AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the
"Agreement") made as of the 1st day of January, 1998, by and between BIG XXXXX
BRANDS, INC., a Delaware corporation (the "Company"), and S. XXXXX XXXXXXXX
(the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to continue to make
contributions to the financial strength of the Company;
WHEREAS, the Executive and the Company are parties to an
Employment Agreement dated January 1, 1996 (the "Prior Agreement") and wish to
amend and restate the terms and conditions of the Prior Agreement in their
entirety with the terms and conditions of this Agreement;
WHEREAS, the Company desires to continue to employ the
Executive and the Executive desires to continue such employment on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto hereby agree as follows:
1. Employment; Term. The Company hereby employs the Executive
as Chairman of the Board of Directors, Chief Executive Officer and President of
the Company
and the Executive agrees to serve the Company in such capacities for the period
commencing as of the date of the Prior Agreement (January 1, 1996) and ending on
December 31, 2003 (the "Extended Term").
2. Termination. Subject to the terms and conditions set forth
herein, the Executive's employment may be terminated by either party hereto upon
thirty (30) days' written notice to the other party hereto. The Company shall
only be entitled to terminate the Executive's employment for cause. The term
"cause" shall mean: (i) the Executive's willful failure or refusal to perform
specific reasonable written directives of the Board of Directors of the Company
(the "Board"), which directives are consistent with the scope and nature of the
Executive's duties and responsibilities under this Agreement, and which failure
or refusal is not remedied by the Executive within thirty (30) days after being
notified, in writing, of such failure by the Board; (ii) the Executive's
conviction of a felony; (iii) any act of dishonesty involving the Company which
results in an unjust gain or enrichment to the Executive at the expense of the
Company; or (iv) any act involving moral turpitude of the Executive which
adversely affects the business of the Company.
3. Duties. The Executive shall be responsible for the
supervision, control and conduct of all the business and affairs of the Company
and shall have such additional duties and any additional responsibilities as are
normally assigned to a Chief Executive Officer, Chairman of the Board and
President or which may from time to time be reasonably designated by the Board;
provided, that in no event shall the scope of his duties and the extent of his
responsibilities be substantially different from the duties and responsibilities
usually associated with those positions in a corporation similar in size and
function to the
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Company. At all times, the Executive shall be subject to the direction of the
Board. During the Extended Term, the Executive shall devote his full business
time and best efforts to the business and affairs of the Company.
4. Compensation. The Company shall pay the Executive a salary
at the rate of three hundred thousand dollars ($300,000.00) per annum during the
first year of the Extended Term. For the remainder of the Extended Term, the
Company shall pay the Executive a salary at a rate equal to the sum of $300,000
plus the Executive's First Year Achievement Bonus (as hereinafter defined) per
annum. Such compensation shall be payable in accordance with the usual payroll
practices of the Company, as compensation to the Executive for the services
rendered by the Executive hereunder, including, but not limited to, all services
rendered by the Executive as an officer or director of the Company and its
subsidiaries. In addition, the Executive shall be entitled to a bonus in respect
of the first year of the Extended Term (the "Executive's First Year Achievement
Bonus") equal to the product obtained by multiplying (x) $200,000 by (y) the
quotient obtained by dividing (i) the Company's pre-tax earnings for its fiscal
year ended December 31, 1996, by (ii) $712,575. During the remainder of the
Extended Term, the Executive shall be entitled to a bonus at the discretion of
the Board.
5. Benefits.
(a) The Company agrees to reimburse the Executive for all
reasonable and necessary travel, business entertainment and other business
expenses incurred by the Executive in connection with the performance of his
duties under this Agreement. Such reimbursement shall be made by the Company on
a timely basis upon submission by the
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Executive of vouchers, in accordance with the Company's standard procedures. All
such reimbursements shall be subject to such reasonable limitations as may from
time to time be prescribed by the Board.
(b) The Executive shall be entitled to participate in any
and all life insurance, medical insurance, group health, disability insurance,
and other benefit plans which are made generally available by the Company to
executives of the Company, including, but not limited to, any stock option plan
established by the Company (to the extent that the Executive qualifies under the
eligibility provisions of such plan or plans). Additionally, the Executive shall
be entitled to receive annual paid vacation and paid holidays made available
pursuant to Company policy to all of the senior executives of the Company.
(c) In the event of the death or disability of the
Executive, the Executive's employment hereunder shall terminate and, in addition
to any amounts then due and owing pursuant to Paragraph 4 hereof (appropriately
pro-rated), the Company shall, for the remainder of the Extended Term, pay to
the Executive or the Executive's personal representative, as the case may be,
the Executive's salary at the date of such death or disability. For the purposes
hereof, the term "disability" shall mean the absence of the Executive, due to
physical or mental illness, on a full-time basis for one hundred twenty (120)
consecutive business days or for shorter periods which aggregate more than four
(4) months during any consecutive twelve (12) month period.
6. Severance.
(a) Upon termination of the Executive's employment (i) by
the Company at any time following a "change in control" (as defined herein), or
(ii) by the
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Executive during the twelve (12) months following a "change in control" (as
hereinafter defined), the Company shall be obligated to provide to the Executive
(or his estate if the Executive shall have died after termination) salary, bonus
and benefits in the amount and kind then in effect (and in the case of bonus,
paid during the most recently completed fiscal year) pursuant to Paragraphs 4
and 5(b) hereof, for three years following his discharge. Payment of such salary
and bonus to the Executive (or his estate) shall be made in a lump sum no later
than thirty (30) days after the date of such Termination; provided, however,
that the aggregate amount of such payments and benefits shall be reduced to the
extent necessary to avoid the treatment of such payments as "parachute payments"
(i) not deductible by the Company under Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and (ii) subject to the excise tax under
Section 4999 of the Code.
(b) The Company acknowledges and agrees that the Executive
shall be entitled to receive all of the payments provided for herein regardless
of any income which the Executive may receive from other sources after the
termination of his employment with the Company.
(c) Nothing in this Paragraph 6 shall confer upon the
Executive the right to continue in the employ of the Company or any of its
subsidiaries or, subject to the terms hereof, shall affect any right which the
Company may have to terminate the employment of the Executive. No benefit
provided herein is intended or shall be deemed to be granted to the Executive in
lieu of any benefits, rights or privileges to which the Executive may be
entitled while he is an employee of the Company under any retirement, pension,
insurance, hospitalization, stock option, stock purchase, incentive compensation
or other plan
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of the Company which may now be in effect or which may hereafter be adopted, it
being understood that the Executive shall have the same rights and privileges to
participate in such plans as any other executive employee of the Company.
(d) In the event the Executive commences litigation to
enforce his rights under this Paragraph 6 and prevails in such litigation, the
Executive shall be entitled to recover his costs and expenses, including
reasonable attorneys' fees.
(e) For purposes of this Agreement, "change in control"
shall mean the acquisition, directly or indirectly, by any "person" or "group"
of "persons" (as these terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 and the rules thereunder) of beneficial
ownership of securities of the Company or of securities of the Company's
ultimate parent corporation, if any, representing 30% or more of the combined
voting power of the then outstanding securities of such corporation.
7. Notices. All notices relating to this Agreement shall be in
writing and shall be deemed to have been given at the time when delivered
personally or sent in the United States by registered or certified mail, return
receipt requested, in a postpaid envelope, addressed to the other party at the
address set forth below, or to such changed address as the other party may have
fixed by notice; provided, however, that any notice of change of address shall
be effective only upon receipt:
To the Company: Big Xxxxx Brands, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
To the Executive: S. Xxxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxx, Xxx. X000
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Xxxx Xxxxx, Xxxxxxx 00000
With a Copy to: Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
8. Assignability, Binding Effect and Survival. This Agreement
shall inure to the benefit of and be binding upon the Company, its successors
and assigns, including without limitation, any corporation which may acquire all
or substantially all of the Company's assets and business or with or into which
the Company may be consolidated or merged, and shall inure to the benefit of and
be binding upon the Executive, his heirs, executors, administrators and legal
representatives; provided, that the obligations of the Executive hereunder may
not be delegated.
9. Complete Understanding; Amendment; Waiver. This Agreement
constitutes the complete understanding between the parties with respect to the
employment of the Executive hereunder, and no statement, representation,
warranty or covenant has been made by either party with respect thereto except
as expressly set forth herein. This Agreement shall not be altered, modified,
amended or terminated except by written instrument signed by each of the parties
hereto. Any waiver of any term or provision hereof, or of the application of any
such term or provision to any circumstances, shall be in writing signed by the
party charged with giving such waiver. Waiver by either party hereto of any
breach hereunder by the other party shall not operate as a waiver of any other
breach, whether similar to or different from the breach waived. No delay on the
part of the Company or the Executive in the exercise of any of their respective
rights or remedies shall operate as a
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waiver thereof, and no single or partial exercise by the Company or the
Executive of any such right or remedy shall preclude other or further exercise
thereof.
10. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be enforced to the fullest extent permitted by
law.
11. Governing Law. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Delaware without
regard to conflict of laws provisions.
12. Indemnification. The Company shall indemnify the Executive
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred, in any action or
proceeding to which the Executive is made a party by reason of the fact that he
is or was an officer or director of the Company, to the fullest extent permitted
by law, the By-laws of the Company and the Certificate of Incorporation of the
Company, as amended or restated.
13. Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
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14. Titles and Captions. All paragraph, article or section
titles or captions in this Agreement are for convenience only and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
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IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first above written.
BIG XXXXX BRANDS, INC.
By:
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Name: Xxxxx X. Xxxxx
Title: Vice President
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S. Xxxxx Xxxxxxxx
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