EXHIBIT 10.126
EMPLOYMENT AGREEMENT
1. PARTIES. The parties to this Employment Agreement (the "Agreement")
effective as of September 1, 2003 are as follows:
a. Xxxxx Xxxx ("Executive"); and
x. Xxxxxxx Apparel Group dba Fashion Resource (including any
successors, the "Company").
2. EMPLOYMENT AND DUTIES. Executive shall report directly to the Board of
Directors (the "Board") and Executive shall perform such executive
duties and functions as shall be specified from time to time by the
Board consistent with Executive's position as President of a
corporation. Executive hereby accepts such employment and agrees to
perform the services contemplated herein faithfully, diligently, to the
best of Executive's ability and in the best interests of the Company.
Executive shall devote substantially all his business time and efforts
to the rendition of such services. Executive's principal place of
employment and the Company's principal place of business will be in Los
Angeles, California.
3. TERM OF AGREEMENT. The term of this Agreement shall commence on the
date set forth above and, subject to the provisions of Section 5, shall
continue for one year from that date (the "Term"). The Term hereof
shall renew automatically thereafter for subsequent one (1) year terms
unless written notice of termination is given by either party to the
other not less than sixty (60) days before the end of the initial Term
or any subsequent one year renewal term.
4. COMPENSATION AND OTHER BENEFITS. The Company shall provide the
following compensation and other benefits to Executive during the Term
as compensation for the performance by Executive of his obligations
under this Agreement.
a. BASE SALARY. The Company shall pay to Executive an annual base
salary (the "Base Salary") at the rate of $400,000 per annum
subject to increase in the Company's sole discretion, payable
over the course of each calendar year in equal installments
every two weeks.
b. ANNUAL BONUS. In addition to the Base Salary, Executive may
receive an additional bonus payable in a lump sum subject to
the discretion of the Board.
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c. STOCK OPTION. The Company shall grant Executive option to
purchase 500,000 shares of the Company's Common Stock with a
vesting of 125,000 shares each year over a period of four (4)
calendar years. The xxxxx xxxxx will be the closing price of
the day the Board ratifies this Employment Agreement.
d. EMPLOYEE BENEFIT PLANS. During the Term Executive shall be
entitled to participate in such pension, welfare, medical and
life insurance plans and programs as are maintained by the
Company from time to time for the general benefit of its
executive employees (with respect to each of the foregoing, a
"Plan" and collectively, the "Plans").
5. TERMINATION OF EMPLOYMENT. Subject to the provisions of this Section 5,
the Company shall have the right to terminate Executive's employment
prior to the expiration of the Term.
a. TERMINATION FOR CAUSE.
i. ENTITLEMENT UPON TERMINATION FOR CAUSE. In the event
Executive's employment is terminated for "Cause" as
defined in subsection 5(a)(ii). Executive shall be
entitled to receive (i) payment of the pro rata
portion of Executive's then current Base Salary
through and including the date of termination, plus a
pro rata portion of Executive's Annual Bonus for the
current year and (ii) payment for all accrued and
unused vacation time existing as of the date of
termination as reflected in the Company's personnel
records, payment of which will be made at a rate
calculated in accordance with Executive's then
current Base Salary. Executive shall not be eligible
to receive Base Salary, Annual Bonus, or to
participate in any plans or to receive any fringe
benefits with respect to future periods after the
date of such termination, except for the right to
receive benefits under any Plan in which Executive
participates in accordance with the terms of such
Plan, provided nothing in this subsection shall
require the Company to make any contribution or
payment to any such Plan after termination of
Executive's employment.
ii. CAUSE DEFINED: For the purposes of this Agreement,
"Cause" shall mean:
(1) Executive's continual and material failure
or refusal (whether intentional, reckless or
negligent) to perform his duties under this
Agreement;
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(2) A material breach by Executive of his
fiduciary duties to the Company resulting in
financial damage to the Company; or
(3) Executive's indictment of a crime
constituting a felony or the commission of
any acts which involve dishonesty or moral
turpitude and which impact adversely upon
the reputation or business of the Company.
iii. TERMINATION DATE: NOTICE. If acts giving rise to the
Company's right to terminate under subsection 5(a)
exists, Company shall provide specific details of
such acts in a written notice of termination
delivered by Company to Executive. Executive shall
have a reasonable period of time (not more than 10
days) to cure such acts if they are curable. If
Executive fails to cure within such period, or if the
acts themselves are not curable, Executive shall be
terminated effective the date written notice of
failure to cure is given by Company to Executive, or,
in the event the acts are inherently not curable,
Executive shall be terminated at the end of the ten
day period.
b. DEATH. If Executive dies prior to the expiration of the Term,
his beneficiary or estate shall be entitled to receive such
amount of the then current Base Salary, Annual Bonus and other
compensation and disbursement of benefits as would have been
payable to Executive under a termination for cause under
subsection 5(a) as of the date of death. Executive's
beneficiary or estate shall also be entitled to receive such
amounts, if any, as are payable to Executive under any
applicable insurance policies.
c. DISABILITY. Company shall maintain on behalf of Executive a
policy of disability insurance providing benefits to the
Executive in the event Executive becomes Permanently Disabled
as defined below. Benefits under such disability policy may be
offset by any disability payments to which Executive is
entitled in accordance with any government programs or other
disability insurance maintained by the Company for its
employees other than the disability insurance purchased on
behalf of Executive. If Executive becomes Permanently Disabled
(as defined below) prior to the expiration of the Term, this
Agreement shall be terminated as of the date of such
disability. In the event of such termination, Executive shall
be entitled to receive such amounts of Base Salary, Annual
Bonus and other compensation and disbursement of benefits as
would have been payable to Executive under a termination for
Cause under subsection 5(a) as of the date on which Executive
became
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Permanently Disabled as defined below. Executive shall also be
entitled to receive such amounts, if any, as are payable to
Executive under any applicable insurance policies. For the
purposes of this subsection, "Permanently Disabled" shall mean
the incapacity of Executive due to illness, accident, or other
incapacity to perform his duties for a period of ninety
consecutive days as determined by the Board.
d. TERMINATION WITHOUT CAUSE. If Executive is terminated by the
Company without Cause as Cause is defined at 5(a)(2) hereof,
the Company shall continue to pay the compensation and bonuses
provided for in Section 4 at the rate then being paid to
Executive through the end of the Term. Executives
participation in various benefit programs sponsored by the
Company shall depend upon the specific terms of those
programs.
e. TERMINATION OF RELATIONSHIP. In the event of the termination
of the employment relationship between the Company and
Executive, Executive shall be deemed to have resigned any and
all positions then held by Executive including, without
limitation, officerships, directorships or governing body
membership in subsidiary corporations of the Company, if any.
6. TRADE SECRETS. The Executive shall not, without the prior written
consent of the Company's Board of Directors in each instance, disclose
or use in any way, either during his employment by the Company or
thereafter, except as required in the course of such employment, any
confidential business or technical information or trade secret of the
Company acquired in the course of such employment, whether or not
patentable, copyrightable or otherwise protected by law, and whether or
not conceived of or prepared by him (collectively, the "Trade
Secrets"), including, without limitation, any confidential information
concerning customer lists, products, procedures, operations,
investments, financing, costs, employees, purchasing, accounting
marketing, merchandising, sales, salaries, pricing, profits and plans
for future development, the identity requirements, preferences,
practices and methods of doing business of specific parties with whom
the Company transacts business, and all other information which is
related to any product, service or business of the Company, other than
information which is generally known in the industry in which the
Company transacts business or is acquired from public sources or was
known to the Executive prior to the date hereof; all of which Trade
Secrets are the exclusive and valuable property of the Company.
7. BOOKS AND RECORDS. All files, accounts, records, documents, books,
forms, notes, reports, memoranda, studies, compilations of information,
correspondence and all copies, abstracts and summaries of the
foregoing, and all other physical items and intellectual property
related to the
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Company, other than a merely personal item, whether of a public nature
or not, and whether prepared by the Executive or not and are shall
remain the exclusive property of the Company and shall not be removed
from premises of the Company, except as required in the course of
employment the Company, without the prior written consent of the
Company's Board of Directors in each instance, and the same shall be
promptly returned to the Company by the Executive on the expiration or
termination of his employment by the Company or at any time prior
thereto upon the request of the Company.
8. SOLICITATION OF EXECUTIVE. During his employment by the Company and for
one year thereafter (such period not to include any period violation
hereof by the Executive or period which is required for litigation to
enforce this paragraph and during which the Executive is in violation
hereof), the Executive shall not, directly or indirectly, either for
his own benefit purposes or the benefit of purposes of any other person
employ or offer to employ, call on, solicit, interfere with or attempt
to divert or entice away any Executive or independent contractor of the
Company (or any person whose employment or status as an independent
contractor has terminated within the twelve months preceding the date
of such solicitation) in any capacity if that person possesses or has
knowledge of any Trade Secrets of the Company.
9. INJUNCTIVE RELIEF. The Executive hereby acknowledges and agrees that it
would be difficult to fully compensate the Company for damages
resulting from the breach or threatened breach of Sections 6, 7 and 8,
and accordingly, that the Company shall be entitled to temporary and
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, to enforce such provisions
without the necessity cot proving actual damages and without the
necessity of posting any bond or other undertaking in connection
therewith. This provisions with respect to injunctive relief shall not,
however, diminish the Company's rights to claim and recover damages.
10. CONSENT TO JURISDICTION. Each party hereto, to the fullest extent it
may effectively do so under applicable law, irrevocable (i) submits to
the exclusive jurisdiction of any court of the State of California or
the United States of America sitting in the City of Los Angeles over
any suit, action or proceeding arising out of or relating to this
Agreement, (ii) waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that is not subject to the jurisdiction
of any such court, any objection that is may now or hereafter have to
the establishment of the venue of any suit, action or proceeding
brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum, (iii) agrees that a final judgment in any such
suit, action or proceeding brought in any such court shall be
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conclusive and binding upon such party and may be enforced in the
courts of the United States of America or the State of California (or
any other courts to the jurisdiction of which such party is or served
in any such suit, action or proceeding by mailing a copy thereof by
registered or certified air mail, postage prepaid, return receipt
requested, to the address of such party specified in or designated
pursuant to Section 15. Each party agrees that such service (i) shall
be deemed in every respect effective service of process upon such party
in any such suit, action proceeding and (ii) shall, to the fullest
extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such party.
11. ARBITRATION. Any controversy arising out of or relating to this
agreement or the transactions contemplated hereby shall be referred to
arbitration before the American Arbitration Association strictly in
accordance with the terms of this Agreement and the substantive law of
the State of California. The board of arbitrators shall convene at a
place mutually acceptable to the parties in the State of California
and, if the place arbitration cannot be agreed upon, arbitration shall
be conducted in Los Angeles. The parties hereto agree to accept the
decision of the board of arbitrators, and judgment upon any award
rendered hereunder may be entered in any court having jurisdiction
thereof. Neither party shall institute a proceeding hereunder until
that party has furnished to the other party, by registered mail, at
least 30 days prior written notice of its intent to do so.
12. ASSIGNMENT. This Agreement shall inure to the benefit of the Company's
successors, assigns, grantees and its associated, affiliated,
subsidiary and parent companies as may now or hereafter exist. This
Agreement shall be binding on Executive, his heirs, executives or
administrators, and legal representatives but shall not be assignable
by Executive and the obligations of Executive may not be delegated.
13. INDEMNIFICATION OF EXECUTIVE. The Company shall indemnify Executive for
all necessary expenditures or losses incurred by Executive in direct
consequence of the discharge of his duties on behalf of Company.
Company shall maintain directors and officers liability coverage
insuring Executive for any loss caused by his wrongful acts or
omissions as such may be defined in the said policy.
14. SEVERABILITY. In the event that any provision of this Agreement should
be held to be void, voidable, unlawful or for any reason unenforceable,
the remaining provision or portions of this Agreement shall remain in
full force and effect.
15. NOTICES. Any notice, request, demand, or other communication required
or permitted to be given under this Agreement shall be sufficient if in
writing and
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delivered personally or sent by certified or registered mail to the
Company at its principal executive offices and to Executive at his
residence as shown on the records of the Company.
16. AMENDMENT WAIVER. This Agreement may not be modified, amended or waived
in any manner except by an instrument in writing signed by both
Executive and the Company. The waiver by either party of compliance
with any provision of this Agreement by the other party shall not
operate or be construed as waiver of any other provision of this
Agreement, or of any subsequent breach by such party of a provision of
this Agreement.
17. APPLICABLE LAW. This Agreement, Executive's employment relationship
with the Company, and any and all matters or claims arising out of or
related to this Agreement or Executive's employment relationship with
the Company, shall be governed by, and construed in accordance with,
the laws of the State of California regardless of the choice of laws
provisions of California or any other jurisdiction.
18. SUPERSEDES PREVIOUS AGREEMENTS. This Agreement constitutes the entire
agreement and understanding between the parties to this Agreement and
supersedes all prior and contemporaneous negotiations and
understandings between the parties whether oral or written, expressed
or implied.
19. COUNTERPARTS. This Agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same
instrument.
20. HEADINGS. The headings of sections and subsections of this Agreement
are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this
Agreement.
21. ATTORNEY'S FEES. In the event of any dispute or controversy arising out
of this Agreement, the prevailing party shall be entitled to
reimbursement of its reasonable costs, including court arbitration
costs and attorneys' fees and costs.
22. LEGAL ADVICE. The parties to this Agreement represent that each has
received prior independent legal advice from legal counsel of such
party's choice with respect to the advisability of executing this
Agreement. Each party and each party's attorney have reviewed this
Agreement at length and have made any desired changes to its form and
substance.
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IN WITNESS WHEREOF, the Company has caused its duly authorized
representative to execute, and Executive has executed, this Agreement as of the
date first above written.
TARRANT APPAREL GROUP
By: /S/ XXXX XXX
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Xxxx Xxx
Vice Chairman
Date: 9/18/03
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By: /S/ XXXXX XXXX
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Xxxxx Xxxx
Date: 9/18/03
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