include an
undertaking by the Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses.
(b) Neither the failure of the Company (including
its board of directors, independent legal counsel or stockholders to have made a
determination prior to the commencement of any proceeding concerning payment of
amounts claimed by the Executive under Section 11(a) above that indemnification
of the Executive is proper because he has met the applicable standard of
conduct, nor a determination by the Company (including its board of directors,
independent legal counsel or stockholders) that the Executive has not met such
applicable standard of conduct, shall create a presumption that the Executive
has not met the applicable standard of conduct.
(c) The Company agrees to continue and maintain a
directors' and officers' liability insurance policy covering the Executive to
the extent the Company provides such coverage for its other executive officers.
(d) Promptly after receipt by the Executive of
notice of any claim or the commencement of any action or proceeding with respect
to which the Executive is entitled to indemnity hereunder, the Executive shall
notify the Company in writing of such claim or the commencement of such action
or proceeding, and the Company shall (i) assume the defense of such action or
proceeding, (ii) employ counsel reasonably satisfactory to the Executive and
(iii) pay the reasonable fees and expenses of such counsel. Notwithstanding the
preceding sentence, the Executive shall be entitled to employ counsel separate
from counsel for the Company and from any other party in such action if the
Executive reasonably determines that a conflict of interest exists which makes
representation by counsel chosen by the Company not advisable. In such event,
the reasonable fees and disbursements of such separate counsel for the Executive
shall be paid by the Company to the extent permitted by law.
15
(e) After the termination of this Agreement and
upon the request of the Executive, the Company agrees to reimburse the Executive
for all reasonable travel, legal and other out-of-pocket expenses related to
assisting the Company to prepare for or defend against any action, suit,
proceeding or claim brought or threatened to be brought against the Company or
to prepare for or institute any action, suit, proceeding or claim to be brought
or threatened to be brought against a third party arising out of or based upon
the transactions contemplated herein and in providing evidence, producing
documents or otherwise participating in any such action, suit, proceeding or
claim. In the event the Executive is required to appear after termination of
this Agreement at a judicial or regulatory hearing in connection with the
Executive's employment hereunder, or Executive's role in connection therewith,
the Company agrees to pay the Executive a sum, to be mutually agreed upon by the
Executive and the Company, per diem for each day of his appearance and each day
of preparation therefor.
12. Effect of Agreement on Other Benefits.
Except as specifically provided in this Agreement,
the existence of this Agreement shall not prohibit or restrict the Executive's
entitlement to full participation in the employee benefit and other plans or
programs in which senior executives of the Company are eligible to participate.
13. Confidentiality.
The Executive shall not, without the prior written
consent of the Company and without limitation as to time, divulge, disclose or
make accessible to any other person, firm, partnership, corporation or other
entity any Confidential Information except (a) in the course of carrying out his
duties under this Agreement or (b) when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order him to divulge, disclose or make
accessible such information.
14. Non-Compete.
(a) During the Term of Employment and for a
period of 12 months thereafter, the Executive shall not, directly or indirectly,
except when acting on behalf of the Company, whether as an employee, consultant,
partner, principal, agent, distributor, representative, stockholder or otherwise
(except that he may be a stockholder of not more than a 1% equity interest in a
public company), engage in any activities in any country world-wide in which the
Company then conducts business or into which the Company then sells or otherwise
distributes any of
16
its products that are in competition with the businesses of the Company or any
Subsidiary. For this purpose, a business shall be deemed to be in competition
with the Company or any Subsidiary if such business involves the business then
conducted by the Company or any Subsidiary and during the Term of Employment was
either being conducted by the Company or any Subsidiary or actively being
developed during the Term of Employment by the Company or any Subsidiary.
(b) During the Term of Employment and for a
period of 12 months thereafter, the Executive shall not directly or indirectly
(i) solicit any customer of the Company or any Subsidiary to do business with
any business that is in competition with the Company or any Subsidiary within
the meaning set forth in Section 12(a) above or (ii) solicit any person, other
than his secretary/administrative assistant who is employed by the Company or
any Subsidiary or who was employed by the Company or any Subsidiary within 12
months of such solicitation to (A) terminate his or her employment with the
Company or any Subsidiary, (B) accept employment with anyone other than the
Company or any Subsidiary or (C) in any manner interfere with the business of
the Company or any Subsidiary.
(c) The Executive acknowledges that the Company
has no adequate remedy at law and would be irreparably harmed if he breaches or
threatens to breach the provisions of Section 13 or Section 14(a) or 14(b)
above, and therefore agrees that the Company or any Subsidiary, as the case may
be, shall be entitled to injunctive relief, to prevent any breach or threatened
breach of any of those provisions and to specific performance of the terms of
each of such provisions in addition to any other legal or equitable remedy it
may have. The Executive further agrees that he shall not, in any equity
proceeding relating to the enforcement of Section 13 or Section 14(a) or 14(b)
above, raise the defense that the Company or any Subsidiary has an adequate
remedy at law. Nothing in this Agreement shall be construed as prohibiting the
Company or any Subsidiary from pursuing any other remedies at law or in equity
that it may have or any other rights that it may have under any other agreement.
(d) In the event of a termination of the
Executive's employment without Cause which entitles the Executive to the
payments and benefits set forth in Section 10(d) above, the provisions of
Section 14(a) and 14(b) above shall be deemed applicable to the Executive for
the period in which his Base Salary and other benefits are continued if such
continuation period exceeds 12 months.
(e) If it is determined that any of the
provisions of this Section 14, or any part thereof, is unenforceable because of
the duration or geographical scope of such provision, it is the intention of the
parties that the
17
duration or scope of such provision, as the case may be, shall be reduced so
that such provision becomes enforceable and, in its reduced form, such provision
shall then be enforceable and shall be enforced.
15. Adequacy of Disclosure.
The Company acknowledges that it has been provided
with the requested information concerning the background of the Executive. The
Company further acknowledges that it has been given the right to independently
examine, inspect and make inquiry with respect to the Executive.
16. Acknowledgment of Representation of Counsel.
The Parties acknowledge that they have been
represented by counsel or knowingly waive their right to be represented by
counsel with regard to this Agreement and the subject matter hereof. Each party
agrees and acknowledges that he or it has not relied upon any tax advice, legal
counsel or business advice provided by the other Party.
17. Cooperation Between the Parties.
(a) The parties agree that each party will use
its or his best efforts in carrying out the terms of this Agreement, including,
but not limited to, the furnishing and supplying of all necessary information
and documents to the other Party.
(b) In the event that at any time after the date
of this Agreement the Internal Revenue Service or any state or local taxing
authority audits the tax returns of the Executive for any taxable year or years,
the Company shall use its best efforts to cooperate with the Executive in
connection with such audit and shall provide the Executive with access to the
books and records of the Company in connection with matters under audit.
(c) Except as specifically provided in Section
10(c)(iii), amounts due to the Executive hereunder may not be offset by the
Company against amounts claimed to be due from the Executive to the Company,
whether by withholding by the Company of payment, or by assertion by the Company
of defenses, claims, counterclaims or setoffs in a litigation commenced either
by the Executive or by the Company with respect to this Agreement or any other
matters; provided, however, that the Company shall have the right to raise any
such defenses, claims, counterclaims or setoffs in a separate action.
18
18. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors, heirs (in the case
of the Executive) and assigns. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
rights or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it legally can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits.
19. Representation.
The Company represents and warrants that this
Agreement was authorized by its Board of Directors on April 17, 1997, it is
fully empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization.
20. Entire Agreement.
This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, including the Agreement dated September 1, 1994
which is amended and restated hereby, understandings, discussions, negotiations
and undertakings, whether written or oral, between the Parties with respect
thereto.
21. Amendment or Waiver.
No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
19
time. Any waiver must be in writing and signed by the Executive
or an authorized officer of the Company, as the case may be.
22. Severability.
In the event that any provision or portion of any
provision of this Agreement shall be determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions and portions
remaining of any provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.
23. Survivorship.
The respective rights and obligations of the
Parties hereunder shall survive any termination of the Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.
24. Beneficiaries/References.
The Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.
25. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New Jersey without
reference to principles of conflict of laws.
26. Resolution of Disputes.
Any disputes arising under or in connection with
this Agreement shall be resolved by binding arbitration before a single
arbitrator, to be held in New Jersey in accordance with the rules and procedures
of the American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) shall be final and subject to appeal only to the extent permitted
by law. Each party shall bear its or his own expenses incurred in connection
with any arbitration; provided, however, the cost of the arbitration, including
without limitation attorneys' fees of the Executive, shall be borne by the
Company in the event Executive is the prevailing party in the arbitration.
Anything to the contrary notwithstanding, each party hereto has the right to
proceed with a court action for injunctive relief or relief
20
from violations of law not within the jurisdiction of an
arbitrator(s).
27. Notices.
Any notice given to a Party shall be in writing
and shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested or by
Federal Express or other similar service, duly addressed to the Party concerned
at the address indicated below or to such changed address as such Party may
subsequently give such notice of:
If to the Company:
Concord Camera Corp.
00 Xxxxxx Xxx
Xxxxxx, Xxx Xxxxxx 00000
Attention:
If to the Executive:
Xx. Xxx X. Xxxxxxx
00 Xxxxxx Xxx
Xxxxxx, Xxx Xxxxxx 00000
28. Headings.
The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
29. Guarantors of Agreement.
It is acknowledged and agreed to by the Parties
that Concord Camera GmbH, Concord Camera Illinois Corp., Concord Camera UK,
Concord Camera HK Limited, Concord Keystone Sales Corp. and any subsequent
Subsidiaries and/or Affiliates of the Company or the above named companies shall
be guarantors of all payments due the Executive under this Agreement. Any
subsequent subsidiaries and/or affiliates shall upon request of the Executive
execute a guaranty in form and substance acceptable to the Executive and the
Company.
30. Execution of Agreement and Further Actions.
This Agreement may be executed in duplicate copies
each of which shall constitute an original Agreement. The Parties agree to
execute such other documents and to take such action as may be necessary to
carry out the intent of this Agreement, including but not limited to the stock
option agreement referred to herein.
21
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
CONCORD CAMERA CORP.
By:_________________________
----/s/ Xxx X. Xxxxxxx------
Xxx X. Xxxxxxx
Each of the undersigned hereby, jointly and severally, confirms the guaranty
provided for in Section 29 of the foregoing Agreement:
CONCORD CAMERA GmbH
By:__________________________
CONCORD CAMERA ILLINOIS CORP.
By:__________________________
CONCORD CAMERA UK
By:__________________________
CONCORD CAMERA HK LIMITED
By:__________________________
CONCORD CAMERA (PANAMA) CORP.
By:__________________________
22
CONCORD CAMERA FRANCE
By:__________________________
CONCORD KEYSTONE SALES CORP.
By:__________________________
K:\CORP\SHARE\XXXXXXX.EM5
1
