EXHIBIT 10.03
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of October 11, 1996 (the "Agreement") by and
between SPECIALTY CATALOG CORP., a Delaware corporation ("Specialty") having its
offices at 00 Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx, SC CORPORATION, a
Delaware corporation ("SC"; together with Specialty, sometimes referred to as
the "Corporation") having its offices at 00 Xxxxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxxxxx, and XXXXXXX X. X'XXXX, an individual residing at 00 Xxxxxxxx
Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 ("Executive").
W I T N E S S E T H :
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WHEREAS, the Corporation entered into an Employment Agreement (the "Prior
Employment Agreement"), Bonus Agreement and Stock Option Agreement with
Executive as of November 30, 1994 (as heretofore amended, taken together, the
"Prior Employment Agreements");
WHEREAS, the Corporation intends in the immediate future to engage in an
initial public offering in which it will offer its common stock to the public
pursuant to a Registration Statement on Form S-1 (which was filed with
Securities and Exchange Commission on August 26, 1996), the effective date of
such registration statement being referred to herein as the "Effective Date" and
the date of closing of such initial public offering being referred to herein as
the "Closing Date";
WHEREAS, the parties hereto wish to consolidate the Prior Employment
Agreements and to amend certain provisions thereof, substantially effective upon
the Effective Date;
WHEREAS, the Corporation desires to continue to employ Executive in an
executive capacity and to be assured of his services as such on the terms and
conditions hereinafter set forth; and
WHEREAS, Executive is willing to accept such employment on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, and intending to be legally bound hereby,
the Corporation and Executive hereby covenant and agree as follows:
1. Term.
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(a) On the terms and subject to the conditions set forth in this
Agreement, the Corporation offers and Executive accepts employment with the
Corporation, effective as of the Effective Date. The terms of this Agreement
shall become effective on and as of the Effective
Date, and the Prior Employment Agreements shall on the Effective Date be
superseded hereby and be and be deemed null and void for all purposes.
(b) Until the Effective Date, Executive's employment shall continue
pursuant to the Prior Employment Agreements. Anything contained herein to the
contrary notwithstanding, if the Effective Date shall not have occurred on or
before November 4, 1996, this Agreement shall be null and void, and Executive's
employment shall continue pursuant to the Prior Employment Agreements.
(c) Subject to earlier termination as hereinafter provided, the term of
this Agreement shall commence on the Effective Date and shall end (unless notice
of expiration shall not have been timely given by the Corporation or Executive,
as hereinafter provided in this Section 1.(c)) at the close of business on
December 31, 1999 (as such term may be extended or earlier terminated, the
"Term"). Either the Corporation or Executive may cause the Term to expire at the
end of any calendar year ending on or after December 31, 1999 by giving not less
than six months' notice of expiration in writing to the other party. For
purposes of this Employment Agreement, a "Term Year" shall be a period during
the Employment Term commencing on January 1, 1997 (or any anniversary thereof)
and ending on the date immediately preceding the next anniversary of such date,
it being understood that, for purposes of this Agreement the portion of any
calendar year following the last full calendar year of the Term shall be deemed
a Term Year, except that vacation pursuant to Section 2.(c) for any Term Year of
less than a full calendar year in duration shall be prorated.
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2. Employment.
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(a) Effective upon the Effective Date, the Corporation hereby employs
Executive, and Executive agrees to serve, as President of the Corporation.
Subject to the control of the Board of Directors and the Chief Executive Officer
of the Corporation, Executive shall have such powers and duties as generally
pertain to a president.
(b) Executive shall be responsible for duties consistent with his
executive position and of such nature as are usually associated with his office
as may be designated from time to time by the Board of Directors or the Chief
Executive Officer, but neither the Board of Directors, the Chief Executive
Officer nor the Corporation will assign Executive any duties inconsistent with
his status as President of the Corporation. Such duties shall be performed
primarily in the Corporation's facility in South Easton, Massachusetts, subject
to reasonable travel outside of this area as may be necessary for Executive to
perform his duties.
(c) Executive shall faithfully and diligently discharge his duties
hereunder and use his best efforts to implement the policies established by the
Board of Directors and the Chief Executive Officer of the Corporation. Executive
agrees to devote substantially all of his time and attention exclusively to the
rendering of services hereunder, subject to four weeks vacation per Term Year
and reasonable time to engage in other business, charitable and professional
activities which are not inconsistent with his duties hereunder (including but
not limited to his
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covenant under Section 10), including but not limited to participation on the
boards of directors of one or more companies.
3. Base Salary. During the Term of Executive's employment hereunder, the
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Corporation shall cause Executive to receive a base salary at the rate set forth
in Exhibit 1. Such base salary in effect at any given time is referred to
herein as the "Base Salary." The Base Salary shall be payable in accordance
with the present payroll practices of the Corporation. In addition, Executive
may receive such additional compensation (in the form of bonuses and the like)
that the Corporation's Board of Directors shall, in the exercise of its good
faith and reasonable discretion, determine (including, but not limited to, the
Bonus Compensation described at Section 4).
4. Bonus Compensation. In addition to the Base Salary payable to Executive
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pursuant to Section 3, the Corporation shall cause Executive to receive the
following additional compensation:
(a) Deferred Bonus. The Corporation shall pay or cause Executive to
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receive a bonus (the "Deferred Bonus") in the aggregate amount of $35,000
payable in three (3) equal installments of $11,666.67 each on January 1, 1997,
June 30,1997 and January 1, 1998.
(b) Performance Bonus. For each fiscal year (a "Fiscal Year") of the
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Corporation during the Term hereof, Executive shall be entitled to receive
incentive compensation (as described below) to be paid on or before the 90th day
following the end of the Corporation's Fiscal Year. The incentive compensation
payable hereunder in respect of the 1996 Fiscal Year shall be at the discretion
of the Board of Directors. Commencing with the Fiscal Year beginning January 1,
1997, Executive's entitlement to incentive compensation for any Fiscal Year of
the Corporation shall be predicated upon the successful accomplishment of
annual, business-related performance goals for the Corporation established by
the Board of Directors of the Corporation in Management's annual budget or plan,
as approved by the Board of Directors of the Corporation (each such annual
budget or plan being referred to, for the relevant year, as the "Plan"). For
each such year, Executive shall earn a Performance Bonus equal to the percentage
of Base Salary set forth in Exhibit 2. The incentive compensation payable
hereunder in respect of any period constituting less than an entire Fiscal Year
(a "Partial Year") shall be based upon the Corporation's actual level of
performance for the full Fiscal Year in which the date of termination occurred,
measured against the Plan, and prorated for the Partial Year by multiplying the
full incentive bonus by a fraction, the numerator of which shall be the number
of days in such Partial Year and the denominator of which shall be 365.
(c) Certain Adjustments. In the event that the Corporation shall acquire
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one or more additional businesses during any year, the parties acknowledge that
the Plan must be adjusted, either upward or downward, to set the formula so that
Management may be compensated for improvements in performance after giving
effect to the pertinent transaction. Similar adjustments shall be necessitated
by one or more dispositions of businesses by the Corporation. Therefore, the
Plan shall be appropriately adjusted, in light of the facts and circumstances of
the particular situation, for acquisitions and dispositions by the Corporation
of businesses. In the event that
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Executive and the Corporation shall dispute the computation of the calculation
of the Performance Bonus or appropriate adjustments to the Plan for acquisitions
or dispositions, such dispute shall be resolved by arbitration as provided in
Section 20, except that the arbitrator shall be one certified public accountant
acceptable to both the Corporation and Executive.
(d) Certain Bonuses under Prior Employment Agreements. Except as provided
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herein, as of the Effective Date, all bonuses to which Executive was entitled
under the Prior Agreements, whether earned or unearned, accrued or otherwise,
are hereby waived and are of no further force or effect.
5. Working Facilities and Benefits.
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(a) Working Facilities. The Corporation shall furnish or cause to be
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furnished to Executive a suitable office, and such other facilities, equipment
and secretarial and other services, as are suitable to his position and are
adequate for the performance of his duties hereunder.
(b) Reimbursement of Expenses. The Corporation shall promptly reimburse
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to Executive, or cause Executive to be reimbursed for, all reasonable expenses
paid or incurred by Executive in connection with the performance of his duties
hereunder, including but not limited to the reasonable costs and expenses of his
business travel and entertainment incurred on behalf of or in connection with
the providing of services for the Corporation.
(c) Fringe Benefits. Executive shall be entitled to receive such fringe
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benefits normally provided by the Corporation to executives in his position
(including life insurance and disability coverage, vacation, sick leave, medical
and dental insurance, travel and accident insurance, participation in the
Corporation's 401(k) Plan, and stock options). During the Term, the Corporation
will retain, maintain and not terminate any compensation plan or benefit program
(including but not limited to certain life and disability insurance policies in
effect on the date of this Agreement) in which Executive participates, and will
not terminate Executive's participation in any such plan or program, unless an
equitable agreement embodied in an ongoing substitute or alternative plan or
program has been made.
(d) Life Insurance. The Corporation shall obtain and maintain in full
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force and effect at all times during the Term (and for any period thereafter
during which the Corporation is obligated to pay severance) a life insurance
policy on the life of Executive, which will provide a death benefit to
Executive's designee (or, if none, Executive's estate) of One Million Dollars
($1,000,000.00).
6. Stock Options.
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(a) Effective upon the Closing Date, of the options previously granted to
Executive pursuant to the Prior Employment Agreements to purchase 272,773 shares
of Common Stock at an exercise price of $.3072 per share,/1/ options to purchase
218,218 of such shares shall automatically vest and all restrictions against
exercising such options (except such as may be required by law) shall thereupon
lapse; and the options to purchase the remaining 54,555 such shares shall vest
upon the first anniversary of the Effective Date.
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/1/After the stock split contemplated in connection with the intended initial
public offering.
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(b) Prior to the Effective Date, the Corporation shall grant to Executive
options, qualifying as incentive stock options ("ISO Options") pursuant to the
Corporation's 1996 Stock Option Plan (the "1996 Stock Option Plan"), to purchase
25,000 shares of Common Stock at an exercise price equal to the price at which
the Corporation's Common Stock will be offered in its initial public offering,
exercisable for a period of ten (10) years from the date of grant. If the
Effective Date shall not have occurred on or before November 4, 1996, all such
ISO Options shall lapse and terminate immediately, without further action on the
part of the Corporation.
(c) Subject to possible earlier vesting or forfeiture as may otherwise be
provided in this Agreement, the option granted under Section 6.(b) shall vest at
the rate of 5,000 shares per year for five years commencing on the date of
grant, after which time all such options shall be fully vested in Executive.
Executive shall remain eligible to receive additional options at the discretion
of the Board of Directors and/or the administrators of the Plan.
7. Termination. Any other provision of this Agreement to the contrary
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notwithstanding, Executive's employment may be terminated at the option of the
Corporation or at the option of Executive, in either case at any time.
8. Certain Effects of Termination.
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(a) In addition to any amounts payable under any other Section of this
Agreement, and subject to certain qualifications and limitations set forth in
other subsections of this Section 8, termination of Executive's employment with
the Corporation for any reason at any time (other than by reason of expiration
of the Term without renewal, or expiration of any extension of the Term without
subsequent renewal) shall have the following consequences:
(i) Executive or his designee (or, if none, Executive's estate) shall
receive any Base Salary accrued to the effective date of such
termination;
(ii) Executive shall receive severance in an amount equal to Base Salary
for one year or such lesser period remaining until the expiration of the
Term (but in any event not less than six months) at the then current Base
Salary rate as set forth at Exhibit 1.;
(iii) Executive or his designee (or, if none, Executive's estate) shall
receive or retain, as the case may be, the 54,555 of the previously granted
options referred to in Section 6.(a) (which, if then unvested, shall
accelerate and vest in their entirety as of the termination date), and
those options, including but not limited to ISO Options, which shall have
vested prior to the effective date of termination; provided, however, that
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50% of such options shall expire if unexercised within six months after the
date of termination, and the remaining 50% of such vested options shall
expire if unexercised within one year after the date of termination;
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(iv) Executive shall receive a pro rata portion of any Performance Bonus
based upon the Corporation's performance through the effective date of such
termination;/2/
(v) Executive shall receive the unpaid balance, if any, of the entire
Deferred Bonus, as provided by Section 4.(a), without regard to such
termination; and
(vi) Executive and his family shall receive health benefits for one year or
such lesser period remaining until the expiration of the Term (but in any
event not less than six months), as provided (or required to be provided)
pursuant to this Agreement.
In each case, all payments pursuant to Sections 8.(a)(i) (salary),
8.(a)(ii) (severance) and 8.(a)(v) (deferred bonus) shall be paid at the times
and in the fashion the same would have been paid if Executive's employment had
continued pursuant to this Agreement.
(b) In the event that Executive's employment shall be terminated by the
Corporation during any Term Year for "Cause," as hereinafter defined, or by the
Executive during any Term Year for any reason, then:
(i) the amount specified under Section 8.(a)(ii) (severance) shall be
forfeited;
(ii) of the options specified under Section 8.(a)(iii), Executive shall
receive or retain, as the case may be, only those options, including but
not limited to ISO Options, which shall have vested prior to the effective
date of termination; provided, however, that 50% of such vested options
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shall expire if unexercised within six months after the date of
termination, and the remaining 50% of such vested options shall expire if
unexercised within one year after the date of termination;
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/2/ For purposes of this Agreement, the "pro rata portion" of any bonus shall
mean a. the actual amount of a full bonus based upon the Corporation's actual
EBITDA for the fiscal year in which termination occurred, multiplied by b. a
fraction, the numerator of which shall be the whole number of full or partial
days during such year in which Executive was employed by the Corporation and the
denominator of which shall be the number of days in such fiscal year. For
example:
if Executive were to die on the 26th of January in any Fiscal Year (other
than a leap year) otherwise expiring on December 31, the "pro rata portion"
of Executive's Performance Bonus for such year would be (a) an amount equal
to the entire Performance Bonus amount, based upon actual EBITDA for the
entire year, multiplied by (b) 26/365, or .07.
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(iii) any Performance Bonus otherwise afforded under Section 8.(a)(iv)
shall be forfeited;
(iv) any Deferred Bonus otherwise afforded under Section 8.(a)(v) shall
be forfeited; and
(v) the provisions of Section 8.(a)(vi) to the contrary notwithstanding,
neither Executive nor his family shall receive any health benefits.
(c) For purposes of this Agreement, "Cause" for termination of Executive's
employment shall include only the following:
(i) (A) The commission by Executive of a fraud or serious crime; or
(B) Executive's knowing and chronic violation of law that results in the
Corporation's having (1) material risk of substantial damages or (2) actual
and substantial liability or loss from such damages.
(ii) any material breach by Executive of the terms hereof, which
Executive shall not have cured after reasonable notice and a reasonable
opportunity to cure.
(iii) Executive chronically abuses alcohol during business hours or
chronically conducts business under the undue influence of alcohol or his
abuse of alcohol chronically and adversely affects his ability to perform
his duties, which Executive shall not have cured after reasonable notice
and a reasonable opportunity to cure.
(iv) Executive chronically abuses drugs during business hours or
chronically conducts business under the undue influence of such drugs or
his abuse of such drugs chronically affects his ability to perform his
duties, which Executive shall not have cured after reasonable notice and a
reasonable opportunity to cure.
(d) In the event that Executive's employment shall be terminated during any
Term Year as a result of his death, Executive's designee (or, if none,
Executive's estate) shall be entitled to receive the payments and benefits set
forth in Section 8.(a), except that:
(i) the amount specified under Section 8.(a)(ii) (severance) shall be
forfeited;
(ii) any Performance Bonus otherwise afforded under Section 8.(a)(iv)
shall be forfeited; and
(iii) any Deferred Bonus otherwise afforded under Section 8.(a)(v) shall
be forfeited.
(e) Upon termination of Executive's employment with the Corporation by
reason of expiration of the Term without renewal, or expiration of any extension
of the Term without subsequent renewal, Executive shall be entitled to receive
severance in an amount equal to Base Salary for six months at the then current
Base Salary rate as set forth at Exhibit 1. All payments pursuant to this
Section 8.(e) shall be paid at the times and in the fashion the same would have
been paid if Executive's employment had continued pursuant to this Agreement.
(f) In the event that any amounts or other benefits are payable hereunder
to or for Executive (or to his designee (or, if none, Executive's estate)) in
respect of any period following the termination of his employment hereunder,
such amounts or other benefits shall not be reduced in any manner by reason of
any other earnings, income or benefits of or to Executive from any other source.
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9. Intellectual Property Rights. All rights in inventions, designs and
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intellectual property (including without limitation in patents, copyright, trade
xxxx, registered designs, design rights and know-how) to which Executive may
become entitled by reason of activities in the course of Executive's employment
shall vest automatically in the Corporation and Executive shall, at the request
and expense of the Corporation, provide the Corporation with all information,
drawings and documents requested by the Corporation and execute such documents
and do such things as may be reasonably required by the Corporation to evidence
such vesting. The provisions of this Section 9 shall survive the termination
of this Agreement.
10. Non-Competition Covenant.
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(a) During the Term, and (subject to the terms of Section 10.(b)) for a
period of twenty-four months thereafter, Executive shall not, directly or
indirectly, (i) engage or become interested in (as owner, stockholder, partner,
director, officer, employee, consultant or otherwise) the business, in the
United States or anywhere else in the world, of marketing, manufacturing,
importing, producing or selling, by direct mail solicitation including but not
limited to catalogs (provided, in each case, that the Corporation derives 5% or
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more of its revenues at the time from such products or business), wigs, wiglets,
ladies' fashion hats, continuing education courses and any other products or
businesses in which the Corporation may then be engaged, or (ii) directly or
indirectly, engage, employ, recruit, or solicit to engage, employ or recruit,
any person who was employed by the Corporation at any time during the nine-month
period immediately preceding such engagement, employment, recruitment or
solicitation; except that Executive shall not be precluded or prevented from (A)
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owning not more than 2% of the common stock of one or more public companies
engaging in any such business, or (B) engaging or becoming interested in or
employed by a company which includes such a business so long as (1) such
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business does not generate more than 5% of the revenues of such company, and (2)
such business does not generate more than $5,000,000 in revenues for such
company, and (3) Executive is not involved in starting, managing or increasing
any such business in other than an insubstantial way.
(b) Anything contained in Section 10 to the contrary notwithstanding, the
terms of Section 10 shall be of no force or effect after termination of the
Term unless:
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(i) Executive's employment shall have been properly terminated pursuant to
and in accordance with this Agreement; and
(ii) the Corporation shall be and remain, in all material respects, in
compliance with all of its obligations under this Agreement;
provided that, in the event of termination of Executive's employment with
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the Corporation by reason of expiration of the Term without renewal, or
expiration of any extension of the Term without subsequent renewal, the duration
of the covenant set forth in this Section 10 shall be limited to the Term and a
period of twelve months thereafter.
11. Confidential Information. Executive acknowledges that, as a result of his
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employment by the Corporation, Executive has obtained and will obtain secret and
confidential information concerning the business of the Corporation, including
without limitation the identity of customers
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and sources of supply, their needs and requirements, the nature and extent of
the Corporation's arrangements with them, and related cost, price and sales
information. Executive also acknowledges that the Corporation would suffer
substantial damage if, during the period of his employment with the Corporation
or thereafter, Executive should divulge secret and confidential information
relating to the business of the Corporation acquired by him in the course of his
employment. Therefore, Executive agrees that he will not at any time, whether
during the Term of this Agreement or thereafter, disclose or divulge at any time
to any person, firm or corporation, any secret or confidential information
obtained by Executive while employed by the Corporation, including but not
limited to operational, financial, business or other affairs of the Corporation,
trade "know how" or secrets, customer lists, sources of supply, pricing
policies, operational methods or technical processes, except (a) in the course
of performing his duties for the Corporation; (b) with the Corporation's
consent; (c) to the extent that any such information is in the public domain
other than as a result of Executive's breach of his obligation hereunder; (d)
where required to be disclosed by court order, subpoena or other government
process; or (e) where otherwise required to be disclosed by law or
administrative rule or regulation. In the event that Executive shall be required
to make disclosure pursuant to the provisions of Section 11.(d) or 11.(e),
above, Executive shall promptly notify the Corporation thereof and shall, in
each case at the Corporation's expense, (A) take all reasonable necessary steps
requested by the Corporation to defend against the enforcement of such subpoena,
court order or other government process, and (B) permit the Corporation, at its
expense, to intervene and participate with counsel of its choice in any
proceeding relating to the enforcement thereof. Upon termination of his
employment with the Corporation, or at any time the Corporation may so request,
Executive will promptly deliver to the Corporation all memoranda, notes,
records, reports, manuals, drawings, blueprints and other documents (and all
copies thereof) relating to the business of the Corporation which he may then
possess or maintain under his control.
12. Specific Performance. The Executive acknowledges that in the event of a
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breach by him of any of the covenants contained in Section 10 or Section 11,
the Corporation shall be entitled to immediate relief enjoining such violations
in any court or before any judicial body having jurisdiction over such a claim.
13. Successors; Binding Agreement.
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(a) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation expressly to
assume and agree to perform this Agreement in the manner and to the same extent
that the Corporation would be required to perform it if no such succession had
taken place. Failure of the Corporation to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement, and for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of termination. As
used in this Agreement, "the Corporation" shall mean the Corporation as
hereinbefore defined and any successor to its business and/or assets, as
aforesaid, which assumes and agrees to perform this Agreement by operation of
law or otherwise.
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(b) This Agreement shall inure to the benefit of and be enforceable by the
Corporation, its successors and assigns, and by Executive, his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
14. Indemnification. The Corporation hereby undertakes and agrees to indemnify
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and hold Executive harmless, to the fullest extent permitted under applicable
law, from, against and in respect of (and shall on demand reimburse Executive
for) any and all loss, liability, cost, expense or damage (and any and all
actions, suits, proceedings, claims, demands, assessments, judgments, costs and
expenses, including, without limitation, legal fees and expenses, incident to
any of the foregoing) suffered or incurred by Executive arising out of or in
connection with (a) his performance of his duties with or for the Corporation,
(b) his holding any office, title or capacity with the Corporation at any time,
or (c) by reason of any act or omission of the Corporation; provided that
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Executive did not act in bad faith or in a manner he reasonably believed to be
opposed to the best interests of the Corporation..
15. Notices. For purposes of this Agreement, all notices and other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand, telecopied (receipt
acknowledged) or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth on the first page of this Agreement, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt, and
provided that all notices to the Corporation shall be directed to the attention
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of the Chief Executive Officer of the Corporation.
16. Miscellaneous. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to, in
writing, and signed by Executive and the Chief Executive Officer or such other
officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. Each party acknowledges that the services to be
rendered under this Agreement are unique and of extraordinary character, and in
the event of a breach by either party of any of the terms of this Agreement, the
other party shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either at law or in equity,
to obtain damages for any breach of the terms and provisions hereunder, to
require and obtain specific performance by the breaching party of its
obligations hereunder, and to enjoin the breaching party from acting in
violation of this Agreement. Such remedies are in addition to those otherwise
available at law or in equity to the Corporation. The validity, interpretation,
construction and performance of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Massachusetts (other than the choice of law principles thereof). References
in this Agreement to Sections and Exhibits are
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to Sections of and Exhibits to this Agreement unless otherwise specified or
unless the context otherwise requires.
17. Severability; Validity. If any term or provision of this Agreement is
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invalid or unenforceable in any jurisdiction, (a) the remaining terms and
provisions hereof shall be unimpaired; (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction; and (c) the invalid or
unenforceable term shall, for purposes of such jurisdiction, be deemed replaced
by a term or provision, as determined by a court or pursuant to an arbitration
proceeding, that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision (but such
replacement shall not in any event be more restrictive or burdensome upon
Executive).
18. Counterparts. This Agreement may be executed in two or more counterparts,
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each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
19. Prior Employment Agreements. Upon the effectiveness of this Agreement, the
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Prior Employment Agreements will be superseded, terminated and of no further
force or effect, and Executive thereupon shall have released, and be deemed to
have released, such claims as he may have thereunder.
20. Arbitration; Certain Expenses. Any and all disputes which may arise under
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Section 4.(c) of this Agreement (but no other Section hereof), to the extent set
forth in such section, shall be submitted to and settled by arbitration in
Boston, Massachusetts in accordance with the procedural rules then obtaining of
the American Arbitration Association and any successor thereto, except as may be
specifically set forth in this Agreement. The decision of the arbitrator or
arbitrators (whether accountants or physicians, as the case may be) shall be
final, conclusive and binding upon the parties, and a judgment may be obtained
thereon in any court having jurisdiction.
IN WITNESS WHEREOF, the Corporation and Executive have executed and
delivered this Employment Agreement as of the date first above written.
SPECIALTY CATALOG CORP.
By:
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Name:
Title:
SC CORPORATION
By:
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Name:
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Title:
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Xxxxxxx X. X'Xxxx
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EXHIBIT 1.
BASE SALARY
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Year Base
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Salary
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[S] [C]
1996 $205,000
1997 $215,000
1998 $225,000
1999 $235,000
Thereafter $235,000
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EXHIBIT 2.
PERFORMANCE BONUS
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For periods commencing January 1, 1997:
Corporation's Actual EBITDA Percentage Of Base Salary To Be
As A Percentage Of Plan EBITDA Awarded As A Performance Bonus
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90% 10.0%
100% 25.0%
115% 50.0%
130% 75.0%
150% 100.0%
In the event that the Corporation's Actual EBITDA as a percentage of Plan
EBITDA is greater than 90% but falls between any percentages set forth in the
left column, then the percentage of Base Salary to be awarded as a Performance
Bonus shall be prorated between the immediately lower and immediately higher
entries in the right column. For example, if actual EBITDA is exactly 95% of
Plan EBITDA, or halfway between 90% and 100% in the left column, then the
Performance Bonus would be exactly halfway between the corresponding percentages
in the right column, or 17.5% of Base Salary.
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