EXHIBIT 10 (ww)
EMPLOYMENT AGREEMENT
This Agreement is entered into as of January 1, 1997 by and between TLC
XXXXXXXX INTERNATIONAL HOLDINGS, INC. (the "Company"), a corporation having its
principal place of business at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
Xxxxx Xxxxxxxxx ("Executive"), residing at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000.
The Company and Executive, in consideration of the promises and mutual
agreements hereinafter contained, agree as follows:
1. Term of Employment. Executive shall be employed by the Company for a
term commencing January 1, 1997, and terminating on the third anniversary of
employment under this Agreement on January 1, 2000; provided, that on the first
and each succeeding anniversary of such employment, this Agreement shall be
extended by one (1) year, unless notice of termination has been given by either
party to this Agreement to the other prior to the first or applicable succeeding
anniversary date.
2. Duties of Executive. Executive shall serve as Executive Vice
President and Chief Financial Officer of the Company and shall perform the
duties and render the executive services on behalf of the Company as shall be
determined by the Company's Chairman or Chief Executive Officer. Executive
agrees to perform such duties and tender such services as determined by the
Chairman or Chief Executive Officer, competently, loyally and to the best of his
ability, devoting thereto substantially all his business time, energy and
attention to such duties. Executive's office shall be in New York, New York and
he may not be required without his consent to: (a) relocate or (b) travel in
excess of the amount reasonably required to perform his duties as Executive Vice
President and Chief Financial Officer.
3. Compensation of Executive
(A) As compensation for the services to be performed under this
Agreement, the Company shall pay Executive an annual base salary of Three
Hundred Thousand U.S. Dollars (U.S. $300,000.00) ("Base Salary"), payable in
monthly or semimonthly installments, on the same schedule as other Executives of
the Company.
(B) Executive shall also be paid after the end of each fiscal
year during the term of this Agreement, a bonus in accordance with an annual
incentive plan ("AIP"), targeted at no less than forty percent (40%) of Base
Salary, but subject to upward or downward adjustment in accordance with AIP
according to Executive's individual performance and financial performance
targets set out by the Company.
(C) Executive has been granted Stock Options ("Options") on
Eighty Thousand (80,000) shares of Common Stock of the Company. The Company and
Executive agree that the Options shall have a purchase price of Twenty-Five
Dollars ($25.00) per share and shall vest and become exercisable by Executive in
accordance with, and in all other respects be subject to, the terms of the
Company's 1996 Long-Term Incentive Stock Option Plan, and the Stock Option
Agreement between the parties hereto collectively the "Stock Option Plan").
Any and all other grants of Stock Options, Stock Appreciation
Rights , Phantom Stock Rights and any similar option compensation of Executive
shall be deemed null and void upon the execution of this Agreement.
(D) The Company shall pay Executive One Thousand Dollars
($1,000.00) a month during his employment under this Agreement as a car
allowance, or at its option provide Executive with a Cadillac or similarly
priced car for his use.
(E) During his employment under this Agreement, the Company shall
provide Executive such coverage under all fringe benefits programs maintained or
offered by the Company to its senior executives, including, but not limited to
those providing for tax and financial planning, group hospitalization, medical,
health and accident, and disability income insurance. The Company shall also
reimburse Executive for his membership in a Health Club. In addition, Executive
shall be entitled to annual vacations consistent with the Company's vacation
policy, but not less than four (4) weeks per year.
(F) The Company shall review Executive's compensation, including
Base Salary, bonus, stock options and additional perquisites and benefits, not
less frequently than annually on the anniversary of the hiring date of
Executive. Following such review, the Company may, in its discretion, increase
such compensation, but shall not decrease such compensation during the term of
this Agreement.
4. Termination of Employment.
(A) Executive's employment under this Agreement may be terminated
by the Company with or without cause. Such termination shall be effective on
written notice delivered personally to Executive or one (1) business day after
it is sent to him by registered or certified mail.
(B) Termination for Cause. Executive's employment under this
Agreement may be terminated by the Company at any time for cause. Cause shall
include, but not be limited to: (i) conviction of any felony involving moral
turpitude or dishonesty; (ii) conviction of the unlawful sale, trafficking in or
use of controlled drugs or substances, or, regardless of arrest or conviction,
the illegal use or sale of controlled drugs or substances, or being under the
influence thereof while at work; (iii) gross neglect or grossly incompetent
performance of Executive's duties, provided that Executive has been given notice
of such cause and at least sixty (60) days to cure such performance problems;
(iv) Executive's death; (v) Executive's disability rendering him unable for a
continuous period of three (3) consecutive months to perform his duties for the
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Company hereunder; (vi) willful dishonesty in dealings with, or on behalf of the
Company or its customers or suppliers or willful violation of Executive's
obligations to the Company; (vii) Executive's material breach of his
confidentiality obligations under this Agreement; or (viii) the expiration of
the term of Executive's employment under this Agreement.
In the event of a termination of this Agreement by the Company
for any cause specified above, Executive's further compensation hereunder shall
be limited to accrued but unpaid Base Salary, unpaid amounts for reimbursable
expenses; and Executive shall have no other or further rights under this
Agreement.
(C) Termination Without Cause. In the event of the Company's
termination of this Agreement for any reason other than for cause, Executive
shall be entitled to receive in addition to the amounts described in Paragraph
4(B) above (but in lieu of any other compensation under this Agreement): (i)
continuation, on the same periodic payment basis as previously in effect for
Executive, of his Base Salary following the date of Executive's termination for
twenty-four (24) months or through the conclusion of the term of this Agreement,
whichever is longer; (ii) an amount equal to Executive's Target Bonus for the
year in which his termination occurs multiplied by a fraction derived by
dividing (x) the number of days elapsed between January 1 of such year and the
date of Executive's termination, by (y) 365; and (iii) an additional payment on
a date mutually agreeable to the parties to this Agreement, but no later than
eighteen (18) months following the termination of Executive's employment, of an
amount equal to the pro-rated Target Bonus Executive will receive for the year
in which Executive's termination occurs. Payments of the amounts set forth in
this Paragraph 4 (C) shall be made by the Company subject to offset by any
amounts owed by Executive to the Company for prereimbursed expenses, loans,
advances, as well as all lawful withholdings and deductions to which all
payments under this Agreement are subject; and may, at the sole discretion of
the Company, be conditioned upon Executive's executing a written release of the
Company and its affiliates and their employees and owners from any and all
claims arising out of this Agreement and his employment and the termination
thereof, in a form suitable to the Company excluding only: the Company's
continuing obligations under this Agreement; Executive's rights under COBRA; and
his vested rights under any savings or retirement plan subject to ERISA. At the
Company's option it may make a lump sum payment to Executive of any unpaid
portion of the applicable period specified above. Payments made under this
Paragraph 4(C) shall not be matched under the Company's 401(k) Plan. No part of
the continuation period nor any payments made pursuant to this Paragraph 4(c)
shall be treated as employment by the Company or compensation under any
retirement, pension, savings or any other employee benefit plan as defined in
ERISA.
(D) Resignation By Executive. Executive agrees to give the
Company written notice of his resignation. Such notice to be effective shall be
delivered personally to the Chairman at least ninety (90) days in advance of the
last day of Executive's employment. In the event of Executive's resignation, the
Company's sole obligation under this Agreement shall be to continue for the
notice period: (i) to pay Executive Executive's Base Salary (at the rate in
effect at the time notice is given); and (ii) the fringe benefits described in
paragraph 3(E) above.
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(E) Death Benefit. In the event Executive dies during the term of
this Agreement the Company shall continue to pay to Executive's estate his Base
Salary for a period of two (2) months.
5. Confidential Information. Executive acknowledges the importance of
the Company's arrangements with its employees, customers and suppliers and he
further acknowledges that the nature of these arrangements and other information
concerning the business, processes, policies and practices of the Company are
trade secrets and constitute valuable assets of the Company. Executive agrees to
keep secret and retain in the strictest confidence all confidential matters of
the Company, including, without limitation, trade secrets, trade "know-how,
customer lists, internal procedures, forms, records, business plans, financial
information, information relating to corporate opportunities and any other
confidential or proprietary information bearing upon or relating to the business
and affairs of the Company, or its suppliers or customers learned by Executive
during his employment, and not to disclose such information, or documents
containing such information, to anyone outside of the Company either during or
after his employment with the Company, except: as required in the course of
performing his duties hereunder, which duties include in the interest of the
Company discussions with investors, investment bankers and financial
institutions; as required by law; with regard to such information which becomes
generally available to the public other than as a result of the violation of
this Agreement; or with the Company's express written consent. Notwithstanding
the foregoing, the company agrees that the agreements, conditions, and
restrictions contained in this Paragraph 5 shall not apply to Information which
(i) is currently or subsequently becomes available to the public or (ii) is made
known through no fault of Executive or in spite of Executive having exercised
reasonable care to safeguard the same. Executive agrees upon request to deliver
promptly to the Company upon the termination of his employment by the Company,
or at any time the Chairman may so request, all memoranda, notes, records,
reports and other documents and computer storage media (and all copies thereof)
which contain such confidential or proprietary information relating to the
Company's business under his control.
6. Consequences of Termination.
(A) During the one-year period following Executive's employment
under this Agreement, Executive will not solicit or attempt to solicit from the
Company, for the purpose of employment, any person who is then or has within six
(6) months prior thereto, been an officer, manager or employee of the Company,
whether or not such persons would commit a breach of a contract of employment,
by reason of leaving the service of the Company.
(B) During the one-year period following the termination of
Executive's employment under this Agreement, Executive will not, individually,
or on behalf of any other person or entity, in any manner materially adversely
affecting the Company engage in the business of a merchant, factor, trader,
wholesaler or retailer, or solicit the business of, or in any other manner deal
with, any person or entity which is then or has at any time during the preceding
one (1) year been a purchaser from or supplier to the Company.
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(C) During the one-year period following the termination of
Executive's employment under this Agreement, Executive will not be employed by,
work for, advise, consult with, serve or assist (whether as principal, agent,
investor, lender, officer, director, employee, consultant, partner, advisor or
otherwise) any person or entity (i) engaged in the food distribution business in
any geographic area or territory in Europe or Asia in which the Company is then
conducting a trade or business in the same line of business, or (ii) which is
reviewing or proposing to acquire a food distribution business which the Company
or any of its affiliates had, during Executive's employment, reviewed or
considered for acquisition; or take advantage of any then existing corporate
opportunity of the Company; provided, however, that nothing herein contained
shall prevent Executive from purchasing and owning up to one percent (1%) of the
stock of any company or business whose securities are actively traded on any
securities exchange or the acquisition of which was, before or after such
termination, approved by the Chairman. In connection with this subparagraph, it
is acknowledged and understood by Executive that the Company is engaged in
international merchandising and business operations and that the scope of its
business, concerning which Executive is expected to develop intimate familiarity
extends throughout Asia and Europe.
(D) Executive acknowledges and agrees that the damages caused by
Executive's breach of Paragraphs 5 or 6 of this Agreement will be irreparable
and may not be quantifiable. Therefore, Executive agrees that his obligations
pursuant to Paragraphs 5 and 6 of this Agreement shall be specifically
enforceable in, at the Company's option, a court of competent jurisdiction or
before the American Arbitration Association (New York office), as set forth in
Paragraph 8 hereof, and that the Company shall, without being required to post
any bond or security, be entitled to obtain temporary relief and/or an
injunction against Executive's breach or threatened breach of the provisions of
Paragraph 5 or 6 of this Agreement.
(E) Upon the termination of his employment under this Agreement,
Executive shall be deemed to have resigned as a director or officer of the
Company and any subsidiaries or affiliates of the Company in which he holds such
positions.
7. Change of Control.
(A) If there is a "change of control" of the Company Executive
may, at his option, upon thirty (30) days written notice given to the Company
within one hundred eighty (180) days after a "change of control," terminate this
Agreement and receive the amount equal to that which he would have received if
he had been terminated other than for cause. For purposes hereof "change of
control" is hereby defined to mean: (i) the sale, conveyance or other
disposition of all or a major portion of the assets of the Company (or successor
organization); (ii) any transaction or series of transactions (as a result of a
tender offer, merger, consolidation or otherwise) that results in, or that is in
connection with, any person, entity or group acquiring or obtaining the right to
acquire, in one or more transactions, "beneficial ownership" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of
such percentage of the aggregate voting power of any class or common stock of
the company (or successor organization) as shall exceed fifty percent (50%) of
such aggregate voting power; (iii) the Company's Board of Directors elects or
appoints a person to serve as either the Chairman or the
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Chief Executive Officer of the Company who is not presently occupying that
position, except during a disability of the current Chairman or Chief Executive
Officer for a period not exceeding one hundred eighty (180) days.
(B) In the event that Executive would, except for this
subparagraph 7(B), be subject to a tax pursuant to Section 4999 of the Internal
Revenue Code of 1986, as amended, (the "Code") or any successor provision that
may be in effect, as a result of "parachute payments" (as that term is defined
in Section 280G(b)(2)(A) and (d)(3) of the Code) made pursuant to this
Agreement, or a deduction would not be allowed to the Company for all or any
part of such payments by reason of Section 280G(a) of the Code, or any successor
provision that may be in effect, such payments shall be reduced, eliminated, or
postponed in such amounts as are required to reduce the aggregate "present
value" (as that term is defined in Section 280G(d)(4) of the Code) of such
payments to one dollar less than an amount equal to three times Executive's
"base amount," (as that term is defined in Section 280G(b)(3)(a) and (d)(1) and
(2) of the Code) to the end that Executive is not subject to tax pursuant to
such Section 4999 and no deduction is disallowed by reason of such Section
280G(a). To achieve such required reduction in aggregate present value,
Executive shall determine what item(s) constituting the parachute payments shall
be reduced, eliminated or postponed, the amount of each such reduction,
elimination or postponement, and the period of each such postponement. To enable
Executive to make such determination, the Company shall be required to provide
Executive with such information as is reasonably necessary for such
determination.
(C) Prior to the making of any payment under paragraph 4(C)
above, either party may request a determination as to whether such payment would
constitute a "parachute payment," and, if so, the amount by which the payment
must be reduced in accordance herewith. If such a determination is requested, it
shall be made promptly, at the Company's expense, by independent tax counsel
selected by the Company and approved by Executive (which approval shall not
unreasonably be withheld), and such determination shall be conclusive and
binding on the parties. The Company shall provide such information as such
counsel may reasonably request, and such counsel may engage accountants or other
experts at the Company's expense to the extent that they deem necessary or
advisable to enable them to reach a determination. The term "independent tax
counsel," as used herein, shall mean a law firm of recognized expertise in
federal income tax matters that has not previously advised or represented either
party. It is hereby agreed that neither the Company nor Executive shall engage
any such firm as counsel for any purpose other than to make the determination
provided for herein and/or to represent or advise such party in connection with
a dispute or audit by the Internal Revenue Service concerning this issue for
three years following such firm's announcement of its determination.
8. Resolution of Disputes. The parties recognize that disputes may arise
concerning this Agreement or with respect to Executive's employment or
termination of employment under this Agreement or any law. The parties agree
that should any such claim, controversy or dispute arise, the parties will use
their best efforts to resolve such dispute informally, between them. In the
event that a claim, controversy or dispute between the Company and Executive
cannot be resolved within thirty (30) days after either party first gives notice
in writing that a dispute exists, either party may then refer the matter to
arbitration before the American Arbitration Association
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(New York office) pursuant to its rules for resolution of employment disputes,
including, but not limited to, its rules allowing for the rendering of awards ex
parte; provided, that nothing contained herein shall require the Company,
pending resolution of any dispute, to continue Executive's employment following
its notice to him of the termination of his employment.
The parties hereby agree that, except for claims by the Company pursuant
to Paragraphs 5 and 6 hereof, referral to arbitration shall be the sole recourse
of either party under this Agreement with respect to any claim, controversy or
dispute between them.
With respect to disputes concerning Paragraphs 5 and/or 6 hereof, the
parties agree that provisional or injunctive relief in connection with disputes
arising under with either Paragraph 5 or 6 may be sought, at the Company's
option, in a court of competent jurisdiction or through arbitration before the
American Arbitration Association. Regardless of whether provisional/injunctive
relief is sought by the Company in a court of competent jurisdiction or through
arbitration, arbitration before the American Arbitration Association (New York
office) pursuant to its rules for resolution of employment disputes shall be the
sole recourse for the ultimate determination of the substantive issues of those
disputes.
The arbitration and/or litigation shall take place in New York City. All
parties concede to personal jurisdiction in New York and hereby waive any
jurisdictional defenses as to New York law and venue.
9. This Agreement constitutes the entire agreement between the parties
and contains all agreements between them, including, but not limited to those
relating to the terms and conditions of Executive's employment and his
compensation. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied in this
Agreement, and that no agreement, statement or promise not contained in this
Agreement shall be valid or binding. This Agreement also supersedes any and all
other agreements and contacts between them whether verbal or in writing.
10. Except as otherwise specifically provided, no amendment or
modification of this Agreement shall be valid or effective, unless it shall have
been reduced to writing and signed by the Chairman and Executive.
11. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect its other provisions, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision had
been omitted.
12. Notice to the Company shall be given to:
TLC Xxxxxxxx International Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000;
Attention of Xxx. Xxxxx Xxxxx
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Notice to Executive shall be given to:
Xxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
All notices shall be in writing. Any party may send any notice, claim, demand or
other communication hereunder to the intended recipient at the address set forth
above using personal delivery, courier, messenger service, telecopy, telex,
ordinary mail or electronic mail, but no such notice shall be deemed to have
been duly given until it is received, unless the party intentionally makes
itself unavailable for service. Any party may change the address to which
notices are to be delivered by giving notice in the manner herein set forth.
13. This Agreement shall be construed and enforced according to the
laws of the State of New York.
IN WITNESS WHEREOF, the undersigned parties have duly executed this
Agreement as of the date first above written.
TLC XXXXXXXX INTERNATIONAL HOLDINGS, INC.
By:
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Title: Chairman
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Xxxxx Xxxxxxxxx
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