EXHIBIT 10.30
EMPLOYMENT AGREEMENT
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AGREEMENT dated as of August 1, 1994 between FALCON SHOE MFG. CO., a Maine
corporation (the "Company"), and XXXXXXXX X. XXXXXXXX (the "Employee").
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter stated, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM.
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The Company agrees to employ the Employee, and the Employee hereby agrees
to work for the Company, as a full-time employee for the term set forth in
Section 6 hereof. The Employee shall be employed as President and Chief
Executive Officer of the Company. The Employee agrees to serve the Company
faithfully and to the best of his ability and to perform such services and
duties of an executive nature in connection with the business, affairs and
operations of the Company as may be assigned or delegated to him from time to
time by or under the authority of the Board of Directors of the Company, and to
use his best efforts in the promotion and advancement of the Company and its
welfare and business.
2. INVENTIONS; TRADE SECRETS.
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(a) The Employee understands and agrees that his employment creates a
relationship of confidence and trust between him and the Company with respect to
(i) all Proprietary Information, as defined below, and (ii) the confidential
information of others with which the Company has a business relationship. At
all times, both during his employment by the Company and after its termination,
the Employee will keep in confidence and trust all such information, and will
not use or disclose any such information without the written consent of the
Company, except as may be necessary in the ordinary course of performing his
duties to the Company. "Proprietary Information" means proprietary,
confidential information that the Company possesses or has rights to, which
information has commercial value in the business of the Company and its
affiliates, including, without limitation, trade secrets, product ideas,
processes, formulas, designs, software, improvements, inventions, data and know-
how, copyrightable materials, marketing plans and strategies, sales and
financial reports and forecasts and customer lists, provided that "Proprietary
Information" shall not include any such information which is generally known to
the public or in the trade unless such knowledge results from a breach of this
Agreement by the Employee.
(b) The Employee further agrees that:
(i) All Proprietary Information shall be the sole property of the
Company and its assigns, and the Company and its assigns shall be the sole owner
of all trade secrets, patents, copyrights, and other rights in connection
therewith, and the Employee hereby assigns to the Company his entire right,
title and interest in the foregoing. The Employee shall, upon the Company's
request, execute any documents necessary or advisable in the opinion of the
Company counsel to assign, and confirm the Company's title in, the foregoing.
(ii) All documents, records, apparatus, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished to the
Employee by the Company or produced by him or others in connection with the
[sic] his employment shall be and remain the sole property of the Company.
3. SALARY.
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The Employee's salary for the term of the employment herein provided will
be One Hundred Ninety Thousand Dollars ($190,000.00) per year, payable no less
often than monthly, subject to increases at the discretion of the Board of
Directors.
4. EXPENSES.
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Upon presentation of appropriate documentation, the Company shall reimburse
the Employee for travel, entertainment and other expenses reasonably incurred by
him in performing his duties hereunder.
5. OTHER BENEFITS.
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(a) During the term of his employment hereunder, the Employee shall be
entitled to up to twenty (20) vacation days per calendar year and shall also be
entitled to all holidays given by the Company to its employees.
(b) During the term of his employment hereunder, the Employee shall be
entitled to participate in the other benefits specified in EXHIBIT A attached
hereto.
6. TERM AND TERMINATION.
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(a) TERM. Subject to the earlier termination of the
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employment of the Employee as hereinafter set forth, this Agreement shall be
effective from and as of August 1, 1994 (the "Commencement Date"), and shall
remain in effect until January 31, 2000. The last day of such period is herein
sometimes referred to as the "Expiration Date." Subject to the earlier
termination of the employment of the Employee hereinafter set forth, on each
date during the term of the Employee's employment hereunder that is one hundred
eighty (180) days prior to the Expiration Date then in effect, the Expiration
Date shall be automatically extended for one
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(1) year, unless either party shall have previously given the other notice that
the Expiration Date shall not be so extended.
(b) MUTUAL CONSENT. This Agreement and the Employee's employment
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hereunder may be terminated at any time by the mutual consent of the parties
hereto.
(c) WITH CAUSE. The Employee's employment hereunder may be
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terminated at any time by the affirmative vote of a majority of the members of
the Board of Directors of the Company taken at any regular or special meeting at
which the Employee has been afforded the opportunity to participate (without
considering the vote of the Employee for any purpose other than for purposes of
establishing a quorum), and shall be effective upon written notice of actual
termination for cause to the Employee:
(i) if the Employee shall have been guilty of acts of
dishonesty, fraud, theft or embezzlement;
(ii) if the Employee shall have been guilty of gross and willful
failure to perform a substantial portion of his duties and responsibilities
hereunder;
(iii) if the Employee shall have violated any provision of a
non-competition agreement between him and the Company of even date herewith
to an extent that shall have caused material harm to the interests of the
Company; or
(iv) if the Employee shall have been convicted of any crime
involving moral turpitude or fraud.
Upon termination for cause as provided in this subsection (c), the Employee
shall be entitled to receive any compensation accrued under the terms of this
Agreement that remains unpaid as of the termination date specified in the above-
mentioned notice of actual termination for cause.
(d) DEATH OF EMPLOYEE. In the event of the Employee's death during
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the Employee's employment hereunder, the Employee's employment shall terminate
on the date of his death.
(e) DISABILITY. If due to physical or mental illness, the Employee
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shall be disabled so as to be unable to perform substantially all of his duties
and responsibilities hereunder, the Board of Directors may designate another
executive to act in his place during the period of such disability.
Notwithstanding any such designation, the Employee shall continue to receive his
full salary and benefits under Sections 3 and 5 of this Agreement until he
becomes eligible for disability income under the Company's disability income
plan as supplemented. While receiving disability income payments under such
supplemented plan, the Employee shall not receive any salary under Section 3,
but shall continue to participate in benefits as set out in Sections 1 and 4 of
EXHIBIT A attached hereto (but no other benefits) until the Expiration Date.
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In the absence of a disability income plan at the time of such disability, the
Company shall pay the Employee benefits equal to those the Employee would have
received if the Company's current disability income plan as supplemented were in
effect at such time. Any question arising as to whether during any period the
Employee was disabled so as to be unable to perform substantially all of his
duties and responsibilities hereunder due to physical or mental illness shall be
determined in accordance with the disability income plan of the Company as
supplemented then in effect, or if there is no such plan in effect, by an
independent physician mutually acceptable to the Company and the Employee.
(f) TERMINATION BY EMPLOYEE. The Employee may terminate his
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employment hereunder at any time by written notice to the Company in the event
of the following:
(i) Failure of the Board of Directors to elect the Employee to
the offices of the President and Chief Executive Officer of the Company, or to
continue the Employee in such offices, or
(ii) Material breach by the Company of any provision of this
Agreement.
(g) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Employee's
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employment with the Company may be terminated without cause by the affirmative
vote of a majority of the members of the Board of Directors on written notice to
the Employee.
(h) CERTAIN TERMINATION BENEFITS. In the event of termination
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pursuant to Sections 6(f) or 6(g), the Employee shall be entitled to the
following benefits:
(i) For the period subsequent to the date of termination until
the Expiration Date, the Company shall continue to pay the Employee an amount
equal to, and payable in the same installments as, the Employee's salary at the
rate in effect on the date of termination.
(ii) For the period subsequent to the date of termination until
the Expiration Date, the Employee shall continue to receive the benefits
described in Sections 1 and 4 of the attached EXHIBIT A (but no other benefits).
(iii) If, in spite of the provisions of Section 6(h)(ii) above,
the benefits or service credits under any benefit plan specified in Section 4 of
the attached EXHIBIT A shall not be payable or provided under any such plan to
the Employee, or the Employee's dependents, beneficiaries or estate, because the
Employee is no longer deemed to be an employee of the Company, the Company
itself shall pay or provide for payment of the benefits and service credits for
such benefits as described in Section 5 of the attached EXHIBIT A to the
Employee, or to the Employee's dependents, beneficiaries or estate.
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(i) SET-OFF. The Company shall be entitled to set off against any
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cash compensation to be provided to the Employee under Section 6(h)(i) above
one-half of the amount of any cash compensation received by the Employee from
other employment during the period in which the Employee receives cash
compensation under Section 6(h)(i). The Employee shall inform the Company of
any such amounts of cash compensation and shall refund to the Company any
amounts which the Company has paid which exceed the amounts due from the Company
after application of the set-off provided for in this paragraph.
Notwithstanding the foregoing and any other provision of this Agreement, the
Employee shall be under no obligation to seek or accept any employment after
termination of employment with the Company for any reason.
(j) CONTINUING OBLIGATIONS. Notwithstanding the foregoing, the
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Employee's obligations under Section 2 hereof shall survive the termination of
his employment under any of the preceding subsections of this Section 6.
7. MISCELLANEOUS.
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(a) WAIVERS. The failure of any of the parties to this Agreement to
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require the performance of a term or obligation or to exercise any right under
this Agreement or the waiver by any of the parties to this Agreement of any
breach hereunder shall not prevent subsequent enforcement of such term or
obligation or exercise of such right or the enforcement at any time of any other
right hereunder or be deemed a waiver of any subsequent breach of the provision
so breached, or of any other breach, hereunder.
(b) GOVERNING LAW; CONSTRUCTION, ETC. This Agreement shall be
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governed by and construed under the laws of the State of Maine, and shall not be
modified or discharged in whole or in part except by an agreement in writing
signed by the parties hereto and approved by the Board of Directors of the
Company. It shall inure to the benefit of successors of the Company by way of
merger, consolidation or transfer of substantially all the assets of the
Company. In case any one or more of the provisions or parts of a provision
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement,
but this Agreement shall be construed as if such invalid or illegal or
unenforceable provision or part of a provision had been limited or modified
(consistent with its general intent) to the extent necessary so that it shall be
valid, legal and enforceable, or if it shall not be possible to so limit or
modify such invalid or illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein.
This Agreement sets forth the entire agreement between the parties, and
supersedes any and all contemporaneous or prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Employee's employment on and after the date hereof.
(c) ARBITRATION.
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(i) Generally. Except solely as set forth in Section 7(c)(iii)
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hereof, each dispute, difference, controversy or claim arising in connection
with or related or incidental to, or question occurring under, this Agreement or
the subject matter hereof shall be finally settled under the Commercial
Arbitration Rules of the American Arbitration Association (the "AAA") by an
arbitral tribunal composed of three arbitrators, at least one of whom shall be
an attorney experienced in corporate transactions, appointed by agreement of the
parties in accordance with said Rules. In the event the parties fail to agree
upon a panel of arbitrators from the first list of potential arbitrators
proposed by the AAA, the AAA will submit a second list in accordance with said
Rules. In the event the parties shall have failed to agree upon a full panel of
arbitrators from said second list, any remaining arbitrators to be selected
shall be appointed by the AAA in accordance with said Rules. If, at the time of
the arbitration, the parties agree in writing to submit the dispute to a single
arbitrator, said single arbitrator shall be appointed by agreement of the
parties in accordance with the foregoing procedure, or, failing such agreement,
by the AAA in accordance with said Rules. The foregoing arbitration proceedings
may be commenced by any party by notice to the other party.
(ii) Place of Arbitration. The place of arbitration shall be
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Suffolk County, Massachusetts.
(iii) Recourse to Courts. The parties hereby exclude any
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right of appeal to any court on the merits of the dispute. The provisions of
this Section 7(c) may be enforced in any court having jurisdiction over the
award or any of the parties or any of their respective assets and judgment on
the award (including without limitation equitable remedies) granted in any
arbitration hereunder may be entered in any such court. Nothing contained in
this Section 7(c) shall prevent any party from seeking interim measures of
protection in the form of the pre-award attachment of assets of preliminary or
temporary equitable relief.
(iv) Reliance. Each of the parties hereto acknowledges that
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such party has been informed by the other party that the provisions of Section
7(c) constitute a material inducement upon which such party is relying and will
rely in entering into this Agreement and the transactions contemplated hereby.
(d) WITHHOLDING, ETC. All amounts and other benefits to be paid or
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provided hereunder shall be reduced by the amount of any applicable tax or other
withholding.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year above first written.
FALCON SHOE MFG. CO.
/s/ Xxxxxxxx X. Xxxxxxxx
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By: Xxxxxxxx X. Xxxxxxxx
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Its: President
/s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
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EXHIBIT A
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1. Automobile.
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(a) During Employment. During the term of his employment hereunder,
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the Company shall provide the Employee with the use of a vehicle of his
choice of a purchase value when new not exceeding Thirty-Five Thousand
Dollars ($35,000), such vehicle to be replaced by a new such vehicle when
specified by the Employee, but not more often than once every thirty (30)
months. The Company shall be the lessor or owner of such vehicle and shall
pay the cost of all maintenance, fuel and insurance with respect to such
vehicle.
(b) Following Employment. In the event the Company is required
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pursuant to Section 6(e) or 6(h) to provide the benefit specified in this
Section 1 at a time when the Employee is not employed by the Company, the
Company shall be obligated to convey title to the vehicle in question (upon
termination of the Employee's employment or as soon as permitted under the
terms of any lease); provided, however, that the Company shall only be
required to convey such title to the extent that the cost to the Company
does not exceed Seventeen Thousand Five Hundred Dollars ($17,500).
2. Basic Bonus. The Employee shall be entitled to participate in the Basic
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Bonus Plan attached hereto as Annex I.
3. Super Incentive Bonus. The Employee shall be entitled to participate in
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the Super Incentive Bonus Plan attached hereto as Annex II.
4. Other. The Employee shall be entitled to participate in the employee
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benefit plans (other than bonus or profit sharing or similar plans other
than the Quarterly Bonus Plan referred to below) maintained from time to
time by the Company for its senior executive officers, subject to the terms
of such plans. Such benefits shall initially include without limitation
those under the Company's flexible benefits plan entitled "Falcon Shoe Flex
Plan," the Company's Long Term Disability Plan with Reliance Standard Life
as amended effective April 1, 1993, and a Quarterly Bonus Profit Sharing
Plan described in a corporate resolution of the directors of the Company on
December 22, 1992.
5. Benefits under Paragraph 6(h)(iii).
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(a) Nominal Employee. At the request of the Company, in the event
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that the Employee may retain the benefits described in Section 4 of this
EXHIBIT A through service as a nominal employee of the Company following
termination under Paragraph 6(h)(iii), the Employee agrees to so serve,
upon such reasonable terms and conditions,
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and in exchange for reasonable reimbursement, as the Company and the
Employee may agree.
(b) If No Longer Employee. In the event that the benefits described
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in Section 4 of this EXHIBIT A are not payable or provided under any such
plan to the Employee, or to the Employee's dependents, beneficiaries or
estate, because the Employee is no longer deemed to be an employee of the
Company, the Employee shall be entitled to equivalent health, disability
(as supplemented) and life insurance benefits at the Company's expense.
(c) If Other Employment. In the event that the Employee obtains
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other employment following termination under Paragraph 6(h)(iii), and is
entitled to employee benefits as a result of such employment at no cost to
the Employee, the Company shall be entitled to proportionately reduce the
benefits provided to the Employee at the cost of the Company under this
Section 5; provided, however, that in all events, the aggregate benefits
provided by the new employer and the Company to the Employee following such
employment shall be at least equivalent to those benefits provided prior to
such employment.
6. Profit Sharing Plan. The Employee shall be entitled to participate in the
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Company's Profit-Sharing Plan.
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ANNEX I
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BASIC BONUS PLAN
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The Executive shall be entitled to annual bonus payments ("Bonus Payments")
during the term of his Employment Agreement in the event the Company achieves
certain target amounts of Net Operating Income (as defined in Schedule B to
Annex II hereto), for the fiscal years set forth on Table I hereto. The Bonus
Payments shall be calculated and payable as hereinafter set forth. The maximum
Bonus Payment ("Maximum Bonus") for each such fiscal year shall be the amount
equal to the Executive's salary pursuant to Section 3 of his Employment
Agreement for such fiscal year multiplied by the Bonus Percentage set forth
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opposite such fiscal year in Table I below; provided, however, that the
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Executive shall not be entitled to receive any Bonus Payments hereunder with
respect to any fiscal year unless the Company's Net Operating Income for such
fiscal year shall equal or exceed an amount equal to 91% of the Target Amount as
defined below.
Table I
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Fiscal Year Ending on the
Last Saturday in January Bonus Percentage
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1996 .25
1997 .25
1998 .25
1999 .30
2000 .35
The Target Amount of the Company's Net Operating Income for each fiscal
year shall be established by the Board of Directors of the Company for such
fiscal year.
In the event the Company's Net Operating Income equals or exceeds the
Target Amount established by the Board of Directors for such fiscal year the
Executive shall be entitled to receive a Bonus Payment for such fiscal year in
an amount equal to the Maximum Bonus for such fiscal year.
If the Company's Net Operating Income shall fail to equal or exceed the
Target Amount established by the Board of Directors for such fiscal year but
shall equal or exceed 91% of such Target Amount, the Executive shall be entitled
to a Bonus Payment equal to the Maximum Bonus for such fiscal year multiplied by
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the applicable Bonus Payment Percentage Factor (corresponding to the Percentage
of Net Operating Income Target achieved) set forth in Table II below.
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Table II
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Percentage of
Net Operating Bonus Payment
Income Target Percentage Factor
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100% 1.00
99% .90
98% .80
97% .70
96% .60
95% .50
94% .40
93% .30
92% .20
91% .10
Less than 91% .00
Determinations of the amount of Net Operating Income and all other matters
in connection with this Bonus Plan shall be made in good faith by the Board of
Directors of the Company and such determination, if made in good faith, shall be
conclusive and binding upon all parties. Payments shall be paid by the Company
in cash as soon as reasonably practicable following determination thereof.
The Board may make such adjustments to the terms and provisions of the
Bonus Plan to take into account material changes in law or in accounting
practices or principles, mergers, consolidations, acquisitions, dispositions or
similar corporate transactions, or any other event, if it is determined by the
Board that adjustments are appropriate to avoid distortion in the operation of
the Plan. Such changes may include, without limitation and as an example,
changes in the Net Operating Income definition or targeted amounts in connection
with mergers, consolidations, acquisitions, dispositions or other events.
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