EXHIBIT 10.17
EMPLOYMENT AGREEMENT
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AGREEMENT dated as of October 1, 1996 between SWANK, INC., a Delaware
corporation with an address at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Corporation"), and XXXXXXXXXXX X. XXXX, residing at 000 Xxxx Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Employee").
W I T N E S S E T H :
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WHEREAS, the Corporation wishes to obtain the services of Employee as the
Corporation's Chief Financial Officer upon the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, Employee is willing to serve as the Corporation's Chief Financial
Officer upon such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Corporation and Employee hereby agree as
follows:
1. Employment and Term.
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The Corporation hereby employs Employee, and Employee hereby accepts
employment by the Corporation, on the terms and conditions herein contained, to
perform the duties described in paragraph 2 for a term (the "Employment Term")
commencing on October 1, 1996 (the "Commencement Date") and, subject to the
remaining provisions of this Agreement, ending on September 30, 1998.
2. Duties.
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(a) During the Employment Term, Employee shall serve as the Corporation's
Chief Financial Officer, with the corporate titles of Senior Vice President and
Treasurer. Employee will perform such duties and responsibilities as from time
to time shall be designated by the Corporation's President and/or its Board of
Directors. Employee shall serve the Corporation faithfully and to the best of
his ability and will devote his full business time and attention to the business
and affairs of the Corporation and its subsidiaries except during vacation
periods and periods of illness or incapacity. Notwithstanding the immediately
preceding sentence, during the period from and after the Commencement Date to
and including the earlier of (i) September 30 , 1997 and (ii) the sale of the
Nursing Home (as hereinafter defined), whether such sale takes the form of a
sale of (1) all or substantially all of its assets, (2) stock or other evidences
of ownership, or (3) otherwise, Employee may
continue to serve as a trustee, and to spend not more than one morning per month
during normal business hours to attend meetings of the board of trustees, of
Maristhill Nursing Home, a non-profit organization (the "Nursing Home").
(b) The Corporation and Employee acknowledge and agree that, while the
duties of Employee under this paragraph 2 are presently intended primarily to be
performed at the Corporation's offices located at 0 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, Employee shall spend such time at the Corporation's other
offices, including those offices located in New York City, and otherwise travel
in furtherance of the business of the Corporation or the performance of
Employees duties and responsibilities hereunder, as the Board of Directors or
the Corporation's President shall deem necessary.
3. Compensation and Benefits.
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(a) During the Employment Term, the Corporation agrees to pay Employee a
salary ("Base Salary") at the rate of $200,000 per year, payable in accordance
with the Corporation's regular pay intervals for its executive officers or in
such other manner as shall be mutually agreeable to Employee and the
Corporation. The Corporation's Board of Directors may, in its discretion, at any
time and from time to time, increase the Base Salary for Employee and grant
Employee other compensation in addition to that provided for hereby.
(b) During the Employment Term, Employee shall be entitled to participate
in any stock option, retirement, medical payment, disability, health or life
insurance and other similar benefit plans and arrangements which may be or
become available to executive officers of the Corporation in general; provided,
that Employee shall be required to comply with the conditions attendant to
coverage by such plans and arrangements and shall comply with, and be entitled
to benefits only in accordance with, the terms and conditions of such plans and
arrangements.
(c) Employee shall be entitled to reimbursement for expenses reasonably
incurred by him in furtherance of the business of the Corporation and in the
performance of his duties hereunder, on an accountable basis with such
substantiation as the Corporation may at the time require from its executive
officers. In addition, during the Employment Term, Employee shall be provided by
the Corporation with a cellular phone and a laptop computer (the cost and
specifications of which laptop computer shall be mutually agreed to by the
Corporation and Employee prior to its purchase), in each case for use in
furtherance of the business of the Corporation. Employee shall be responsible
and shall reimburse the Corporation for cellular phone charges incurred by him
that are not related to the business of the Corporation. Such cellular phone and
laptop computer shall be the property of the Corporation.
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(d) Employee shall be entitled to three weeks vacation in each year during
the Employment Term. Such vacation shall be taken at such time or times as may
be mutually agreed upon by the Corporation and Employee.
(e) The Corporation shall pay Employee' membership dues (i) for the
American Institute of Certified Public Accountants and the Massachusetts Society
of Certified Public Accountants and (ii) for other professional societies upon
which the Corporation and Employee shall mutually agree.
4. Termination upon Death; Death Benefit. The Employment Term shall
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terminate on the date of Employee's death, except that Employee's Base Salary
shall be paid to his estate through the end of the month in which his death
occurs.
5. Termination for Disability. If, during the Employment Term, in the
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judgment of the Corporation's Board of Directors, Employee shall, because of
physical or mental illness or incapacity, become unable adequately to perform
the duties and services required of him pursuant to this Agreement for a period
of 90 consecutive days or for a period of 120 days in any 365-day period, the
Corporation may, upon prior written notice given at any time after the
expiration of such 90-day period or 120-day period, as the case may be, to
Employee of its intention to do so, terminate the Employment Term to such date
as may be set forth in such notice. In case of such termination, Employee shall
be entitled to receive his Base Salary through the end of the month in which the
Employment Term shall be terminated. The payment of Base Salary provided for in
this paragraph 5 shall be in addition to amounts, if any, that shall be payable
to Employee upon his illness or incapacity under any disability insurance policy
or other disability plan of the Company.
6. Termination by Corporation; Expiration of the Employment Term.
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(a) The Corporation may terminate this Agreement, without liability other
than for payment of accrued but unpaid compensation through the date the
Employment Term ends, "for cause." The term "for cause" shall mean (i) a breach
by Employee of this Agreement which is not cured within 14 days after notice of
such breach shall have been given to Employee by the Corporation, (ii) the
commission by Employee of an act involving moral turpitude, dishonesty, theft or
unethical business conduct, (iii) any other conduct of Employee which
significantly impairs or xxxxx the reputation, or is otherwise to the
significant detriment, of the Corporation, or any of its subsidiaries or
affiliates, (iv) the possession or use of illegal drugs or prohibited
substances, (v) excessive drinking which, in the good faith determination of the
Corporation's Board of Directors, significantly impairs Employee's ability to
perform his duties and responsibilities hereunder, (vi) the conviction of
Employee of a felony or (vii) the breach by Employee of a fiduciary duty or
obligation to the Corporation or any of its subsidiaries or affiliates.
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(b) The Corporation may also terminate this Agreement at any time without
cause. In such event, provided Employee shall not at any time be in violation of
paragraph 7 hereof, the Corporation shall pay to Employee (i) if termination
shall occur on or prior to April 1, 1998, his Base Salary (at the annual rate in
effect on the date of termination) from the date of termination of the
Employment Term through and including September 30, 1998, or (ii) if termination
shall occur after April 1, 1998, his Base Salary (at the annual rate in effect
on the date of termination) from the date of termination through and including
the day immediately preceding the six month anniversary of the date of
termination, in each case, which Base Salary shall be payable in installments in
accordance with the Corporation's regular pay intervals for its executive
officers or in such other manner as shall be mutually agreeable to Employee and
the Corporation.
(c) Notwithstanding anything contained in this Agreement to the contrary,
in the event that Employee's employment with the Corporation and/or its
subsidiaries and affiliates shall terminate and he shall be entitled to receive
amounts under that certain Termination Agreement dated the date hereof between
the Corporation and Employee (the "Termination Agreement"), Employee shall not
be entitled to receive, and the Corporation shall not be required to pay, any
amounts to which he may otherwise be entitled under this Agreement, including,
without limitation, under paragraphs 6(b) and (d) hereof.
(d) In the event that (i) the Employment Term shall expire by its terms on
September 30, 1998 and (ii) the employment of Employee shall terminate on such
date, then, provided Employee shall not at any time be in violation of paragraph
7 hereof, the Corporation shall pay to Employee his Base Salary (at the annual
rate in effect on September 30, 1998) from October 1, 1998 through and including
March 31, 1999, with such Base Salary payable in installments in accordance with
the Corporation's regular pay intervals for its executive officers or in such
other manner as shall be mutually agreeable to Employee and the Corporation. In
the event that after the Employment Term (iii) Employee shall continue to be
employed by the Corporation and (iv) he shall terminate his employment with the
Corporation or the Corporation shall terminate the employment of Employee for
any reason other than for cause, then, provided Employee shall not at any time
be in violation of paragraph 7 hereof, the Corporation shall pay to Employee his
Base Salary (at the annual rate in effect on the date of termination) from the
date of termination through and including the day immediately preceding the six
month anniversary of the date of termination, with such Base Salary payable in
installments in accordance with the Corporation's regular pay intervals for its
executive officers or in such other manner as shall be mutually agreeable to
Employee and the Corporation. Nothing herein shall be deemed to require the
Corporation to employ Employee after the expiration or termination of the
Employment Term or to require the Employee to agree to be so employed.
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(e) Employee shall be required to mitigate the amount of the payments to
which he is entitled under paragraphs 6(b) and (d). Without limiting the
generality of the foregoing, in the event Employee secures employment of any
kind and receives compensation in respect thereof, any payments to which he
might otherwise be entitled under paragraph 6(b) or (d) shall be reduced by the
amount of such compensation actually received by him.
7. Certain Covenants and Agreements.
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(a) In consideration of Employee's employment hereunder, Employee agrees
that during the Employment Term and for a period of one year thereafter (and for
such additional period, if any, during which Employee shall be receiving amounts
from the Corporation pursuant to paragraphs 6(b) or (d) hereof), Employee will
not directly or indirectly (i) solicit, induce or entice for employment,
retention or affiliation, or recommend to any corporation, entity or other
person the solicitation, inducement or enticement for employment, retention or
affiliation of, any employee, consultant, independent contractor or other person
employed or retained by, or affiliated with, the Corporation, or any of its
subsidiaries or affiliates, (ii) engage in any activity intended to terminate,
disrupt or interfere with the Corporation's or any of its subsidiary's or
affiliate's relationship with a customer, supplier, lessor or other person, or
(iii) engage or participate in, or have any interest in any corporation, entity
or other person that engages or participates in any business or activity engaged
or participated in by the Corporation on date of termination of the Employment
Term. For purposes of this paragraph 7(a), Employee will be deemed directly or
indirectly to be engaged or participating in the operation of such a business or
activity, or to have an interest in a corporation, entity or other person, if he
is a proprietor, partner, joint venturer, shareholder, director, officer,
lender, manager, employee, consultant, advisor or agent or if he, directly or
indirectly (including as a member of a group), controls all or any part thereof;
provided, that nothing in this paragraph 7(a) shall prohibit Employee from
holding less than two percent (2%) of a class of a corporation's outstanding
securities that are listed on a national securities exchange or traded in the
over-the-counter market.
(b) Employee acknowledges that by his employment he will be in a
confidential relationship with the Corporation and will have access to
confidential information and trade secrets of the Corporation, its subsidiaries
and affiliates (collectively, the "Confidential Information"). Confidential
Information includes, but is not limited to, customer and client lists,
financial information, price lists, marketing and sales strategies and
procedures, computer programs, databases and software, supplier, vendor and
service information, personnel information, operating procedures and techniques,
business plans and systems, and all other records, files, and information in
respect of the Corporation. During the Employment Term and thereafter, Employee
shall maintain the strictest confidentiality of all Confidential Information and
shall not use or permit the use of, or disclose, discuss,
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communicate or transmit or permit the disclosure, discussion, communication or
transmission of, any Confidential Information. This paragraph 7(b) shall not
apply to (i) information that, by means other than Employee's deliberate or
inadvertent disclosure, becomes generally known to the public or (ii)
information the disclosure of which is compelled by law (including judicial or
administrative proceedings and legal process). In that connection, in the event
that Employee is requested or required (by oral question, interrogatories,
requests for information or documents, subpoenas, civil investigative demand or
other legal process) to disclose any Confidential Information, Employee agrees
to provide the Corporation with prompt written notice of such request or
requirement so that the Corporation may seek an appropriate protective order or
relief therefrom or may waive the requirements or this paragraph 7(b). If,
failing the entry of a protective order or the receipt of a waiver hereunder,
Employee is, in the opinion of counsel, compelled to disclose Confidential
Information under pain of liability for contempt or other censure or penalty,
Employee may disclose such Confidential Information to the extent so required.
(c) In the event of a breach or threatened breach by Employee of any of the
provisions of this paragraph 7, the Corporation shall be entitled to an
injunction to be issued by any court or tribunal of competent jurisdiction to
restrain Employee from committing or continuing any such violation. In any
proceeding for an injunction, Employee agrees that his ability to answer in
damages shall not be a bar or be interposed as a defense to the granting of a
temporary or permanent injunction against him. Employee acknowledges that the
Corporation will not have an adequate remedy at law in the event of any breach
by him as aforesaid and that the Corporation may suffer irreparable damage and
injury in the event of such a breach by him. Nothing contained herein shall be
construed as prohibiting the Corporation from pursuing any other remedy or
remedies available to the Corporation in respect of such breach or threatened
breach.
(d) If any term or provision of this paragraph 7 shall be held invalid or
unenforceable because of its duration, geographic scope, or for any other
reason, the Corporation and Employee agree that the court making such
determination shall have the power to modify such provision, whether by limiting
the geographic scope, reducing the duration, or otherwise, to the minimum extent
necessary to make such term or provision valid and enforceable, and such term or
provision shall be enforceable in such modified form.
(e) The provisions of this paragraph 7 shall survive the termination of the
Employment Term.
8. Assignability. This Agreement may not be assigned by Employee and all of
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its terms and conditions shall be binding upon and inure to the benefit of
Employee and his heirs, executors, administrators, legal representatives and
assigns and the Corporation and its successors and assigns. Successors of the
Corporation shall include, without
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limitation, any corporation or other entity acquiring directly or indirectly all
or a substantial part of the assets of the Corporation whether by merger,
consolidation, purchase, lease or otherwise, and such successor shall thereafter
be deemed the "Corporation" for purposes hereof.
9. Notices. All notices, requests, demands and other communications
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provided for hereby shall be in writing and shall be deemed to have been duly
given when delivered personally or two days after sent by registered or
certified mail, return receipt requested, to the party entitled thereto at the
address first above written or to such changed address as the addressee may have
given by a similar notice, with a copy, in each case, to Xxxxxxx X. Xxxxxxxx,
Esq., Xxxxxx Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000.
10. Modification. This Agreement may be modified or amended only by an
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instrument in writing signed by Employee and the Corporation and any provision
hereof may be waived only by an instrument in writing signed by the party hereto
against whom any such waiver is sought to be enforced.
11. Termination Agreement. The Corporation represents and warrants to
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Employee that the provisions of the Termination Agreement are substantially the
same as the provisions of the form of termination agreement executed and
delivered by the Corporation and the immediately preceding chief financial
officer of the Corporation.
12. Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect, impair or invalidate any other provision of
this Agreement.
13. Governing Law. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of New York, without regard
to principles of conflicts of law (or any other law that would make the laws of
any jurisdiction other than the State of New York applicable to this Agreement).
[PAGE ENDS HERE]
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14. Captions. The captioned headings contained herein are for convenience
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of reference only and are not intended, nor shall they be construed, to have any
substantive effect.
IN WITNESS WHEREOF, the Corporation and Employee have signed this Agreement
on the date set forth on the first page of this Agreement.
SWANK, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President
/s/ Xxxxxxxxxxx X. Xxxx
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Xxxxxxxxxxx X. Xxxx
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