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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended September 30, 2003
Commission file number 1-19254
Lifetime Hoan Corporation
(Exact name of registrant as specified in its charter)
Delaware 11-2682486
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Merrick Avenue, 11590
Westbury, NY (Zip Code)
(Address of principal
executive offices)
(516) 683-6000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No___
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act)
Yes__No X
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.01 Par Value 10,688,186 shares outstanding as of
October 31, 2003
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LIFETIME HOAN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30,
2003 December 31,
(unaudited) 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $213 $62
Accounts receivable, less allowances of
$2,401 in 2003 and $3,888 in 2002 28,114 19,143
Merchandise inventories 56,357 41,333
Prepaid expenses 2,167 1,603
Deferred income taxes - 15
Other current assets 2,330 2,505
TOTAL CURRENT ASSETS 89,181 64,661
PROPERTY AND EQUIPMENT, net 19,985 20,850
EXCESS OF COST OVER NET ASSETS ACQUIRED 14,952 14,952
OTHER INTANGIBLES, net 8,708 9,000
OTHER ASSETS 2,120 2,123
TOTAL ASSETS $134,946 $111,586
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $26,500 $14,200
Accounts payable and trade acceptances 7,482 2,720
Accrued expenses 17,249 13,894
Income taxes payable 3,573 2,463
TOTAL CURRENT LIABILITIES 54,804 33,277
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value, authorized
25,000,000 shares; issued and outstanding
10,688,186 in 2003 and 10,560,704 in 2002 107 106
Paid-in capital 62,210 61,405
Retained earnings 18,304 17,277
Notes receivable for shares issued to
stockholders (479) (479)
TOTAL STOCKHOLDERS' EQUITY 80,142 78,309
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $134,946 $111,586
See notes to consolidated financial statements.
LIFETIME HOAN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
Net Sales $44,068 $32,235 $98,302 $83,703
Cost of Sales 25,552 17,612 55,982 45,199
Distribution Expenses 5,337 4,885 14,103 15,543
Selling, General and
Administrative Expenses 8,163 7,435 22,742 21,085
Income from Operations 5,016 2,303 5,475 1,876
Interest Expense 189 239 480 687
Other Income (16) (18) (51) (47)
Income Before Income Taxes 4,843 2,082 5,046 1,236
Tax Provision 1,956 854 2,038 471
Income from Continuing Operations 2,887 1,228 3,008 765
Discontinued Operations:
Loss from Discontinued
Operations, net of tax - (151) - (495)
Loss on Disposal, net of tax - (534) - (534)
Total Loss from Discontinued
Operations - (685) - (1,029)
NET INCOME (LOSS) $2,887 $543 $3,008 ($264)
BASIC AND DILUTED INCOME PER COMMON
SHARE FROM CONTINUING OPERATIONS $0.27 $0.12 $0.28 $0.07
LOSS PER COMMON SHARE FROM
DISCONTINUED OPERATIONS - ($0.07) - ($0.10)
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE $0.27 $0.05 $0.28 ($0.03)
See notes to consolidated financial statements.
LIFETIME HOAN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,
2003 2002
OPERATING ACTIVITIES
Net income (loss) $3,008 ($264)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Loss on sale of discontinued operations - 534
Depreciation and amortization 2,639 2,623
Deferred tax provision (benefit) 422 (77)
Provision for losses on accounts receivable 91 53
Reserve for sales returns and allowances 5,579 5,171
Changes in operating assets and liabilities:
Accounts receivable (14,641) (4,968)
Merchandise inventories (15,024) (13,545)
Prepaid expenses, other current assets
and other assets (386) (1,581)
Accounts payable, trade acceptances
and accrued expenses 8,117 2,163
Accrued income taxes payable 703 -
Discontinued operations - 3,257
NET CASH USED IN OPERATING ACTIVITIES (9,492) (6,634)
INVESTING ACTIVITIES
Purchase of property and equipment, net (1,482) (1,279)
NET CASH USED IN INVESTING ACTIVITIES (1,482) (1,279)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net 12,300 4,753
Proceeds from the exercise of stock options 806 304
Cash dividends paid (1,981) (1,968)
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,125 3,089
EFFECT OF EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS - (172)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 151 (4,996)
Cash and cash equivalents at beginning of
period 62 5,021
CASH AND CASH EQUIVALENTS AT END OF PERIOD $213 $25
See notes to consolidated financial statements.
LIFETIME HOAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for
the three-month and nine-month periods ended September 30, 2003
are not necessarily indicative of the results that may be
expected for the year ending December 31, 2003. It is suggested
that these interim consolidated financial statements be read in
conjunction with the financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.
Note B - Inventories
Merchandise inventories, principally finished goods, are priced
at the lower of cost (first-in, first-out basis) or market.
Note C - Distribution Expenses
Distribution expenses primarily consist of freight-out,
warehousing expenses, and handling costs of products sold. These
expenses also include relocation charges, duplicate rent and
other costs associated with the Company's move into its
Robbinsville, New Jersey warehouse, amounting to $0.1 million in
the third quarter of 2003 as compared to $0.3 million in the
third quarter of 2002 and $0.6 million for the nine-month period
ended September 30, 2003 as compared to $1.8 million for the nine-
month period ended September 30, 2002.
Note D - Credit Facilities
As of September 30, 2003, the Company had $1.2 million of letters
of credit and trade acceptances outstanding and $26.5 million of
borrowings under its $40 million three-year secured, reducing
revolving credit agreement (the "Agreement"), and as a result,
the availability under the Agreement was $12.3 million. Interest
rates on borrowings at September 30, 2003 ranged from 2.75% to
3.06%.
Note E - Capital Stock and Stock Options
Cash Dividends: On January 16, 2003, the Board of Directors
declared a quarterly cash dividend of $0.0625 per share to
stockholders of record on February 6, 2003, paid on February 20,
2003. On April 29, 2003, the Board of Directors declared a
quarterly cash dividend of $0.0625 per share to stockholders of
record on May 5, 2003, paid on May 20, 2003. On July 31, 2003,
the Board of Directors declared a quarterly cash dividend of
$0.0625 per share to stockholders of record on August 5, 2003,
paid on August 19, 2003. On October 30, 2003, the Board of
Directors of the Company declared a regular quarterly cash
dividend of $0.0625 per share to stockholders of record on
November 4, 2003, to be paid on November 20, 2003.
Earnings (Loss) Per Share: Basic earnings per share has been
computed by dividing net income by the weighted average number of
common shares outstanding of 10,628,000 for the three months
ended September 30, 2003 and 10,512,000 for the three months
ended September 30, 2002. For the nine-month period ended
September 30, 2003 and September 30, 2002, the weighted average
number of common shares outstanding were 10,584,000 and
10,501,000, respectively. Diluted earnings per share has been
computed by dividing net income by the weighted average number of
common shares outstanding, including the dilutive effects of
stock options, of 10,784,000 for the three months ended September
30, 2003 and 10,536,000 for the three months ended September 30,
2002. For the nine-month periods ended September 30, 2003 and
September 30, 2002, the diluted number of common shares
outstanding were 10,660,000 and 10,534,000, respectively.
LIFETIME HOAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note E - Capital Stock and Stock Options (continued)
Accounting for Stock Option Plan: The Company has a stock option
plan, which is more fully described in the footnotes to the
financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2002. The Company
accounts for options granted under the plan under the recognition
and measurement principles of APB Opinion No. 25, "Accounting for
Stock Issued to Employees", and related interpretations. No
stock-based employee compensation cost is reflected in net income
(loss), as all options granted under the plans had an exercise
price equal to the market values of the underlying common stock
on the dates of grant. The following table illustrates the
effect on net earnings (loss) and net earnings (loss) per share
if the Company had applied the fair value recognition provisions
of Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation" to stock-based employee
compensation.
Three Months Nine Months
Ended Ended
September 30, September 30,
(in thousands, (in thousands,
except per except per share
share data) data)
2003 2002 2003 2002
Net income (loss), as reported $2,887 $543 $3,008 ($264)
Deduct: Total stock option
employee compensation expense
determined under fair value
based method for all awards,
net of related tax effects (19) (43) (42) (139)
Proforma net income (loss) $2,868 $500 $2,966 ($403)
Income (loss) per common share:
Basic and diluted - as reported $0.27 $0.05 $0.28 ($0.03)
Basic and diluted - proforma $0.27 $0.05 $0.28 ($0.04)
Note F - Sale of Prestige Companies
Effective September 27, 2002, the Company sold its 51%
controlling interest in Prestige Italiana, Spa and, together with
its minority interest shareholder, caused Prestige Haushaltswaren
GmbH (together with Prestige Italiana, Spa, the "Prestige
Companies") to sell all of its receivables and inventory to a
European housewares distributor. Accordingly, the Company has
classified the Prestige Companies business as discontinued
operations. Net sales for the Prestige Companies totaled $2.1
million for the three-month period ended September 30, 2002 and
$6.4 million for the nine-month period ended September 30, 2002.
Net loss from the Prestige Companies discontinued operations and
disposal totaled $0.7 million for the three-month period ended
September 30, 2002 and $1.0 million for the nine-month period
ended September 30, 2002. For all periods in 2002, the Company
has reclassified its financial statements to reflect the results
of operations of the Prestige Companies as discontinued
operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth income statement data of the
Company as a percentage of net sales for the periods indicated
below.
Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 58.0 54.6 56.9 54.0
Distribution expenses 12.1 15.2 14.4 18.6
Selling, general and
administrative expenses 18.5 23.1 23.1 25.2
Income from operations 11.4 7.1 5.6 2.2
Interest expense 0.4 0.7 0.5 0.8
Other income - (0.1) (0.1) (0.1)
Income before income taxes 11.0 6.5 5.2 1.5
Tax provision 4.4 2.6 2.1 0.6
Income from continuing
operations 6.6 3.9 3.1 0.9
Loss from discontinued
operations, net of tax - (0.5) - (0.6)
Loss on disposal, net of tax - (1.7) - (0.6)
Net income (loss) 6.6 % 1.7 % 3.1 % (0.3) %
Seasonality
Although the Company sells its products throughout the year, the
Company has traditionally had higher net sales during its third
and fourth quarters. Accordingly, operating results for the
three-month and nine-month periods ended September 30, 2003 are
not necessarily indicative of the results that may be expected
for the year ending December 31, 2003.
Three Months Ended September 30, 2003
Compared to Three Months ended September 30, 2002
Net Sales
Net sales for the three months ended September 30, 2003 were
approximately $44.1 million, an increase of $11.8 million, or
36.7%, over net sales for the prior year's corresponding quarter.
The increase in sales volume was attributable primarily to
increased shipments of kitchen tools and gadgets, bakeware, the
Company's newly designed S'mores Makers, and Kamenstein
pantryware products.
Cost of Sales
Cost of sales for the three months ended September 30, 2003 was
$25.6 million, an increase of $7.9 million, or 45.1% over the
comparable 2002 period. Cost of sales as a percentage of net
sales increased to 58.0% from 54.6%, primarily as a result of
higher sales of licensed branded products which generate lower
margins due to the added costs of royalties and, to a lesser
extent, a higher cost of sales-to-net sales relationship for
Kamenstein products in the 2003 quarter.
Distribution Expenses
Distribution expenses for the three months ended September 30,
2003 were $5.3 million, an increase of $0.5 million or 9.3% from
the comparable 2002 period. Excluding the expenses associated
with the move to the new Robbinsville, New Jersey warehouse of
$0.1 million for the three months ended September 30, 2003 and
$0.3 million for the three months ended September 30, 2002,
distribution expenses increased by approximately $0.6 million or
12.2% in the third quarter of 2003 as compared to the third
quarter of 2002. The higher expenses were primarily increased
personnel and freight-out costs related to the increased shipping
levels. As a percentage of net sales, distribution expenses were
12.1% in the third quarter of 2003 as compared to 15.2% in 2002.
This improved relationship reflects the benefits of labor savings
generated by the new systems in our Robbinsville, New Jersey
warehouse.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months
ended September 30, 2003 were $8.2 million, an increase of $0.7
million or 9.8% over the comparable 2002 period. The increase in
selling, general and administrative expenses was due principally
to increased personnel costs, including planned additions in the
sales and product design departments and higher professional
fees.
Nine Months Ended September 30, 2003
Compared to Nine Months ended September 30, 2002
Net Sales
Net sales for the nine months ended September 30, 2003 were $98.3
million, an increase of $14.6 million or 17.4% as compared to the
corresponding 2002 period. The increase in sales volume was
attributable primarily to higher sales of kitchen tools and
gadgets, sales of the Company's newly designed S'mores Makers and
increased sales of Kamenstein pantryware products.
Cost of Sales
Cost of sales for the nine months ended September 30, 2003 was
$56.0 million, an increase of $10.8 million or 23.9% from the
comparable 2002 period. Cost of sales as a percentage of net
sales increased to 56.9% from 54.0%, primarily as a result of
higher sales of licensed branded products which generate lower
margins due to the added costs of royalties and, to a lesser
extent, a higher cost of sales-to-net sales relationship of
Kamenstein products for the 2003 periods.
Distribution Expenses
Distribution expenses for the nine months ended September 30,
2003 were $14.1 million, a decrease of $1.4 million or 9.3% from
the comparable 2002 period. Excluding the expenses associated
with the move to the new Robbinsville, New Jersey warehouse of
approximately $0.6 million for the nine-month period ended
September 30, 2003 and $1.8 million for the nine-month period
ended September 30, 2002, distribution expenses decreased by
approximately $0.3 million in the nine-month period ended
September 30, 2003 as compared to the nine-month period ended
September 30, 2002. The lower expenses were primarily decreased
payroll expenses, the result of labor efficiencies realized from
the new systems in the Company's Robbinsville, New Jersey
warehouse.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the nine months
ended September 30, 2003 were $22.7 million, an increase of $1.7
million or 7.9% from the comparable 2002 period. The increase in
selling, general and administrative expenses was due principally
to increased personnel costs, including planned additions in the
sales and product design departments.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $40 million three-year secured, reducing
revolving credit facility under an agreement (the "Agreement")
with a group of banks. The facility matures on November 8, 2004.
Borrowings under the Agreement are secured by all of the assets
of the Company and the facility reduces to $35 million at
December 31, 2003. Under the terms of the Agreement, the Company
is required to satisfy certain financial covenants, including
limitations on indebtedness and sale of assets; a minimum fixed
charge ratio; and net worth maintenance. Borrowings under the
Agreement have different interest rate options that are based on
an alternate base rate, LIBOR rate, or the lender's cost of funds
rate. As of September 30, 2003, the Company had $1.2 million of
letters of credit and trade acceptances outstanding and $26.5
million of borrowings under the agreement and, as a result, the
availability under the Agreement was $12.3 million. Interest
rates on borrowings at September 30, 2003 ranged from 2.75% to
3.06%.
At September 30, 2003, the Company had cash and cash equivalents
of $213,000 as compared to $62,000 at December 31, 2002.
On October 30, 2003, the Board of Directors declared a regular
quarterly cash dividend of $0.0625 per share to shareholders of
record on November 4, 2003 to be paid on November 20, 2003. The
dividend to be paid will be approximately $668,000.
The Company believes that its cash and cash equivalents,
internally generated funds and its existing credit arrangements
will be sufficient to finance its operations for at least the
next 12 months.
The results of operations of the Company for the periods
discussed have not been significantly affected by inflation or
foreign currency fluctuation. The Company negotiates all of its
purchase orders with its foreign manufacturers in United States
dollars. Thus, notwithstanding any fluctuation in foreign
currencies, the Company's cost for any purchase order is not
subject to change after the time the order is placed. However,
any weakening of the United States dollar against local
currencies could lead certain manufacturers to increase United
States dollar prices for their products. The Company believes it
would be able to compensate for any such price increase.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Market risk represents the risk of loss that may impact the
consolidated financial position, results of operations or cash
flows of the Company. The Company is exposed to market risk
associated with changes in interest rates. The Company's line of
credit bears interest at variable rates. The Company is subject
to increases and decreases in interest expense on its variable
rate debt resulting from fluctuations in the interest rates of
such debt. There have been no changes in interest rates that
would have a material impact on the consolidated financial
position, results of operations or cash flows of the Company
during the nine-month period ended September 30, 2003.
Item 4. Control and Procedures
The Chief Executive Officer and the Chief Financial Officer of
the Company (its principal executive officer and principal
financial officer, respectively) have concluded, based on their
evaluation as of a date within 90 days prior to the date of the
filing of this Report on Form 10-Q, that the Company's controls
and procedures are effective to ensure that information required
to be disclosed by the Company in the reports filed by it under
the Securities and Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be
disclosed by the Company in such reports is accumulated and
communicated to the Company's management, including the Chief
Executive Officer and Chief Financial Officer of the Company, as
appropriate to allow timely decisions regarding required
disclosure.
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
these controls subsequent to the date of such evaluation.
PART II - OTHER INFORMATION
Forward Looking Statements: This Quarterly Report on Form 10-Q
contains certain forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, including statements concerning the Company's
future products, results of operations and prospects. These
forward-looking statements involve risks and uncertainties,
including risks relating to general economic and business
conditions, including changes which could affect customer payment
practices or consumer spending; industry trends; the loss of
major customers; changes in demand for the Company's products;
the timing of orders received from customers; cost and
availability of raw materials; increases in costs relating to
manufacturing and transportation of products; dependence on
foreign sources of supply and foreign manufacturing; and the
seasonal nature of the business as detailed from time to time in
the Company's filings with the Securities and Exchange
Commission. Such statements are based on management's current
expectations and are subject to a number of factors and
uncertainties which could cause actual results to differ
materially from those described in the forward-looking
statements.
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security-Holders
Not applicable
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits in the third quarter of 2003:
Exhibit 31.1 Certification by Jeffrey Siegel, Chief
Executive Officer, pursuant to Rule 13a-
14(a) or Rule 15d-14(a) of the Securities
and Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Exhibit 31.2 Certification by Robert McNally, Chief
Financial Officer, pursuant to Rule 13a-
14(a) or Rule 15d-14(a) of the Securities
and Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Exhibit 32 Certification by Jeffrey Siegel,
Chief Executive Officer, and Robert
McNally, Chief Financial Officer, pursuant
to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Exhibit 10.38 Robert McNally Employment Agreement,
dated July 1, 2003.
Exhibit 10.39 Craig Phillips Employment Agreement,
dated July 1, 2003.
Exhibit 10.40 Bruce Cohen Employment Agreement,
dated July 1, 2003.
Exhibit 10.41 Evan Miller Employment Agreement,
dated July 1, 2003.
Exhibit 10.42 Robert Reichenbach Employment
Agreement, dated July 1, 2003.
(b) Reports on Form 8-K:
On July 31, 2003, the Company filed a
report on Form 8-K announcing results of
operations and financial condition for its
second quarter ended June 30, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Lifetime Hoan Corporation
November 14, 2003
/s/ Jeffrey Siegel
__________________________________
Jeffrey Siegel
Chief Executive Officer and President
(Principal Executive Officer)
November 14, 2003
/s/ Robert McNally
__________________________________
Robert McNally
Vice President - Finance and Treasurer
(Principal Financial and Accounting Officer)
EXHIBIT 31.1
CERTIFICATIONS
I, Jeffrey Siegel, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Lifetime Hoan Corporation ("the registrant");
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15e and 15d-
15e) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15f and 15d-15f) for the registrant and we
have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's second fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting,
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: November 14, 2003
__/s/ Jeffrey Siegel______________
Jeffrey Siegel
President and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATIONS
I, Robert McNally, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Lifetime Hoan Corporation ("the registrant");
2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15e and 15d-
15e) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15f and 15d-15f) for the registrant and we
have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's second fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting,
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: November 14, 2003
___/s/ Robert McNally___________
Robert McNally
Vice President and Chief Financial Officer
EXHIBIT 32
Certification by Jeffrey Siegel, Chief Executive Officer, and
Robert McNally, Chief Financial Officer,
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
I, Jeffrey Siegel, Chief Executive Officer, and I, Robert
McNally, Chief Financial Officer, of Lifetime Hoan Corporation, a
Delaware corporation (the "Company"), each hereby certifies that:
(1) The Company's periodic report on Form 10-Q for the period
ended September 30, 2003 (the "Form 10-Q") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and
(2) The information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of the Company.
/s/ Jeffrey Siegel /s/ Robert McNally
Jeffrey Siegel Robert McNally
Chief Executive Officer Chief Financial Officer
Date: November 14, 2003 Date: November 14, 2003
EXHIBIT 10.38
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the date set forth on Schedule 1 by and
between Lifetime Hoan Corporation (the "Company"), a Delaware
corporation, having its principal place of business at One
Merrick Avenue, Westbury, NY 11590, and Robert McNally (the
"Executive"), residing at the address set forth on the signature
page hereof.
WHEREAS, the Company is engaged in the development, design,
sourcing, manufacturing, licensing, marketing, distribution and
sale, at both wholesale and retail, of proprietary housewares
products; including, without limitation, cutlery, kitchen tools
and gadgets, kitchenware, pantryware, bakeware, barware, and
spices and the Executive has many years of experience as an
executive in the industry; and
WHEREAS, the Company desires to employ the Executive in the
senior management position and with responsibility as set forth
on Schedule 2, and the Executive wishes to serve the Company in
such capacity, all in accordance with the terms and conditions
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by
the Executive and the Company as follows:
Employment; Term; Duties and Responsibilities. The Executive's
employment with the Company shall be subject to the following:
Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive in the senior management position set
forth in Schedule 2 and the Executive hereby agrees to be
employed by the Company in such capacity.
The term of this Agreement shall commence as of the date set
forth on Schedule 3 and shall continue through the initial
expiration date also set forth on Schedule 3 (the "Initial
Term"), unless earlier terminated as hereinafter provided. The
Executive's employment shall continue thereafter for consecutive
periods of one year (each, an "Additional Term"), unless either
the Executive or the Company gives written notice to the other no
later than thirty (30) days prior to the expiration of the
Initial Term or any Additional Term, as the case may be, of the
decision not to extend the Executive's employment. The period of
the Executive's employment hereunder shall hereinafter be
referred to as the "Employment Term."
Subject to the policy directions and instructions of the Board of
Directors of the Company (the "Board") and the Chief Executive
Officer ("CEO") of the Company, the Executive shall have
management responsibility as set forth on Schedule 2, and shall
perform such other duties as are consistent with his position and
as may be prescribed from time to time by the Board or the CEO.
The Executive shall report to the senior executive of the Company
set forth on Schedule 4.
The Executive shall devote all of his business time, attention
and energies to the business and affairs of the Company, and
shall use his best efforts to advance the best interests of the
Company.
The Executive's principal office location shall be as set forth
on Schedule 5; however, the Executive recognizes that frequent
travel, both within and outside the United States of America, may
be required in connection with his responsibilities under this
Agreement. In addition, Executive shall be expected to attend
regular meetings with the CEO of the Company and with other
executives of the Company, and to keep the CEO and such other
executives fully informed of Executive's activities, so as to
make the most effective use of Executive's services to the
Company.
Compensation. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
Base Salary. For the period commencing as set forth on Schedule 6
and ending on the completion of the initial base salary period
set forth on Schedule 6, the Company shall pay to the Executive a
base salary (the "Base Salary") at the annual rate as set forth
on Schedule 6.
Annual Bonus. The Executive shall be entitled to earn a bonus
(the "Annual Bonus") in accordance with terms and conditions set
forth on Schedule 7, during each calendar year of the Employment
Term commencing with the year designated as the first bonus year
on Schedule 7. The Company shall prepare an amended Schedule 7 or
a new Schedule 7 for each calendar year of the Employment Term.
The Company, in its sole discretion, may waive any of the terms
and conditions set forth on Schedule 7, or pay such additional
bonus, as it, in its sole discretion, may deem appropriate.
Calculation of Annual Bonus. The Company's Chief Financial
Officer shall calculate the Annual Bonus pursuant to the terms
and conditions set forth on Schedule 7. Such calculation shall be
final, and the Annual Bonus, if earned, shall be payable on or
before April 30 of the subsequent year.
Fringe Benefits. Except as specifically provided in this
Agreement, the Executive shall be provided with perquisites and
other fringe benefits to the same extent and on the same terms as
those benefits are provided generally to the Company's executive
employees. This shall include enrollment in the Company's
medical, dental and disability plans and participation in the
Company's 401(k) Plan under normal procedures under such plans.
Nothing in this paragraph 2(d) shall be construed to prevent the
Company from revising the benefits or perquisites generally
provided to executives from time to time. The Executive shall
complete all forms and physical examinations, and otherwise take
all other necessary actions to secure coverage and benefits
described in this paragraph 2(d).
Expenses. The Executive is authorized to incur reasonable
expenses for travel, meals, lodging, entertainment and similar
items in the performance of his duties for the Company in
accordance with Company policies. The Company will reimburse the
Executive for all reasonable business expenses so incurred,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company. The Executive shall not be permitted to use Company
personnel, vehicles or equipment for personal purposes. The
charging of expenses to the Company in violation of Company
policy will subject Executive to termination pursuant to Section
3(d) below.
Automobile Allowance. During the Employment Term, the Company
shall pay the Executive an automobile allowance in the amount per
month set forth on Schedule 8 or shall provide Executive with a
Company vehicle as described on Schedule 8. If an allowance is
provided by the Company, it is intended to cover all expenses
associated with Executive's use of an automobile for Company
business, so that no other expenses relating to such automobile
use will be reimbursed, except gas and tolls incurred in using
such automobile for Company business.
Time Bank. The Executive shall be entitled to paid leave in
accordance with the Company's Time Bank policies.
Deductions; Set-Off. The compensation payable to the Executive
hereunder shall be subject to all legally required withholding
and deductions. The Company shall be entitled to set-off any
amounts owed to it by the Executive against all amounts owed by
the Company to the Executive by operation of this Agreement.
Termination. During the Employment Term, the Executive's
employment shall terminate upon the events or circumstances
described in paragraphs 3(a) through 3(e) below.
Death. The Executive's employment hereunder shall terminate upon
his death.
Total Disability. The Company may terminate the Executive's
employment as a result of the Executive's Total Disability.
"Total Disability" means the failure of the Executive, after
reasonable accommodation, to perform the essential functions of
his position for an aggregate period of nine (9) months (whether
or not continuous) during any twelve (12) month period by reason
of the Executive's physical or mental disability.
Termination by the Executive. The Executive may terminate his
employment hereunder at any time for Good Reason or without Good
Reason by giving the Company prior written notice of termination,
which notice of termination shall be effective not less than
thirty (30) days after it is given to the Company. A termination
for "Good Reason" shall mean termination by the Executive within
60 days following, and as a result of:
A material diminution in the Executive's position, authority,
duties or responsibilities; or
A reduction in the Executive's Base Salary (other than a
reduction not greater than 20% as part of a general reduction in
compensation applied equitably to all senior executives of the
Company).
Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
The Executive's conviction of a felony or any other crime
involving fraud, embezzlement or bribery;
The Executive's indictment for, entering a plea of guilty or nolo
contendere, or agreeing to a civil penalty or entering into a
consent decree, in connection with any criminal act or any
banking or securities law violation related to the Company;
The Executive's having committed an act of disloyalty, dishonesty
or breach of trust relating to the Company;
The engaging by the Executive in misconduct involving moral
turpitude;
The willful engaging by the Executive in conduct that, in the
reasonable judgment of the Board, is materially injurious to the
Company, or has or threatens to have a material adverse impact on
the Company;
The Executive's failure to maintain decorum or professional
behavior that, in the reasonable judgment of the Board,
materially affects the Executive's credibility or reputation;
The Executive's repeated abuse of alcohol or drugs (legal or
illegal), that, in the reasonable judgment of the Board,
materially impairs the Executive's ability to perform his duties
hereunder;
The engaging by the Executive in misconduct in material violation
of the Company's personnel policies; including, but not limited
to, harassment, disparagement or abusive treatment of personnel,
customers, licensees, licensors, vendors, suppliers or
contractors of the Company;
The willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive being Disabled);
The Executive's extended absences without permission, failure to
work on a full time basis, or charging of material improper
expenses to the Company.
The Executive's failure to cure, within ten (10) days of
receiving written notice of same by the Company (to the extent a
cure is possible), any gross neglect, gross misconduct or act
outside the scope of his authority engaged in by the Executive;
The Executive's willful violation or failure to follow the lawful
instructions and directions of the Board, the CEO or the
Company's policies; or
The breach or violation of any provision of this Agreement,
including, but not limited to, the confidentiality and non-
competition provisions set forth in paragraphs 7 and 8 hereof.
Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder at any time
without Cause and for any reason or for no reason, by giving the
Executive written notice of termination, which notice of
termination shall be effective immediately, or at such later time
as specified in such notice. The Company shall not be required to
specify a reason for the termination of the Executive's
employment pursuant to this paragraph 3(e), provided that
termination of the Executive's employment by the Company shall be
deemed to have occurred under this paragraph 3(e) only if none of
the reasons specified in paragraph 3(a), 3(b), 3(c) or 3(d) shall
be applicable.
Termination Date. "Termination Date" means the last day that the
Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
Effect of Termination. If, on the Termination Date, the Executive
is a member of the Board of Directors of the Company or any
subsidiary or affiliate of the Company, or holds any position
with the Company or any subsidiary of the Company other than the
position specified in paragraph 1(a) hereof, the Executive shall
resign from all such positions as of the Termination Date.
Rights Upon Termination or Company's Failure to Renew. The
Executive's right to payment and benefits under this Agreement
for periods after the Termination Date shall be determined in
accordance with the following provisions of this paragraph 4:
General. If the Executive's employment hereunder is terminated
during the Employment Term for any reason, the Company shall pay
to the Executive:
The Executive's Base Salary for the period ending on the
Termination Date.
Payment for unused Time Bank days, as determined in accordance
with Company Time Bank policy, as in effect from time to time.
If the Termination Date occurs after the end of a fiscal year and
prior to payment of an Annual Bonus earned by the Executive for
such fiscal year, the Executive shall be paid the Annual Bonus
for such fiscal year at the regularly scheduled time.
The Executive and any of his dependents shall be eligible for
medical continuation coverage under the provisions of section
4980B of the Internal Revenue Code or section 601 of the Employee
Retirement Income Security Act (sometimes called "COBRA
coverage") to the extent required by applicable law. All other
benefits and perquisites otherwise provided under this Agreement
shall be discontinued on the Termination Date.
Death. If the Executive's employment hereunder is terminated by
reason of the Executive's death, then, in addition to the amounts
payable in accordance with paragraph 4(a), the Executive's estate
shall receive payment of the Annual Bonus for the fiscal year in
which the Termination Date occurs, computed as provided in
Section 2(b) for the entire fiscal year, and payable at the same
time as the Annual Bonus would otherwise have been paid;
provided, however, that the amount of the Annual Bonus shall be
subject to a pro-rata reduction for the portion of the fiscal
year following the Termination Date ("Pro-Rated Annual Bonus").
Disability. If the Executive's employment hereunder is terminated
by reason of the Executive's Total Disability, then, in addition
to the amounts payable in accordance with paragraph 4(a), the
Executive shall receive payment of the Pro-Rated Annual Bonus for
the fiscal year in which the Termination Date occurs, and payable
at the same time as the Annual Bonus would otherwise have been
paid.
Cause. If the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(d) relating to
the termination for Cause, then, except as otherwise expressly
provided in this Agreement, the Company shall have no obligation
to make payments under this Agreement for any period after the
Termination Date.
Resignation. If the Executive's employment hereunder is
terminated by the Executive without Good Reason, as provided in
paragraph 3(c) relating to the Executive's resignation, then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under this
Agreement for any period after the Termination Date.
Termination by the Company Without Cause or Termination by the
Executive for Good Reason. If the Executive's employment
hereunder is terminated by the Company Without Cause, as provided
in paragraph 3(e) or by the Executive for Good Reason, as
provided in paragraph 3(c), then in addition to the amounts
payable in accordance with paragraph 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(f) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Failure of the Company to Renew. Upon the expiration of the
Initial Term or any Additional Term of this Agreement, if the
Company shall notify the Executive of its desire not to renew the
term of this Agreement for the next Additional Term of one (1)
year, and the Executive notifies the Company in writing that the
Executive is ready, willing and able to renew the term of this
Agreement for the next Additional Term of one (1) year, and the
Company at such time did not have grounds to terminate the
Executive's employment for "Cause" as described in Section 3(d)
above, then the Company's failure to renew shall be treated in
the same manner as a termination without "Cause" and in addition
to the amounts payable under Section 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(g) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Other Benefits. The Executive's rights under this paragraph 4
shall be in lieu of any benefits that may be otherwise payable to
or on behalf of the Executive pursuant to the terms of any
severance pay arrangement of the Company, or any similar
arrangement of the Company providing benefits upon termination of
employment.
Severance Reduced by Other Compensation. Payments by the Company
of Base Salary for any period after the Termination Date and
through the Severance Expiration Date (the "Severance Period"),
if any are required to be made pursuant to the terms of
paragraphs 4(f) or 4(g), shall be reduced and offset by any
compensation Executive receives which is attributable to services
performed for other enterprises during such period, whether
characterized as salary, bonus, consulting fees, commissions,
distributions or otherwise. Executive shall promptly inform the
Company of his securing new employment, consulting or similar
engagements during the Severance Period and the compensation to
be received by Executive thereunder so that the Company can make
adjustments to, or terminate payments of, Base Salary. At the
request of the Company, Executive shall provide copies of the
Executive's federal income tax returns covering such Severance
Period. Any overpayments by the Company with respect to the
Severance Period shall be promptly refunded by Executive to the
Company.
Duties on Termination. During the period beginning on the date
notice is given of (a) the decision not to extend the Executive's
employment beyond the expiration of the Initial or Additional
Term then in effect or (b) termination of the Executive's
employment pursuant to paragraphs 3(c), 3(d) or 3(e), and ending
on the Termination Date, the Executive shall continue to perform
him duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate
for a smooth transition to the Executive's successor, if any.
Notwithstanding the foregoing, the Company may suspend the
Executive from performing him duties under this Agreement
following the giving of the notices contemplated by this
paragraph 5; provided, however, that during the period of
suspension (which shall end on the Termination Date), the
Executive shall continue to be treated as employed by the Company
for other purposes, and his rights to compensation or benefits
shall not be reduced by reason of the suspension.
Inventions. The Executive shall disclose promptly to the Company
any and all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the business of the Company,
developed, initiated, conceived or made by him, alone or in
conjunction with others, during the Employment Term, all of which
shall be considered "work for hire," and the Executive shall
assign, without additional consideration, all of his right, title
and interest therein to the Company or it nominee. Whenever
requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain letters
patent, trademarks or copyrights of the United States or any
foreign country, or otherwise protect the Company's interest
therein. These obligations shall continue beyond the conclusion
of the Employment Term with respect to inventions, discoveries,
improvements or copyrightable works made by the Executive during
the Employment Term and shall be binding upon the Executive's
assigns, executors, administrators and other legal
representatives.
Confidentiality. The Executive acknowledges and agrees that the
Company owns, controls and has exclusive access to a body of
existing technical knowledge and technology, and that the Company
has expended and is expending substantial resources in a
continuing program of research, development and production with
respect to its business. The Company possesses and will continue
to possess information that has been or will be created,
discovered or developed, or has or will otherwise become known to
the Company, and/or in which property rights have been or will be
assigned or otherwise conveyed to the Company, which information
has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter
called "Confidential Information." By way of illustration but not
limitation, Confidential Information includes all product designs
and development plans, costs, profits, pricing policies, sales
records, terms and conditions of license, purchase, distributor
or franchise arrangements, data, compilations, blueprints, plans,
audio and/or visual recordings and/or devices, information on
computer disks, software in various stages of development, source
codes, tapes, printouts and other printed, typewritten or
handwritten documents, specifications, strategies, systems,
schemes, methods (including delivery, storage, receipt,
transmission, presentation and manufacture of audio, visual,
informational or other data or content), business and marketing
development plans and projections, customer lists, prospects
lists, vendor lists, employee files and compensation data,
research projections, processes, techniques, designs, sequences,
components, programs, technology, ideas, know-how, improvements,
inventions (whether or not patentable or copyrightable),
information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information
concerning the actual or anticipated business, research or
development of the Company or its actual or potential customers
or partners or which is or has been generated or received in
confidence by the Company by or from any person, and all tangible
and intangible embodiments thereof of any kind whatsoever
including where appropriate and without limitation all
compositions, machinery, apparatus, records, reports, drawings,
copyright applications, patent applications, documents and
samples prototypes, models, products and the like. Confidential
Information also includes any such information as to which the
Company is bound under confidentiality and/or license,
distribution, purchase or franchise agreements with third
parties, and any information which the Company has obtained or
will obtain from its customers, vendors, licensors, licensees or
any other party and which the Company treats as confidential,
whether or not owned or developed by the Company. The Executive
understands that Confidential Information does not include any of
the foregoing that has become publicly known and made generally
available through no wrongful act by him or others who were under
confidentiality obligations as to such information.
Disclosure of Confidential Information to Executive. The
Executive acknowledges and agrees that his employment hereunder
creates a relationship of confidence and trust between the
Executive and the Company, and that by reason of such employment
the Executive will come into possession of, contribute to, have
access to and knowledge of Confidential Information.
Obligation to Keep Confidential. The Executive acknowledges and
confirms that all Confidential Information that comes into his
possession during the Employment Term (including any Confidential
Information originated or developed by the Executive) is or will
be the exclusive property of the Company. Further, during the
period of his employment hereunder and at all times thereafter,
the Executive shall use and hold such Confidential Information
solely for the benefit of the Company and shall not use
Confidential Information for the Executive's own benefit or for
the benefit of any third party. The Executive shall not, directly
or indirectly, disclose or reveal Confidential Information, in
any manner, to any person other than the Company's employees
unless required by law and, then, to the extent practicable, only
following prior written notice to the Company.
Return of Company Property. Upon termination of the Executive's
employment hereunder for any reason, or at any other time upon
the request of the Company, the Executive shall immediately
deliver or cause to be delivered to the Company all of the
Confidential Information in the Executive's possession or
control, including, without limitation: originals and/or copies
of books; catalogues; sales brochures; customer lists; vendor
lists; price lists; product design and development materials,
product data, employee manuals; operation manuals; marketing and
sales plans and strategies; files; computer disks; and all other
documents and materials, in any form whatsoever, reflecting or
referencing Confidential Information as well as all other
materials and equipment furnished to or acquired by the Executive
as a result of or during the course of the Executive's employment
by the Company.
Non-Solicitation and Non-Competition. The Executive acknowledges
that the Company has expended substantial time, money and effort
in developing and solidifying its relationships with customers,
vendors, licensors and licensees and developing certain brand
name or trademarked products; and that the Executive's
compensation hereunder represents consideration, among other
things, for the development and preservation of Confidential
Information, good will, loyalty and contacts for and on behalf of
the Company. Accordingly, the Executive covenants and agrees that
he will not under any circumstance, directly or indirectly, for
or on behalf of himself or any other person, firm or entity,
during the Executive's employment hereunder and for the
Restricted Period set forth on Schedule 10, following the
termination of such employment for any reason:
Solicit or accept business, in competition with the Company, from
any of the customers, or known customer prospects of the Company,
its subsidiaries, parent corporation or affiliates, or otherwise
induce or influence any such customer or known customer prospect
to reduce its volume of business, or terminate or divert its
relationship or otherwise in any way adversely affect its
relationship, with the Company, its subsidiaries, parent
corporation or affiliates; or
Employ, engage or retain, or solicit for employment, engagement
or retention, any person who, within the prior twelve (12)
months, was a director, officer, employee, consultant,
representative or agent of the Company, or encourage any such
person to terminate his or her employment or other relationship
with the Company; or
Engage in, be employed by or participate in any way in the United
States in any business that engages in any business that the
Company is engaging in, or is actively planning to engage in, on
the Termination Date (including, without limitation, the
development, design, sourcing, manufacturing, licensing,
marketing, distribution and sale of housewares products;
including, without limitation, cutlery, kitchen tools and
gadgets, kitchenware, pantryware, bakeware, barware, and spices
or the licensing of trademarks and brand names therefore). Such
prohibited engagement, employment or participation includes, but
is not limited to, acting as a director, officer, employee,
agent, member, manager, managing member, independent contractor,
partner, general partner, limited partner, consultant,
representative, salesman, licensor or licensee, franchisor or
franchisee, proprietor, syndicate member, shareholder or
creditor. Notwithstanding the foregoing, the Executive may own
or hold equity securities (or securities convertible into, or
exchangeable or exercisable for, equity securities) of companies
or entities that engage in a business that is the same or similar
to that of the Company or of its parent entities (if any) or any
of its subsidiaries or affiliates; provided, however, that (i)
such equity securities are publicly traded on a securities
exchange and (ii) the Executive's aggregate holdings of such
securities do not exceed at any time five percent (5%) of the
total issued and outstanding equity securities of such company or
entity.
The Company and the Executive expressly acknowledge and agree
that the scope of the Executive's promises specified in this
paragraph 8 are in each case reasonable and necessary to protect
the Confidential Information, trade secrets and good will of the
Company. In the event that, for any reason, any aspect of the
Executive's obligations specified in this paragraph 8 are
determined by a court of competent jurisdiction to be
unreasonable or unenforceable against him, such provisions shall,
if possible, be modified by such court to the minimum extent
required by law to make the provisions enforceable with respect
to the Executive.
Non-Disparagement. The Executive covenants and agrees that during
the Employment Term and following termination of the Employment
Term, he will not make any disparaging, false or abusive remarks
or communications, written or oral, regarding the Company, its
products, brands, trademarks, officers, directors, employees,
personnel, licensors, licensees, customers, vendors or others
with which it has business relationships.
Specific Remedies. The Executive acknowledges that the Company
would be irreparably injured, and that it is impossible to
measure in money the damages which will accrue to the Company if
he shall breach or violate him covenants in paragraphs 6, 7, 8 or
9 hereof. Accordingly, the Executive agrees that if he shall
breach or violate any of such covenants or obligations, the
Company shall have the full right to seek injunctive relief in
addition to any other rights provided in this Agreement or by
operation of law, without the requirement of posting bond or
proving special damages, and to terminate any payments to the
Executive. In any action or proceeding instituted by the Company
to enforce the provisions of paragraph 6, 7, 8 or 9 of this
Agreement, the Executive waives any claim or defense that the
Company has an adequate remedy at law or that the Company has not
been, or is not being, irreparably injured by the Executive's
breach or violation. The provisions of paragraphs 6, 7, 8, 9 and
10 hereof shall survive any termination of this Agreement or the
Employment Term.
Acknowledgment by Executive. The Executive represent and
warrants that (i) he is not, and will not become party to any
agreement, contract, arrangement or understanding, whether or
employment or otherwise, that would in any way restrict or
prohibit him from undertaking or performing him duties in
accordance with this Agreement or that restricts him ability to
be employed by the Company in accordance with this Agreement;
(ii) his position with the Company, as described in this
Agreement, will not require him to improperly use any trade
secrets or confidential information of any prior employer, or any
other person or entity for whom he has performed services.
Arbitration of Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be
settled by final and binding arbitration in New York, New York by
three arbitrators. Except as otherwise expressly provided in this
paragraph 12, the arbitration shall be conducted in accordance
with the commercial rules of the American Arbitration Association
(the "Association") then in effect. One of the arbitrators shall
be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within the thirty (30) days of the appointment
of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This paragraph 12 shall not be
construed to limit the Company's right to obtain equitable relief
under this Agreement with respect to any matter or controversy
subject to this Agreement, and, pending, a final determination by
the arbitrators with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without
first being required to arbitrate such matter or controversy and
without the necessity of posting bond.
Notices. All notices and other communications hereunder shall be
deemed given upon (a) the sender's confirmation of receipt of a
facsimile transmission to the recipient's facsimile number set
forth below, (b) confirmed delivery by a standard overnight
carrier to the recipient's address set forth below, (c) delivery
by hand to the recipient's address set forth below or (d) the
expiration of five (5) business days after the day mailed in the
United States by certified or registered mail, postage prepaid,
return receipt requested, addressed to the recipient's addresses
set forth below (or, in each case, to or at such other facsimile
number or address for a party as such party may specify by notice
given in accordance with this paragraph 13):
If to the Company, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, New York 11590
Attention: Jeffrey Siegel, Chief Executive Officer
Facsimile: (516) 450-1017
If to the Executive, to the address set forth on the
signature page hereof.
Entire Agreement; Modification. This Agreement constitutes the
entire agreement and understanding of the parties with respect to
the matters set forth herein and supersedes all prior and
contemporaneous agreements and understandings between the parties
with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than
those set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the parties
hereto.
Waiver of Breach. Waiver by either party of a beach of any
provision of this Agreement by the other shall not operate as a
waiver of any other or subsequent breach by such other party.
Assignment. Neither this Agreement, nor the Executive's rights,
powers, duties or obligations hereunder, may be assigned by the
Executive. This Agreement may be assigned by the Company to any
successor in interest and the obligations hereunder shall be
binding on such third party assignee.
Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability the remainder of this Agreement shall continue
in full force and effect.
Survival. Notwithstanding the termination of this Agreement or
the Executive's employment hereunder, such provisions of this
Agreement as by their terms survive the termination of this
Agreement shall continue in full force and effect in accordance
with their respective terms.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without
giving effect to those laws that would require the application of
the substantive law of another jurisdiction). The Executive
hereby consents to the personal jurisdiction of the federal and
state courts located in New York in connection with any matter
arising out of this Agreement and confirms and agrees that any
claim against the Company, including without limitation,
enforcement of any arbitration award under paragraph 12 hereof
shall be brought only in the federal and state courts located in
New York.
Representation by Counsel; No Duress. The Executive acknowledges
that this Agreement has been negotiated at arm's length; that he
has full opportunity for representation by counsel in connection
with the negotiation and review of this Agreement, and has either
been adequately represented by counsel or has chosen to forego
him opportunity to be so represented; that this Agreement will be
deemed to have been drafted by both parties and, as such,
ambiguities shall not be construed against any one party; and
that he enters this Agreement freely and without duress or
compulsion of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
LIFETIME HOAN CORPORATION
By:
Printed Name:
Title:
Date:
EXECUTIVE
Printed Name:
Title:
Date:
ADDRESS OF EXECUTIVE:
EXECUTIVE EMPLOYMENT AGREEMENT
FOR
ROBERT McNALLY
___________________________
SCHEDULE OF TERMS AND CONDITIONS
Schedule 1: Date of Agreement: July 1, 2003
Schedule 2: (a) Title and Management Position; Responsibilities
Vice President - Finance
Treasurer
Chief Financial Officer
Schedule 3: (b) Initial Term Commencement Date: July 1, 2003
(c) Initial Term Expiration Date: July 31, 2006
Schedule 4: Reporting Authority: Chief Executive Officer
Schedule 5: Principal Office Location: Westbury, New York
Schedule 6: (a) Initial Base Salary per annum: $240,000.00
(b) Initial Base Salary Commencement Period: January
1, 2003
(c) Initial Base Salary Completion Period:
December 31, 2003
Schedule 7: (d) First Bonus Year ended:
December 31, 2003
(e) Calculation of Eligibility for Annual Bonus:
Executive shall eligible for an Annual Bonus based
upon the level of the Company's Income from
Continuing Operations for the year ended December 31,
2003. Income from Continuing Operations shall be
defined as the net earnings of the Company for the
year ended December 31, 2003, after deducting all
federal, state and local taxes, but before (a) any
income or loss from Discontinued Operations, and (b)
any extraordinary charges or special reserves, which
in the opinion of the Company's Board of Directors
are necessary or appropriate to accurately reflect
the financial condition of the Company, whether or
not such charges or reserves are classified as
extraordinary or non-recurring items in the Company's
audited financial statements for the year ended
December 31, 2003.
For the year ended December 31, 2003, the Employee's
Annual Bonus shall be equal to:
$15,000 if Income from Continuing
Operations is between $5,000,000 and
$7,999,999.
$25,000 if Income from Continuing
Operations is between $8,000,000 and
$8,999,999.
$35,000 if Income from Continuing
Operations is between $9,000,000 and
$9,999,999.
$45,000 if Income from Continuing
Operations is $10,000,000 or greater.
Notwithstanding the foregoing, the Executive shall be
not be entitled to an Annual Bonus for the year ended
December 31, 2003, if the Net Income of the Company
for the year ended December 31, 2003, is less than
$5,000,000. Net Income shall mean the net earnings of
the Company for the year ended December 31, 2003,
after deducting all federal, state and local taxes
and all other charges and reserves, as shown in the
Company's audited financial statements for that year.
Schedule 8: Automobile Allowance Per Month: Use of 2001 Cadillac
Seville.
Schedule 9: Severance Expiration Date: The Severance Expiration
Date shall be twelve (12) months after the
Termination Date.
Schedule 10: Restricted Period: The Restricted Period shall be
twelve (12) months following the Termination Date.
EXHIBIT 10.39
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the date set forth on Schedule 1 by and
between Lifetime Hoan Corporation (the "Company"), a Delaware
corporation, having its principal place of business at One
Merrick Avenue, Westbury, NY 11590, and Craig Phillips (the
"Executive"), residing at the address set forth on the signature
page hereof.
WHEREAS, the Company is engaged in the development, design,
sourcing, manufacturing, licensing, marketing, distribution and
sale, at both wholesale and retail, of proprietary housewares
products; including, without limitation, cutlery, kitchen tools
and gadgets, kitchenware, pantryware, bakeware, barware, and
spices and the Executive has many years of experience as an
executive in the industry; and
WHEREAS, the Company desires to employ the Executive in the
senior management position and with responsibility as set forth
on Schedule 2, and the Executive wishes to serve the Company in
such capacity, all in accordance with the terms and conditions
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by
the Executive and the Company as follows:
Employment; Term; Duties and Responsibilities. The Executive's
employment with the Company shall be subject to the following:
Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive in the senior management position set
forth in Schedule 2 and the Executive hereby agrees to be
employed by the Company in such capacity.
The term of this Agreement shall commence as of the date set
forth on Schedule 3 and shall continue through the initial
expiration date also set forth on Schedule 3 (the "Initial
Term"), unless earlier terminated as hereinafter provided. The
Executive's employment shall continue thereafter for consecutive
periods of one year (each, an "Additional Term"), unless either
the Executive or the Company gives written notice to the other no
later than thirty (30) days prior to the expiration of the
Initial Term or any Additional Term, as the case may be, of the
decision not to extend the Executive's employment. The period of
the Executive's employment hereunder shall hereinafter be
referred to as the "Employment Term."
Subject to the policy directions and instructions of the Board of
Directors of the Company (the "Board") and the Chief Executive
Officer ("CEO") of the Company, the Executive shall have
management responsibility as set forth on Schedule 2, and shall
perform such other duties as are consistent with his position and
as may be prescribed from time to time by the Board or the CEO.
The Executive shall report to the senior executive of the Company
set forth on Schedule 4.
The Executive shall devote all of his business time, attention
and energies to the business and affairs of the Company, and
shall use his best efforts to advance the best interests of the
Company.
The Executive's principal office location shall be as set forth
on Schedule 5; however, the Executive recognizes that frequent
travel, both within and outside the United States of America, may
be required in connection with his responsibilities under this
Agreement. In addition, Executive shall be expected to attend
regular meetings with the CEO of the Company and with other
executives of the Company, and to keep the CEO and such other
executives fully informed of Executive's activities, so as to
make the most effective use of Executive's services to the
Company.
Compensation. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
Base Salary. For the period commencing as set forth on Schedule 6
and ending on the completion of the initial base salary period
set forth on Schedule 6, the Company shall pay to the Executive a
base salary (the "Base Salary") at the annual rate as set forth
on Schedule 6.
Annual Bonus. The Executive shall be entitled to earn a bonus
(the "Annual Bonus") in accordance with terms and conditions set
forth on Schedule 7, during each calendar year of the Employment
Term commencing with the year designated as the first bonus year
on Schedule 7. The Company shall prepare an amended Schedule 7 or
a new Schedule 7 for each calendar year of the Employment Term.
The Company, in its sole discretion, may waive any of the terms
and conditions set forth on Schedule 7, or pay such additional
bonus, as it, in its sole discretion, may deem appropriate.
Calculation of Annual Bonus. The Company's Chief Financial
Officer shall calculate the Annual Bonus pursuant to the terms
and conditions set forth on Schedule 7. Such calculation shall be
final, and the Annual Bonus, if earned, shall be payable on or
before April 30 of the subsequent year.
Fringe Benefits. Except as specifically provided in this
Agreement, the Executive shall be provided with perquisites and
other fringe benefits to the same extent and on the same terms as
those benefits are provided generally to the Company's executive
employees. This shall include enrollment in the Company's
medical, dental and disability plans and participation in the
Company's 401(k) Plan under normal procedures under such plans.
Nothing in this paragraph 2(d) shall be construed to prevent the
Company from revising the benefits or perquisites generally
provided to executives from time to time. The Executive shall
complete all forms and physical examinations, and otherwise take
all other necessary actions to secure coverage and benefits
described in this paragraph 2(d).
Expenses. The Executive is authorized to incur reasonable
expenses for travel, meals, lodging, entertainment and similar
items in the performance of his duties for the Company in
accordance with Company policies. The Company will reimburse the
Executive for all reasonable business expenses so incurred,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company. The Executive shall not be permitted to use Company
personnel, vehicles or equipment for personal purposes. The
charging of expenses to the Company in violation of Company
policy will subject Executive to termination pursuant to Section
3(d) below.
Automobile Allowance. During the Employment Term, the Company
shall pay the Executive an automobile allowance in the amount per
month set forth on Schedule 8 or shall provide Executive with a
Company vehicle as described on Schedule 8. If an allowance is
provided by the Company, it is intended to cover all expenses
associated with Executive's use of an automobile for Company
business, so that no other expenses relating to such automobile
use will be reimbursed, except gas and tolls incurred in using
such automobile for Company business.
Time Bank. The Executive shall be entitled to paid leave in
accordance with the Company's Time Bank policies.
Deductions; Set-Off. The compensation payable to the Executive
hereunder shall be subject to all legally required withholding
and deductions. The Company shall be entitled to set-off any
amounts owed to it by the Executive against all amounts owed by
the Company to the Executive by operation of this Agreement.
Termination. During the Employment Term, the Executive's
employment shall terminate upon the events or circumstances
described in paragraphs 3(a) through 3(e) below.
Death. The Executive's employment hereunder shall terminate upon
his death.
Total Disability. The Company may terminate the Executive's
employment as a result of the Executive's Total Disability.
"Total Disability" means the failure of the Executive, after
reasonable accommodation, to perform the essential functions of
his position for an aggregate period of nine (9) months (whether
or not continuous) during any twelve (12) month period by reason
of the Executive's physical or mental disability.
Termination by the Executive. The Executive may terminate his
employment hereunder at any time for Good Reason or without Good
Reason by giving the Company prior written notice of termination,
which notice of termination shall be effective not less than
thirty (30) days after it is given to the Company. A termination
for "Good Reason" shall mean termination by the Executive within
60 days following, and as a result of:
A material diminution in the Executive's position, authority,
duties or responsibilities; or
A reduction in the Executive's Base Salary (other than a
reduction not greater than 20% as part of a general reduction in
compensation applied equitably to all senior executives of the
Company).
Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
The Executive's conviction of a felony or any other crime
involving fraud, embezzlement or bribery;
The Executive's indictment for, entering a plea of guilty or nolo
contendere, or agreeing to a civil penalty or entering into a
consent decree, in connection with any criminal act or any
banking or securities law violation related to the Company;
The Executive's having committed an act of disloyalty, dishonesty
or breach of trust relating to the Company;
The engaging by the Executive in misconduct involving moral
turpitude;
The willful engaging by the Executive in conduct that, in the
reasonable judgment of the Board, is materially injurious to the
Company, or has or threatens to have a material adverse impact on
the Company;
The Executive's failure to maintain decorum or professional
behavior that, in the reasonable judgment of the Board,
materially affects the Executive's credibility or reputation;
The Executive's repeated abuse of alcohol or drugs (legal or
illegal), that, in the reasonable judgment of the Board,
materially impairs the Executive's ability to perform his duties
hereunder;
The engaging by the Executive in misconduct in material violation
of the Company's personnel policies; including, but not limited
to, harassment, disparagement or abusive treatment of personnel,
customers, licensees, licensors, vendors, suppliers or
contractors of the Company;
The willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive being Disabled);
The Executive's extended absences without permission, failure to
work on a full time basis, or charging of material improper
expenses to the Company.
The Executive's failure to cure, within ten (10) days of
receiving written notice of same by the Company (to the extent a
cure is possible), any gross neglect, gross misconduct or act
outside the scope of his authority engaged in by the Executive;
The Executive's willful violation or failure to follow the lawful
instructions and directions of the Board, the CEO or the
Company's policies; or
The breach or violation of any provision of this Agreement,
including, but not limited to, the confidentiality and non-
competition provisions set forth in paragraphs 7 and 8 hereof.
Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder at any time
without Cause and for any reason or for no reason, by giving the
Executive written notice of termination, which notice of
termination shall be effective immediately, or at such later time
as specified in such notice. The Company shall not be required to
specify a reason for the termination of the Executive's
employment pursuant to this paragraph 3(e), provided that
termination of the Executive's employment by the Company shall be
deemed to have occurred under this paragraph 3(e) only if none of
the reasons specified in paragraph 3(a), 3(b), 3(c) or 3(d) shall
be applicable.
Termination Date. "Termination Date" means the last day that the
Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
Effect of Termination. If, on the Termination Date, the Executive
is a member of the Board of Directors of the Company or any
subsidiary or affiliate of the Company, or holds any position
with the Company or any subsidiary of the Company other than the
position specified in paragraph 1(a) hereof, the Executive shall
resign from all such positions as of the Termination Date.
Rights Upon Termination or Company's Failure to Renew. The
Executive's right to payment and benefits under this Agreement
for periods after the Termination Date shall be determined in
accordance with the following provisions of this paragraph 4:
General. If the Executive's employment hereunder is terminated
during the Employment Term for any reason, the Company shall pay
to the Executive:
The Executive's Base Salary for the period ending on the
Termination Date.
Payment for unused Time Bank days, as determined in accordance
with Company Time Bank policy, as in effect from time to time.
If the Termination Date occurs after the end of a fiscal year and
prior to payment of an Annual Bonus earned by the Executive for
such fiscal year, the Executive shall be paid the Annual Bonus
for such fiscal year at the regularly scheduled time.
The Executive and any of his dependents shall be eligible for
medical continuation coverage under the provisions of section
4980B of the Internal Revenue Code or section 601 of the Employee
Retirement Income Security Act (sometimes called "COBRA
coverage") to the extent required by applicable law. All other
benefits and perquisites otherwise provided under this Agreement
shall be discontinued on the Termination Date.
Death. If the Executive's employment hereunder is terminated by
reason of the Executive's death, then, in addition to the amounts
payable in accordance with paragraph 4(a), the Executive's estate
shall receive payment of the Annual Bonus for the fiscal year in
which the Termination Date occurs, computed as provided in
Section 2(b) for the entire fiscal year, and payable at the same
time as the Annual Bonus would otherwise have been paid;
provided, however, that the amount of the Annual Bonus shall be
subject to a pro-rata reduction for the portion of the fiscal
year following the Termination Date ("Pro-Rated Annual Bonus").
Disability. If the Executive's employment hereunder is terminated
by reason of the Executive's Total Disability, then, in addition
to the amounts payable in accordance with paragraph 4(a), the
Executive shall receive payment of the Pro-Rated Annual Bonus for
the fiscal year in which the Termination Date occurs, and payable
at the same time as the Annual Bonus would otherwise have been
paid.
Cause. If the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(d) relating to
the termination for Cause, then, except as otherwise expressly
provided in this Agreement, the Company shall have no obligation
to make payments under this Agreement for any period after the
Termination Date.
Resignation. If the Executive's employment hereunder is
terminated by the Executive without Good Reason, as provided in
paragraph 3(c) relating to the Executive's resignation, then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under this
Agreement for any period after the Termination Date.
Termination by the Company Without Cause or Termination by the
Executive for Good Reason. If the Executive's employment
hereunder is terminated by the Company Without Cause, as provided
in paragraph 3(e) or by the Executive for Good Reason, as
provided in paragraph 3(c), then in addition to the amounts
payable in accordance with paragraph 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(f) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Failure of the Company to Renew. Upon the expiration of the
Initial Term or any Additional Term of this Agreement, if the
Company shall notify the Executive of its desire not to renew the
term of this Agreement for the next Additional Term of one (1)
year, and the Executive notifies the Company in writing that the
Executive is ready, willing and able to renew the term of this
Agreement for the next Additional Term of one (1) year, and the
Company at such time did not have grounds to terminate the
Executive's employment for "Cause" as described in Section 3(d)
above, then the Company's failure to renew shall be treated in
the same manner as a termination without "Cause" and in addition
to the amounts payable under Section 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(g) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Other Benefits. The Executive's rights under this paragraph 4
shall be in lieu of any benefits that may be otherwise payable to
or on behalf of the Executive pursuant to the terms of any
severance pay arrangement of the Company, or any similar
arrangement of the Company providing benefits upon termination of
employment.
Severance Reduced by Other Compensation. Payments by the Company
of Base Salary for any period after the Termination Date and
through the Severance Expiration Date (the "Severance Period"),
if any are required to be made pursuant to the terms of
paragraphs 4(f) or 4(g), shall be reduced and offset by any
compensation Executive receives which is attributable to services
performed for other enterprises during such period, whether
characterized as salary, bonus, consulting fees, commissions,
distributions or otherwise. Executive shall promptly inform the
Company of his securing new employment, consulting or similar
engagements during the Severance Period and the compensation to
be received by Executive thereunder so that the Company can make
adjustments to, or terminate payments of, Base Salary. At the
request of the Company, Executive shall provide copies of the
Executive's federal income tax returns covering such Severance
Period. Any overpayments by the Company with respect to the
Severance Period shall be promptly refunded by Executive to the
Company.
Duties on Termination. During the period beginning on the date
notice is given of (a) the decision not to extend the Executive's
employment beyond the expiration of the Initial or Additional
Term then in effect or (b) termination of the Executive's
employment pursuant to paragraphs 3(c), 3(d) or 3(e), and ending
on the Termination Date, the Executive shall continue to perform
him duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate
for a smooth transition to the Executive's successor, if any.
Notwithstanding the foregoing, the Company may suspend the
Executive from performing him duties under this Agreement
following the giving of the notices contemplated by this
paragraph 5; provided, however, that during the period of
suspension (which shall end on the Termination Date), the
Executive shall continue to be treated as employed by the Company
for other purposes, and his rights to compensation or benefits
shall not be reduced by reason of the suspension.
Inventions. The Executive shall disclose promptly to the Company
any and all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the business of the Company,
developed, initiated, conceived or made by him, alone or in
conjunction with others, during the Employment Term, all of which
shall be considered "work for hire," and the Executive shall
assign, without additional consideration, all of his right, title
and interest therein to the Company or it nominee. Whenever
requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain letters
patent, trademarks or copyrights of the United States or any
foreign country, or otherwise protect the Company's interest
therein. These obligations shall continue beyond the conclusion
of the Employment Term with respect to inventions, discoveries,
improvements or copyrightable works made by the Executive during
the Employment Term and shall be binding upon the Executive's
assigns, executors, administrators and other legal
representatives.
Confidentiality. The Executive acknowledges and agrees that the
Company owns, controls and has exclusive access to a body of
existing technical knowledge and technology, and that the Company
has expended and is expending substantial resources in a
continuing program of research, development and production with
respect to its business. The Company possesses and will continue
to possess information that has been or will be created,
discovered or developed, or has or will otherwise become known to
the Company, and/or in which property rights have been or will be
assigned or otherwise conveyed to the Company, which information
has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter
called "Confidential Information." By way of illustration but not
limitation, Confidential Information includes all product designs
and development plans, costs, profits, pricing policies, sales
records, terms and conditions of license, purchase, distributor
or franchise arrangements, data, compilations, blueprints, plans,
audio and/or visual recordings and/or devices, information on
computer disks, software in various stages of development, source
codes, tapes, printouts and other printed, typewritten or
handwritten documents, specifications, strategies, systems,
schemes, methods (including delivery, storage, receipt,
transmission, presentation and manufacture of audio, visual,
informational or other data or content), business and marketing
development plans and projections, customer lists, prospects
lists, vendor lists, employee files and compensation data,
research projections, processes, techniques, designs, sequences,
components, programs, technology, ideas, know-how, improvements,
inventions (whether or not patentable or copyrightable),
information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information
concerning the actual or anticipated business, research or
development of the Company or its actual or potential customers
or partners or which is or has been generated or received in
confidence by the Company by or from any person, and all tangible
and intangible embodiments thereof of any kind whatsoever
including where appropriate and without limitation all
compositions, machinery, apparatus, records, reports, drawings,
copyright applications, patent applications, documents and
samples prototypes, models, products and the like. Confidential
Information also includes any such information as to which the
Company is bound under confidentiality and/or license,
distribution, purchase or franchise agreements with third
parties, and any information which the Company has obtained or
will obtain from its customers, vendors, licensors, licensees or
any other party and which the Company treats as confidential,
whether or not owned or developed by the Company. The Executive
understands that Confidential Information does not include any of
the foregoing that has become publicly known and made generally
available through no wrongful act by him or others who were under
confidentiality obligations as to such information.
Disclosure of Confidential Information to Executive. The
Executive acknowledges and agrees that his employment hereunder
creates a relationship of confidence and trust between the
Executive and the Company, and that by reason of such employment
the Executive will come into possession of, contribute to, have
access to and knowledge of Confidential Information.
Obligation to Keep Confidential. The Executive acknowledges and
confirms that all Confidential Information that comes into his
possession during the Employment Term (including any Confidential
Information originated or developed by the Executive) is or will
be the exclusive property of the Company. Further, during the
period of his employment hereunder and at all times thereafter,
the Executive shall use and hold such Confidential Information
solely for the benefit of the Company and shall not use
Confidential Information for the Executive's own benefit or for
the benefit of any third party. The Executive shall not, directly
or indirectly, disclose or reveal Confidential Information, in
any manner, to any person other than the Company's employees
unless required by law and, then, to the extent practicable, only
following prior written notice to the Company.
Return of Company Property. Upon termination of the Executive's
employment hereunder for any reason, or at any other time upon
the request of the Company, the Executive shall immediately
deliver or cause to be delivered to the Company all of the
Confidential Information in the Executive's possession or
control, including, without limitation: originals and/or copies
of books; catalogues; sales brochures; customer lists; vendor
lists; price lists; product design and development materials,
product data, employee manuals; operation manuals; marketing and
sales plans and strategies; files; computer disks; and all other
documents and materials, in any form whatsoever, reflecting or
referencing Confidential Information as well as all other
materials and equipment furnished to or acquired by the Executive
as a result of or during the course of the Executive's employment
by the Company.
Non-Solicitation and Non-Competition. The Executive acknowledges
that the Company has expended substantial time, money and effort
in developing and solidifying its relationships with customers,
vendors, licensors and licensees and developing certain brand
name or trademarked products; and that the Executive's
compensation hereunder represents consideration, among other
things, for the development and preservation of Confidential
Information, good will, loyalty and contacts for and on behalf of
the Company. Accordingly, the Executive covenants and agrees that
he will not under any circumstance, directly or indirectly, for
or on behalf of himself or any other person, firm or entity,
during the Executive's employment hereunder and for the
Restricted Period set forth on Schedule 10, following the
termination of such employment for any reason:
Solicit or accept business, in competition with the Company, from
any of the customers, or known customer prospects of the Company,
its subsidiaries, parent corporation or affiliates, or otherwise
induce or influence any such customer or known customer prospect
to reduce its volume of business, or terminate or divert its
relationship or otherwise in any way adversely affect its
relationship, with the Company, its subsidiaries, parent
corporation or affiliates; or
Employ, engage or retain, or solicit for employment, engagement
or retention, any person who, within the prior twelve (12)
months, was a director, officer, employee, consultant,
representative or agent of the Company, or encourage any such
person to terminate his or her employment or other relationship
with the Company; or
Engage in, be employed by or participate in any way in the United
States in any business that engages in any business that the
Company is engaging in, or is actively planning to engage in, on
the Termination Date (including, without limitation, the
development, design, sourcing, manufacturing, licensing,
marketing, distribution and sale of housewares products;
including, without limitation, cutlery, kitchen tools and
gadgets, kitchenware, pantryware, bakeware, barware, and spices
or the licensing of trademarks and brand names therefore). Such
prohibited engagement, employment or participation includes, but
is not limited to, acting as a director, officer, employee,
agent, member, manager, managing member, independent contractor,
partner, general partner, limited partner, consultant,
representative, salesman, licensor or licensee, franchisor or
franchisee, proprietor, syndicate member, shareholder or
creditor. Notwithstanding the foregoing, the Executive may own
or hold equity securities (or securities convertible into, or
exchangeable or exercisable for, equity securities) of companies
or entities that engage in a business that is the same or similar
to that of the Company or of its parent entities (if any) or any
of its subsidiaries or affiliates; provided, however, that (i)
such equity securities are publicly traded on a securities
exchange and (ii) the Executive's aggregate holdings of such
securities do not exceed at any time five percent (5%) of the
total issued and outstanding equity securities of such company or
entity.
The Company and the Executive expressly acknowledge and agree
that the scope of the Executive's promises specified in this
paragraph 8 are in each case reasonable and necessary to protect
the Confidential Information, trade secrets and good will of the
Company. In the event that, for any reason, any aspect of the
Executive's obligations specified in this paragraph 8 are
determined by a court of competent jurisdiction to be
unreasonable or unenforceable against him, such provisions shall,
if possible, be modified by such court to the minimum extent
required by law to make the provisions enforceable with respect
to the Executive.
Non-Disparagement. The Executive covenants and agrees that during
the Employment Term and following termination of the Employment
Term, he will not make any disparaging, false or abusive remarks
or communications, written or oral, regarding the Company, its
products, brands, trademarks, officers, directors, employees,
personnel, licensors, licensees, customers, vendors or others
with which it has business relationships.
Specific Remedies. The Executive acknowledges that the Company
would be irreparably injured, and that it is impossible to
measure in money the damages which will accrue to the Company if
he shall breach or violate him covenants in paragraphs 6, 7, 8 or
9 hereof. Accordingly, the Executive agrees that if he shall
breach or violate any of such covenants or obligations, the
Company shall have the full right to seek injunctive relief in
addition to any other rights provided in this Agreement or by
operation of law, without the requirement of posting bond or
proving special damages, and to terminate any payments to the
Executive. In any action or proceeding instituted by the Company
to enforce the provisions of paragraph 6, 7, 8 or 9 of this
Agreement, the Executive waives any claim or defense that the
Company has an adequate remedy at law or that the Company has not
been, or is not being, irreparably injured by the Executive's
breach or violation. The provisions of paragraphs 6, 7, 8, 9 and
10 hereof shall survive any termination of this Agreement or the
Employment Term.
Acknowledgment by Executive. The Executive represent and
warrants that (i) he is not, and will not become party to any
agreement, contract, arrangement or understanding, whether or
employment or otherwise, that would in any way restrict or
prohibit him from undertaking or performing him duties in
accordance with this Agreement or that restricts him ability to
be employed by the Company in accordance with this Agreement;
(ii) his position with the Company, as described in this
Agreement, will not require him to improperly use any trade
secrets or confidential information of any prior employer, or any
other person or entity for whom he has performed services.
Arbitration of Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be
settled by final and binding arbitration in New York, New York by
three arbitrators. Except as otherwise expressly provided in this
paragraph 12, the arbitration shall be conducted in accordance
with the commercial rules of the American Arbitration Association
(the "Association") then in effect. One of the arbitrators shall
be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within the thirty (30) days of the appointment
of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This paragraph 12 shall not be
construed to limit the Company's right to obtain equitable relief
under this Agreement with respect to any matter or controversy
subject to this Agreement, and, pending, a final determination by
the arbitrators with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without
first being required to arbitrate such matter or controversy and
without the necessity of posting bond.
Notices. All notices and other communications hereunder shall be
deemed given upon (a) the sender's confirmation of receipt of a
facsimile transmission to the recipient's facsimile number set
forth below, (b) confirmed delivery by a standard overnight
carrier to the recipient's address set forth below, (c) delivery
by hand to the recipient's address set forth below or (d) the
expiration of five (5) business days after the day mailed in the
United States by certified or registered mail, postage prepaid,
return receipt requested, addressed to the recipient's addresses
set forth below (or, in each case, to or at such other facsimile
number or address for a party as such party may specify by notice
given in accordance with this paragraph 13):
If to the Company, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, New York 11590
Attention: Jeffrey Siegel, Chief Executive Officer
Facsimile: (516) 450-1017
If to the Executive, to the address set forth on the
signature page hereof.
Entire Agreement; Modification. This Agreement constitutes the
entire agreement and understanding of the parties with respect to
the matters set forth herein and supersedes all prior and
contemporaneous agreements and understandings between the parties
with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than
those set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the parties
hereto.
Waiver of Breach. Waiver by either party of a beach of any
provision of this Agreement by the other shall not operate as a
waiver of any other or subsequent breach by such other party.
Assignment. Neither this Agreement, nor the Executive's rights,
powers, duties or obligations hereunder, may be assigned by the
Executive. This Agreement may be assigned by the Company to any
successor in interest and the obligations hereunder shall be
binding on such third party assignee.
Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability the remainder of this Agreement shall continue
in full force and effect.
Survival. Notwithstanding the termination of this Agreement or
the Executive's employment hereunder, such provisions of this
Agreement as by their terms survive the termination of this
Agreement shall continue in full force and effect in accordance
with their respective terms.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without
giving effect to those laws that would require the application of
the substantive law of another jurisdiction). The Executive
hereby consents to the personal jurisdiction of the federal and
state courts located in New York in connection with any matter
arising out of this Agreement and confirms and agrees that any
claim against the Company, including without limitation,
enforcement of any arbitration award under paragraph 12 hereof
shall be brought only in the federal and state courts located in
New York.
Representation by Counsel; No Duress. The Executive acknowledges
that this Agreement has been negotiated at arm's length; that he
has full opportunity for representation by counsel in connection
with the negotiation and review of this Agreement, and has either
been adequately represented by counsel or has chosen to forego
him opportunity to be so represented; that this Agreement will be
deemed to have been drafted by both parties and, as such,
ambiguities shall not be construed against any one party; and
that he enters this Agreement freely and without duress or
compulsion of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
LIFETIME HOAN CORPORATION
By:
Printed Name:
Title:
Date:
EXECUTIVE
Printed Name:
Title:
Date:
ADDRESS OF EXECUTIVE:
EXECUTIVE EMPLOYMENT AGREEMENT
FOR
CRIAG PHILLIPS
___________________________
SCHEDULE OF TERMS AND CONDITIONS
Schedule 1: Date of Agreement: July 1, 2003
Schedule 2: Title and Management Position; Responsibilities
Senior Vice President - Distribution
Schedule 3:(a) Initial Term Commencement Date: July 1, 2003
(b) Initial Term Expiration Date: July 31, 2006
Schedule 4: Reporting Authority: Chief Executive Officer
Schedule 5: Principal Office Location: Robbinsville, NJ
Schedule 6: Initial Base Salary per annum: $220,000.00
(f) Initial Base Salary Commencement Period: January
1, 2003
(g) Initial Base Salary Completion Period: December
31, 2003
Schedule 7:(h) First Bonus Year: Year ended December 31, 2003
(i) Calculation of Eligibility for Annual Bonus:
Executive shall be eligible for an Annual Bonus based
upon the level of "Warehouse Payroll Expense
Percentage." Warehouse Payroll Expense Percentage
shall be determined by dividing the "Warehouse
Payroll Expense" related to the Company's warehouse
and distribution facilities (excluding those
facilities used exclusively by the Company's
Kamenstein Division) by the value of "Warehouse
Shipments" from those facilities. Warehouse Payroll
Expense shall comprise Payroll Expense, Payroll
Taxes, Benefits Expenses, payroll-processing fees and
other payroll-related expenses, as well as all
expenses for outsourced labor or other similar
services, less the direct labor expense for "re-work"
of inventory received with defects, where such direct
labor expense has been identified and the Company has
submitted a claim for reimbursement to the
manufacturer. Warehouse Shipments shall comprise
shipments to unaffiliated customers, plus shipments
to the Company's Farberware Outlet Stores, adjusted
to wholesale pricing. The calculation of Warehouse
Payroll Expense Percentage shall be made by the
Company's Chief Financial Officer.
For the year ended December 31, 2003, the Executive's
Annual Bonus shall be equal to:
$25,000 if the Warehouse Expense Percentage is
less than 9.0%, plus
$37,500 if the Warehouse Expense Percentage is
less than 8.5%, plus
$50,000 if the Warehouse Expense Percentage is
less than 8.0%, plus
$75,000 if the Warehouse Expense Percentage is
less than 7.5%
Notwithstanding the foregoing:
A. The Executive's Annual Bonus for the year ended
December 31, 2003, as calculated pursuant to the
preceding formula, shall be reduced by an amount
equal to 10% of the amounts paid by the Company, or
charged to the Company by customers, for shipping
errors that occurred during the year ended December
31, 2003, where such shipping errors were the result
of warehouse error.
B. The Executive's Annual Bonus for the year ended
December 31, 2003, shall be further reduced by (i)
2.0% for every month in which the value of Unshipped
Orders exceeds 15% of the value of shipments for that
month, and (ii) an additional 3.0% for every month in
which the value of Unshipped Orders exceeds 25% of
the value of shipments for that month. Unshipped
Orders shall exclude the value of (a) orders
completed at least three (3) business days prior to
the last shipping day of the month but not picked up
by customers, and (b) orders not shipped due to "Item
Not Available." Item Not Available means any item or
component that was not received in the warehouse at
least three (3) days prior to the shipping date
specified by the customer, but shall exclude any
items or components that would have been available
other than for the failure to assemble, pick, pack,
ticket, label or otherwise process such item in a
timely manner. The provisions of this paragraph B.
shall not apply to any months prior to July 2003.
All calculations required to determine the
Executive's Annual Bonus hereunder shall be performed
by the Company's Chief Financial Officer.
EXHIBIT 10.40
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the date set forth on Schedule 1 by and
between Lifetime Hoan Corporation (the "Company"), a Delaware
corporation, having its principal place of business at One
Merrick Avenue, Westbury, NY 11590, and Bruce Cohen (the
"Executive"), residing at the address set forth on the signature
page hereof.
WHEREAS, the Company is engaged in the development, design,
sourcing, manufacturing, licensing, marketing, distribution and
sale, at both wholesale and retail, of proprietary housewares
products; including, without limitation, cutlery, kitchen tools
and gadgets, pantryware, bakeware, barware, and spices and the
Executive has many years of experience as an executive in the
industry; and
WHEREAS, the Company desires to employ the Executive in the
senior management position and with responsibility as set forth
on Schedule 2, and the Executive wishes to serve the Company in
such capacity, all in accordance with the terms and conditions
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by
the Executive and the Company as follows:
Employment; Term; Duties and Responsibilities. The Executive's
employment with the Company shall be subject to the following:
Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive in the senior management position set
forth in Schedule 2 and the Executive hereby agrees to be
employed by the Company in such capacity.
The term of this Agreement shall commence as of the date set
forth on Schedule 3 and shall continue through the initial
expiration date also set forth on Schedule 3 (the "Initial
Term"), unless earlier terminated as hereinafter provided. The
Executive's employment shall continue thereafter for consecutive
periods of one year (each, an "Additional Term"), unless either
the Executive or the Company gives written notice to the other no
later than thirty (30) days prior to the expiration of the
Initial Term or any Additional Term, as the case may be, of the
decision not to extend the Executive's employment. The period of
the Executive's employment hereunder shall hereinafter be
referred to as the "Employment Term."
Subject to the policy directions and instructions of the Board of
Directors of the Company (the "Board") and the Chief Executive
Officer ("CEO") of the Company, the Executive shall have
management responsibility as set forth on Schedule 2, and shall
perform such other duties as are consistent with his position and
as may be prescribed from time to time by the Board or the CEO.
The Executive shall report to the senior executive of the Company
set forth on Schedule 4.
The Executive shall devote all of his business time, attention
and energies to the business and affairs of the Company, and
shall use his best efforts to advance the best interests of the
Company.
The Executive's principal office location shall be as set forth
on Schedule 5; however, the Executive recognizes that frequent
travel, both within and outside the United States of America, may
be required in connection with his responsibilities under this
Agreement. In addition, Executive shall be expected to attend
regular meetings with the CEO of the Company and with other
executives of the Company, and to keep the CEO and such other
executives fully informed of Executive's activities, so as to
make the most effective use of Executive's services to the
Company.
Compensation. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
Base Salary. For the period commencing as set forth on Schedule 6
and ending on the completion of the initial base salary period
set forth on Schedule 6, the Company shall pay to the Executive a
base salary (the "Base Salary") at the annual rate as set forth
on Schedule 6, in accordance with the Company's normal payroll
practices.
Annual Bonus. The Executive shall be entitled to earn a bonus
(the "Annual Bonus") in accordance with terms and conditions set
forth on Schedule 7, during each calendar year of the Employment
Term commencing with the year designated as the first bonus year
on Schedule 7. The Company shall prepare an amended Schedule 7 or
a new Schedule 7 for each calendar year of the Employment Term.
The Company, in its sole discretion, may waive any of the terms
and conditions set forth on Schedule 7, or pay such additional
bonus, as it, in its sole discretion, may deem appropriate.
Calculation of Annual Bonus. The Company's Chief Financial
Officer shall calculate the Annual Bonus pursuant to the terms
and conditions set forth on Schedule 7. Such calculation shall be
final, and the Annual Bonus, if earned, shall be payable on or
before April 30 of the subsequent year.
Fringe Benefits. Except as specifically provided in this
Agreement, the Executive shall be provided with perquisites and
other fringe benefits to the same extent and on the same terms as
those benefits are provided generally to the Company's executive
employees. This shall include enrollment in the Company's
medical, dental and disability plans and participation in the
Company's 401(k) Plan under normal procedures under such plans.
Nothing in this paragraph 2(d) shall be construed to prevent the
Company from revising the benefits or perquisites generally
provided to executives from time to time. The Executive shall
complete all forms and physical examinations, and otherwise take
all other necessary actions to secure coverage and benefits
described in this paragraph 2(d).
Expenses. The Executive is authorized to incur reasonable
expenses for travel, meals, lodging, entertainment and similar
items in the performance of his duties for the Company in
accordance with Company policies. The Company will reimburse the
Executive for all reasonable business expenses so incurred,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company. The Executive shall not be permitted to use Company
personnel, vehicles or equipment for personal purposes. The
charging of expenses to the Company in violation of Company
policy will subject Executive to termination pursuant to Section
3(d) below.
Automobile Allowance. During the Employment Term, the Company
shall pay the Executive an automobile allowance in the amount per
month set forth on Schedule 8. The allowance provided by the
Company is intended to cover all expenses associated with
Executive's use of an automobile for Company business, so that no
other expenses relating to such automobile use will be
reimbursed, except gas and tolls incurred in using such
automobile for Company business.
Time Bank. The Executive shall be entitled to paid leave in
accordance with the Company's Time Bank policies.
Deductions; Set-Off. The compensation payable to the Executive
hereunder shall be subject to all legally required withholding
and deductions. The Company shall be entitled to set-off any
amounts owed to it by the Executive against all amounts owed by
the Company to the Executive by operation of this Agreement.
In the event Executive's employment hereunder is terminated for
any reason, the Company shall permit the Executive to purchase
any life insurance policy in force on the Termination Date at the
value of such policy on the Company's books. The Company shall
not be obligated to offer such benefit if it is not provided by
the life insurance company.
Termination. During the Employment Term, the Executive's
employment shall terminate upon the events or circumstances
described in paragraphs 3(a) through 3(e) below.
Death. The Executive's employment hereunder shall terminate upon
his death.
Total Disability. The Company may terminate the Executive's
employment as a result of the Executive's Total Disability.
"Total Disability" means the failure of the Executive, after
reasonable accommodation, to perform the essential functions of
his position for an aggregate period of nine (9) months (whether
or not continuous) during any twelve (12) month period by reason
of the Executive's physical or mental disability.
Termination by the Executive. The Executive may terminate his
employment hereunder at any time for Good Reason or without Good
Reason by giving the Company prior written notice of termination,
which notice of termination shall be effective not less than
thirty (30) days after it is given to the Company. A termination
for "Good Reason" shall mean termination by the Executive within
60 days following, and as a result of:
A material diminution in the Executive's position, authority,
duties or responsibilities; or
A reduction in the Executive's Base Salary (other than a
reduction not greater than 20% as part of a general reduction in
compensation applied equitably to all senior executives of the
Company); or
A material change in the structure of the Executive's Annual
Bonus; or
The relocation of Executive's principal office location outside
of Long Island, New York; or
A material breach by the Company of any provision of this
Agreement.
Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
The Executive's conviction of a felony or any other crime
involving fraud, embezzlement or bribery;
The Executive's indictment for, entering a plea of guilty or nolo
contendere, or agreeing to a civil penalty or entering into a
consent decree, in connection with any criminal act or any
banking or securities law violation related to the Company;
The Executive's having committed an act of disloyalty, dishonesty
or breach of trust relating to the Company;
The engaging by the Executive in misconduct involving moral
turpitude;
The willful engaging by the Executive in conduct that, in the
reasonable judgment of the Board, is materially injurious to the
Company, or has or threatens to have a material adverse impact on
the Company;
The Executive's failure to maintain decorum or professional
behavior that, in the reasonable judgment of the Board,
materially affects the Executive's credibility or reputation;
The Executive's repeated abuse of alcohol or drugs (legal or
illegal), that, in the reasonable judgment of the Board,
materially impairs the Executive's ability to perform his duties
hereunder;
The engaging by the Executive in misconduct in material violation
of the Company's personnel policies; including, but not limited
to, harassment, disparagement or abusive treatment of personnel,
customers, licensees, licensors, vendors, suppliers or
contractors of the Company;
The willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive being Disabled);
The Executive's extended absences without permission, failure to
work on a full time basis, or charging of material improper
expenses to the Company.
The Executive's failure to cure, within ten (10) days of
receiving written notice of same by the Company (to the extent a
cure is possible), any gross neglect, gross misconduct or act
outside the scope of his authority engaged in by the Executive;
The Executive's willful violation or failure to follow the lawful
instructions and directions of the Board, the CEO or the
Company's policies; or
The breach or violation of any provision of this Agreement,
including, but not limited to, the confidentiality and non-
competition provisions set forth in paragraphs 7 and 8 hereof.
Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder at any time
without Cause and for any reason or for no reason, by giving the
Executive written notice of termination, which notice of
termination shall be effective immediately, or at such later time
as specified in such notice. The Company shall not be required to
specify a reason for the termination of the Executive's
employment pursuant to this paragraph 3(e), provided that
termination of the Executive's employment by the Company shall be
deemed to have occurred under this paragraph 3(e) only if none of
the reasons specified in paragraph 3(a), 3(b), 3(c) or 3(d) shall
be applicable.
Termination Date. "Termination Date" means the last day that the
Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
Effect of Termination. If, on the Termination Date, the Executive
is a member of the Board of Directors of the Company or any
subsidiary or affiliate of the Company, or holds any position
with the Company or any subsidiary of the Company other than the
position specified in paragraph 1(a) hereof, the Executive shall
resign from all such positions as of the Termination Date.
Rights Upon Termination or Company's Failure to Renew. The
Executive's right to payment and benefits under this Agreement
for periods after the Termination Date shall be determined in
accordance with the following provisions of this paragraph 4:
General. If the Executive's employment hereunder is terminated
during the Employment Term for any reason, the Company shall pay
to the Executive:
The Executive's Base Salary for the period ending on the
Termination Date.
Payment for unused Time Bank days, as determined in accordance
with Company Time Bank policy, as in effect from time to time.
If the Termination Date occurs after the end of a fiscal year and
prior to payment of an Annual Bonus earned by the Executive for
such fiscal year, the Executive shall be paid the Annual Bonus
for such fiscal year at the regularly scheduled time.
The Executive and any of his dependents shall be eligible for
medical continuation coverage under the provisions of section
4980B of the Internal Revenue Code or section 601 of the Employee
Retirement Income Security Act (sometimes called "COBRA
coverage") to the extent required by applicable law. All other
benefits and perquisites otherwise provided under this Agreement
shall be discontinued on the Termination Date.
Notwithstanding the foregoing, Executive shall retain all rights
under the Company's 401K plan, all rights under the Company's
stock option plan or any stock option agreement between himself
and the Company and any conversion rights under any non-health
insurance policy under which he has coverage.
Death. If the Executive's employment hereunder is terminated by
reason of the Executive's death, then, in addition to the amounts
payable in accordance with paragraph 4(a), the Executive's estate
shall receive payment of the Annual Bonus for the fiscal year in
which the Termination Date occurs, computed as provided in
Section 2(b) for the entire fiscal year, and payable at the same
time as the Annual Bonus would otherwise have been paid;
provided, however, that the amount of the Annual Bonus shall be
subject to a pro-rata reduction for the portion of the fiscal
year following the Termination Date ("Pro-Rated Annual Bonus").
Disability. If the Executive's employment hereunder is terminated
by reason of the Executive's Total Disability, then, in addition
to the amounts payable in accordance with paragraph 4(a), the
Executive shall receive payment of the Pro-Rated Annual Bonus for
the fiscal year in which the Termination Date occurs, and payable
at the same time as the Annual Bonus would otherwise have been
paid.
Cause. If the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(d) relating to
the termination for Cause, then, except as otherwise expressly
provided in this Agreement, the Company shall have no obligation
to make payments under this Agreement for any period after the
Termination Date.
Resignation. If the Executive's employment hereunder is
terminated by the Executive without Good Reason, as provided in
paragraph 3(c) relating to the Executive's resignation, then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under this
Agreement for any period after the Termination Date.
Termination by the Company Without Cause or Termination by the
Executive for Good Reason. If the Executive's employment
hereunder is terminated by the Company Without Cause, as provided
in paragraph 3(e) or by the Executive for Good Reason, as
provided in paragraph 3(c), then in addition to the amounts
payable in accordance with paragraph 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9.
Notwithstanding the foregoing, the Executive shall not receive
any amounts, rights or benefits under this paragraph 4(f) that
are due on or after the date that is 121 days after the
Termination Date unless and until he executes a release of claims
against the Company, in a form reasonably acceptable to the
Company, which release excepts therefrom (i) any obligations of
the Company due pursuant to the terms of this Agreement and (ii)
any claims made by or on behalf of the Executive, in writing,
prior to the delivery of said release.
Failure of the Company to Renew. Upon the expiration of the
Initial Term or any Additional Term of this Agreement, if the
Company shall notify the Executive of its desire not to renew the
term of this Agreement for the next Additional Term of one (1)
year, and the Executive notifies the Company in writing that the
Executive is ready, willing and able to renew the term of this
Agreement for the next Additional Term of one (1) year, and the
Company at such time did not have grounds to terminate the
Executive's employment for "Cause" as described in Section 3(d)
above, then the Company's failure to renew shall be treated in
the same manner as a termination without "Cause" and in addition
to the amounts payable under Section 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. For
purposes hereof, any offer by the Company to renew or extend the
term of this Agreement pursuant to terms less favorable to the
Executive than those in effect shall be deemed to be notification
of the Company's decision not to renew the term of this Agreement
and decision not to extend the Executive's employment.
Notwithstanding the foregoing, the Executive shall not receive
any amounts, rights or benefits under this paragraph 4(g) that
are due on or after the date that is 121 days after the
Termination Date unless and until he executes a release of claims
against the Company, in a form reasonably acceptable to the
Company, which release excepts therefrom (i) any obligations of
the Company due pursuant to the terms of this Agreement and (ii)
any claims made by or on behalf of the Executive, in writing,
prior to the delivery of said release.
Other Benefits. The Executive's rights under this paragraph 4
shall be in lieu of any benefits that may be otherwise payable to
or on behalf of the Executive pursuant to the terms of any
severance pay arrangement of the Company, or any similar
arrangement of the Company providing benefits upon termination of
employment.
Severance Reduced by Other Compensation. Payments by the Company
of Base Salary for any period after the Termination Date and
through the Severance Expiration Date (the "Severance Period"),
if any, that are required to be made pursuant to the terms of
paragraphs 4(f) or 4(g), shall be reduced and offset by any
compensation (in excess of that amount received by the Executive
as Base Salary and Annual Bonus for the prior calendar year)
Executive receives which is attributable to services performed
for other enterprises during such period, whether characterized
as salary, bonus, consulting fees, commissions, distributions or
otherwise. Executive shall promptly inform the Company of his
securing new employment, consulting or similar engagements during
the Severance Period and the compensation to be received by
Executive thereunder so that the Company can make adjustments to,
or terminate payments of, Base Salary. At the request of the
Company, Executive shall provide copies of the Executive's
federal income tax returns covering such Severance Period. Any
overpayments by the Company with respect to the Severance Period
shall be promptly refunded by Executive to the Company.
Duties on Termination. During the period beginning on the date
notice is given of (a) the decision not to extend the Executive's
employment beyond the expiration of the Initial or Additional
Term then in effect or (b) termination of the Executive's
employment pursuant to paragraphs 3(c), 3(d) or 3(e), and ending
on the Termination Date, the Executive shall continue to perform
him duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate
for a smooth transition to the Executive's successor, if any.
Notwithstanding the foregoing, the Company may suspend the
Executive from performing his duties under this Agreement
following the giving of the notices contemplated by this
paragraph 5; provided, however, that during the period of
suspension (which shall end on the Termination Date), the
Executive shall continue to be treated as employed by the Company
for other purposes, and his rights to compensation or benefits
shall not be reduced by reason of the suspension.
Inventions. The Executive shall disclose promptly to the Company
any and all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the business of the Company,
developed, initiated, conceived or made by him, alone or in
conjunction with others, during the Employment Term, all of which
shall be considered "work for hire," and the Executive shall
assign, without additional consideration, all of his right, title
and interest therein to the Company or it nominee. Whenever
requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain letters
patent, trademarks or copyrights of the United States or any
foreign country, or otherwise protect the Company's interest
therein. These obligations shall continue beyond the conclusion
of the Employment Term with respect to inventions, discoveries,
improvements or copyrightable works made by the Executive during
the Employment Term and shall be binding upon the Executive's
assigns, executors, administrators and other legal
representatives.
Confidentiality. The Executive acknowledges and agrees that the
Company owns, controls and has exclusive access to a body of
existing technical knowledge and technology, and that the Company
has expended and is expending substantial resources in a
continuing program of research, development and production with
respect to its business. The Company possesses and will continue
to possess information that has been or will be created,
discovered or developed, or has or will otherwise become known to
the Company, and/or in which property rights have been or will be
assigned or otherwise conveyed to the Company, which information
has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter
called "Confidential Information." By way of illustration but not
limitation, Confidential Information includes all product designs
and development plans, costs, profits, pricing policies, sales
records, terms and conditions of license, purchase, distributor
or franchise arrangements, data, compilations, blueprints, plans,
audio and/or visual recordings and/or devices, information on
computer disks, software in various stages of development, source
codes, tapes, printouts and other printed, typewritten or
handwritten documents, specifications, strategies, systems,
schemes, methods (including delivery, storage, receipt,
transmission, presentation and manufacture of audio, visual,
informational or other data or content), business and marketing
development plans and projections, customer lists, prospects
lists, vendor lists, employee files and compensation data,
research projections, processes, techniques, designs, sequences,
components, programs, technology, ideas, know-how, improvements,
inventions (whether or not patentable or copyrightable),
information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information
concerning the actual or anticipated business, research or
development of the Company or its actual or potential customers
or partners or which is or has been generated or received in
confidence by the Company by or from any person, and all tangible
and intangible embodiments thereof of any kind whatsoever
including where appropriate and without limitation all
compositions, machinery, apparatus, records, reports, drawings,
copyright applications, patent applications, documents and
samples prototypes, models, products and the like. Confidential
Information also includes any such information as to which the
Company is bound under confidentiality and/or license,
distribution, purchase or franchise agreements with third
parties, and any information which the Company has obtained or
will obtain from its customers, vendors, licensors, licensees or
any other party and which the Company treats as confidential,
whether or not owned or developed by the Company. The Executive
understands that Confidential Information does not include any of
the foregoing that has become publicly known and made generally
available through no wrongful act by him or others who were under
confidentiality obligations as to such information.
Disclosure of Confidential Information to Executive. The
Executive acknowledges and agrees that his employment hereunder
creates a relationship of confidence and trust between the
Executive and the Company, and that by reason of such employment
the Executive will come into possession of, contribute to, have
access to and knowledge of Confidential Information.
Obligation to Keep Confidential. The Executive acknowledges and
confirms that all Confidential Information that comes into his
possession during the Employment Term (including any Confidential
Information originated or developed by the Executive) is or will
be the exclusive property of the Company. Further, during the
period of his employment hereunder and at all times thereafter,
the Executive shall use and hold such Confidential Information
solely for the benefit of the Company and shall not use
Confidential Information for the Executive's own benefit or for
the benefit of any third party. The Executive shall not, directly
or indirectly, disclose or reveal Confidential Information, in
any manner, to any person other than the Company's employees
unless required by law and, then, to the extent practicable, only
following prior written notice to the Company.
Return of Company Property. Upon termination of the Executive's
employment hereunder for any reason, or at any other time upon
the request of the Company, the Executive shall immediately
deliver or cause to be delivered to the Company all of the
Confidential Information in the Executive's possession or
control, including, without limitation: originals and/or copies
of books; catalogues; sales brochures; customer lists; vendor
lists; price lists; product design and development materials,
product data, employee manuals; operation manuals; marketing and
sales plans and strategies; files; computer disks; and all other
documents and materials, in any form whatsoever, reflecting or
referencing Confidential Information as well as all other
materials and equipment furnished to or acquired by the Executive
as a result of or during the course of the Executive's employment
by the Company.
Non-Solicitation and Non-Competition. The Executive acknowledges
that the Company has expended substantial time, money and effort
in developing and solidifying its relationships with customers,
vendors, licensors and licensees and developing certain brand
name or trademarked products; and that the Executive's
compensation hereunder represents consideration, among other
things, for the development and preservation of Confidential
Information, good will, loyalty and contacts for and on behalf of
the Company. Accordingly, the Executive covenants and agrees that
he will not under any circumstance, directly or indirectly, for
or on behalf of himself or any other person, firm or entity,
during the Executive's employment hereunder and for the
Restricted Period set forth on Schedule 10, following the
termination of such employment for any reason:
Solicit or accept business, in competition with the Company, from
any of the customers, or known customer prospects of the Company,
its subsidiaries, parent corporation or affiliates, or otherwise
induce or influence any such customer or known customer prospect
to reduce its volume of business, or terminate or divert its
relationship or otherwise in any way adversely affect its
relationship, with the Company, its subsidiaries, parent
corporation or affiliates; or
Employ, engage or retain, or solicit for employment, engagement
or retention, any person who, within the prior twelve (12)
months, was a director, officer, employee, consultant,
representative or agent of the Company, or encourage any such
person to terminate his or her employment or other relationship
with the Company; or
Engage in, be employed by or participate in any way in the United
States in any business that engages in any business that the
Company is engaging in, or is actively planning to engage in, on
the Termination Date (including, without limitation, the
development, design, sourcing, manufacturing, licensing,
marketing, distribution and sale of housewares products;
including, without limitation, cutlery, kitchen tools and
gadgets, pantryware, bakeware, barware, and spices or the
licensing of trademarks and brand names therefore). Such
prohibited engagement, employment or participation includes, but
is not limited to, acting as a director, officer, employee,
agent, member, manager, managing member, independent contractor,
partner, general partner, limited partner, consultant,
representative, salesman, licensor or licensee, franchisor or
franchisee, proprietor, syndicate member, shareholder or
creditor. Notwithstanding the foregoing, the Executive may own
or hold equity securities (or securities convertible into, or
exchangeable or exercisable for, equity securities) of companies
or entities that engage in a business that is the same or similar
to that of the Company or of its parent entities (if any) or any
of its subsidiaries or affiliates; provided, however, that (i)
such equity securities are publicly traded on a securities
exchange and (ii) the Executive's aggregate holdings of such
securities do not exceed at any time five percent (5%) of the
total issued and outstanding equity securities of such company or
entity.
The Company and the Executive expressly acknowledge and agree
that the scope of the Executive's promises specified in this
paragraph 8 are in each case reasonable and necessary to protect
the Confidential Information, trade secrets and good will of the
Company. In the event that, for any reason, any aspect of the
Executive's obligations specified in this paragraph 8 are
determined by a court of competent jurisdiction to be
unreasonable or unenforceable against him, such provisions shall,
if possible, be modified by such court to the minimum extent
required by law to make the provisions enforceable with respect
to the Executive.
Non-Disparagement. The Company and the Executive covenant and
agree that during the Employment Term and following termination
of the Employment Term, neither party will make any disparaging,
false or abusive remarks or communications, written or oral,
regarding the Executive or the Company, the Company's products,
brands, trademarks, officers, directors, employees, personnel,
licensors, licensees, customers, vendors or others with which it
has business relationships.
Specific Remedies. The Executive acknowledges that the Company
would be irreparably injured, and that it is impossible to
measure in money the damages which will accrue to the Company if
he shall breach or violate him covenants in paragraphs 6, 7, 8 or
9 hereof. Accordingly, the Executive agrees that if he shall
breach or violate any of such covenants or obligations, the
Company shall have the full right to seek injunctive relief in
addition to any other rights provided in this Agreement or by
operation of law, without the requirement of posting bond or
proving special damages, and to terminate any payments to the
Executive. In any action or proceeding instituted by the Company
to enforce the provisions of paragraph 6, 7, 8 or 9 of this
Agreement, the Executive waives any claim or defense that the
Company has an adequate remedy at law or that the Company has not
been, or is not being, irreparably injured by the Executive's
breach or violation. The provisions of paragraphs 6, 7, 8, 9 and
10 hereof shall survive any termination of this Agreement or the
Employment Term.
Acknowledgment by Executive. The Executive represent and warrants
that (i) he is not, and will not become party to any agreement,
contract, arrangement or understanding, whether or employment or
otherwise, that would in any way restrict or prohibit him from
undertaking or performing him duties in accordance with this
Agreement or that restricts him ability to be employed by the
Company in accordance with this Agreement; (ii) his position with
the Company, as described in this Agreement, will not require him
to improperly use any trade secrets or confidential information
of any prior employer, or any other person or entity for whom he
has performed services.
Arbitration of Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be
settled by final and binding arbitration in New York, New York by
three arbitrators. Except as otherwise expressly provided in this
paragraph 12, the arbitration shall be conducted in accordance
with the commercial rules of the American Arbitration Association
(the "Association") then in effect. One of the arbitrators shall
be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within the thirty (30) days of the appointment
of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This paragraph 12 shall not be
construed to limit the Company's right to obtain equitable relief
under this Agreement with respect to any matter or controversy
subject to this Agreement, and, pending, a final determination by
the arbitrators with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without
first being required to arbitrate such matter or controversy and
without the necessity of posting bond.
Notices. All notices and other communications hereunder shall be
deemed given upon (a) the sender's confirmation of receipt of a
facsimile transmission to the recipient's facsimile number set
forth below, (b) confirmed delivery by a standard overnight
carrier to the recipient's address set forth below, (c) delivery
by hand to the recipient's address set forth below or (d) the
expiration of five (5) business days after the day mailed in the
United States by certified or registered mail, postage prepaid,
return receipt requested, addressed to the recipient's addresses
set forth below (or, in each case, to or at such other facsimile
number or address for a party as such party may specify by notice
given in accordance with this paragraph 13):
If to the Company, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, New York 11590
Attention: Jeffrey Siegel, Chief Executive Officer
Facsimile: (516) 450-1017
If to the Executive, to the address set forth on the
signature page hereof.
Entire Agreement; Modification. This Agreement constitutes the
entire agreement and understanding of the parties with respect to
the matters set forth herein and supersedes all prior and
contemporaneous agreements and understandings between the parties
with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than
those set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the parties
hereto.
Waiver of Breach. Waiver by either party of a beach of any
provision of this Agreement by the other shall not operate as a
waiver of any other or subsequent breach by such other party.
Assignment. Neither this Agreement, nor the Executive's rights,
powers, duties or obligations hereunder, may be assigned by the
Executive. This Agreement may be assigned by the Company to any
successor in interest and the obligations hereunder shall be
binding on such third party assignee.
Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability the remainder of this Agreement shall continue
in full force and effect.
Survival. Notwithstanding the termination of this Agreement or
the Executive's employment hereunder, such provisions of this
Agreement as by their terms survive the termination of this
Agreement shall continue in full force and effect in accordance
with their respective terms.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without
giving effect to those laws that would require the application of
the substantive law of another jurisdiction). The Executive
hereby consents to the personal jurisdiction of the federal and
state courts located in New York in connection with any matter
arising out of this Agreement and confirms and agrees that any
claim against the Company, including without limitation,
enforcement of any arbitration award under paragraph 12 hereof
shall be brought only in the federal and state courts located in
New York.
Representation by Counsel; No Duress. The Executive acknowledges
that this Agreement has been negotiated at arm's length; that he
has full opportunity for representation by counsel in connection
with the negotiation and review of this Agreement, and has either
been adequately represented by counsel or has chosen to forego
him opportunity to be so represented; that this Agreement will be
deemed to have been drafted by both parties and, as such,
ambiguities shall not be construed against any one party; and
that he enters this Agreement freely and without duress or
compulsion of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
LIFETIME HOAN CORPORATION
By:
Printed Name:
Title:
Date:
EXECUTIVE
Printed Name:
Title:
Date:
ADDRESS OF EXECUTIVE:
EXECUTIVE EMPLOYMENT AGREEMENT
FOR
BRUCE COHEN
___________________________
SCHEDULE OF TERMS AND CONDITIONS
Schedule 1: Date of Agreement: July 1, 2003
Schedule 2: Title and Management Position; Responsibilities
Executive Vice President
Division President - Farberware Outlet Stores
Schedule 3:(a) Initial Term Commencement Date: July 1, 2003
(b) Initial Term Expiration Date: June 30, 2006
Schedule 4: Reporting Authority: Chief Executive Officer
Schedule 5: Principal Office Location: Westbury, NY
Schedule 6: Initial Base Salary per annum: $313,424.00
Initial Base Salary Commencement Period: January 1,
2003
Initial Base Salary Completion Period: December 31,
2003
Schedule 7: First Bonus Year: Year ended December 31, 2003
Calculation of Eligibility for Annual Bonus:
For the year ended December 31, 2003, Executive shall
receive an Annual Bonus of $50,000 if the EBIT of the
Farberware Outlet Stores Division for the year ended
December 31, 2003 shall equal or exceed $350,000.
EBIT of the Farberware Outlet Stores Division shall
be determined by subtracting from the Net Sales of
the Farberware Outlet Stores Division, the sum of (a)
the Cost of Goods Sold and (b) the actual Operating
Expenses of the Farberware Outlet Stores Division,
calculated in the same manner as in the year ended
December 31, 2002.
For the years ended December 31, 2004 and December
31, 2005, Executive shall receive an Annual Bonus
equal to 5% of the Contribution Dollars earned from
the Farberware Outlet Stores Division. Contribution
Dollars earned from the Farberware Outlet Stores
Division shall be determined by subtracting from the
Net Sales of the Division, the sum of (a) the Cost of
Goods Sold of that Division and (b) the actual
Operating Expenses of the Farberware Outlet Stores
Division and (c) Freight, Warehouse, Sales,
Marketing, Product Development, Graphics/Art and
General & Administrative Expenses, as allocated to
that Division by the Corporation's Finance
Department.
Notwithstanding the foregoing, the Executive shall
not be entitled to an Annual Bonus for any year for
which the Net Income of the Company is less than
$5,000,000. Net Income shall mean the net earnings of
the Company for the year ended December 31, 2003,
after deducting all federal, state and local taxes
and all other charges and reserves, as shown in the
Company's audited financial statements for that year.
Schedule 8: Automobile Allowance Per Month: $800 per month.
Schedule 9: Severance Expiration Date: The Severance Expiration
Date shall be twelve (12) months after the
Termination Date.
Schedule 10: The Restricted Period shall be two (2) years
following the Termination Date; provided, however, if
the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(e)
(relating to termination by the Company without
Cause), or paragraph 3(c) (relating to Termination by
the Executive for Good Reason) or at the end of the
Initial Term or any Additional Term, either party, or
both parties, choose(s) not to extend the Executive's
employment, then in any such case the Restricted
Period shall be one (1) year following the
Termination Date.
EXHIBIT 10.41
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the date set forth on Schedule 1 by and
between Lifetime Hoan Corporation (the "Company"), a Delaware
corporation, having its principal place of business at One
Merrick Avenue, Westbury, NY 11590, and Evan Miller (the
"Executive"), residing at the address set forth on the signature
page hereof.
WHEREAS, the Company is engaged in the development, design,
sourcing, manufacturing, licensing, marketing, distribution and
sale, at both wholesale and retail, of certain proprietary
housewares products; including, without limitation, cutlery,
kitchen tools and gadgets, pantryware, bakeware, barware, and
spices and the Executive has many years of experience as an
executive in the industry; and
WHEREAS, the Company desires to employ the Executive in the
senior management position and with responsibility as set forth
on Schedule 2, and the Executive wishes to serve the Company in
such capacity, all in accordance with the terms and conditions
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by
the Executive and the Company as follows:
Employment; Term; Duties and Responsibilities. The Executive's
employment with the Company shall be subject to the following:
Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive in the senior management position set
forth in Schedule 2 and the Executive hereby agrees to be
employed by the Company in such capacity.
The term of this Agreement shall commence as of the date set
forth on Schedule 3 and shall continue through the initial
expiration date also set forth on Schedule 3 (the "Initial
Term"), unless earlier terminated as hereinafter provided. The
Executive's employment shall continue thereafter for consecutive
periods of one year (each, an "Additional Term"), unless either
the Executive or the Company gives written notice to the other no
later than thirty (30) days prior to the expiration of the
Initial Term or any Additional Term, as the case may be, of the
decision not to extend the Executive's employment. The period of
the Executive's employment hereunder shall hereinafter be
referred to as the "Employment Term."
Subject to the policy directions and instructions of the Board of
Directors of the Company (the "Board") and the Chief Executive
Officer ("CEO") of the Company, the Executive shall have
management responsibility as set forth on Schedule 2, and shall
perform such other duties as are consistent with his position and
as may be prescribed from time to time by the Board or the CEO.
The Executive shall report to the senior executive of the Company
set forth on Schedule 4.
The Executive shall devote all of his business time, attention
and energies to the business and affairs of the Company, and
shall use his best efforts to advance the best interests of the
Company.
The Executive's principal office location shall be as set forth
on Schedule 5; however, the Executive recognizes that frequent
travel, both within and outside the United States of America, may
be required in connection with his responsibilities under this
Agreement. In addition, Executive shall be expected to attend
regular meetings with the CEO of the Company and with other
executives of the Company, and to keep the CEO and such other
executives fully informed of Executive's activities, so as to
make the most effective use of Executive's services to the
Company.
Compensation. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
Base Salary. For the period commencing as set forth on Schedule 6
and ending on the completion of the initial base salary period
set forth on Schedule 6, the Company shall pay to the Executive a
base salary (the "Base Salary") at the annual rate as set forth
on Schedule 6, in accordance with the Company's normal payroll
practices.
Annual Bonus. The Executive shall be entitled to earn a bonus
(the "Annual Bonus") in accordance with terms and conditions set
forth on Schedule 7, during each calendar year of the Employment
Term commencing with the year designated as the first bonus year
on Schedule 7. The Company, in its sole discretion, may waive any
of the terms and conditions set forth on Schedule 7, or pay such
additional bonus, as it, in its sole discretion, may deem
appropriate.
Calculation of Annual Bonus. The Company's Chief Financial
Officer shall calculate the Annual Bonus pursuant to the terms
and conditions set forth on Schedule 7. Such calculation shall be
final, and the Annual Bonus, if earned, shall be payable on or
before April 30 of the subsequent year.
Fringe Benefits. Except as specifically provided in this
Agreement, the Executive shall be provided with perquisites and
other fringe benefits to the same extent and on the same terms as
those benefits are provided generally to the Company's executive
employees. This shall include enrollment in the Company's
medical, dental and disability plans and participation in the
Company's 401(k) Plan under normal procedures under such plans.
Nothing in this paragraph 2(d) shall be construed to prevent the
Company from revising the benefits or perquisites generally
provided to executives from time to time. The Executive shall
complete all forms and physical examinations, and otherwise take
all other necessary actions to secure coverage and benefits
described in this paragraph 2(d).
Expenses. The Executive is authorized to incur reasonable
expenses for travel, meals, lodging, entertainment and similar
items in the performance of his duties for the Company in
accordance with Company policies. The Company will reimburse the
Executive for all reasonable business expenses so incurred,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company. The Executive shall not be permitted to use Company
personnel, vehicles or equipment for personal purposes, except
that the Executive may use a Company computer for personal
purposes as well as other Company property, so long as such
personal use is insignificant and incidental. The charging of
expenses to the Company in violation of Company policy will
subject Executive to termination pursuant to Section 3(d) below.
Automobile Allowance. During the Employment Term, the Company
shall pay the Executive an automobile allowance in the amount per
month set forth on Schedule 8. Such allowance is provided by the
Company to cover all expenses associated with Executive's use of
an automobile for Company business, so that no other expenses
relating to such automobile use will be reimbursed, except gas
and tolls incurred in using such automobile for Company business.
Time Bank. The Executive shall be entitled to paid leave in
accordance with the Company's Time Bank policies.
Deductions; Set-Off. The compensation payable to the Executive
hereunder shall be subject to all legally required withholding
and deductions. The Company shall be entitled to set-off any
amounts owed to it by the Executive against all amounts owed by
the Company to the Executive by operation of this Agreement.
In the event Executive's employment hereunder is terminated for
any reason, the Company shall permit the Executive to purchase
any life insurance policy in force on the Termination Date at the
value of such policy on the Company's books. The Company shall
not be obligated to offer such benefit if it is not provided by
the life insurance company.
Termination. During the Employment Term, the Executive's
employment shall terminate upon the events or circumstances
described in paragraphs 3(a) through 3(e) below.
Death. The Executive's employment hereunder shall terminate upon
his death.
Total Disability. The Company may terminate the Executive's
employment as a result of the Executive's Total Disability.
"Total Disability" means the failure of the Executive, after
reasonable accommodation, to perform the essential functions of
his position for an aggregate period of nine (9) months (whether
or not continuous) during any twelve (12) month period by reason
of the Executive's physical or mental disability.
Termination by the Executive. The Executive may terminate his
employment hereunder at any time for Good Reason or without Good
Reason by giving the Company prior written notice of termination,
which notice of termination shall be effective not less than
thirty (30) days after it is given to the Company. A termination
for "Good Reason" shall mean termination by the Executive within
60 days following, and as a result of:
A material diminution in the Executive's position, authority,
duties or responsibilities; or
A reduction in the Executive's Base Salary (other than a
reduction not greater than 20% as part of a general reduction in
compensation applied equitably to all senior executives of the
Company); or
A material change in the structure of the Executive's Annual
Bonus; or
The relocation of Executive's principal office location outside
of Long Island, New York.
Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
The Executive's conviction of a felony or any other crime
involving fraud, embezzlement or bribery;
The Executive's indictment for, entering a plea of guilty or nolo
contendere, or agreeing to a civil penalty or entering into a
consent decree, in connection with any criminal act or any
banking or securities law violation related to the Company;
The Executive's having committed an act of disloyalty, dishonesty
or breach of trust relating to the Company;
The engaging by the Executive in misconduct involving moral
turpitude;
The willful engaging by the Executive in conduct that, in the
reasonable judgment of the Board, is materially injurious to the
Company, or has or threatens to have a material adverse impact on
the Company;
The Executive's failure to maintain decorum or professional
behavior that, in the reasonable judgment of the Board,
materially affects the Executive's credibility or reputation;
The Executive's repeated abuse of alcohol or drugs (legal or
illegal), that, in the reasonable judgment of the Board,
materially impairs the Executive's ability to perform his duties
hereunder;
The engaging by the Executive in misconduct in material violation
of the Company's personnel policies; including, but not limited
to, harassment, disparagement or abusive treatment of personnel,
customers, licensees, licensors, vendors, suppliers or
contractors of the Company;
The willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive being Disabled);
The Executive's extended absences without permission, failure to
work on a full time basis, or charging of material improper
expenses to the Company.
The Executive's failure to cure, within ten (10) days of
receiving written notice of same by the Company (to the extent a
cure is possible), any gross neglect, gross misconduct or act
outside the scope of his authority engaged in by the Executive;
The Executive's willful violation or failure to follow the lawful
instructions and directions of the Board, the CEO or the
Company's policies; or
The breach or violation of any provision of this Agreement,
including, but not limited to, the confidentiality and non-
competition provisions set forth in paragraphs 7 and 8 hereof.
Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder at any time
without Cause and for any reason or for no reason, by giving the
Executive written notice of termination, which notice of
termination shall be effective immediately, or at such later time
as specified in such notice. The Company shall not be required to
specify a reason for the termination of the Executive's
employment pursuant to this paragraph 3(e), provided that
termination of the Executive's employment by the Company shall be
deemed to have occurred under this paragraph 3(e) only if none of
the reasons specified in paragraph 3(a), 3(b), 3(c) or 3(d) shall
be applicable.
Termination Date. "Termination Date" means the last day that the
Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
Effect of Termination. If, on the Termination Date, the Executive
is a member of the Board of Directors of the Company or any
subsidiary or affiliate of the Company, or holds any position
with the Company or any subsidiary of the Company other than the
position specified in paragraph 1(a) hereof, the Executive shall
resign from all such positions as of the Termination Date.
Rights Upon Termination or Company's Failure to Renew. The
Executive's right to payment and benefits under this Agreement
for periods after the Termination Date shall be determined in
accordance with the following provisions of this paragraph 4:
General. If the Executive's employment hereunder is terminated
during the Employment Term for any reason, the Company shall pay
to the Executive:
The Executive's Base Salary for the period ending on the
Termination Date.
Payment for unused Time Bank days, as determined in accordance
with Company Time Bank policy, as in effect from time to time.
If the Termination Date occurs after the end of a fiscal year and
prior to payment of an Annual Bonus earned by the Executive for
such fiscal year, the Executive shall be paid the Annual Bonus
for such fiscal year at the regularly scheduled time.
The Executive and any of his dependents shall be eligible for
medical continuation coverage under the provisions of section
4980B of the Internal Revenue Code or section 601 of the Employee
Retirement Income Security Act (sometimes called "COBRA
coverage") to the extent required by applicable law. All other
benefits and perquisites otherwise provided under this Agreement
shall be discontinued on the Termination Date.
Death. If the Executive's employment hereunder is terminated by
reason of the Executive's death, then, in addition to the amounts
payable in accordance with paragraph 4(a), the Executive's estate
shall receive payment of the Annual Bonus for the fiscal year in
which the Termination Date occurs, computed as provided in
Section 2(b) for the entire fiscal year, and payable at the same
time as the Annual Bonus would otherwise have been paid;
provided, however, that the amount of the Annual Bonus shall be
subject to a pro-rata reduction for the portion of the fiscal
year following the Termination Date ("Pro-Rated Annual Bonus").
Disability. If the Executive's employment hereunder is terminated
by reason of the Executive's Total Disability, then, in addition
to the amounts payable in accordance with paragraph 4(a), the
Executive shall receive payment of the Pro-Rated Annual Bonus for
the fiscal year in which the Termination Date occurs, and payable
at the same time as the Annual Bonus would otherwise have been
paid.
Cause. If the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(d) relating to
the termination for Cause, then, except as otherwise expressly
provided in this Agreement, the Company shall have no obligation
to make payments under this Agreement for any period after the
Termination Date.
Resignation. If the Executive's employment hereunder is
terminated by the Executive without Good Reason, as provided in
paragraph 3(c) relating to the Executive's resignation, then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under this
Agreement for any period after the Termination Date.
Termination by the Company Without Cause or Termination by the
Executive for Good Reason. If the Executive's employment
hereunder is terminated by the Company Without Cause, as provided
in paragraph 3(e) or by the Executive for Good Reason, as
provided in paragraph 3(c), then in addition to the amounts
payable in accordance with paragraph 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9.
Notwithstanding the foregoing, the Executive shall not receive
any amounts, rights or benefits under this paragraph 4(f) that
are due on or after the date that is 121 days after the
Termination Date unless and until he executes a release of claims
against the Company, in a form reasonably acceptable to the
Company, which release excepts therefrom (i) any obligations of
the Company due pursuant to the terms of this Agreement and (ii)
any claims made by or on behalf of the Executive, in writing,
prior to the delivery of said release.
Failure of the Company to Renew. Upon the expiration of the
Initial Term or any Additional Term of this Agreement, if the
Company shall notify the Executive of its desire not to renew the
term of this Agreement for the next Additional Term of one (1)
year, and the Executive notifies the Company in writing that the
Executive is ready, willing and able to renew the term of this
Agreement for the next Additional Term of one (1) year, and the
Company at such time did not have grounds to terminate the
Executive's employment for "Cause" as described in Section 3(d)
above, then the Company's failure to renew shall be treated in
the same manner as a termination without "Cause" and in addition
to the amounts payable under Section 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. For
purposes hereof, any offer by the Company to renew or extend the
term of this Agreement pursuant to terms less favorable to the
Executive than those in effect shall be deemed to be notification
of the Company's decision not to renew the term of this Agreement
and decision not to extend the Executive's employment.
Notwithstanding the foregoing, the Executive shall not receive
any amounts, rights or benefits under this paragraph 4(g) that
are due on or after the date that is 121 days after the
Termination Date unless and until he executes a release of claims
against the Company, in a form reasonably acceptable to the
Company, which release excepts therefrom (i) any obligations of
the Company due pursuant to the terms of this Agreement and (ii)
any claims made by or on behalf of the Executive, in writing,
prior to the delivery of said release.
Other Benefits. The Executive's rights under this paragraph 4
shall be in lieu of any benefits that may be otherwise payable to
or on behalf of the Executive pursuant to the terms of any
severance pay arrangement of the Company, or any similar
arrangement of the Company providing benefits upon termination of
employment.
Severance Reduced by Other Compensation. Payments by the Company
of Base Salary for any period after the Termination Date and
through the Severance Expiration Date (the "Severance Period"),
if any, that are required to be made pursuant to the terms of
paragraphs 4(f) or 4(g), shall be reduced and offset by any
compensation (in excess of that amount received by the Executive
as Base Salary and Annual Bonus for the prior calendar year)
Executive receives which is attributable to services performed
for other enterprises during such period, whether characterized
as salary, bonus, consulting fees, commissions, distributions or
otherwise. Executive shall promptly inform the Company of his
securing new employment, consulting or similar engagements during
the Severance Period and the compensation to be received by
Executive thereunder so that the Company can make adjustments to,
or terminate payments of, Base Salary. At the request of the
Company, Executive shall provide copies of the Executive's
federal income tax returns covering such Severance Period. Any
overpayments by the Company with respect to the Severance Period
shall be promptly refunded by Executive to the Company.
Duties on Termination. During the period beginning on the date
notice is given of (a) the decision not to extend the Executive's
employment beyond the expiration of the Initial or Additional
Term then in effect or (b) termination of the Executive's
employment pursuant to paragraphs 3(c), 3(d) or 3(e), and ending
on the Termination Date, the Executive shall continue to perform
him duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate
for a smooth transition to the Executive's successor, if any.
Notwithstanding the foregoing, the Company may suspend the
Executive from performing his duties under this Agreement
following the giving of the notices contemplated by this
paragraph 5; provided, however, that during the period of
suspension (which shall end on the Termination Date), the
Executive shall continue to be treated as employed by the Company
for other purposes, and his rights to compensation or benefits
shall not be reduced by reason of the suspension.
Inventions. The Executive shall disclose promptly to the Company
any and all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the business of the Company,
developed, initiated, conceived or made by him, alone or in
conjunction with others, during the Employment Term, all of which
shall be considered "work for hire," and the Executive shall
assign, without additional consideration, all of his right, title
and interest therein to the Company or it nominee. Whenever
requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain letters
patent, trademarks or copyrights of the United States or any
foreign country, or otherwise protect the Company's interest
therein. These obligations shall continue beyond the conclusion
of the Employment Term with respect to inventions, discoveries,
improvements or copyrightable works made by the Executive during
the Employment Term and shall be binding upon the Executive's
assigns, executors, administrators and other legal
representatives.
Confidentiality. The Executive acknowledges and agrees that the
Company owns, controls and has exclusive access to a body of
existing technical knowledge and technology, and that the Company
has expended and is expending substantial resources in a
continuing program of research, development and production with
respect to its business. The Company possesses and will continue
to possess information that has been or will be created,
discovered or developed, or has or will otherwise become known to
the Company, and/or in which property rights have been or will be
assigned or otherwise conveyed to the Company, which information
has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter
called "Confidential Information." By way of illustration but not
limitation, Confidential Information includes all product designs
and development plans, costs, profits, pricing policies, sales
records, terms and conditions of license, purchase, distributor
or franchise arrangements, data, compilations, blueprints, plans,
audio and/or visual recordings and/or devices, information on
computer disks, software in various stages of development, source
codes, tapes, printouts and other printed, typewritten or
handwritten documents, specifications, strategies, systems,
schemes, methods (including delivery, storage, receipt,
transmission, presentation and manufacture of audio, visual,
informational or other data or content), business and marketing
development plans and projections, customer lists, prospects
lists, vendor lists, employee files and compensation data,
research projections, processes, techniques, designs, sequences,
components, programs, technology, ideas, know-how, improvements,
inventions (whether or not patentable or copyrightable),
information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information
concerning the actual or anticipated business, research or
development of the Company or its actual or potential customers
or partners or which is or has been generated or received in
confidence by the Company by or from any person, and all tangible
and intangible embodiments thereof of any kind whatsoever
including where appropriate and without limitation all
compositions, machinery, apparatus, records, reports, drawings,
copyright applications, patent applications, documents and
samples prototypes, models, products and the like. Confidential
Information also includes any such information as to which the
Company is bound under confidentiality and/or license,
distribution, purchase or franchise agreements with third
parties, and any information which the Company has obtained or
will obtain from its customers, vendors, licensors, licensees or
any other party and which the Company treats as confidential,
whether or not owned or developed by the Company. The Executive
understands that Confidential Information does not include any of
the foregoing that has become publicly known and made generally
available through no wrongful act by him or others who were under
confidentiality obligations as to such information.
Disclosure of Confidential Information to Executive. The
Executive acknowledges and agrees that his employment hereunder
creates a relationship of confidence and trust between the
Executive and the Company, and that by reason of such employment
the Executive will come into possession of, contribute to, have
access to and knowledge of Confidential Information.
Obligation to Keep Confidential. The Executive acknowledges and
confirms that all Confidential Information that comes into his
possession during the Employment Term (including any Confidential
Information originated or developed by the Executive) is or will
be the exclusive property of the Company. Further, during the
period of his employment hereunder and at all times thereafter,
the Executive shall use and hold such Confidential Information
solely for the benefit of the Company and shall not use
Confidential Information for the Executive's own benefit or for
the benefit of any third party. The Executive shall not, directly
or indirectly, disclose or reveal Confidential Information, in
any manner, to any person other than the Company's employees
unless required by law and, then, to the extent practicable, only
following prior written notice to the Company.
Return of Company Property. Upon termination of the Executive's
employment hereunder for any reason, or at any other time upon
the request of the Company, the Executive shall immediately
deliver or cause to be delivered to the Company all of the
Confidential Information in the Executive's possession or
control, including, without limitation: originals and/or copies
of books; catalogues; sales brochures; customer lists; vendor
lists; price lists; product design and development materials,
product data, employee manuals; operation manuals; marketing and
sales plans and strategies; files; computer disks; and all other
documents and materials, in any form whatsoever, reflecting or
referencing Confidential Information as well as all other
materials and equipment furnished to or acquired by the Executive
as a result of or during the course of the Executive's employment
by the Company.
Non-Solicitation and Non-Competition. The Executive acknowledges
that the Company has expended substantial time, money and effort
in developing and solidifying its relationships with customers,
vendors, licensors and licensees and developing certain brand
name or trademarked products; and that the Executive's
compensation hereunder represents consideration, among other
things, for the development and preservation of Confidential
Information, good will, loyalty and contacts for and on behalf of
the Company. Accordingly, the Executive covenants and agrees that
he will not under any circumstance, directly or indirectly, for
or on behalf of himself or any other person, firm or entity,
during the Executive's employment hereunder and for the
Restricted Period set forth on Schedule 10, following the
termination of such employment for any reason:
Solicit or accept business, in competition with the Company, from
any of the customers, or known customer prospects of the Company,
its subsidiaries, parent corporation or affiliates, or otherwise
induce or influence any such customer or known customer prospect
to reduce its volume of business, or terminate or divert its
relationship or otherwise in any way adversely affect its
relationship, with the Company, its subsidiaries, parent
corporation or affiliates; or
Employ, engage or retain, or solicit for employment, engagement
or retention, any person who, within the prior twelve (12)
months, was a director, officer, employee, consultant,
representative or agent of the Company, or encourage any such
person to terminate his or her employment or other relationship
with the Company; or
Engage in, be employed by or participate in any way in the United
States in any business that engages in any business that the
Company is engaging in, or is actively planning to engage in, on
the Termination Date (including, without limitation, the
development, design, sourcing, manufacturing, licensing,
marketing, distribution and sale of certain housewares products;
including, without limitation, cutlery, kitchen tools and
gadgets, pantryware, bakeware, barware, and spices or the
licensing of trademarks and brand names therefore). Such
prohibited engagement, employment or participation includes, but
is not limited to, acting as a director, officer, employee,
agent, member, manager, managing member, independent contractor,
partner, general partner, limited partner, consultant,
representative, salesman, licensor or licensee, franchisor or
franchisee, proprietor, syndicate member, shareholder or
creditor. Notwithstanding the foregoing, the Executive may own
or hold equity securities (or securities convertible into, or
exchangeable or exercisable for, equity securities) of companies
or entities that engage in a business that is the same or similar
to that of the Company or of its parent entities (if any) or any
of its subsidiaries or affiliates; provided, however, that (i)
such equity securities are publicly traded on a securities
exchange and (ii) the Executive's aggregate holdings of such
securities do not exceed at any time five percent (5%) of the
total issued and outstanding equity securities of such company or
entity.
The Company and the Executive expressly acknowledge and agree
that the scope of the Executive's promises specified in this
paragraph 8 are in each case reasonable and necessary to protect
the Confidential Information, trade secrets and good will of the
Company. In the event that, for any reason, any aspect of the
Executive's obligations specified in this paragraph 8 are
determined by a court of competent jurisdiction to be
unreasonable or unenforceable against him, such provisions shall,
if possible, be modified by such court to the minimum extent
required by law to make the provisions enforceable with respect
to the Executive.
Non-Disparagement. The Company and the Executive covenant and
agree that during the Employment Term and following termination
of the Employment Term, neither party will make any disparaging,
false or abusive remarks or communications, written or oral,
regarding the Executive or the Company, the Company's products,
brands, trademarks, officers, directors, employees, personnel,
licensors, licensees, customers, vendors or others with which it
has business relationships.
Specific Remedies. The Executive acknowledges that the Company
would be irreparably injured, and that it is impossible to
measure in money the damages which will accrue to the Company if
he shall breach or violate him covenants in paragraphs 6, 7, 8 or
9 hereof. Accordingly, the Executive agrees that if he shall
breach or violate any of such covenants or obligations, the
Company shall have the full right to seek injunctive relief in
addition to any other rights provided in this Agreement or by
operation of law, without the requirement of posting bond or
proving special damages, and to terminate any payments to the
Executive. In any action or proceeding instituted by the Company
to enforce the provisions of paragraph 6, 7, 8 or 9 of this
Agreement, the Executive waives any claim or defense that the
Company has an adequate remedy at law or that the Company has not
been, or is not being, irreparably injured by the Executive's
breach or violation. The provisions of paragraphs 6, 7, 8, 9 and
10 hereof shall survive any termination of this Agreement or the
Employment Term.
Acknowledgment by Executive. The Executive represent and
warrants that (i) he is not, and will not become party to any
agreement, contract, arrangement or understanding, whether or
employment or otherwise, that would in any way restrict or
prohibit him from undertaking or performing him duties in
accordance with this Agreement or that restricts him ability to
be employed by the Company in accordance with this Agreement;
(ii) his position with the Company, as described in this
Agreement, will not require him to improperly use any trade
secrets or confidential information of any prior employer, or any
other person or entity for whom he has performed services.
Arbitration of Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be
settled by final and binding arbitration in New York, New York by
three arbitrators. Except as otherwise expressly provided in this
paragraph 12, the arbitration shall be conducted in accordance
with the commercial rules of the American Arbitration Association
(the "Association") then in effect. One of the arbitrators shall
be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within the thirty (30) days of the appointment
of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This paragraph 12 shall not be
construed to limit the Company's right to obtain equitable relief
under this Agreement with respect to any matter or controversy
subject to this Agreement, and, pending, a final determination by
the arbitrators with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without
first being required to arbitrate such matter or controversy and
without the necessity of posting bond.
Notices. All notices and other communications hereunder shall be
deemed given upon (a) the sender's confirmation of receipt of a
facsimile transmission to the recipient's facsimile number set
forth below, (b) confirmed delivery by a standard overnight
carrier to the recipient's address set forth below, (c) delivery
by hand to the recipient's address set forth below or (d) the
expiration of five (5) business days after the day mailed in the
United States by certified or registered mail, postage prepaid,
return receipt requested, addressed to the recipient's addresses
set forth below (or, in each case, to or at such other facsimile
number or address for a party as such party may specify by notice
given in accordance with this paragraph 13):
If to the Company, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, New York 11590
Attention: Jeffrey Siegel, Chief Executive Officer
Facsimile: (516) 450-1017
If to the Executive, to the address set forth on the
signature page hereof.
Entire Agreement; Modification. This Agreement constitutes the
entire agreement and understanding of the parties with respect to
the matters set forth herein and supersedes all prior and
contemporaneous agreements and understandings between the parties
with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than
those set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the parties
hereto.
Waiver of Breach. Waiver by either party of a beach of any
provision of this Agreement by the other shall not operate as a
waiver of any other or subsequent breach by such other party.
Assignment. Neither this Agreement, nor the Executive's rights,
powers, duties or obligations hereunder, may be assigned by the
Executive. This Agreement may be assigned by the Company to any
successor in interest and the obligations hereunder shall be
binding on such third party assignee.
Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability the remainder of this Agreement shall continue
in full force and effect.
Survival. Notwithstanding the termination of this Agreement or
the Executive's employment hereunder, such provisions of this
Agreement as by their terms survive the termination of this
Agreement shall continue in full force and effect in accordance
with their respective terms.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without
giving effect to those laws that would require the application of
the substantive law of another jurisdiction). The Executive
hereby consents to the personal jurisdiction of the federal and
state courts located in New York in connection with any matter
arising out of this Agreement and confirms and agrees that any
claim against the Company, including without limitation,
enforcement of any arbitration award under paragraph 12 hereof
shall be brought only in the federal and state courts located in
New York.
Representation by Counsel; No Duress. The Executive acknowledges
that this Agreement has been negotiated at arm's length; that he
has full opportunity for representation by counsel in connection
with the negotiation and review of this Agreement, and has either
been adequately represented by counsel or has chosen to forego
him opportunity to be so represented; that this Agreement will be
deemed to have been drafted by both parties and, as such,
ambiguities shall not be construed against any one party; and
that he enters this Agreement freely and without duress or
compulsion of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
LIFETIME HOAN CORPORATION
By:
Printed Name:
Title:
Date:
EXECUTIVE
Printed Name:
Title:
Date:
ADDRESS OF EXECUTIVE:
EXECUTIVE EMPLOYMENT AGREEMENT
FOR
EVAN MILLER
___________________________
SCHEDULE OF TERMS AND CONDITIONS
Schedule 1: Date of Agreement: July 1, 2003
Schedule 2: Title and Management Position; Responsibilities:
Executive Vice President
President - Sales Division
Schedule 3: Initial Term Commencement Date: July 1, 2003
Initial Term Expiration Date: July 31, 2006
Schedule 4: Reporting Authority: Chief Executive Officer
Schedule 5: Principal Office Location: Westbury, NY
Schedule 6: Initial Base Salary per annum $313,424.00
Initial Base Salary Commencement Period: January 1,
2003
Schedule 7: First Bonus Year: Year ended December 31, 2003
Calculation of Eligibility for Annual Bonus:
Executive shall receive an Annual Bonus of not less
than 2.5% of the Net Income of the Company. Net
Income shall mean the net earnings of the Company,
after deducting all federal, state and local taxes
and all other charges and reserves, as reported in
the Company's audited financial statements for that
year. Notwithstanding the foregoing, Executive shall
not be eligible for any Annual Bonus for any year in
which the Net Income of the Company is less than
$5,000,000.
Schedule 8: Automobile Allowance Per Month: $1000 per month
Schedule 9: Severance Expiration Date: The Severance Expiration
Date shall be twelve (12) months after the
Termination Date.
Schedule 10: The Restricted Period shall be two (2) years
following the Termination Date; provided, however, if
the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(e)
(relating to termination by the Company without
Cause), or paragraph 3(c) (relating to Termination by
the Executive for Good Reason) or at the end of the
Initial Term or any Additional Term, either party, or
both parties, choose(s) not to extend the Executive's
employment, then in any such case the Restricted
Period shall be one (1) year following the
Termination Date.
EXHIBIT 10.42
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of the date set forth on Schedule 1 by and
between Lifetime Hoan Corporation (the "Company"), a Delaware
corporation, having its principal place of business at One
Merrick Avenue, Westbury, NY 11590, and Robert Reichenbach (the
"Executive"), residing at the address set forth on the signature
page hereof.
WHEREAS, the Company is engaged in the development, design,
sourcing, manufacturing, licensing, marketing, distribution and
sale, at both wholesale and retail, of proprietary housewares
products; including, without limitation, cutlery, kitchen tools
and gadgets, kitchenware, pantryware, bakeware, barware, and
spices and the Executive has many years of experience as an
executive in the industry; and
WHEREAS, the Company desires to employ the Executive in the
senior management position and with responsibility as set forth
on Schedule 2, and the Executive wishes to serve the Company in
such capacity, all in accordance with the terms and conditions
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, it is hereby covenanted and agreed by
the Executive and the Company as follows:
Employment; Term; Duties and Responsibilities. The Executive's
employment with the Company shall be subject to the following:
Subject to the terms of this Agreement, the Company hereby agrees
to employ the Executive in the senior management position set
forth in Schedule 2 and the Executive hereby agrees to be
employed by the Company in such capacity.
The term of this Agreement shall commence as of the date set
forth on Schedule 3 and shall continue through the initial
expiration date also set forth on Schedule 3 (the "Initial
Term"), unless earlier terminated as hereinafter provided. The
Executive's employment shall continue thereafter for consecutive
periods of one year (each, an "Additional Term"), unless either
the Executive or the Company gives written notice to the other no
later than thirty (30) days prior to the expiration of the
Initial Term or any Additional Term, as the case may be, of the
decision not to extend the Executive's employment. The period of
the Executive's employment hereunder shall hereinafter be
referred to as the "Employment Term."
Subject to the policy directions and instructions of the Board of
Directors of the Company (the "Board") and the Chief Executive
Officer ("CEO") of the Company, the Executive shall have
management responsibility as set forth on Schedule 2, and shall
perform such other duties as are consistent with his position and
as may be prescribed from time to time by the Board or the CEO.
The Executive shall report to the CEO.
The Executive shall devote all of his business time, attention
and energies to the business and affairs of the Company, and
shall use his best efforts to advance the best interests of the
Company.
The Executive's principal office location shall be as set forth
on Schedule 5; however, the Executive recognizes that frequent
travel, both within and outside the United States of America, may
be required in connection with his responsibilities under this
Agreement. In addition, Executive shall be expected to attend
regular meetings with the CEO of the Company and with other
executives of the Company, and to keep the CEO and such other
executives fully informed of Executive's activities, so as to
make the most effective use of Executive's services to the
Company.
Compensation. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
Base Salary. Subject to the terms of this Agreement, during the
Employment Term, while the Executive is employed by the Company,
the Company shall compensate him for his services as follows:
For the period commencing on January 1, 2003 and ending on
December 31, 2003, the Company shall pay to the Executive an
annual base salary (the "Base Salary") of $250,000.
For the period commencing on January 1, 2004, and ending on
December 31, 2004, the Company shall pay to the Executive a Base
Salary of $300,000.
For the period commencing on January 1, 2005, and ending on
December 31, 2005, the Company shall pay to the Executive a Base
Salary of $350,000, provided that the Company's Diluted Earnings
Per Share for 2004, as shown in the Company's audited financial
statements for 2004, shall have exceeded the Company's Diluted
Earnings Per Share for 2003.
For each annual period thereafter, beginning with the period
commencing on January 1, 2006, and ending on December 31, 2006,
the Company shall increase the Executive's Base Salary in
proportion to the increase, if any, in the Company's Diluted
Earnings Per Share for its most recent year, as compared to the
Company's Diluted Earnings Per Share for the prior year. The
Company's obligation to increase the Executive's Base Salary
annually pursuant to this paragraph 2(a)(iv) shall be limited to
$50,000 per year.
Annual Bonus. The Executive shall be entitled to earn a bonus
(the "Annual Bonus") in accordance with terms and conditions set
forth on Schedule 7, during each calendar year of the Employment
Term commencing with the year designated as the first bonus year
on Schedule 7. The Company shall prepare an amended Schedule 7 or
a new Schedule 7 for each calendar year of the Employment Term.
The Company, in its sole discretion, may waive any of the terms
and conditions set forth on Schedule 7, or pay such additional
bonus, as it, in its sole discretion, may deem appropriate.
Calculation of Annual Bonus. The Company's Chief Financial
Officer shall calculate the Annual Bonus pursuant to the terms
and conditions set forth on Schedule 7. Such calculation shall be
final, and the Annual Bonus, if earned, shall be payable on or
before April 30 of the subsequent year.
Fringe Benefits. Except as specifically provided in this
Agreement, the Executive shall be provided with perquisites and
other fringe benefits to the same extent and on the same terms as
those benefits are provided generally to the Company's executive
employees. This shall include enrollment in the Company's
medical, dental and disability plans and participation in the
Company's 401(k) Plan under normal procedures under such plans.
Nothing in this paragraph 2(d) shall be construed to prevent the
Company from revising the benefits or perquisites generally
provided to executives from time to time. The Executive shall
complete all forms and physical examinations, and otherwise take
all other necessary actions to secure coverage and benefits
described in this paragraph 2(d).
Expenses. The Executive is authorized to incur reasonable
expenses for travel, meals, lodging, entertainment and similar
items in the performance of his duties for the Company in
accordance with Company policies. The Company will reimburse the
Executive for all reasonable business expenses so incurred,
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the
Company. The Executive shall not be permitted to use Company
personnel, vehicles or equipment for personal purposes. The
charging of expenses to the Company in violation of Company
policy will subject Executive to termination pursuant to Section
3(d) below.
Automobile Allowance. During the Employment Term, the Company
shall pay the Executive an automobile allowance in the amount per
month set forth on Schedule 8 or shall provide Executive with a
Company vehicle as described on Schedule 8. If an allowance is
provided by the Company, it is intended to cover all expenses
associated with Executive's use of an automobile for Company
business, so that no other expenses relating to such automobile
use will be reimbursed, except gas and tolls incurred in using
such automobile for Company business.
Time Bank. The Executive shall be entitled to paid leave in
accordance with the Company's Time Bank policies.
Deductions; Set-Off. The compensation payable to the Executive
hereunder shall be subject to all legally required withholding
and deductions. The Company shall be entitled to set-off any
amounts owed to it by the Executive against all amounts owed by
the Company to the Executive by operation of this Agreement.
Termination. During the Employment Term, the Executive's
employment shall terminate upon the events or circumstances
described in paragraphs 3(a) through 3(e) below.
Death. The Executive's employment hereunder shall terminate upon
his death.
Total Disability. The Company may terminate the Executive's
employment as a result of the Executive's Total Disability.
"Total Disability" means the failure of the Executive, after
reasonable accommodation, to perform the essential functions of
his position for an aggregate period of nine (9) months (whether
or not continuous) during any twelve (12) month period by reason
of the Executive's physical or mental disability.
Termination by the Executive. The Executive may terminate his
employment hereunder at any time for Good Reason or without Good
Reason by giving the Company prior written notice of termination,
which notice of termination shall be effective not less than
thirty (30) days after it is given to the Company. A termination
for "Good Reason" shall mean termination by the Executive within
60 days following, and as a result of:
A material diminution in the Executive's position, authority,
duties or responsibilities; or
A reassignment of the Executive to a position not reporting
directly to the CEO; or
A reduction in the Executive's Base Salary (other than a
reduction not greater than 20% as part of a general reduction in
compensation applied equitably to all senior executives of the
Company).
Termination by the Company for Cause. The Company may terminate
the Executive's employment hereunder at any time for Cause. For
purposes of this Agreement, "Cause" shall mean:
The Executive's conviction of a felony or any other crime
involving fraud, embezzlement or bribery;
The Executive's indictment for, entering a plea of guilty or nolo
contendere, or agreeing to a civil penalty or entering into a
consent decree, in connection with any criminal act or any
banking or securities law violation related to the Company;
The Executive's having committed an act of disloyalty, dishonesty
or breach of trust relating to the Company;
The engaging by the Executive in misconduct involving moral
turpitude;
The willful engaging by the Executive in conduct that, in the
reasonable judgment of the Board, is materially injurious to the
Company, or has or threatens to have a material adverse impact on
the Company;
The Executive's failure to maintain decorum or professional
behavior that, in the reasonable judgment of the Board,
materially affects the Executive's credibility or reputation;
The Executive's repeated abuse of alcohol or drugs (legal or
illegal), that, in the reasonable judgment of the Board,
materially impairs the Executive's ability to perform his duties
hereunder;
The engaging by the Executive in misconduct in material violation
of the Company's personnel policies; including, but not limited
to, harassment, disparagement or abusive treatment of personnel,
customers, licensees, licensors, vendors, suppliers or
contractors of the Company;
The willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive being Disabled);
The Executive's extended absences without permission, failure to
work on a full time basis, or charging of material improper
expenses to the Company.
The Executive's failure to cure, within ten (10) days of
receiving written notice of same by the Company (to the extent a
cure is possible), any gross neglect, gross misconduct or act
outside the scope of his authority engaged in by the Executive;
The Executive's willful violation or failure to follow the lawful
instructions and directions of the Board, the CEO or the
Company's policies; or
The breach or violation of any provision of this Agreement,
including, but not limited to, the confidentiality and non-
competition provisions set forth in paragraphs 7 and 8 hereof.
Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder at any time
without Cause and for any reason or for no reason, by giving the
Executive written notice of termination, which notice of
termination shall be effective immediately, or at such later time
as specified in such notice. The Company shall not be required to
specify a reason for the termination of the Executive's
employment pursuant to this paragraph 3(e), provided that
termination of the Executive's employment by the Company shall be
deemed to have occurred under this paragraph 3(e) only if none of
the reasons specified in paragraph 3(a), 3(b), 3(c) or 3(d) shall
be applicable.
Termination Date. "Termination Date" means the last day that the
Executive is employed by the Company, provided that the
Executive's employment is terminated in accordance with the
foregoing provisions of this paragraph 3.
Effect of Termination. If, on the Termination Date, the Executive
is a member of the Board of Directors of the Company or any
subsidiary or affiliate of the Company, or holds any position
with the Company or any subsidiary of the Company other than the
position specified in paragraph 1(a) hereof, the Executive shall
resign from all such positions as of the Termination Date.
Rights Upon Termination or Company's Failure to Renew. The
Executive's right to payment and benefits under this Agreement
for periods after the Termination Date shall be determined in
accordance with the following provisions of this paragraph 4:
General. If the Executive's employment hereunder is terminated
during the Employment Term for any reason, the Company shall pay
to the Executive:
The Executive's Base Salary for the period ending on the
Termination Date.
Payment for unused Time Bank days, as determined in accordance
with Company Time Bank policy, as in effect from time to time.
If the Termination Date occurs after the end of a fiscal year and
prior to payment of an Annual Bonus earned by the Executive for
such fiscal year, the Executive shall be paid the Annual Bonus
for such fiscal year at the regularly scheduled time.
The Executive and any of his dependents shall be eligible for
medical continuation coverage under the provisions of section
4980B of the Internal Revenue Code or section 601 of the Employee
Retirement Income Security Act (sometimes called "COBRA
coverage") to the extent required by applicable law. All other
benefits and perquisites otherwise provided under this Agreement
shall be discontinued on the Termination Date.
Death. If the Executive's employment hereunder is terminated by
reason of the Executive's death, then, in addition to the amounts
payable in accordance with paragraph 4(a), the Executive's estate
shall receive payment of the Annual Bonus for the fiscal year in
which the Termination Date occurs, computed as provided in
Section 2(b) for the entire fiscal year, and payable at the same
time as the Annual Bonus would otherwise have been paid;
provided, however, that the amount of the Annual Bonus shall be
subject to a pro-rata reduction for the portion of the fiscal
year following the Termination Date ("Pro-Rated Annual Bonus").
Disability. If the Executive's employment hereunder is terminated
by reason of the Executive's Total Disability, then, in addition
to the amounts payable in accordance with paragraph 4(a), the
Executive shall receive payment of the Pro-Rated Annual Bonus for
the fiscal year in which the Termination Date occurs, and payable
at the same time as the Annual Bonus would otherwise have been
paid.
Cause. If the Executive's employment hereunder is terminated
under the circumstances described in paragraph 3(d) relating to
the termination for Cause, then, except as otherwise expressly
provided in this Agreement, the Company shall have no obligation
to make payments under this Agreement for any period after the
Termination Date.
Resignation. If the Executive's employment hereunder is
terminated by the Executive without Good Reason, as provided in
paragraph 3(c) relating to the Executive's resignation, then,
except as otherwise expressly provided in this Agreement, the
Company shall have no obligation to make payments under this
Agreement for any period after the Termination Date.
Termination by the Company Without Cause or Termination by the
Executive for Good Reason. If the Executive's employment
hereunder is terminated by the Company Without Cause, as provided
in paragraph 3(e) or by the Executive for Good Reason, as
provided in paragraph 3(c), then in addition to the amounts
payable in accordance with paragraph 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(f) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Failure of the Company to Renew. Upon the expiration of the
Initial Term or any Additional Term of this Agreement, if the
Company shall notify the Executive of its desire not to renew the
term of this Agreement for the next Additional Term of one (1)
year, and the Executive notifies the Company in writing that the
Executive is ready, willing and able to renew the term of this
Agreement for the next Additional Term of one (1) year, and the
Company at such time did not have grounds to terminate the
Executive's employment for "Cause" as described in Section 3(d)
above, then the Company's failure to renew shall be treated in
the same manner as a termination without "Cause" and in addition
to the amounts payable under Section 4(a), the Executive shall
receive payment of the Pro-Rated Annual Bonus for the fiscal year
in which the Termination Date occurs, payable at the same time as
the Annual Bonus would otherwise have been paid, and the Company
shall continue to pay the Executive his Base Salary, at the rate
in effect on the Termination Date, from the Termination Date
until the Severance Expiration Date set forth on Schedule 9. In
no event, however, shall the Executive be entitled to receive any
amounts, rights or benefits under this paragraph 4(g) unless he
executes a release of claims against the Company in a form
prepared by, and acceptable to, the Company.
Other Benefits. The Executive's rights under this paragraph 4
shall be in lieu of any benefits that may be otherwise payable to
or on behalf of the Executive pursuant to the terms of any
severance pay arrangement of the Company, or any similar
arrangement of the Company providing benefits upon termination of
employment.
Severance Reduced by Other Compensation. Payments by the Company
of Base Salary for any period after the Termination Date and
through the Severance Expiration Date (the "Severance Period"),
if any are required to be made pursuant to the terms of
paragraphs 4(f) or 4(g), shall be reduced and offset by any
compensation Executive receives which is attributable to services
performed for other enterprises during such period, whether
characterized as salary, bonus, consulting fees, commissions,
distributions or otherwise. Executive shall promptly inform the
Company of his securing new employment, consulting or similar
engagements during the Severance Period and the compensation to
be received by Executive thereunder so that the Company can make
adjustments to, or terminate payments of, Base Salary. At the
request of the Company, Executive shall provide copies of the
Executive's federal income tax returns covering such Severance
Period. Any overpayments by the Company with respect to the
Severance Period shall be promptly refunded by Executive to the
Company.
Duties on Termination. During the period beginning on the date
notice is given of (a) the decision not to extend the Executive's
employment beyond the expiration of the Initial or Additional
Term then in effect or (b) termination of the Executive's
employment pursuant to paragraphs 3(c), 3(d) or 3(e), and ending
on the Termination Date, the Executive shall continue to perform
him duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate
for a smooth transition to the Executive's successor, if any.
Notwithstanding the foregoing, the Company may suspend the
Executive from performing him duties under this Agreement
following the giving of the notices contemplated by this
paragraph 5; provided, however, that during the period of
suspension (which shall end on the Termination Date), the
Executive shall continue to be treated as employed by the Company
for other purposes, and his rights to compensation or benefits
shall not be reduced by reason of the suspension.
Inventions. The Executive shall disclose promptly to the Company
any and all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the business of the Company,
developed, initiated, conceived or made by him, alone or in
conjunction with others, during the Employment Term, all of which
shall be considered "work for hire," and the Executive shall
assign, without additional consideration, all of his right, title
and interest therein to the Company or it nominee. Whenever
requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain letters
patent, trademarks or copyrights of the United States or any
foreign country, or otherwise protect the Company's interest
therein. These obligations shall continue beyond the conclusion
of the Employment Term with respect to inventions, discoveries,
improvements or copyrightable works made by the Executive during
the Employment Term and shall be binding upon the Executive's
assigns, executors, administrators and other legal
representatives.
Confidentiality. The Executive acknowledges and agrees that the
Company owns, controls and has exclusive access to a body of
existing technical knowledge and technology, and that the Company
has expended and is expending substantial resources in a
continuing program of research, development and production with
respect to its business. The Company possesses and will continue
to possess information that has been or will be created,
discovered or developed, or has or will otherwise become known to
the Company, and/or in which property rights have been or will be
assigned or otherwise conveyed to the Company, which information
has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter
called "Confidential Information." By way of illustration but not
limitation, Confidential Information includes all product designs
and development plans, costs, profits, pricing policies, sales
records, terms and conditions of license, purchase, distributor
or franchise arrangements, data, compilations, blueprints, plans,
audio and/or visual recordings and/or devices, information on
computer disks, software in various stages of development, source
codes, tapes, printouts and other printed, typewritten or
handwritten documents, specifications, strategies, systems,
schemes, methods (including delivery, storage, receipt,
transmission, presentation and manufacture of audio, visual,
informational or other data or content), business and marketing
development plans and projections, customer lists, prospects
lists, vendor lists, employee files and compensation data,
research projections, processes, techniques, designs, sequences,
components, programs, technology, ideas, know-how, improvements,
inventions (whether or not patentable or copyrightable),
information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information
concerning the actual or anticipated business, research or
development of the Company or its actual or potential customers
or partners or which is or has been generated or received in
confidence by the Company by or from any person, and all tangible
and intangible embodiments thereof of any kind whatsoever
including where appropriate and without limitation all
compositions, machinery, apparatus, records, reports, drawings,
copyright applications, patent applications, documents and
samples prototypes, models, products and the like. Confidential
Information also includes any such information as to which the
Company is bound under confidentiality and/or license,
distribution, purchase or franchise agreements with third
parties, and any information which the Company has obtained or
will obtain from its customers, vendors, licensors, licensees or
any other party and which the Company treats as confidential,
whether or not owned or developed by the Company. The Executive
understands that Confidential Information does not include any of
the foregoing that has become publicly known and made generally
available through no wrongful act by him or others who were under
confidentiality obligations as to such information.
Disclosure of Confidential Information to Executive. The
Executive acknowledges and agrees that his employment hereunder
creates a relationship of confidence and trust between the
Executive and the Company, and that by reason of such employment
the Executive will come into possession of, contribute to, have
access to and knowledge of Confidential Information.
Obligation to Keep Confidential. The Executive acknowledges and
confirms that all Confidential Information that comes into his
possession during the Employment Term (including any Confidential
Information originated or developed by the Executive) is or will
be the exclusive property of the Company. Further, during the
period of his employment hereunder and at all times thereafter,
the Executive shall use and hold such Confidential Information
solely for the benefit of the Company and shall not use
Confidential Information for the Executive's own benefit or for
the benefit of any third party. The Executive shall not, directly
or indirectly, disclose or reveal Confidential Information, in
any manner, to any person other than the Company's employees
unless required by law and, then, to the extent practicable, only
following prior written notice to the Company.
Return of Company Property. Upon termination of the Executive's
employment hereunder for any reason, or at any other time upon
the request of the Company, the Executive shall immediately
deliver or cause to be delivered to the Company all of the
Confidential Information in the Executive's possession or
control, including, without limitation: originals and/or copies
of books; catalogues; sales brochures; customer lists; vendor
lists; price lists; product design and development materials,
product data, employee manuals; operation manuals; marketing and
sales plans and strategies; files; computer disks; and all other
documents and materials, in any form whatsoever, reflecting or
referencing Confidential Information as well as all other
materials and equipment furnished to or acquired by the Executive
as a result of or during the course of the Executive's employment
by the Company.
Non-Solicitation and Non-Competition. The Executive acknowledges
that the Company has expended substantial time, money and effort
in developing and solidifying its relationships with customers,
vendors, licensors and licensees and developing certain brand
name or trademarked products; and that the Executive's
compensation hereunder represents consideration, among other
things, for the development and preservation of Confidential
Information, good will, loyalty and contacts for and on behalf of
the Company. Accordingly, the Executive covenants and agrees that
he will not under any circumstance, directly or indirectly, for
or on behalf of himself or any other person, firm or entity,
during the Executive's employment hereunder and for the
Restricted Period set forth on Schedule 10, following the
termination of such employment for any reason:
Solicit or accept business, in competition with the Company, from
any of the customers, or known customer prospects of the Company,
its subsidiaries, parent corporation or affiliates, or otherwise
induce or influence any such customer or known customer prospect
to reduce its volume of business, or terminate or divert its
relationship or otherwise in any way adversely affect its
relationship, with the Company, its subsidiaries, parent
corporation or affiliates; or
Employ, engage or retain, or solicit for employment, engagement
or retention, any person who, within the prior twelve (12)
months, was a director, officer, employee, consultant,
representative or agent of the Company, or encourage any such
person to terminate his or her employment or other relationship
with the Company; or
Engage in, be employed by or participate in any way in the United
States in any business that engages in any business that the
Company is engaging in, or is actively planning to engage in, on
the Termination Date (including, without limitation, the
development, design, sourcing, manufacturing, licensing,
marketing, distribution and sale of housewares products;
including, without limitation, cutlery, kitchen tools and
gadgets, kitchenware, pantryware, bakeware, barware, and spices
or the licensing of trademarks and brand names therefore). Such
prohibited engagement, employment or participation includes, but
is not limited to, acting as a director, officer, employee,
agent, member, manager, managing member, independent contractor,
partner, general partner, limited partner, consultant,
representative, salesman, licensor or licensee, franchisor or
franchisee, proprietor, syndicate member, shareholder or
creditor. Notwithstanding the foregoing, the Executive may own
or hold equity securities (or securities convertible into, or
exchangeable or exercisable for, equity securities) of companies
or entities that engage in a business that is the same or similar
to that of the Company or of its parent entities (if any) or any
of its subsidiaries or affiliates; provided, however, that (i)
such equity securities are publicly traded on a securities
exchange and (ii) the Executive's aggregate holdings of such
securities do not exceed at any time five percent (5%) of the
total issued and outstanding equity securities of such company or
entity.
The Company and the Executive expressly acknowledge and agree
that the scope of the Executive's promises specified in this
paragraph 8 are in each case reasonable and necessary to protect
the Confidential Information, trade secrets and good will of the
Company. In the event that, for any reason, any aspect of the
Executive's obligations specified in this paragraph 8 are
determined by a court of competent jurisdiction to be
unreasonable or unenforceable against him, such provisions shall,
if possible, be modified by such court to the minimum extent
required by law to make the provisions enforceable with respect
to the Executive.
Non-Disparagement. The Executive covenants and agrees that during
the Employment Term and following termination of the Employment
Term, he will not make any disparaging, false or abusive remarks
or communications, written or oral, regarding the Company, its
products, brands, trademarks, officers, directors, employees,
personnel, licensors, licensees, customers, vendors or others
with which it has business relationships.
Specific Remedies. The Executive acknowledges that the Company
would be irreparably injured, and that it is impossible to
measure in money the damages which will accrue to the Company if
he shall breach or violate him covenants in paragraphs 6, 7, 8 or
9 hereof. Accordingly, the Executive agrees that if he shall
breach or violate any of such covenants or obligations, the
Company shall have the full right to seek injunctive relief in
addition to any other rights provided in this Agreement or by
operation of law, without the requirement of posting bond or
proving special damages, and to terminate any payments to the
Executive. In any action or proceeding instituted by the Company
to enforce the provisions of paragraph 6, 7, 8 or 9 of this
Agreement, the Executive waives any claim or defense that the
Company has an adequate remedy at law or that the Company has not
been, or is not being, irreparably injured by the Executive's
breach or violation. The provisions of paragraphs 6, 7, 8, 9 and
10 hereof shall survive any termination of this Agreement or the
Employment Term.
Acknowledgment by Executive. The Executive represent and warrants
that (i) he is not, and will not become party to any agreement,
contract, arrangement or understanding, whether or employment or
otherwise, that would in any way restrict or prohibit him from
undertaking or performing him duties in accordance with this
Agreement or that restricts him ability to be employed by the
Company in accordance with this Agreement; (ii) his position with
the Company, as described in this Agreement, will not require him
to improperly use any trade secrets or confidential information
of any prior employer, or any other person or entity for whom he
has performed services.
Arbitration of Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be
settled by final and binding arbitration in New York, New York by
three arbitrators. Except as otherwise expressly provided in this
paragraph 12, the arbitration shall be conducted in accordance
with the commercial rules of the American Arbitration Association
(the "Association") then in effect. One of the arbitrators shall
be appointed by the Company, one shall be appointed by the
Executive, and the third shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within the thirty (30) days of the appointment
of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This paragraph 12 shall not be
construed to limit the Company's right to obtain equitable relief
under this Agreement with respect to any matter or controversy
subject to this Agreement, and, pending, a final determination by
the arbitrators with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without
first being required to arbitrate such matter or controversy and
without the necessity of posting bond.
Notices. All notices and other communications hereunder shall be
deemed given upon (a) the sender's confirmation of receipt of a
facsimile transmission to the recipient's facsimile number set
forth below, (b) confirmed delivery by a standard overnight
carrier to the recipient's address set forth below, (c) delivery
by hand to the recipient's address set forth below or (d) the
expiration of five (5) business days after the day mailed in the
United States by certified or registered mail, postage prepaid,
return receipt requested, addressed to the recipient's addresses
set forth below (or, in each case, to or at such other facsimile
number or address for a party as such party may specify by notice
given in accordance with this paragraph 13):
If to the Company, to:
Lifetime Hoan Corporation
One Merrick Avenue
Westbury, New York 11590
Attention: Jeffrey Siegel, Chief Executive Officer
Facsimile: (516) 450-1017
If to the Executive, to the address set forth on the
signature page hereof.
Entire Agreement; Modification. This Agreement constitutes the
entire agreement and understanding of the parties with respect to
the matters set forth herein and supersedes all prior and
contemporaneous agreements and understandings between the parties
with respect to those matters. There are no promises,
representations, warranties, covenants or undertakings other than
those set forth herein. This Agreement may not be amended,
modified or changed except by a writing signed by the parties
hereto.
Waiver of Breach. Waiver by either party of a beach of any
provision of this Agreement by the other shall not operate as a
waiver of any other or subsequent breach by such other party.
Assignment. Neither this Agreement, nor the Executive's rights,
powers, duties nor obligations hereunder, may be assigned by the
Executive. This Agreement may be assigned by the Company to any
successor in interest and the obligations hereunder shall be
binding on such third party assignee.
Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability the remainder of this Agreement shall continue
in full force and effect.
Survival. Notwithstanding the termination of this Agreement or
the Executive's employment hereunder, such provisions of this
Agreement as by their terms survive the termination of this
Agreement shall continue in full force and effect in accordance
with their respective terms.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without
giving effect to those laws that would require the application of
the substantive law of another jurisdiction). The Executive
hereby consents to the personal jurisdiction of the federal and
state courts located in New York in connection with any matter
arising out of this Agreement and confirms and agrees that any
claim against the Company, including without limitation,
enforcement of any arbitration award under paragraph 12 hereof
shall be brought only in the federal and state courts located in
New York.
Representation by Counsel; No Duress. The Executive acknowledges
that this Agreement has been negotiated at arm's length; that he
has full opportunity for representation by counsel in connection
with the negotiation and review of this Agreement, and has either
been adequately represented by counsel or has chosen to forego
him opportunity to be so represented; that this Agreement will be
deemed to have been drafted by both parties and, as such,
ambiguities shall not be construed against any one party; and
that he enters this Agreement freely and without duress or
compulsion of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
LIFETIME HOAN CORPORATION
By: ______________________________
Printed Name: JEFFREY SIEGEL
Title: CHAIRMAN, PRESIDENT & CHIEF EXECUTIVE OFFICER
EXECUTIVE
__________________________________
Printed Name: ROBERT REICHENBACH
Title: EXECUTIVE VICE PRESIDENT
Date: AUGUST 20, 2003
ADDRESS OF EXECUTIVE:
________________________
________________________
________________________
EXECUTIVE EMPLOYMENT AGREEMENT
FOR
BOB REICHENBACH
___________________________
SCHEDULE OF TERMS AND CONDITIONS
Schedule 1: Date of Agreement: July 1, 2003
Schedule 2: Title and Management Position; Responsibilities
Executive Vice President
Division President - Cutlery Division
Division President - Bakeware Division
Division President - Barware & At Home
Entertaining Division
Schedule 3: (c) Initial Term Commencement Date: July 1, 2003
(d) Initial Term Expiration Date: June 30, 2006
Schedule 4: Reporting Authority: Chief Executive Officer
Schedule 5: Principal Office Location: Westbury, NY
Schedule 6: Initial Base Salary per annum: $250,000.00
Initial Base Salary Commencement Period: January 1,
2003
Initial Base Salary Completion Period: December 31,
2003
Schedule 7: First Bonus Year: Year ended December 31, 2003
Calculation of Eligibility for Annual Bonus:
Executive shall eligible for an Annual Bonus based
upon the level of aggregate "Contribution Dollars"
earned from the Cutlery Division, the Bakeware
Division and the Barware & At Home Entertaining
Division. Contribution Dollars for each Division
shall be determined by subtracting from the Net Sales
of each Division, the sum of (a) the Cost of Goods
Sold of that Division and (b) Freight, Warehouse,
Sales, Marketing, Product Development, Graphics/Art
and General & Administrative Expenses, as allocated
to that Division by the Corporation's Finance
Department.
For the year ended December 31, 2003, the Employee's
Annual Bonus shall be equal to:
0.40% of Contribution Dollars up to $10,361,000,
plus
2.00% of Contribution Dollars above $10,361,000
to $11,842,000, plus
2.40% of Contribution Dollars above $11,842,000
to $13,322,000, plus
2.80% of Contribution Dollars above $13,322,000
to $14,802,000, plus
3.75% of Contribution Dollars above $14,802,000
Notwithstanding the foregoing, the Executive shall be
not be entitled to an Annual Performance Bonus for
the year ended December 31, 2003, (a) if the
aggregate Contribution Dollars for the Cutlery
Division, the Bakeware Division and the Barware & At
Home Entertaining Division for the year ended
December 31, 2003, are less than $10,361,000; or (b)
if the Net Income of the Company for the year ended
December 31, 2003 is less than $5,000,000. Net Income
shall mean the net earnings of the Company for the
year ended December 31, 2003, after deducting all
federal, state and local taxes and all other charges
and reserves, as reported in the Company's audited
financial statements for that year.
Schedule 8: Automobile Allowance Per Month: $600 per month.
Schedule 9: Severance Expiration Date: The Severance Expiration
Date shall be twelve (12) months after the
Termination Date.
Schedule 10: Restricted Period: The Restricted Period shall be
twelve (12) months following the Termination Date.