Exhibit 10.11
EMPLOYMENT AGREEMENT
Agreement made as of the 21st day of June 1999 between
NS Group, Inc., a Kentucky corporation ("Employer"), and
Xxxx X. Xxxxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee in an
executive position with significant executive and
administrative responsibilities and Employee desires to be
employed by Employer in such capacity upon the terms and
conditions hereinafter provided; and
WHEREAS, Employee shall serve Employer in the executive
capacity specified by the Board of Directors of NS Group,
Inc., a Kentucky corporation; and
WHEREAS, in such capacity Employee will develop or have
access to all of the business methods and confidential
information relating to Employer, including, but not
limited to, its financial matters, its sales and
distribution organization and methods, its designs and
procedures for the manufacture of its products, its market
development, its personnel training and development programs
and its customer and supplier relationships; and
WHEREAS, Employee and Employer are desirous of entering
into this Employment Agreement which sets forth the rights
and obligations of the parties during the continuation of
such employment, as well as following any termination
thereof;
NOW THEREFORE, in consideration of the mutual covenants
and promises herein contained and in pursuance of the above,
Employee and Employer agree as follows:
1. EMPLOYMENT
Employer shall employ Employee as President and Chief
operating Officer or in such other executive capacity as the
Board of Directors of NS Group shall specify, to perform all
duties that are customarily performed by one holding such
position or as otherwise designated by the Board of
Directors of NS Group, and Employee agrees to such
employment, subject to the general supervision and direction
by Employer and pursuant to the terms and conditions hereof.
Employee covenants and agrees that he will, at all times,
faithfully and industriously perform any and all duties
conferred upon him by Employer, and Employee further agrees
that he will devote all necessary working time and attention
thereto.
2. TERM; TERMINATION
Employee's employment with Employer will commence on June
21, 1999 and shall continue for a period of three (3) years
thereafter, subject to the right of Employer to terminate
this Employment Agreement for just cause, upon thirty (30)
days prior written notice to Employee, and the right of
Employee to terminate this Employment Agreement for any
reason or no reason upon thirty (30) days prior written
notice to Employer.
3. COMPENSATION; EMPLOYEE BENEFITS
Employer shall pay Employee for Employee's services
hereunder a salary at the rate of not less than $300,000 per
annum. Employee shall also be entitled to participate in a
bonus participation plan, stock option program, and other
fringe benefits available to other employees of NS Group or
any of its subsidiaries who are similarly situated in terms
of (i) position with NS Group or any of its subsidiaries,
(ii) seniority and (iii) geographical location of
employment. Employee's participation in such plans,
benefits and programs shall be subject to the rules,
regulations and amendments pertaining to eligibility and
participation therein.
In addition, Employee shall be eligible to receive vacation
as follows:
Length of Service Vacation Entitlement
Six months, but less than 1 year 1 week
One year, but less than 15 years 3 weeks
4. OTHER EMPLOYMENT
Employee shall devote substantially all of his normal
working time, attention, knowledge, and skills solely to the
business and interest of Employer. Employee shall not,
directly, or indirectly in any manner whatsoever, solicit,
accept or serve, on behalf of himself or any other third
party, any similar or related business without Employer's
approval. Furthermore, Employee shall not, directly or
indirectly, act for the benefit or on behalf of any
competitor of Employer or in any way inconsistent with
Employer's best interest.
This provision shall not be construed to prohibit Employee
from devoting non-business hours to the passive pursuit of
personal business interests not competitive with the
business of Employer or NS Group, or any subsidiary or
affiliate of Employer or NS Group, provided such interests
do not interfere with Employee's duties and responsibilities
owed to Employer.
5. REPRODUCTION OF DOCUMENTS
Employee shall not (except in the performance of his duties
hereunder) at any time or in any manner make or cause to be
made any copies, pictures, duplicates, facsimiles or other
reproductions or recordings or any abstracts or summaries of
any reports, studies, memoranda, correspondence, manuals,
records, plans or other written, printed or otherwise
recorded materials of any kind whatsoever belonging to or in
the possession of Employer or NS Group, or any subsidiary or
affiliate of Employer or NS Group. Employee shall have no
right, title or interest in any such material, and Employee
agrees that (except in the performance of his duties
hereunder) he will not, without the prior written consent of
Employer, remove any such material from any premises of
Employer or NS Group, or any subsidiary or affiliate of
Employer or NS Group, and that he will surrender all such
material to Employer, immediately upon the termination of
his employment or at any time prior thereto upon the request
of Employer.
6. NON-DISCLOSURE OF INFORMATION
Employee specifically agrees that he will not at any time,
whether during his employment or for a period of two (2)
years after such employment ends for any reason, disclose or
communicate to any third party any secret, private or
confidential information or trade secret relating to the
business of Employer or NS Group, or any subsidiary or
affiliate of Employer or NS Group, including business
methods and techniques, research data, marketing and sales
information, customer lists, know-how, and any other
information, process or technique or information concerning
the business of Employer or NS Group, or any subsidiary or
affiliate of Employer or NS Group, their manner and method
of operation, their plans or other data not disclosed to the
general public or known with the industry, regardless of
whether such information or trade secret was acquired prior
to or after execution of this Employment Agreement.
7. COVENANT NOT TO COMPETE
Employer and Employee recognize that Employer's industry is
highly competitive and that Employee will acquire special
knowledge from Employer. Employee, therefore, agrees that
for twelve (12) months after the employment relationship
ends for any reason;
(a) He shall not, either directly or indirectly, by
or for himself, or as agent of another, or through others as
his agent, in any way seek to induce, bring about, promote,
facilitate or encourage the discontinuance of or in any way
solicit for himself or others, those persons or entities who
are customers or employees of Employer or NS Group, or any
subsidiary or affiliate of Employer or NS Group;
(b) He shall not engage in, or become an owner,
stockholder, partner, lender, investor, director, officer,
employee, consultant or act in any other capacity with
respect to any entity which engages in, a business that
competes with, or is substantially similar to, the business
currently being conducted by Employer or NS Group, or any
subsidiary or affiliate of Employer or NS Group, and located
within North America; and
(c) If he fails to comply with any of the provisions
of this paragraph 7, Employee shall forthwith pay over to
the Employer the lesser of all benefits received by Employee
or Employer's actual damages resulting from such violation
of these covenants, together with all sums expended or costs
incurred by Employer to enforce the provisions of this
covenant, including Employer's reasonable attorneys' fees.
8. INJUNCTIVE RELIEF
In addition to, and not in lieu of, any other remedy to
which Employer may otherwise be entitled, the parties agree
that a breach by Employee of any covenant set forth in
paragraphs 1, 4, 5, 6, 7, or 9 of this Employment Agreement
shall result in irreparable injury, harm and damage to
Employer for which there is no adequate remedy at law, and
the parties further agree that, in the event of any
violation or breach by Employee of any of those provisions
of this Employment Agreement, Employer shall be entitled to
an immediate injunction and restraining order through proper
action filed in a court of competent jurisdiction to prevent
such violation or breach. Employee agrees to indemnify and
hold Employer harmless for any costs and expenses, including
reasonable attorneys' fees, which Employer may incur to
remedy any violation or breach by Employee of any covenant
set forth in paragraphs 1, 4, 5, 6, 7, or 9 hereof.
9. INVENTIONS
Employee agrees that any and all inventions and discoveries,
whether or not patentable, which Employee has conceived or
may conceive and which pertain to work or business which he
has performed or may perform on behalf of Employer, whether
or not during working hours, shall be the sole and exclusive
property of Employer.
Employee further agrees to inform Employer of all inventions
and discoveries promptly after they have been conceived or
made in detail sufficient to permit Employer to understand
such inventions and discoveries and practice them without
the exercise of further inventive skill. When requested to
do so, Employee agrees, whether during the term of this
Employment Agreement or within three (3) years thereafter,
to execute any and all documents necessary or desirable to
convey title to such inventions and discoveries to Employer
and to assist Employer in perfecting and enforcing
Employer's right in and to any such invention or discovery,
including filing patent applications regarding such
inventions or discoveries in the United States or in foreign
countries. Employee agrees that any invention, product
design, product improvement or technological innovation
which Employee, either individually or jointly with others,
has already conceived or during the term of this Employment
Agreement may conceive, develop, create or suggest that
directly results from any work which Employee does or has
done for Employer or NS Group, or any subsidiary or
affiliate of Employer or NS Group, shall be the absolute
property of Employer and shall promptly be disclosed by
Employee to Employer.
10. REPRESENTATIONS BY EMPLOYEE
Employee represents that he is neither restricted nor
prohibited in any manner from employment and performance of
duties on behalf of Employer as herein provided.
11. SEVERABILITY
Employer and Employee agree that should any provision of
this Employment Agreement be held to be illegal, invalid or
unenforceable for any reason, such term or provision shall
be deemed to be modified to the extent necessary to permit
its enforcement to the maximum extent permitted by
applicable law, and any court making such determination
shall have power to modify any and all such provisions, and
such provisions shall then be applicable in modified form.
If any provision of this Employment Agreement is invalid or
unenforceable for any reason, the remainder of this
Employment Agreement and all other provisions herein shall
not be affected thereby.
12. ENTIRE AGREEMENT AND AMENDMENTS
Employer and Employee agree that this Agreement constitutes
the entire agreement between them with respect to the
subject matter hereof and that any and all prior
discussions, negotiations, commitments and understandings
relating thereto are hereby superseded and merged herein.
The terms and provisions of this Agreement shall not be
changed, amended, waived, modified or terminated in any
respect whatsoever except by a written instrument executed
by Employer and Employee.
13. INTERPRETATION
This Employment Agreement shall be interpreted as written
jointly by Employer and Employee.
14. GOVERNING LAW, FORUM SELECTION and CONSENT TO PERSONAL
JURISDICTION
Employer and Employee hereby consent that any action to
enforce any provision of this Employment Agreement shall be
brought only in a state or federal court located in the
Commonwealth of Kentucky. This Agreement shall be
interpreted, governed and enforced in accordance with the
laws of the Commonwealth of Kentucky.
15. ASSIGNMENT
This Employment Agreement shall be binding upon and inure to
the benefit of Employer, its successors and assigns, and to
the benefit of Employee, his heirs, administrators and legal
representatives, except that Employee's duties to perform
services hereunder are non-transferable.
16. NO WAIVER OF RIGHTS
Neither failure nor delay on the part of a party in
exercising any right, power or privilege herein contained
shall operate as a waiver thereof on the part of such part,
nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege
by a party to this Employment Agreement.
17. AMENDMENT A
More specific conditions of employment are described in the
attached Amendment A to this Employment Agreement.
IN WITNESS WHEREOF, the Employer and Employee have agreed
upon and executed this Employment Agreement on the day and
year first written above.
WITNESSES:
/s/Xxxxx Xxxxxx
/s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
NS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
Its: Chairman and CEO
Attachment: Amendment A
AMENDMENT A
CONDITIONS OF EMPLOYMENT
EMPLOYMENT - The position of President and Chief Operating
Officer of NS Group, Inc. All subsidiary companies of NS
Group will report to you. In addition, all corporate staff
functions including Finance and Treasurer, human resource
management, capital planning and environmental policy will
report to you. You will be expected to lead the Company's
strategic planning and development activities to include the
direction taken by its' existing businesses as well as
potential acquisitions to achieve diversification.
SALARY - The starting base salary will be $300,000 per year.
In addition, you will have a bonus opportunity equal to 100%
of your annual base salary. The bonus will be based on the
financial results of NS Group, Inc.
STOCK OPTIONS - The Compensation Committee of the Board of
Directors is prepared to offer you, on your acceptance of
the position, 500,000 options of common stock of NS Group,
Inc. The options will be exercisable in five equal segments
on the first through the fifth anniversary of the date of
the award. (The award of 550,000 options at $7.30 per share
was awarded on June 22, 1999.)
DIRECTORSHIP - As President of NS Group, Inc. you will be
appointed a director of the Company at the Board Meeting
scheduled for July 15, 1999.
RETIREMENT - Should you remain with NS Group until age 62,
you will be eligible for a retirement benefit of $12,500 per
month. This payment is payable for life. In the event of
your death prior to the payment of 120 monthly payments, the
balance (120 less the payments received) would be payable to
your spouse or other person designated by you.
PROMOTION - The Board review of your performance leading to
promotion to Chief Executive Officer will begin with the six-
month anniversary of your employment.
SAVINGS PLAN - You will be eligible to participate in the
Company's Salaried Employee Retirement Savings Plan. As a
highly compensated employee, your contribution will be
limited to $10,000 per year. NS Group matches employee
contributions to your account equivalent to 50% of the first
4% of gross earnings.
AUTOMOTIVE STIPEND - You will be provided with an automotive
stipend of $15,000 per year or $1,250 per month. This
benefit is designed to cover the cost of a leased company
car, all fuel, oil and maintenance requirements, and the tax
gross-up for this taxable benefit. The Company will cover
insurance costs on its liability policy.
GOLF OR COUNTRY CLUB FEES - The Company will pay the
initiation and membership fees associated with your joining
a golf or country club of your choice once you have
relocated your family to the Greater Cincinnati/Northern
Kentucky areas.
OTHER FRINGE BENEFITS - Other benefits include health care
and dental benefits for you and your family, employee life
insurance, sickness and accident salary continuation and
long-term disability, supplemental sickness and accident
benefits, educational assistance, as well as paid vacations
and holidays. Also included are relocation benefits
covering moving of household goods, real estate commissions
on selling your existing home, and other costs related to
relocating your family to the Greater Cincinnati area.
CONTRACT GUARANTEE - With this contract your salary and any
bonuses earned during the three years are guaranteed in the
event your employment is terminated for reasons other than
"cause", suicide, or leaving for other employment. In
addition, sixty percent of the June 22, 1999 option award
will vest at termination if cause, suicide, or other
employment are not involved.
CHANGE OF CONTROL SEVERANCE AGREEMENT - A Change of Control
Severance Agreement offering individual financial security
in the event a Change of Control occurs provides benefits
which generally would exceed the guarantees of this
contract. The benefits are not additive. The conditions
prevailing would dictate which contract or agreement would
apply.
